1. Bargaining: describes the competitive, win-lose situations Negotiation: refers to win-win situations such as those that occur when parties try to find a mutually acceptable solution to a complex conflict Preparations Elements of Preparation -Information gathering -Analysis -Plannings Downsides of preparation -Resource limit -Informational limit -Cognitive limits -Mistaken assumptions -Selective Perception Reason for Negotiatiations- -To agree on how to share or divide a limited resource -To create something new that neither party could attain on his or her own -To resolve a problem or dispute between the parties Successful negotiation involves: -Management of tangibles (e.g., the price or the terms of agreement) -Resolution of intangibles (the underlying psychological motivations) such as winning, losing, saving face Flow of Negotiations: Stages and Phases -Beginning phase (initiation) -Middle phase (problem solving) -Ending phase (resolution) Possitive Bargaining Zone - The Common Price range between the reservation points of both buyer and seller. Bargaining Surplus - The gap between the reservation points of both buyer and seller. Basic Rules of Negotiation - -Remain Focussed -Know the other party -Be reasonable -Use your words carefully -Compliment -Sense of Humor -Use creativity Strategy and Tactics of Distributive Bargaining Bargaining Situations -Goals of one party are in fundamental,direct conflict to another party -Resources are fixed and limited -Maximizing ones own share of resources is the goal Preparationset a -Target point, aspiration point -Walkaway, resistance point 2. -Asking price, initial offer Fundamental Strategies -Push for settlement near opponents resistance point -Get the other party to change their resistance point -If settlement range is negative, either: Get the other side to change their resistance point Modify your own resistance point -Convince the other party that the settlement is the best possible alternative -Discovering the other partys resistance point * -Influencing the other partys resistance point* Assessing the other partys resistance point *- -Indirect Assessment find information used by the opponent to determine (unions fund position, manufacturers inventory position, property on sale for the duration etc) -Direct Assessment Opponent reveals so that it is not considered as a bargaining ploy (show wallet). Provoking the other party into an angry outburst hoping slip of tongue. Influencing the other partys resistance point*- -Highlight the cost of delay -Show little interest in the thing your opponent perceives valuable -Highlight the value of the thing that you offer Tactical Tasks of Negotiators -Assess outcome values and the costs of termination for the other party -Manage the other partys impressions -Modify the other partys perceptions -Manipulate the actual costs of delay or termination Tactics for distributive negotiations -Do not disclose any significant information about your circumstances. -Learn as much as possible about the other side -Establish an anchor -Divert the discussion away from unacceptable anchors -Make cautious concessionary moves -Use time as a negotiation tool -Offer multiple proposals, and consider packaging options -Signal your interest in closing the deal Strategy And Tactics of Integrative Negotiation -Inquire about the other side's interests -Provide significant information about your circumstances -Look for differences to create value -Take your time What Makes Integrative#Negotiation Different? -Focus on commonalties rather than differences -Address needs and interests, not positions * -Commit to meeting the needs of all involved parties -Exchange information and ideas -Invent options for mutual gain -Use objective criteria for standards of performance Key Steps in the Integrative Negotiation Process 3. -Identify and define the problem -Understand the problem fully identify interests and needs on both sides -Generate alternative solutions -Evaluate and select among alternatives Factors That Facilitate Successful Integrative Negotiation -Some common objective or goal -Faith in ones own problem-solving ability -A belief in the validity of ones own position and the others perspective -The motivation and commitment to work together -Trust -Clear and accurate communication -An understanding of the dynamics of integrative negotiation Why Integrative Negotiation #Is Difficult to Achieve -The history of the relationship between the parties -The belief that an issue can only be resolved distributive -The mixed-motive nature of most negotiating situations Major aspects for consideration (Cross Culture)- Greetings Degree of formality Gift giving Touching Eye contact Emotions Silence Eating Body language Punctuality Power Moves -Strengthening your BATNA -Weakening other partys BATNA -Changing the other partys perception of your BATNA -Changing the other partys perception of their own BATNA -Using credible threats -Engaging in a war of attrition -Using brinkmanship