Reflection Report on Negotiations
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2022_Negotiations_Review1.pptxNegotiations
Review Session November 28, 2022
Review Session Outline
2
Review Key Concepts From Class that Apply to the Prep Sheet
Notes on the Prep Sheet
3
The Concepts
The Best Alternative to a Negotiated Agreement (BATNA)
4
The BATNA is an action, not a number
What’s the best action you could take if the negotiation results in a “no-deal” situation?
Negotiation
Agreement
No Agreement
Possible Actions
C
D
Expected Value
7
1
ATNA
7
BATNA
The Reservation Price
5
The value of a negotiated outcome that leaves you just as well off as your BATNA
Negotiation
Agreement
No Agreement
A
B
Possible Actions
C
Expected Value
10
5
7
7
BATNA
10
5
Agreement is Best
BATNA is Best
Reservation Price
Targets/Aspirations
6
What is the outcome that you are aiming for?
BATNA & RP
What you are willing to accept before you walk away from the negotiation.
Targets & Aspirations
The best possible outcome that you want from your negotiation
Thinking carefully about your target will help you develop a strategy
Consider it self-anchoring
7
The Prep Sheet
The Point of the Prep Sheet
8
Provides you with a template to systematize your thinking, alleviating biases and making you aware of what you don’t know
Give you a tool for applying class concepts to in-class negotiations
Shows you the role of preparation in effective negotiations
The Importance of Preparation
9
In Class
In Life
The prep sheets give you a framework to prepare effectively for negotiation
Allow you to see how class concepts apply to a negotiation
Gives you practice in leveraging concepts to improve negotiation outcomes
Can show you the impact of thinking through key issues in depth prior to negotiating
Give you a framework for thinking through key issues prior to a negotiation
Helps you think about information to gather prior to negotiation
Increase your confidence during a negotiation
Allows you to develop more effective and flexible strategies for negotiations
Filling in the “Other” Section
10
You cannot effectively think through a good strategy without thinking about what the other party in your negotiation cares about.
Provides you with insights like:
Your counterparty’s opening move
Your counterparty’s response to your opening move
What deal your counterparty is likely to accept
And Much Much More!
Prioritized Interests Section
11
The key things you (and the other side) care about
Can extract from the case and also make educated inferences
Usually will be more than one prioritized interest – make sure to list multiple!
The Strategy Section
12
The part where you put together what you’ve learned in the other section of the prep sheet
Key Questions to Answer:
How do you want to open the negotiation?
What are some contingencies that you expect?
How do you intend to react to these contingencies?
The more you think about contingencies, the better you’re likely to handle contingencies that you didn’t consider
The Importance of Contingency Planning
Contingency planning should be dynamic
You should think about your response to multiple possible actions your counterparty might take
Open-Ended Question(s)
13
At the end of the prep sheet – don’t miss these!
Will usually ask you to reflect on key takeaways
Say whatever you learned that was most valuable/interesting to you
Prep Sheet Best Practices (1)
BATNA and RP:
For the RP and BATNA, be as concrete as possible
If you don’t know an exact RP, make an educated guess
Assumptions based on research can help you come up with a BATNA and RP
Strategy:
Be as concrete as possible
Consider lots of contingencies
Consider your response to multiple possible actions that your counterparty might take in response to your moves
Prep Sheet Best Practices (2)
The “Other” Side of the Sheet
Fill it out!
If you don’t know something, try to make an informed guess
Outside research can help with filling out this side of the sheet
Use Appendices
Appendices are a good place to put supplementary preparatory materials that don’t fit well into the predefined areas of the prep sheet
Items like models, spreadsheets, or other supplementary information belong in appendices
Common Prep Sheet Pitfalls
Treating the BATNA as a number rather than an action
Not explaining/justifying your BATNA
Underestimating the “other” section or saying that there is no data to fill it out. You should always make an educated guess and justify it even if you aren’t confident
Underestimating the benefits of preparation. Being deliberate about understanding and practicing the concepts from class in the prep sheets will improve your performance in real-life negotiations.
