Transcript ba 322 ppt chapter 9

CHAPTER 9
9-1
Preparation:
What to Do Before
Negotiation
CHAPTER 9
9-2
Exhibit 9-1: SCO-IBM Negotiation Structure
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CHAPTER 9
9-3
Exhibit 9-2: Levels of Analysis in Multiparty Negotiation
P, principal; C, constituency group; M, group member; A, agent
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CHAPTER 9
9-4
Key Challenges of
Multiparty Negotiation
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Dealing with coalitions
Formulating trade-offs
Voting and majority rule
Communication breakdowns
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Private caucusing
Biased interpretation
Perspective-taking failures (curse of knowledge)
Indirect speech acts
Multiple audience problem
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CHAPTER 9
9-5
Key Strategies for Dealing with
Multiparty Negotiation
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Know who will be at the table
Manage information and systematize proposal making
Use brainstorming wisely
Develop and assign process roles
Stay at the table
Strive for equal participation
Allow for some points of agreement, even if only on
process
• Avoid the “equal shares” bias
• Avoid the agreement bias
• Avoid sequential bargaining
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CHAPTER 9
9-6
Coalitions
• Key challenges of coalitions
• Optimal size
• Trust and temptation
• Dividing the pie
• Strategies for maximizing coalitional effectiveness
• Make your contacts early
• Seek verbal contracts
• Use unbiased-appearing rationale to divide the pie
Instructor’s Manual with Overheads to accompany
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Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-7
Advantages to Using Agents
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Expertise
Substantive knowledge
Networks and special influence
Emotional detachment
Ratification
Face-saving
Instructor’s Manual with Overheads to accompany
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Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-8
Disadvantages to Using Agents
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Shrinking ZOPA
Incompatible incentive structure
Communication distortion
Loss of control
Agreement at any cost
Instructor’s Manual with Overheads to accompany
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Inc. publishing as Prentice Hall
CHAPTER 9
9-9
Exhibit 9-8: Bargaining Zone, Maximum Surplus,
and Agent Commission Rates for a House Sale
Commission
0% (for sale by
owner)
2%
4%
5%
6%
Seller RP* [adjusted from
$410,000/ (1 – c)]
Bargaining Zone
[Buyer RP ($440,000)
– Seller RP*]
Buyer Maximum
Surplus
Seller Maximum
Surplus
Agents’ Surplus Range
$410,000
$30,000
$30,000
$30,000
$0
$418,367
$427,083
$431,578
$436,170
$21,633
$12,917
$8,422
$3,830
$21,633
$12,917
$8,422
$3,830
$21,200
$12,400
$8,000
$3,600
$8,367–$8,800
$17,083–$17,600
$21,579–$22,000
$26,170–$26,400
Bargaining Zone
Seller RP
$410,000 $418,367
$427,083
Bargaining Zone
Buyer RP Asking Price
$431,578
$440,000
$436,170
$450,000
$30,000
actual bargaining zone = $25,000
bargaining zone with 2% commission
bargaining zone with 4% commission
bargaining zone with 5% commission
bargaining zone with
6% commission
Instructor’s Manual with Overheads to accompany
The Mind and Heart of the Negotiator 5/e (Thompson)
Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-10
Strategies for Effectively
Working with Agents
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Shop around
Know your BATNA before meeting with agent
Communicate interests without giving away your BATNA
Capitalize on the agent’s expertise
Tap into your agent’s sources of information
Discuss ratification
Use your agent to help save face
Use your agent to buffer emotions
Instructor’s Manual with Overheads to accompany
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Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-11
Constituents
• Challenges for constituent relationships
• Identification
• Accountability
• Conflicts of interest
• Strategies for improving constituent relationships
• Communicate with your constituents
• Do not expect homogeneity of constituent views
• Educate your constituents on your role and your
limitations
• Help your constituents do horizon thinking
Instructor’s Manual with Overheads to accompany
The Mind and Heart of the Negotiator 5/e (Thompson)
Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-12
Challenges That Face
Negotiating Teams
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Picking your teammates
How many on the team?
Communication on the team (information pooling)
Team cohesion
Information processing (common information bias)
Instructor’s Manual with Overheads to accompany
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CHAPTER 9
9-13
Strategies for Improving
Team Negotiations
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Goal and strategy alignment
Prepare together
Plan scheduled breaks
Assess accountability
Instructor’s Manual with Overheads to accompany
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Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-14
Exhibit 9-10: Preparing for Your Team-on-Team
Negotiation
Step 1: Individual preparation
• Identify the issues.
• Identify your BATNA.
• Determine what you believe to be your team’s “worstcase” scenario.
• Determine what you believe to be your team’s “best-case”
scenario.
• Write these scenarios down and be prepared to share
them with the members of your team.
Step 2: As a team, decide on your procedures for
running the preparation meeting
• Who is going to run the meeting (i.e., who is going to
summarize, synthesize, etc.)?
• What materials do you need to be effective (calculator,
flipcharts, computer, etc.), and who is bringing them?
• What is your timeline, and who will enforce it so that the
team arrives at the negotiation table prepared and
refreshed?
Step 3: As a team, clarify facts and information
• Develop a “Positions and Interests” chart.
• Prioritize your issues. Understand the reasons for your
priorities.
Instructor’s Manual with Overheads to accompany
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• Identify what you think the other party’s priorities are.
• Identify what information you need from the other party.
• Determine your BATNA.
• What do you know about the other party’s BATNA?
• Identify your worst-case scenario (reservation price).
• Identify your best-case scenario (target).
• As you complete the preceding tasks, make a list of
questions to research.
• Identify information that is too sensitive to reveal at any
point under any condition (get clarification and closure
within the team on this point).
• Identify information that you are willing to share with the
other team if they inquire (get clarification and closure
within the team on this point).
Step 4: Strategy
• As a team, plan your OPENING OFFER.
• Choose a lead negotiator (speaker).
• Choose a lead strategist (listener and strategic
watchdog).
• Choose an accountant to run the numbers.
• Choose a scribe to keep track of offers. Decide on a
signal to adjourn for a private caucus.
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CHAPTER 9
9-15
Challenges of Intergroup Negotiations
• Stereotyping
• Changing identities
• In-group bias and downward social
comparison
• Extremism and naïve realism
Instructor’s Manual with Overheads to accompany
The Mind and Heart of the Negotiator 5/e (Thompson)
Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-16
Strategies for Optimizing
Intergroup Negotiations
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Separate conflict of interest from symbolic conflict
Search for common identity
Avoid the out-group homogeneity bias
Mere contact strategy
GRIT model (graduated and reciprocal initiative in
tension reduction)
Instructor’s Manual with Overheads to accompany
The Mind and Heart of the Negotiator 5/e (Thompson)
Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
9-17
Exhibit 9-10: The GRIT Model
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Announce your general intentions to de-escalate tensions and your specific
intention to make an initial concession.
2.
Execute the initial concession unilaterally, completely, and, of course, publicly.
Provide as much verification as possible.
3.
Invite reciprocity from the out-group. Expect the out-group to react to these steps
with mistrust and skepticism. To overcome this, continued concessions should be
made.
4.
Match any reciprocal concessions made by the out-group and invite more.
5.
Diversify the nature of your concessions.
6.
Maintain your ability to retaliate if the out-group escalates tension. Any such
retaliation should be carefully calibrated to match the intensity of the out-group’s
transgression.
Source: Based on Barron, R. S., Kerr, N. L., & Miller, N. (1992). Group process, group decision, group action (p. 151). Pacific
Grove, CA: Brooks/Cole.
Instructor’s Manual with Overheads to accompany
The Mind and Heart of the Negotiator 5/e (Thompson)
Copyright ©2012 Pearson Education,
Inc. publishing as Prentice Hall
CHAPTER 9
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9-18