Negotiation & Conflict Resolution Midterm – Flashcards

an interpersonal decision-making process necessary when we can't achieve our objectives single-handedly; when we need to get something done & can't do it alone

points of interaction with others

More points of ________ open more conflict opportunities.

-leaving money on the table (lose-lose) -settling for too little (winners curse) -waling away from table -settling for terms that are worse than the alternative

-it is a source of power -it is alive -it is always in flux -constantly work to improve it

BATNA

1. The 11th hour and negotiations are at a standstill: Reveal at the last minute on the chance the other party might meet it or beat it 2. Your BATNA is phenomenal and you'd be happy to have the other party meet it or trivially improve upon it

- WE are the ones who should make first offers. - First offers are so important because it allows you to establish the anchor - There is a HIGH correlation between the anchor and the final price

If you know the other person's ________ ______ you can offer them a slightly better offer and get an agreement very favorable to you. (unless there is no overlapping in your bargaining zone)

Don't ask other party's ______ if you aren't welling to share yours.

If you share your ____ ask other party to share yours.

What are the likely results if you reveal your reservation point?

What are the likely results if you don't reveal your reservation point?

- spread between the resistance points - area of overlap between parties' Reservation Prices - Zone of Possible Agreement (ZOPA)

ZOPA aka bargaining zone

What is the effect of a narrow (v. wide) Bargaining Zone?

no overlap in reservation points meas...

for seller-lowest willing price to sell; for buyer-highest willing price to buy aka resistance point, reservation price, bottom line

- optimal goal -aspiration point - keeps you motivated to continue negotiating & trying to improve your outcome (even after you an offer better than your reservation point)

- keeps you motivated to continue negotiating & trying to improve your outcome (even after you an offer better than your reservation point)

Focus on the ____ ____, not the bottom line.

Your _____ is far more important in value-claiming.

higher aspiration = _____ _____ __ ______

Where should you open a Distributive negotiation?

First offer review: should I open first?

Make it your goal to open first unless you have bad ________ about other party.

If/then threats

Is there any alternative but to threaten the other party when at the point of impasse?

When to make threats in negotiation?

What if you use threats or make false verbal commitments?

Does it matter if negotiation process was cooperative or antagonistic?

Can you claim more from the other party if you are tough and offensive?

Payback Phenomenon

-perceived incompatible goals -goals in fundamental and direct conflict -resources fixed, limited -both parties want to maximize their share of the pie (value of current deal) -reach settlement within bargaining range -focus on power/rights negotiations -focused on differences -emphasis on tangibles -mistrust, suspicion, defensiveness and perceived weakness •Fixed pie •Predictable Outcomes •Claiming value

-the negotiator's preferred price (aspiration) -point where negotiator would like to conclude negotiations -influence negotiator outcomes & satisfaction with outcomes

-price beyond the negotiator will go, the bottom line -should be kept secret -most buyer will pay -smallest amount seller with settle for

the initial price set by the seller

-the first number interested buyer will quote to seller -play important role in influencing negotiation outcomes

Both parties to a negotiation should establish their _______, _______, and ______ points before beginning a negotiation.

often in the opening statements each party makers; seller's asking price, buyer's initial offer

when buyer's resistance point is above the seller's

when seller's resistance point is above the buyer's

-give negotiators the power to walk away when the emerging deal is not good -continue to improve during negotiation

Having many attractive, realistic _______ mean negotiator has more __________ power and can set goals higher and make fewer ________.

BATNA

total package of issues for negotiation ex: price, date of sale, renovations

Distributive Bargaining Strategies:

2 tasks important in all distributive bargaining situations:

Tactics for Distributive Bargaining:

Integrative bargaining

Only 1 issue and it was a compatible interest.

Debunking 6 myths

•Most actual negotiations are a combination of both integrative and distributive negotiation. •Recognize situations that require more of one approach than the other •Be comfortable with both strategies. •We tend to see problems as more distributive/ competitive than they really are

• Win-Win negotiation • All creative opportunities are exploited • no resources are left on the table • Pertains to how the pie is enlarged (not divided)

•Create a free flow of information •Attempt to understand the other negotiator's real needs and objectives •Emphasize the commonalties between the parties and minimize the differences •Search for solutions that meet the goals and objectives of both sides

What win-win does NOT mean

Why integrative solutions are so desirable?

Producing wise agreements

Why negotiators are inefficient

• A Stance • statement that doesn't define a concern or interest •Doesn't explain the "why", no rationale given, no reasoning is provided

• Produces Unwise Agreements • Is Inefficient • Endangers an ongoing relationship •Multi-Party Negotiations • Even Worse

Getting stuck in positions: • increases the time and costs of reaching agreement •Increases the risk that no agreement will be reached at all." (Getting to Yes pg. 6)

Advantages: •emphasizes the importance of building and maintaining a relationship •can be efficient •agreement highly likely •Makes many concessions in order to agree • can end up feeling unhappy, dissatisfied, unfulfilled, misunderstood •But will it be a wise agreement? Possibly not!

•If primarily concerned with relationship, agreement could end up sloppy without our interests protected •Makes us vulnerable to someone who plays a hard game of positional bargaining

•Sees any situation as a conflict of wills •Wants to win •Produces Hard Responses •Harms Relationships •Can leave both parties exhausted and worn out

Soft or hard negotiation?

Goals of principled/ integrative negotiations

Principled Negotiation Method

Two levels of negotiation:

• underlying reasons for position • explain "why" • they define the problem

Goal to figure out each sides:

The problem lies not in conflicting positions, but in conflicting underlying _______.

Most powerful interests

To understand your underlying ______, ask yourself what fundamental need is motivating you to seek a particular result; ask why?

Find Compatible Interests Steps:

How to build trust?

what is said and how it is said (first few minutes most critical)

Be specific...

Support your requests with a _______ reason.

Focus on the future ______ result rather than having big reactions.

One of Three Possible Outcomes when you advocate for your interests (but be flexible):

Your interests are your own responsibility:

To _____ the pie you must first determine the other side's interests.

How do we identify their interests?

Revealing interests pays off:

rewinding & repeating what was said ex •"Correct me if I'm wrong...." •"Tell me if I am hearing correctly..." •If I understand what you are saying...." •"I want to make sure I am understanding you...when you say---do you mean?"

How to listen actively...

How to validate their interests...

When making a request, your request should...

How to disassociate the people from the problem:

One breakthrough strategy:

Benefits of trying in their shoes:

Be an investigator by:

Our goal:

4 Strategies for making concessions:

Categories of people problems:

____ problems begin with our inability to see as others see

•We must separate the people from the problem. •"Their thinking is the problem"

One's opinion, point of view, or understanding of a situation - not necessarily fact.

perception qualities:

barriers to communication

any barrier to the flow of communication that occurs in the environment around the discussion ex •Loud Machinery •Babies Crying •Other people talking •Other people interrupting •Annoying tapping or rapping •Barking Dogs •Ringing

Interruptions to the flow of communication that occur inside of a person (in their thought, emotional, or physical processes) ex: •Unavailability •Power •Fear •Lack of Knowledge

Attention Signed Elsewhere

Unavailability Types:

Types of noise:

Types of Power based noise:

when party asserts his own or someone else's credentials, affiliations or abilities in order to gain recognition for his own perspective.

when party expresses a commitment, in any small or large scale, to righting what they perceive is wrong. Commitment to action or even just faith creates a noise factor that will impede the productive flow of communication.

Types of Fear Based Noise:

when a party is worried about changes in established procedures, modes of thinking and/or acting, or basically, anything that threatens to disturb their comfort zone "we've never done things this way"

When a party is concerned he will not be accepted by: -a group of fellows outside of the negotiation if he is able to communicate with the other party -the other party if the party's position is honestly expressed

when the party is absorbed in self-pity; when one feels persecuted because he believes that being called to a meeting he has done something wrong "you wouldn't understand me"

Types of Blame:

Assigning blame for the party's own behavior or circumstances directly to the other party in the conflict, or on their words and/or actions "This never would have happened if you hadn't..."

Assigning blame for the party's own behavior or circumstances to anyone or anything besides the other party in the conflict or their words or actions "I was just doing what I was told..."

Types of Lack of Knowledge Based Noise:

•party is overwhelmed with too much information too fast •too technical or intellectual for their full comprehension •it makes no sense

Types of assumptions:

•A belief about a person (especially the other party) or an outcome not based on reality -revealed in the NOW communication exchange •Belief that people are able to read each other's minds, especially their negative thoughts. •Belief that one can foretell the future, especially negative outcomes •Why wait to see what would happen in reality?

Examples of Negative Prediction:

Lack of Knowledge Based Noise Assumption: •misunderstood due to the lack of immediate research of the receiver. •words hold many meanings •Mistaken belief that people can accurately read minds without confirming up truth

Examples of Misinterpretation:

Reasons common words and phrasing may be misunderstood:

Lack of Knowledge Based Noise Assumption: •When misinterpretation (unresearched information) is taken as fact and is passed on to others who have not bothered to research.

Lack of Knowledge Based Noise Assumption: •When a party thinks or acts on partial information. They in essence jump the gun. Impatience is usually at the root of this category.

Prevention when we're the problem steps:

How do you "go to the balcony":

Disentangle their intentions from:

3 big problems in communication:

A.C.E.

Acknowledge what has been said:

Ask Clarifying Questions:

Explore options for moving forward from the situation or disagreement:

Toolkit for expanding the pie:

Tool 1: Cultivate an Abundance Mentality

Abundance Mentality solutions:

Mental trap where: negotiators enter negotiations expecting the other party's interests to be completely opposed to their own

Mental trap where: -people construct elaborate mental rationales for considering themselves materially deprived; causes their life to be unhappy -"it's never enough.."

Mental trap where: prosperity of the United States can't be enjoyed because the Western lifestyle may crash bc economic breakdown, environmental damage, resource exhaustion, terrorism, population growth, or other calamity

Provide information and ask diagnostic questions "A good negotiator will have thought in advance about information she does not want to disclose, and will have decided how to deal with requests for that information. It is the unprepared negotiator who often discloses inadvertently or lies because, on the spot, he can think of no other way to avoid disclosing sensitive information." - Bruce Patton, co-author of Getting to Yes Provide Information and Ask Diagnostic Questions •Share information about your interests and concerns. •Ask about their interests and concerns •Key Question: Where are our shared concerns? *See deal relationship cycle in notes*

Unbundle, Add Issues, and Repackage BUYING A NEW CAR EXAMPLE •Buying a car •Financing - Air Bag Levels •Extras - Color •Warranty - Delivery Date •Audio - Price •Career negotiations usually resolve around a single issue: SALARY. Unbundle the issues! •What other issues could be added to a salary negotiation that create value for both parties? Unbundle, Add Issues, and Repackage Another Helpful Tip: Make multiple offers simultaneously whenever possible. THINK: "Here are 3 'yes-able' propositions..."

Identify Value Creating Trade-offs •The search for trade-offs helps you avoid compromise. •Trade-offs occur when you exchange your lower priority issues for your higher priority issues. •Key Diagnostic Question: "Where do our interests differ?" Resources Do you and the other side have different assets that you could trade? Examples: Exchange lawn mowing for lower rent Exchange higher home price for a new roof Relative Valuations Are there things that are valuable to you but less valuable to the other side, and vice versa? Examples: Trade 10% Financing for 30 Month Warranty Trade a better title for a windowless office Time Preferences Do you have different needs concerning when things happen or don't happen? Are there differences in short-term versus long-term interests? Examples: Buyer cares more about the present. Seller cares more about the future. Installment Plan: Buy item now, pay more in the future! Forecasts Do you have different predictions about some future event that you could bet on? Examples: Unproven author and publishers Exchange lower advance for larger royalties

Structure Provisional Contracts •"All or Nothing" thinking demands that all contracts be permanent, comprehensive, and final. •Break this mental roadblock by creating agreements that are "provisional", "partial", or "experimental." •Sounds like: "Let's try this for one month/one quarter/one year just to see if it works...." Structure Contingent Contracts Trading "Forecasts" is really building a contingent contract. Structure Contingent Contracts 1997 Contract •$4.5M guaranteed, $10.5M possible •$1M for making all playoff games •$500,000 for winning rebound title •$185,000 for each game played after 59th game in the season •$100,000 for positive assist-to-turnover ratio Structure Contingent Contracts Contingent Contracts Allow You To: 1.Move forward in spite of speculative disagreements about the future. 2.Makes "Can we trust Dennis?" a non-issue. 3.Share risk among all parties involved (and risk sharing motivates risk taking). 4.Motivates performance by "building success into the agreement."

Search for Post Settlement Settlements At the end ask: "Is there any way you see that you can be better off without me being worse off?" Or more simply: "Is there a better agreement for both sides?

•Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do *•Insist on Using Objective Criteria* • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc. Use objective standards both as a sword to persuade others and as a shield to help you resist pressure to give in arbitrarily. 1."I am asking for no more or no less than you are paying others for comparable work." 2."I would like to give you a discount, but the price is firm. It's what ABC Co. paid for the same item last week; here is the bill of sale."

1) Is it independent of each party's will? 2) Does it apply equally to both parties (the test of reciprocal application)? 3) Is it supported by a legitimate theory?

•Market Value •Precedent •Scientific Judgment •Professional Standards •Efficiency •Costs •What a Court Would Decide •Moral Standards •Equal Treatment •Tradition •Reciprocity •Etc.

1.Frame each issue as a joint search for objective criteria. 2.Reason and be open to reason. 3.Never yield to pressure—refocus their pressure toward finding a solution using an objective criteria

•"How did you arrive at that number?" •"What standard do you think we should use to determine the price?" •"Do you want more than is fair?"

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"Pressure can take many forms: a bribe, a threat, a manipulative appeal to trust, or a simple refusal to budge. In all these cases, the principled response is the same: invite them to state their reasoning, suggest objective criteria you think apply, and refuse to budge except on this basis. Never yield to pressure, only to principle." (p. 91)

•Drawing Straws/Flipping Coin •Taking turns •Auction •Third-party expert •Arbitration •Rock, Paper, Scissors

•Preparation •In vivo process - during the process •Post offer

•Do not immediately accept the offer •"This looks great. I need to go over everything one last time before we make this official. I will get back with you at [a specific time]." •Get a copy of the offer in writing •"Can I have a copy of it?" • or - write down your understanding of the terms •Be enthusiastic and gracious •Remember: It's not over til it's over....

•Issues negotiated •Focal project, duties •Laptop, software, cell phone •Vacation time •Job location •Earlier start date •$4000 in relocation reimbursement •Equity in business Insisting on Using Objective Criteria & Job Negotiations Insist on Using an Objective Standard Loading... "Getting to Yes" Overview THE METHOD: Principled Negotiation •Separate People from the Problem •Focus on Interests, Not Positions •Invent Options for Mutual Gain • Generate a variety of possibilities before deciding what to do •Insist on Using Objective Criteria • Insist that the result be based on some objective criteria. (Not because you say so, but because of an expert opinion, custom, law, market value, etc. Use objective standards both as a sword to persuade others and as a shield to help you resist pressure to give in arbitrarily. 1."I am asking for no more or no less than you are paying others for comparable work." 2."I would like to give you a discount, but the price is firm. It's what ABC Co. paid for the same item last week; here is the bill of sale." Loading... How do you know it's objective? 1) Is it independent of each party's will? 2) Does it apply equally to both parties (the test of reciprocal application)? 3) Is it supported by a legitimate theory? Objective Criteria •Market Value •Precedent •Scientific Judgment •Professional Standards •Efficiency •Costs •What a Court Would Decide •Moral Standards •Equal Treatment •Tradition •Reciprocity •Etc. Something independent of each side's will! How Do I Insist on Using Objective Criteria? 1.Frame each issue as a joint search for objective criteria. 2.Reason and be open to reason. 3.Never yield to pressure—refocus their pressure toward finding a solution using an objective criteria •"How did you arrive at that number?" •"What standard do you think we should use to determine the price?" •"Do you want more than is fair?" What Does it Sound Like? Reason and be open to reason. Reason is your friend •Almost everybody wants to appear reasonable. •Humility is the key virtue •Consider that you might be wrong and show you're open to persuasion •"I have not yet reached a final decision and I'm open to persuasion." •"Why don't we study the matter and talk again?" •"Would you agree that ____ is reasonable?" What does it sound like? Loading... Never yield to pressure. "Pressure can take many forms: a bribe, a threat, a manipulative appeal to trust, or a simple refusal to budge. In all these cases, the principled response is the same: invite them to state their reasoning, suggest objective criteria you think apply, and refuse to budge except on this basis. Never yield to pressure, only to principle." (p. 91) Objective Procedures •Drawing Straws/Flipping Coin •Taking turns •Auction •Third-party expert •Arbitration •Rock, Paper, Scissors Objective Standards Activity Negotiating a Job Offer •Preparation •In vivo process - during the process •Post offer •http://www.ehow.co.uk/video_2279846_expect-job-interview-salary-negotiation.html Job Negotiation •http://www.ehow.co.uk/video_4983812_justify-new-job-salary.html Seeking a salary increase Once you have an offer •Do not immediately accept the offer •"This looks great. I need to go over everything one last time before we make this official. I will get back with you at [a specific time]." •Get a copy of the offer in writing •"Can I have a copy of it?" • or - write down your understanding of the terms •Be enthusiastic and gracious •Remember: It's not over til it's over.... Alumni Survey Results •Issues negotiated •Focal project, duties •Laptop, software, cell phone •Vacation time •Job location •Earlier start date •$4000 in relocation reimbursement •Equity in business •Their advice •"Don't be afraid to ask" •"You have to ask! They won't bring up expenses/negotiable issues" •"It shows initiative to negotiate for something" •"Be sure you are ready to explain WHY you feel you deserve the salary you ask for" •"While it's tempting to make money your top priority, don't miss out on a great opportunity to grow yourself and your company" •"You are worth more than you realize. Businesses love Baylor"

•How do salary negotiations differ in today's economy? •2012 Survey - 38% of CFOs more willing to negotiate salary than 1 year ago •Possible suggestions •Know what you are worth and current salary ranges •Apply to wide range of jobs •Gauge whether negotiating salary is appropriate •Suggest a contingent contract based on performance •Negotiate salary at the next promotion date

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The Most any Negotiation Method can do: •Protect you against making an agreement you should reject; •Help you make the most of the assets you do have so that any agreement you reach will satisfy your interests as well as possible.

1.Physical Force = Negotiating Power 2.Start adversarial...you can always go soft later 3.Creating a false impression in the minds of others (bluffing, deceit, misrepresentation)

1.The Power of Talent 2.The Power of Relationships 3.The Power of Alternatives 4.The Power of Preparation 5.The Power of Legitimacy 6.The Power of Ideas 7.The Power of Persistence 8.Control Over Resources 9.The Power of Time 10.A Seat at the Table

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•Men who negotiate receive 4.3% higher salaries than men who do not. •Women who negotiate receive 2.7% higher salaries than women who do not. •Assume $50,000 base pay, 3-4% raise each year for 50 years...and the difference? •Negotiating men receive $1,714,779 more. •Negotiating women receive $1,040,917 more.

•Build the relationship before you negotiate (when possible). •Be polite. Show respect. •Signal "win-win" •Say "Thanks." Say "I'm sorry." •Listen and acknowledge. (Remember: A negotiation is really a series of small, incremental agreements.)

1.Build a relationship with someone in a position of power 2.Join Associations •Shared Interests - Pooling of resources and a Stronger Voice

•Students loans and consumer credit debt •Strong location preferences •Risk-averse mentality •"Get a job" rather than "create a job" •Working only where they speak English