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Now What…. I want the last remaining orange and so do you. Focus on interests, not positions:. Behind opposed positions lie shared and/or compatible interests Each side likely has multiple interests that may be valued differently by each party

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now what
Now What…..
  • I want the last remaining orange and so do you
focus on interests not positions
Focus on interests, not positions:
  • Behind opposed positions lie shared and/or compatible interests
    • Each side likely has multiple interests that may be valued differently by each party
    • Find these compatible interests and then make trade-offs
  • Complete satisfaction for both parties
mythical fixed pie
Mythical Fixed-Pie
  • Assume that there can only be one winner and one loser (distributive bargaining approach)
    • However, only a small percentage of organizational negotiations are purely distributive, involving just one resource or just one issue
  • Consider:
    • Price, delivery date, financing, service, relationships
continued
Continued
  • Assumption that our interests conflict with the other side
    • “What’s good for them must be bad for us”
      • Terms that appear beneficial when suggested by your side often seem disadvantageous when proposed by the other side
  • The fixed-pie mentality is prevalent
salt u s russia
SALT (U.S. & Russia)
  • “I have had a philosophy for some time in regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in their best interest, it can’t be in our best interest”
    • Floyd Spence, U.S. Congress
arms reduction proposal
Arms Reduction Proposal
  • The sameproposal was reviewed by two groups of people in the U.S.A.
    • Group 1: The arms reduction proposal was offered by Russian President Gorbachev
    • How favorable was it to Russia, the U.S.?
      • 56% said it strongly favored Russia
      • 16% said it favored the U.S.
      • 28% said it favored both sides equally
slide7
Group 2: The arms reduction proposal was offered by U.S. President Reagan
    • 27% said it favored the USSR.
    • 27% said it favored the US
    • 46% said it favored both sides equally
finding the trade offs easy or not so easy
Finding the trade-offs: Easy or not so easy?
  • Pairs were presented with a negotiation involving multiple issues. On two of these issues, the opposing sides had compatible interests (similar to an interest in the orange peel versus an interest in the fruit)
    • What percentage of the time did the negotiators fail to trade-off?
      • 40%
    • Instead of realizing the gains, they tended to compromise on each one
slide9
Two students in a library, one wants the window open, the other wants it closed. A loud argument breaks out.
    • How might this be resolved?
      • Fixed-pie assumptions and
      • Anger closes our minds to alternative solutions
  • Expand the pie
    • There may be just ONE way to satisfy a position, but there are MULTIPLE ways to satisfy interests.
    • Inventing options for mutual gain
slide10

Negotiation & Conflict-handling Styles

High

Competition

Collaboration

Compromising

Interest in achieving OWN goals

Avoidance

Accommodation

Low

Low

High

Interest in helping the other party to

achieve its goals

common negotiation styles
Common Negotiation Styles
  • Competing (distributive mind-set)
    • Your gain is my loss
  • Compromising (the middle ground)
    • “Let’s split the difference”
      • Seems like a good strategy: Isn’t it better than no deal at all?
    • However, the middle ground results in incomplete satisfaction for both parties
      • “Leaving money on the table”
distributive vs integrative bargaining
Distributive vs. Integrative Bargaining

Distributive Integrative

Characteristics Bargaining Bargaining

Available resources:

Primary MINDSET:

Primary interests:

View of relationships:

Fixed amount of

resources to be divided

I win, you lose

Opposed to each other

Short term

Variable amount of

resources to be divided

I win, you win

Convergent

with each other

Long term

principled negotiation reaching agreement without giving in
Principled Negotiation: Reaching Agreement, Without Giving In
  • Focus on interests, not positions
    • Do you know your interests?
      • Identify and value your sides interests
        • Ranking process is one way to start
      • Consult with team to help valuation process
presentation approaches
Presentation Approaches
  • Option 1: “I want that orange because I am interested in baking an orange cake and I need the peel”
  • Option 2: “I am interested in baking an orange cake and I need the peel, that’s why I want that orange”
    • How are these options the same? Different
    • Which approach will most effectively convey your interests to the other side? Why?
find out the other party s interests and preferences
Find out the other party’s interests and preferences
  • Ask questions
    • Listen to the response!
slide16
Concessions
    • Find an issue of lower value to you and offer a concession on that issue
      • Other party will typically reciprocate
    • Contingent concessions
      • I can give here if you can work with me on another issue
slide17
Make multiple offers simultaneously
    • Each is different, yet results in the same level of profitability for you
emotional strategy
Emotional Strategy
  • Benefits of a good mood
    • More creative, more ideas
    • Found most trade-offs for joint gain
      • Highest level of value
  • Detriments of anger
    • Found fewest trade-offs
    • Least value
slide19
Expressed emotion
    • “Put on a happy face”
    • Your smile is often reciprocated by the other side
      • Positive feelings and behaviors
      • Finding trade-offs
      • Offering concessions
where do we start
Where do we start?

A. Start with the easy issues first!

B. Start with the most difficult ones first!

C. Either A or B: It depends

D. None of the above

principled negotiation getting to yes
Principled Negotiation: “Getting to Yes”
  • Separate the people from the problem
    • Perceive yourself working side by side with the other party to resolve the issue
    • Resist the temptation to “attack” people
    • Physically/actually sit on the same side of the table
      • Together we can attack this problem
slide22
Insist on objective criteria
    • Search for a standard such as market value, expert opinion, law
      • This way, neither party is “giving in” to the other and a fair agreement is possible
      • We are asking for $200,000 in fees
        • How did you arrive at that figure?
        • Is it supported by market data?
where do we start24
Where do we start?

A. Start with the easy issues first!

B. Start with the most difficult ones first!

C. Either A or B: It depends

D. None of the above

issues in negotiation
Issues in Negotiation
  • Anchoring
    • Putting too much weight on an initial offer