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NEGOTIATIONSANDCONFLICTMANAGEMENTXUELIWANGSCHOOLOFECONOMICSANDMANAGEMENTTSINGHUAUNIVERSITYNegotiationNegotiation:aninterpersonaldecision-makingprocessbywhichtwoormorepeopleagreehowtoallocatescarceresources.WhyoccurtocreatesomethingnewthatneitherpartycoulddoonhisorherowntoresolveaproblemordisputebetweenthepartiesManagerisnegotiatorDynamicnatureofbusinessInterdependenceCompetitionInformationageDiversityCharacteristicsofnegotiationTwoormorepartiesconflictofinterestbetweentwoormorepartiesvoluntaryprocessandastrategypursuedbychoicenofixedorestablishedsetofrulesorprefertoinventtheirowngiveandtakebothintangiblesandtangiblesareconcernedNatureofNegotiation---InterdependenceMutualdependency(goal)andmutualadjustment(process)ActualstructureofinterdependenceVs.perceivedinterdependenceDilemmainnegotiationdilemmaofhonestydilemmaoftrustBuildingtrust(effortsontheperceptionoftheoutcomeandeffortsontheprocess)ThemajorsinsofnegotiationLeavingmoneyonthetableSettlingfortoolittleWalkingawayfromthetableSettlingfortermsthatareworsethanyouralternativeMythsaboutnegotiatorsGoodnegotiatorsarebornExperienceisagreatteacherGoodnegotiatorstakerisksGoodnegotiatorsrelyonintuitionSometermsusedinN&CBATNA:(BestAlternativetoaNegotiatedAgreement)determinesthepointatwhichanegotiatorispreparedtowalkawayfromthenegotiationtableoryourfallbackposition.PositionVsInterest:apositioniswhatyousayyouwantormusthave.Whileaninterestiswhyyouwantwhatyouwant.Positionalbargainingisusuallydistributive------andmaybeinefficientinthesensethatvaluemaybeleftonthetableatthetimeofsettlementbecauseeachpartydidnotknowwhattheotherreallywanted---butitmayhelponepartygainmoreshort-termprofit.Interest-basedbargainingaddsintegrativepotential.SometermsusedinN&CReservationpoint:thepointatwhichtheBATNAbecomespreferabletostartingorcontinuinganegotiation.Targetpoint:yourobjectiveAskingofferandcounteroffer:thestartofthenegotiationBargainingRange:thedistancebetweenthereservationpointsoftheparties.PreparationworksheetfornegotiationSelf-assessmentAssessmentoftheotherpartyAssessmentofthesituationDetailsinthehandoutworksheetHowtoevaluatethenegotiationRelationshipbuildingConstructivecommunicationInterestsatisfied(includingtheotherpartyandthethirdparty)SolutionsReasonableBANTA(benchmark)COMMITMENT(understandingandfeasible)DistributiveBargainingWhenanegotiatorwantstomaximizethevalueobtainedinasingledealandwhentherelationshipwiththeotherpartyisnotimportant.Targetpointandresistancepoint;askingpriceandinitialoffer;alternativeoutcomeTwotasksindistributivebargainingDiscovertheotherparty’sresistancepointinfluencingtheotherparty’sresistancepointwillvarydirectlywithhisestimateofyourcostofdelayorabortingnegotiationswillvaryinverselywithhiscostofdelayorabortingwillvarydirectlywiththevaluetheotherpartyattachestothatoutcomewillvaryinverselywiththeperceivedvaluethefirstpartyattachestoanoutcomeTacticaltasksToassesstheotherparty’soutcomevaluesandthecostsofterminatingnegotiationtomanagetheotherparty’simpressionofthenegotiator’soutcomevaluestomodifytheotherparty’sperceptionofhisownoutcomevaluestomanipulatetheactualcostsofdelayingorabortingnegotiationsplandisruptiveactionalliancewithoutsidersschedulemanipulationPositionsduringnegotiationOpeningofferopeningstanceinitialconcessionsroleofconcessionspatternofconcessionmakingfinalofferCommitmentEstablishingacommitmentpublicpronouncementlinkwithanoutsideallyincreasetheprominenceofdemandsreinforcethethreatorpromiseCommitmentAbandonacommitmenttoindicatetheconditionsunderwhichitappliedhavechangedtoletthematterdiesilentlytorestatethecommitmentinmoregeneraltermstominimizeanypossibledamagetohisself-esteemortoconstituentrelationshipsClosingthedealProvidealternativesassumetheclosesplitthedifferenceexplodingofferssweetenersPie-slicingstrategiesKnowyourBATNAResearchtheotherparty’sBATNAsethighaspirationsmakethefirstoffercounterofferimmediatelyavoidstatingrangesmakebilateralconcessionsuseanobjective-appearingrationaletosupportyouroffersappealtonormsoffairnessdonotfallforthe“evensplit”ployTacticstouseindistributivebargainingDelaySilenceandBracketingLimitedAuthorityThebottomlineNoNibblingExpectationandcontrolAuctionConcessionsRationaleMessage-sendingDeadlinesHardballtacticsGoodguy/badguyhighball/lowballbogeythenibblechickenintimidationaggressivebehaviorsnowjobHowtodealwithhardballIgnorethemDiscussthemRespondinkindCo-opttheotherparty