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mgmt_566_ppt_module_2__1_.pptxMGMT 566 Negotiation in The Workplace
Module 2a Overview
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Learning Objectives
Identify the basic negotiation language: Negotiation Issues, BATNA, Target, Reservation Point, Position and Interest, Priorities etc.
Conduct self-assessment
Assess the other parties
Explore the impact of situational factors on negotiation outcomes
Complete a negotiation planning document
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Readings
Chapter 1: Preparation: What to do before negotiation
Article: Galinsky et al., (2006). The view from the other side of the table: Getting inside your counterpart’s head can increase the value of the deal you walk away with. Here’s how to do it. Negotiation, 9(3), 1-5.
Video 1: Overview
Video 2: Negotiation Issues, Position and Interests
Video 3: Target Point / Aspiration Point
Video 4: BATNA and Reservation Point
Video 5: Instruction for Mock Negotiation Exercise #1
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Assignment - Quiz
Module 2 Quiz Prepare for Negotiations
20 multiple choice questions in 30 minutes
Two attempts
Take quiz after you have completed the readings and watched the video lectures
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Assignment – Mock Negotiation Exercise #1
Before Exercise
Planning document
During Exercise
Record your exercise using Google Hangouts
After Exercise
Post Google Hangouts Link
Submit your agreement
Take survey
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MGMT 566 Negotiation in the Workplace
Module 2b Negotiation Issues, Positions and Interests
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Negotiation Issues / Issue Mix
Issues are the specific items or terms you actually negotiate and are generally the first thing that we think of when we anticipate negotiating.
Figure 1: Coloring page iceberg
https://www.pinterest.com/pin/69102175512171355/
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Negotiation Issues / Issue Mix
What disputants say they want in a negotiation: a particular price, job, work schedule, change in someone else’s behavior, revised contract provision, etc.
Positions
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Negotiation Issues / Issue Mix
Underlying desires or concerns that motivate people in particular situations (May sometimes be the same as their positions!)
Interests
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Prioritizing Issues /Issue Mix
Identify issues
Address interests
Prioritize
| Issue | Your priority | Seller’s priority |
| Price of property | 1st | 1st |
| Furniture included | 3rd | 3rd |
| Inspection | 2nd | 4th |
| Closing Date | 4th | 2nd |
MGMT 566 Negotiation in the Workplace
Module 2c Target Point / Aspiration Point
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Target / Aspiration Point
A negotiator needs to determine what would constitute an ideal outcome.
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Mistake #1:Underaspiring Negotiator
I will take $70
How much should I offer? $80?
Deal! Take it!
$80!
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Mistake #2: Overaspiring Negotiator
$10,000,000!
$48,000!
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Mistake #3: Grass-is-Greener Negotiator
I propose A
…
Then how about I propose B?
I propose C
…
…
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MGMT 566 Negotiation in the Workplace
Module 2d BATNA, and Reservation Point
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BATNA
What is my alternative to reaching agreement in this situation (BATNA)?
Best Alternative To a Negotiated Agreement
BATNA is determined by objective reality
BATNA is time sensitive
Do not let the other party manipulate your BATNA
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A quantification of a negotiator’s BATNA
When three types of information – market price, reservation price, and aspiration – were made available to negotiators, only reservation prices drove final outcomes.
Reservation Point
Scenario 1
You are going to negotiate a job offer with Firm A. You already have one offer from Firm B in hand. Salary is the only thing you care about.
| Issue | Firm A | Firm B |
| Salary | ? | $120, 000 |
BATNA: Offer from Firm B
Reservation Point: 120, 000
Scenario 2
You are going to negotiate a job offer with Firm A. You already have offers from Firm B, C, & D in hand. Salary is the only thing you care about.
| Issue | Firm A | Firm B | Firm C | Firm D |
| Salary | ? | $120, 000 | $100,000 | $150,000 |
BATNA: Offer from Firm D
Reservation Point: 150, 000
Scenario 3
You are going to negotiate a job offer with Firm A. You already have offers from Firm B, C, & D in hand. Multiple issues are of your concern.
| Issue | Firm A | Firm B | Firm C | Firm D |
| Salary | ? | $120, 000 | $100,000 | $150,000 |
| Benefits | ? | $60,000 | $30,000 | $10,000 |
| Location | NYC | Miami | D.C. | LA |
Scenario 4
You are going to negotiate a job offer with Firm A. You already have offers from Firm B, C, & D in hand. Multiple issues are of your concern.
| Issue | Firm A | Firm B | Firm C | Firm D |
| Salary | ? | $120, 000 | $100,000 | $150,000 |
| Benefits | ? | $60,000 | $30,000 | $10,000 |
| Location | $30,000 | $10,000 | $20,000 | 0 |
| Total Value | ? | 190,000 | 150,000 | 160,000 |
BATNA: Offer from Firm B
Reservation Point: 190, 000
Scenario 5
You are going to negotiate a job offer with Firm A. You have no other offer in hand!
BATNA: NO!
Reservation point:?
| Possible offers | Probability |
| 150,000 | 10% |
| 120,000 | 20% |
| 100,000 | 30% |
| 80,000 | 40% |
| Expected Value | 101,000 |
