Successful Negotiations

How to assess your negotiation style

Plan for negotiation

Should I negotiate?
  • How do you feel about negotiating in this specific situation?
  • What are the risks? (downside)
  • Is reward after successful negotiation worth it? (upside)

Types Of Negotiations

Position or interest based?
  • Traditional negotiation has been positional.
  • Positional - what do you want?
  • Interest based - Why do you want something?
Distributive/Positional Integrative/Interest Based
divide the pie integrate interests to find common ground
competitive cooperative
win/lose win/win
zero sum non zero sum
adverserial problem solving
claiming value creating value

Most negotiations start off as positional, but always looks for common interests to build larger pie. And it is an iterative process - positional to interest based to positional.

Dispute resolution or deal making?
Deal Making Dispute Resolution
Forward looking Backward looking
Interest based Positional
Problem solving Adverserial
Dispute resolution processes
  • Power
  • Litigation
  • Arbitration
  • Mediation
  • Negotiation
  • Avoidance
  • Alternative Dispute Resolution - Arbitration, Mediation, Negotiation
  • Third Party Processes - Litigation, Arbitration, Mediation
  • Power/Rights/Interests - Power/Litigation and Arbitration/Mediation and Negotiation

How Should I Analyse Negotiation

What Questions Should I Ask To Complete Analysis?
  • What are your overall goals?
  • What issues are most important to you? And Why?
  • What is your best altenative to negotiated agreement (BATNA)?
    • What do you do if deal falls apart?
    • This is your leverage, if you have a decent BATNA.
  • What is your reservation price? - lowest price.
  • What is your most likely price?
  • What is your stretch goal?
    • Should not be more than the reservation price of the other party

Zone Of Potential Aggrement(ZOPA) - The difference between reservation price of the parties.

Best Alternative To A Negotiated Aggrement For Dispute Resolution
  • Litigation or Arbitration
  • Understand the elements of legal process and how it works in countries involved.
  • Use decison tree analysis to calculate cost of potential risk and value of the deal/dispute adjusted to reflect those risks.

Decision Tree Analysis Sample

Cross Cultural Negotiation

  • Negotiation style and values and beliefs can be different.
  • Try to be sensitive to the culture but dont sterotype.
  • Gap analysis of difference between your and their negotiation styles.
  • Adopt local styles as long as you are knowledgable about it.
  • Be aware of important taboos or gotchas of other cultures and avoid them.

Ethical Issues And Standards

  • Two clusterss - legal and ethical.
  • Law based ethical standards - intersection of legal and ethical
    • Fraud
    • Fiduciary duty
    • Unconscionability
  • General ethical standards
    • Organizational standards
    • Mentor - will my mentor do this?
    • Gut test.
    • Newspaper test - how would you feel if it appeared on front page in local Newspaper?
    • Family test
    • Golden Rule - treat others the way you will treat others.

Agents In Negotiations

Should you hire an agent?
  • Is the agent better negotiator?
  • Does the agent have specific experience in the issue?
  • Does the issue require technical knowledge of the agent?
  • How much time I do need to invest in negotiation?
  • What is my relationship to the other side?
Negotiating with an agent
  • First question - does the agent have authority to close?
  • Types of authority
    • Express
    • Implied
    • Apparent