Slide 1

Preparation for Negotiation

The Four Phases of negotiation Phase One: how to prepare

Phase Two: how to debate

Phase Three: how to propose

Phase Four: how to bargain

Slide 2

Epilogue

Slide 3

Trading potatoes…

Slide 4

Preparation…

Preparation does not eliminate surprises, nor does it cause both parties to stick to the agenda, or even the topic under discussion.

What is does is allow you to anticipate likely stances and demands, and to focus your attention on the potential for trade.

If you are thinking about the potential for trade you are thinking about the potential solution, and this alone increases your effectiveness as a negotiator

Slide 5

What do we need to do first?

Textbook example – Royale Multinational ComponentsPlant is undergoing a four year total quality

improvementSpecial and very expensive machines are used to

produce computer chipsUptime – time available for production has fallen

below 70 %, while 80-90 % was expectedJack Duval has asked the manufacturer to visit the

plant and discuss how they can ensure a permanent improvement in the uptime performance

Slide 6

Exercise

Slide 7

Answers

“In God we trust; all others must use data”

“It does not really matter what it is that you are planning to negotiate about, if you do not have data you cannot do much but hope for the best

“Without data we are negotiating about impressions, feelings and assumptions, non of which provide a firm basis for effective decision making

Slide 8

Uptime rates for five machines

Slide 9

What are we negotiating about?

Kennedy writes:The negotiators are guided by their wants

by identifying their interests and from these interests selecting the issues that will achieve those interests, and for all issues they would need to decide their positions, or preferably a range of positions that they would like to achieve

Slide 10

Royale Multinational Components

Interest arise from the data – the profitability of chip making is enhanced significantly when high uptime rates are achieved (their interest)

Royale wants to increase uptime (the issue)

The degree to which they want to increase the uptime is their position

Slide 11

Interests and wants

Interests are found by asking “why” you want something to happen Why do I want this problem solved?

Why do I want the problem solved in this or that particular way?

Why is it necessary to adopt this or that position?

Fear, hopes and concerns

Slide 12

Examples of interests

Raising living standard

Becoming more profitable

Reduce crime in order to feel safer

Satisfying your customers

Slide 13

Interests and wants

Next question – what issues and positions will deliver our interests?Issues and positions – anything over which

you can trade. Anything a negotiator can trade is a tradable

Tradables unlocks deadlocks

Tradeables have different values for each negotiator

Slide 14

Mustafa wants to buy a PC

Slide 15

Tradables for Mustafa

Slide 16

Royale Multinational Components

Suppose that the Royale project team concludes that the following elements would satisfy their wantsAn agreed minimum acceptable uptime of the

machines greater than the current average performance

Some form of self financing incentive scheme for the manufacturer if these minimum uptime rates were achieved

Some range of stiff penalties on the manufacturer if he fails to reach or sustain the minimum acceptable uptimes

Slide 17

Negotiable tradables

Slide 18

What is most important

After the tradables have been identified we must decide on their priorities – not everything contributes to the overall objective to the same extent

People have different wants and hence trade is possible

Each tradable is assigned as being ofHigh, Medium or Low importance

Slide 19

Tradables prioritised

Slide 20

Tradables prioritised

Slide 21

What does the manufacturer want?

Slide 22

Is there a basis for trade?

Slide 23

Comparative valuations

Both place high value on uptime and medium on time of acceptable uptime

Not everything is equally prioritised

Slide 24

Can we trade?

Slide 25

Negotiable Ranges