NEGOTIATIONS AND CONFLICT MANAGEMENT
XUELI WANG SCHOOL OF ECONOMICS AND MANAGEMENT TSINGHUA UNIVERSITY
Negotiation
❖ Negotiation: an interpersonal decisionmaking process by which two or more people agree how to allocate scarce resources.
❖ Position Vs Interest: a position is what you say you want or must have. While an interest is why you want what you want.Positional bargaining is usually distributive-----and may be inefficient in the sense that value may be left on the table at the time of settlement because each party did not know what the other really wanted---but it may help one party gain more short-term profit. Interestbased bargaining adds integrative potential.
plan disruptive action
alliance with outsiders
schedule manipulation
Positions during negotiation
❖ Opening offer ❖ opening stance ❖ initial concessions ❖ role of concessions ❖ pattern of concession making ❖ final offer
❖ Expectation and control
❖ Auction ❖ Concessions ❖ Rationale ❖ Message-sending ❖ Deadlines
Hardball tactics
❖ voluntary process and a strategy pursued by choice
❖ no fixed or established set of rules or prefer to invent their own
❖ give and take
❖ both intangibles and tangibles are concerned
Some terms used in N&C
❖ Reservation point:the point at which the BATNA becomes preferable to starting or continuing a negotiation.
❖ Target point: your objective ❖ Asking offer and counter offer: the start of the
❖ Dynamipendence ❖ Competition ❖ Information age ❖ Diversity
Characteristics of negotiation
❖ Two or more parties
❖ conflict of interest between two or more parties
terms to minimize any possible damage to his self-
esteem or to constituent relationships
Closing the deal
❖ Provide alternatives ❖ assume the close ❖ split the difference ❖ exploding offers ❖ sweeteners
❖ Leaving money on the table ❖ Settling for too little ❖ Walking away from the table ❖ Settling for terms that are worse than your
alternative
Myths about negotiators
negotiation ❖ Bargaining Range:the distance between the
reservation points of the parties.
Preparation worksheet for negotiation
❖ Self-assessment ❖ Assessment of the other party ❖ Assessment of the situation ❖ Details in the handout worksheet
Commitment
❖ Establishing a commitment
public pronouncement link with an outside ally increase the prominence of demands reinforce the threat or promise
❖ Dilemma in negotiation
dilemma of honesty dilemma of trust Building trust (efforts on the perception of the outcome
and efforts on the process)
The major sins of negotiation
❖ Target point and resistance point; asking price and initial offer; alternative outcome
Two tasks in distributive
bargaining
❖ Discover the other party’s resistance point ❖ influencing the other party’s resistance point
will vary directly with his estimate of your cost of delay or aborting negotiations
will vary inversely with his cost of delay or aborting
will vary directly with the value the other party attaches to that outcome
will vary inversely with the perceived value the first party attaches to an outcome
Tactical tasks
❖ To assess the other party’s outcome values and the costs of terminating negotiation
Pie-slicing strategies
❖ Know your BATNA ❖ Research the other party’s BATNA ❖ set high aspirations ❖ make the first offer ❖ counteroffer immediately ❖ avoid stating ranges ❖ make bilateral concessions ❖ use an objective-appearing rationale to support
Nature of Negotiation--Interdependence
❖ Mutual dependency(goal) and mutual adjustment(process)
❖ Actual structure of interdependence Vs. perceived interdependence
❖ Good negotiators are born ❖ Experience is a great teacher ❖ Good negotiators take risks ❖ Good negotiators rely on intuition
Some terms used in N&C
❖ BATNA: (Best Alternative to a Negotiated Agreement) determines the point at which a negotiator is prepared to walk away from the negotiation table or your fall back position.
❖ to manage the other party’s impression of the negotiator’s outcome values
❖ to modify the other party’s perception of his own outcome values
❖ to manipulate the actual costs of delaying or aborting negotiations
your offers ❖ appeal to norms of fairness ❖ do not fall for the “even split” ploy
Tactics to use in distributive bargaining