Win-Win Negotiation Paper 3 Page (MBA Level) - Single Space. Delivery Before 11AM 3 Dec (Time Zone In Atlantic, NS (GMT-4))
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Win-WinNegotiation--ppp.pptMBA6808
Business Negotiation
&
Alternative Dispute Resolution
Win-Win Negotiation
- Cases where win-win negotiation is appropriate:
Long-term relationship
Goal compatibility
Intangible benefits
Concession
Constituency
Win-Win Negotiation
- For most people, negotiation
- A win-lose enterprise
- Taught to think that way
- Even if they think of it as win-win,
- Money left on the table
- Need to be hyper-vigilant
- To create and maximize value
What is a win-win negotiation?
- To many people, it means
- Compromise
- Even split
- Feeling good
- Building a relationship
- Wasted resources; money left on the table.
- However, win-win negotiation is
- All creative opportunities are exploited
- No resources are left on the table
Signs of Win-Win Potential
- In most negotiation, win-win potential
- How to discover?
- Is there more than a single issue?
- Can other issues be brought in?
- Can side deals be made?
- Do parties have different priorities?
A Pyramid Model of Win-Win Negotiation
- Three levels of integrative agreements
Agreement is better than no agreement
Agreements that are good for both parties
Agreements that are impossible to improve upon
- Pareto Optimality
- Only 25% reach this level
- Of this, 50% do so by chance
Pareto Optimality Condition
“The community becomes better off if one individual becomes better off and none worse off.”
A state of a given system is Pareto optimal, and thus efficient, if and only if there is no feasible alternative state of that system in which at least one person is better and no one is worse off.
A Pyramid Model
of Integrative Agreements
Level 3: Pareto-optimal
Level 2: Settlement demonstrably superior to other feasible settlements
Level 1: Mutual settlement (positive bargaining zone)
What Prevents People from Reaching this?
- Two key problems
False Conflict
Believe in incompatible interest
Lose-lose effect: failure to capitalize on compatible interest
Fixed-pie Perception
Faulty assumptions
Perception that other party’s interests are completely opposed
What to do?
- Be aware of the fixed-pie perception
- Avoid making premature concessions
- Have accurate understanding of the other party
- Realize that most negotiations are mixed-motive
Strategies That Don’t Work
- Commitment to reach a win-win agreement
- Compromise
- Adopting a cooperative Orientation
- Focusing on a long-term relationship
- Taking Extra time to negotiate
Strategies for Win-Win Negotiation
- Perspective Taking
- Different from empathy
- See the world through counterparty’s eyes
- Ask Diagnostic Questions
- Underlying interests and priorities as well as justification
- Lead to more interaction and receptivity
- Have a high epistemic motivation
- Discover where the value is (Frank McKenna case)
Frank McKenna of New Brunswick
“We had to know what was a “win” for the other party because if you don’t know what that is, you can’t meet it. When we negotiated to get call centers to come into our province, we had to know about their interests as far as location, turnover, and quality of the work force and how they prioritized each of these interests.”
The Globe and Mail, June 17, 2002
Strategies for Win-Win Negotiation
- Provide Information
- Paradox of negotiation
- The question is not whether to reveal but what to reveal
- Capitalize on reciprocity
- Time Course for unraveling information
- Avoid illusion of transparency
Strategies for Win-Win Negotiation
- Unbundle the Issues
- From single issue to multiple issue
- Make Package Deals
- Make several packages, don’t follow agenda
- Make Multiple Offers Simultaneously
- Multiple-issue package
- Equal value offers
- Dessert tray of offers
Advantages of Multiple Offers
- Anchoring
- Other party
- Persistence
- Signaling
- Concession aversion
Strategies for Win-Win Negotiation
- Structuring Contingency Contracts
- Differences in value -- logrolling
- Expectations -- a woman and her brother
- Risk attitude -- risk-seeking vs. risk-taking
- Time
- Capabilities -- can collaborate
- Pre-settlement Settlement
- Formal, initial and partial
- Search for Post-settlement Settlement
Decision-Making Model
of Integrative Negotiation
Resource Assessment
Construct Offers and Trade-Offs
Assessment of Differences
Postsettlement Settlements
not acceptable (optimistic)
not acceptable (bleak)
both agree
Current “Best” Terms
Impasse
Implement Agreement
Claiming Value
- Old-fashioned negotiator
- Taking hard, tough position
- Flower child negotiator
- Win-win negotiation
- Enlightened negotiator
- Pie-expansion as well as claiming value
