MBA G506 Negotiation Skills & Techniques Outline Ew 4 Intodution 2. Advantages of making fst offer 3. Disadvantages of making fst offer When youshould make the ist offer? 5. Where to star? How to make the fist offer . Traps involved in defning reasonable offer Few tps on fist offer 2. Advantages of Making the First Offer Ee + Setexpectations + Ht genuine reaction How to determine that your counterpart’ reaction i genuine? ~ Research your counterpart’ reputation ¥ Get more information ¥ Go with your hunches 3, Disadvantages of Making the First Offer + Lackof information to appropritely set it + other sides gains important information + Bracketing Bracketing is. strategy n which one party esponds to afr offer by selecting an inital counteroffer such that thelr desired goal ‘ends up alway between the partis’ offers. . When You Should Make the First Offer? a | ‘Involves sophisticated partes with substantial {cee to nformation ‘+ Wmere you have mere information, defined standards, and strong leverage, Second Semester 2016-2017MBA G506 5. Where to Start? + Industry or context + Goal + Standard + The “room to move" Negotiation Skills & Techniques 6. How to Make the First Offer’ a Decide whether to go fr: + Aaaressve& pitch high (Generous) + Low pitch (Less Generous) + Crete Far & Reasonable) Tips for Opening * Don't open high where you have 8 weak BATNA and other side knows it + Don'thighball where the other part hates haggling. + Don'tbe afraid to open high 7. Traps Involved in Defining a Credible Offer + Endowmentetfect + Framing + tis an individualized definition a a suation. + Way of showing how we mean what we say oF do and figuring out how others mean what ‘they say ordo. + How parties define & negotiating isu of problem, 7. Traps Involved in Defining a Credible Offer Frames + Mental_structures, subjective mechanism put around situations, issues or decisions in order to ‘make sense of them. + Manage the alignment of an observer in relation to issues, + tefluences subsequent judgment. + Used to developa rationale. ‘Traps Involved in Defining a Credible Offer =e Role of frames in Negotiation + determine how parties define problems & sues Influence expectations, preferences, possible outcomes rect the negotiator towards confirming evidence decide the procedures used to present his/her ease provide justification forthe other side to make concessions shape the negotiators criteria to evaluate the outcomes achieved cestablsh status quo Introduce particular anchor + emphasizes the value ofthe offer Second Semester 2016-2017MBA G506 Negotiation Skills & Techniques ‘Traps Involved in Defining a Credible Offer Ee 7. Traps involved in Defining a Credible Offer Role of frames in Negotiation knowing the Frame Framingin a negotiation consist of: Toknow your own frame, sk: + What information is included, and what ignored? + What issues does our frame highlight? + Which options are considered, andl which are “ff the radar"? * What sues does our frame downplay or enone? + What measures do we use to judge success? + Which goals reconsidered reasonable? ‘ee + Which bottom lines are considered realistic? Toknow other parties frame, ask: + What do they tak about most? + Whatissues or fats do they downplay or ignore? + What measures wil they use to judge success? + Which BATNA ar created, perceived or understood? + What op offer might be reasonable? 7. Traps involved in Defining a Credible Offer Types of frames Types Fa Substantive [leses and nature of confit ‘Outcome |Predspostion to. achieve 3 desea] rest ‘Aspiration |Predsposion to satsty broader st of needs interes, rocese Process of negotiation dasion | handing enes/confit ‘dong How eath negotiator define “who” they ‘haractriation |How each nots define “wha” tet counterparts are oergain [Risk or reward associated with each 18. Few More Tips on First Offer + open fst i you believe you have better Information than your opponent + tet the other party go first f you have serious doubts about your information + tthey open fst, beware of being overly influenced by the anchoring effet. + once you made your intial offer go silent + counteroffer quchlyif he other party opens “+ fl high, but make sure your offer is realistic and create Second Semester 2016-2017