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foundationsofcrmm3-25696.pptxTrident University
NCM 501
Foundations of Conflict Resolution Management
Module 3
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Negotiation Strategies & Procedures
Introduction to Negotiation
Bargaining or Positional Negotiations
Distributive Bargaining
Preparations for Negotiation
“At the Negotiating Table”
Collaboration and Principled Negotiations
Introduction
Principle I – Separate the People from the Problem
Principle II – Focus on Interests, not Positions
Principle III – Generate Options for Mutual Gain
Principle IV – Insist on Using Objective Criteria
Principle V– Know your BATNA
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Introduction to Negotiation - Why Negotiate?
Fulfillment of needs.
Scarcity of resources.
The introduction of Trade by Bartering and Monetary means.
No Dependency – No Trade.
The terms and conditions of our transaction, will be determined by negotiation.
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Introduction to Negotiation - Why Negotiate?
“Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog…“. Adam Smith (1776)
Negotiating is a human activity, enjoying and suffering, the full range and extent of human behaviors.
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Introduction to Negotiation - Why Negotiate?
How to approach conflict? What strategy to adopt?
Negotiation is but one of the options.
If negotiation is chosen,we are exploring: Whether there is common ground, and whether we can find acceptable terms, that can enable a transaction between the two sides.
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Bargaining or Positional Negotiations
Distributive Bargaining
Preparations for Negotiation
“At the Negotiating Table”
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Distributive Bargaining
A known a priori price vs. An unknown and To-Be determined price
Entering Price (EP) - The first and beginning price offered or requested.
Leaving Price (LP) - The final price offered or requested. If this price cannot or will not be met, we will “leave the table”.
Distributing the Difference.
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Distributive Bargaining
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Distributive Bargaining
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Distributive Bargaining
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Distributive Bargaining
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Distributive Bargaining
Questions
What are the factors that influence our decision in deciding our EP?
Should we be the first to disclose and present our EP to the other side - make the first offer?
How do we know where we are on the continuum, when we do not know the other side’s LP?
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Distributive Bargaining - cont.
Answers
Answers are not definitive.
The opening offer, is rarely the closing offer:
EP>LP for the seller
EP<LP for the buyer.
We are not completely in “the dark”:
Published public indices
Market values.
Avoiding “Horse-Trading and Haggling” by “Splitting-the-Difference”.
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Distributive Bargaining - cont.
Dilemma’s
Sellers - setting too high an EP, may “frighten off” potential buyers.
Buyers – presenting an offer too low, will cause seller to “walk away”.
Is “what he says” - “what he means”?
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Preparations for Negotiation
Why prepare
Interests and Positions
“Trading Cards”
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Preparations for Negotiation
Why Prepare
To Identify different needs and expectations: Ours and Theirs.
To Save time “at the table”.
To Reduce uncertainty
To Rehearse / Simulate situations.
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Preparations for Negotiation
Interests and Positions
Our aim - to achieve our goals and satisfy our needs. Therefore, we need to define: goals and objectives.
Interests are not negotiable.
All exchange of: communications, options and solutions, are evaluated solely on their contribution or detriment to my interests.
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Preparations for Negotiation
Interests and Positions – cont.
The positions I adopt, are those that best serve my interests.
Positions are negotiable.
Interests are constant. Positions are flexible.
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Preparations for Negotiation
“Trading Cards”
We wish to exchange: “something of value”.
We need to agree on the “value of the something”.
Create list of assets.
Assets will become: “trading cards”.
We never give away any asset we hold, without getting something back in return. It is always traded for something else of worth.
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“At the Negotiating Table”
The Discussion
Making and Accepting Proposals
“Closing the Deal”
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“At the Negotiating Table”
The Discussion
Exchange of ideas, information, offers and counter-offers, requires communication.
The message sent is not the message received.
A professional: approach, attitude and style, will ensure that discussions will focus on the issue.
Phases:
I - We present our stand on the issues.
II - We listen to their stand on the issues
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“At the Negotiating Table”
The Discussion – cont.
We exchange information, we do not negotiate information.
The outcome of the negotiation process is dependent, to a great extent, on the atmosphere at the table and the conduct of both sides.
Behaviors can be: positive and constructive or detrimental and damaging, to the discussions.
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“At the Negotiating Table”
The Discussion – What Not To Do
Do not behave or say words that will cause anger and irritation.
By listening, we learn valuable information, so do not interrupt or block their speech.
A verbal attack on the other side, is devastating!
You are not a missionary! Do not attempt to “convert” the other side to accept “your” beliefs!
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“At the Negotiating Table”
The Discussion - What To Do
In general be: direct, polite and professional.
Present: data, information and statements, in a factual and neutral manner.
Look for inhibitions.
Reassure your counterpart, that he is regarded as such, and not as an adversary.
Maintain a practical forward and solution-seeking attitude.
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“At the Negotiating Table”
The Discussion - What To Do – Cont.
Ask questions!
Keep notes, and summarize proceedings.
Demonstrate calmness,keep a cool head and be patient.
No-one is infallible! Check yourself!
Bottom line: “put aside” personal and emotional behaviors, and attain a constructive and professional behavior.
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“At the Negotiating Table”
Making and Accepting Proposals
Proposals are an indication,
of our readiness to reach a solution.
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“At the Negotiating Table”
Making Proposals
A proposal is NOT the solution to the problem, but an exploratory attempt, at reaching one.
There is no “free gain” for the other side. Whatever we wish to offer, is always conditioned, by some form of response, we wish to receive.
“If you do “A”, then I will agree to “B”.
Note: the condition precedes the offer!
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“At the Negotiating Table”
Accepting Proposals
When offered a proposal:
Listen in full to the proposal.
Ask clarifying questions
Take your time in responding.
Present a counter proposal (if required).
We can make proposals on individual or batches of “trading cards.
Partial agreement is subject to our reaching an agreement on All the issues.
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“At the Negotiating Table”
“Closing the Deal”
Proposals were tentative, “closing” requires being explicit and specific.
Negotiations focus now on the “fine details”.
Linkage of “trading cards” to keep the momentum.
Records of the proceedings, facilitate summation.
Introduction of professional/ legal advisors.
Transforming the agreed verbal solution, into a documented and legal paper.
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“At the Negotiating Table”
“Closing the Deal” – cont.
Negotiations may be: quick; lengthy; heated; go back and forth; proceed fast or become “deadlocked”.
In what ever form they take: Do not bypass the preparatory and optional solution finding phases, and try to “close the deal”, before it is time!
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Collaborative or Principled Negotiation
Collaborative Negotiating
The “Principled Negotiation” conflict resolution method by Fisher and Ury, is in essence an interest oriented approach to negotiation, having the parties reach an agreed solution, by going through a collaborative process.
Fisher and Ury argued that:
Most negotiations, take the form of positional bargaining.
Positional bargaining does not produce good results, and brings adversary behaviors to the negotiating table.
A good agreement, is defined by being: “wise and efficient, and which improves the parties' relationship”.
They advocate the concept of a collaborative win-win approach.
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Collaborative or Principled Negotiation
Benefits of Collaborative Negotiating
Keeps the relationship between the two parties intact:
trust building blocks
Lower tensions
approaching disagreements as such, and not as “wars”.
Collaborative negotiating is fairly simple to learn and implement.
It is time saving! Focus is on working on mutual solutions, and not on playing “power games”.
Creative Problem Solving - creates more and better options, than would have surfaced in a non-collaborative meeting.
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Collaborative or Principled Negotiation
Principled Negotiating
I - Separate the People from the Problem
II - Focus on Interests, not Positions
III - Generate Options for Mutual Gain
IV - Insist on Using Objective Criteria
V - Know your BATNA
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Collaborative or Principled Negotiation
Principle I – Separate the People from the Problem
People, have the propensity of identifying themselves and becoming personally involved in their side’s position.
When people are separated from the problem, both sides focus on the issues, and retain a professional working relationship.
Focus on the the issues, saves time, as we do not get distracted from the substantive “heart of the matter”.
Avoid an emotional reaction, either by not attacking your counterpart personally, or by keeping your own cool under attack.
“People related problems: Perceptions, Emotions and Communications.
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Collaborative or Principled Negotiation
Principle I – Separate the People from the Problem
People Problem I – Perceptions
There is never an absolute truth, or an “objective reality”. People perceive and interpret the world and its issues, in different ways.
These different perceptions, are the Problem and the Key for a possible solution.
Understanding the other side’s viewpoint of the matter is fundamental.
Neither they, nor ourselves, are to be blamed for the conflict.
Present appealing and feasible proposals.
you are not the “God-Father” making an “offer they can’t refuse”
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Collaborative or Principled Negotiation
Principle I – Separate the People from the Problem
People Problem II - Emotions
Accept that emotional reactions may surface, in all their manifestations.
Emotions become intertwined with the “real” issues.
Never dismiss or ridicule a display of emotions, try to understand the underlying reasons.
Don’t make matters worse, show empathy and consideration.
Negotiations can become continuous and stressful. Physical fatigue and tiredness, may cause emotional outbreaks.
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Collaborative or Principled Negotiation
Principle I – Separate the People from the Problem
People Problem III – Communication
Not Speaking - negotiators are not actually talking to one another, but are “grandstanding”, and presenting a “show”.
Not Listening – while side A is talking, side B is occupied in “other” matters. the non-listener, is rude and missing important information.
Misunderstanding - speaking and listening is essential but does not preclude the possibility of a misunderstanding or misinterpretation.
Directly address and listen to your counterpart, ask clarifying questions and summarize the major points, to ensure that all sides: “march to the same tune”.
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Collaborative or Principled Negotiation
Principle II – Focus on Interests, not Positions
Interests vs. Positions
Your position is something you have decided upon, your interests are what caused you to so decide”. (Fisher & Ury).
Interests - an outcome or result we wish to achieve.
Positions - our stance or opinion on the issue.
We need to identify our own interests and positions, and understand “their” interests and positions.
So, we can openly “Look for common ground”.
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Collaborative or Principled Negotiation
Principle II – Focus on Interests, not Positions
Defining the Problem
Problem definition needs to be depersonalized, and should focus on the interests, not on the positions.
It is important that both sides agree to this definition, thus enhancing the chances for a solution that will satisfy both sides.
Accepting, that both problem and solution, should be interest oriented, is the key to "integrative bargaining.“
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Collaborative or Principled Negotiation
Principle III
Generate Options for Mutual Gain - Brainstorming
A process of generating possible solutions, that addresses, presents and provides an answers for both sides’ interests.
In a Brainstorming session, the parties “put on the table” possible solutions, to be seen and evaluated by all present.
Brainstorming sessions are broken down into 3 parts:
Idea Generation; Idea Evaluation; Choosing a Solution.
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Collaborative or Principled Negotiation
Principle III – Generate Options for Mutual Gain
Brainstorming
Idea Generation - This is the creative part. Everyone “throws-in” an idea, suggestion or solution. There is no criticism or ridicule. All “contributions” are recorded “as is”, with no commentary or evaluation.
Idea Evaluation - criteria is developed, to evaluate the generated list of ideas and suggestions, checking for feasibility and realistic solutions.
Choosing a Solution - The “short list”, is subjected to an enhanced scrutinizing analysis, cross improvement of suggestions, the outcome of which is a solution that maximizes mutual gains.
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Collaborative or Principled Negotiation
Principle IV – Insist on Using Objective Criteria
Measuring decisions based on personal (and biased) feelings and emotions, or subject to external pressures, should be avoided.
Both sides can (and should): search, find and agree to objective standards.
Objective sources: Scientific and/or technological data; standards commonly used by professional bodies; legal precedents pertaining to our issue; market indices.
An objective criteria, is regarded as being “neutral” or “fair”, and can be accepted as a mutual agreed standard.
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Collaborative or Principled Negotiation
Principle V– Know your BATNA
We need to have a clear idea of our options and alternatives.
Not always is the solution that both sides can concoct, preferable to the alternative, of not reaching an agreement.
I will reject a poor agreement, if I assess that my overall situation will not be improved by this agreement.
We compare the proposed solution, to our BATNA (Best Alternative To a Negotiated Agreement). My “walk-away-price”.
A well prepared BATNA, allows me to assess at all times my negotiating status. The whole negotiation process and outcome, need to fulfill the basic requirement of improving my situation relative to my BATNA.
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“Negotiating Range” 100
-
400
Buyer
Seller
EP=100
EP=400
“Negotiating Range” 100 - 400
Buyer Seller
EP=100 EP=400
Buyer and Seller’s LPs do not meet.
Gap between: 250
–
300
.
Buyer
Seller
EP=100
LP=250
LP=300
EP=400
Buyer and Seller’s LPs do not meet.
Gap between: 250 – 300.
Buyer Seller
EP=100 LP=250 LP=300 EP=400
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1
Buyer and Seller’s LPs meet at 300
.
Buyer
Seller
EP=100
LP=300
LP=300
EP=400
Buyer and Seller’s LPs meet at 300.
Buyer Seller
EP=100 LP=300 LP=300 EP=400
PAGE
1
Buyer and Seller’s LPs overlap at: 200
-
350
Buyer
Seller
EP=100
LP=350
LP=200
EP=400
Note
:
buyer and seller will bargain and distribute the
overlap range
.
Any price agreed
between 200 and 350 is:
·
LESS
than the final price t
he buyer was willing to pay,
thus he is
satisfied
.
·
MORE
than the final price the seller was willing to accept,
thus he is
satisfied
.
Buyer and Seller’s LPs overlap at: 200-350
Buyer Seller
EP=100 LP=350
LP=200 EP=400
Note: buyer and seller will bargain and distribute the overlap range. Any price agreed between 200 and 350 is:
· LESS than the final price the buyer was willing to pay,
thus he is satisfied.
· MORE than the final price the seller was willing to accept,
thus he is satisfied.
PAGE
1
