Negotiations: The Principles & Strategies of Claiming Value. Jose Jorge Saavedra

Transcription

1 Negotiations: The Principles & Strategies of Claiming Value Jose Jorge Saavedra

2 Zone of Possible Agreement: ZOPA ZOPA Minimum Price for Seller Maximum Price for Buyer

3 Small ZOPA ZOPA Seller s Reservation Point Buyer s Reservation Point $60, $66,000 $68,000

4 Negative ZOPA ZOPA Buyer s reservation Point Seller s Reservation Point $60,000 $66,000 $68,

5 Claiming Value Seller s arguments Buyer s arguments $58,000 $62,000 $66,000 $70,000

6 The Settlement Point The point at which both parties feel they have achieved the best deal for themselves that they can. This frequently means having a perception that the agreement is very close to the other s reservation point.

7 Influencing The Other Party s Perceptions of Your BATNA: The Negotiation Dance Opening offers Concession Making Final Offers or Commitments

8 STRATEGIES FOR CLAIMING VALUE 1) Know your BATNA 2) Research The Other Party s BATNA 3) Set High Aspirations 4) Make the First Offer 5) Counteroffer Immediately 6) Avoid Stating Ranges 7) Make Bilateral (Not Unilateral) Concessions 8) Use an Objective-Appearing Rationale to Support your Offers 9) Appeal to norms of fairness 10) Do not fall for the Even Split Ploy Bazerman, Neale &Thompson

9 The Principles and Strategies of Creating Value

10 Model of Integrative Negotiations Supporting Factors Inhibiting Factors Negotiation Processes Solutions or Agreements

11 Best Deal for Party A Pareto (Possibilities) Frontier Party A Reservation Point Worst Deal for Party A ZOPA Part B Reservation Point Worst Deal for Party B Best Deal for Party B

12 Flat Pareto Frontier: Claiming Value Situation Best Deal for Party A Party A Reservation Point Worst Deal for Party A ZOPA Part B Reservation Point Worst Deal for Party B Best Deal for Party B

13 Convex Pareto Frontier: Creating Value Situation Best Deal for Other ZOPA Other s Reservation Point Worst Deal for Other Own Reservation Point Worst Deal for Self Best Deal for Self

14 Concave Pareto Frontier: Shrinking Value Situation Best Deal for Other Other s Reservation Point Worst Deal for Other ZOPA Own Reservation Point Worst Deal for Self Best Deal for Self

15 Creating-Value Solutions 1) Bridging Solutions: Re-definitions of the situation that are more mutually beneficial without the parties giving up something in return. 2) Trade-Off Solutions: Strategic compromises in which the parties each give up something of lesser value to gain something of greater value. Logrolling Solutions Turn-Taking Solutions

16 Trade-Off Solutions: Logrolling Based on DIFFERENCES in: Relative Importance of Different Issues

17 Trade-Off Solutions: Logrolling Based on DIFFERENCES in: Relative Importance of Different Issues Probability Assessments: Contingent Solutions

18 Trade-Off Solutions: Logrolling Based on DIFFERENCES in: Relative Importance of Different Issues Probability Assessments: Contingent Solutions Risk Preference: Risk-Sharing Solutions

19 Value Creating Processes: The Stages of Creative Problem Solving 1) Problem Identification and Definition 2) Solution Generation 3) Evaluation and Selection of Solutions

20 Dual-Concerns Models High Concern for Own Interests Low Contending Inaction/ Avoidance Low Compromising Problem Solving/ Collaboration Yielding High Concern for Other Party s Interests

21 TELLTALE SIGNS OF WIN-WIN POTENTIAL 1) Does the Negotiation Contain More Than a Single Issue? 2) Can Other Issues be Brought in 3) Can Side Deals be made? 4) Do Parties have different Preferences Across Negotiation Issues? Leigh Thompson

22 STRATEGIES FOR CLAIMING VALUE 1) Know your BATNA 2) Research The Other Party s BATNA 3) Set High Aspirations 4) Make the First Offer 5) Counteroffer Immediately 6) Avoid Stating Ranges 7) Make Bilateral (Not Unilateral) Concessions 8) Use an Objective-Appearing Rationale to Support your Offers 9) Appeal to norms of fairness 10) Do not fall for the Even Split Ploy Bazerman, Neale &Thompson

23 WIN-WIN STRATEGIES THAT WORK 1) Build Trust and Share Information 2) Ask Diagnostic Questions 3) Provide Information 4) Unbundle the Issues 5) Make Package Deals, not Single-Issue Offers 6) Make Multiple Offers Simultaneously 7) Structure Contingency Contracts by Capitalizing on Differences 8) Presettlement Settlements (PreSS) 9) Search for Postsettlement Settlements Leigh Thompson

24 PREPARE, PREPARE AND PRERARE Before every meeting, prepare. After the meeting, evaluate your achievements and performance Adapt your strategies and prepare again The majority of negotiations are won or lost before getting to the table.

25 PREPARE, PREPARE AND PRERARES If you cannot afford the luxury of preparing, for certain you cannot afford the luxury of NOT preparing