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. Other topics include the role of power and authority. Click here for procedures that can help you prepare for and launch a negotiation, handle an initial offer, and close a deal. Click here for brief reminders about setting the time, place, and tone of a negotiation. Click here for worksheets that can help you prepare for a negotiation—including assessing your and the other side’s positions and interests. Click here to test your knowledge of negotiating. Click here for recommended resources that can help you fine-tune your knowledge of negotiating. Summary This topic contains relevant information on how to
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understand the basic types of negotiation and the key concepts underlying them know how to prepare for, conduct, and close a negotiation be able to make effective use of power and authority in a negotiation be familiar with strategies that can help you maintain a good negotiating relationship with the other side and maximize value for both sides. Outline
The Fundamental Framework Two Types of Negotiation Real Sources of Power 1
Authority—Theirs and Yours Multiphase Transactions Multiparty Negotiations Special Problems Frequently Asked Questions Steps for Preparing for a Negotiation Steps for Getting an Integrative or Win-Win Negotiation Under Way Steps for Handling an Initial Offer in a Zero-Sum Negotiation Steps for Closing the Deal Tips for Setting the Time and Place Tips for Establishing the Right Tone Tips for Getting Off to a Good Start Preparing for a Negotiation Identifying Your BATNA Setting Your Reservation Price Assessing the Other Side’s Position and Interests Authority—Theirs and Yours Sales Negotiation Planner
Harvard Online Article Notes and Articles Books Other Information Sources eLearning Programs Key Terms Apparent withdrawal. A tactic used in sales or other negotiations where one party implies that it may withdraw from the negotiation. BATNA. The acronym for "Best Alternative to a Negotiated Agreement." Knowing your BATNA means knowing the options of what you will do or what will happen if you do not reach agreement in the negotiation at hand. For example, the BATNA for a consultant negotiating with a potential client about a month-long assignment might be to spend three weeks developing marketing materials for a different client. Bluffing. When one party in a negotiation indicates that it may be willing to do or accept something that it actually has no intention of following through on. For example, a tenant may bluff that he will not renew his lease unless certain improvements are made to his office space. Deadlining. A tactic used in sales or other negotiations whereby one party gives a specific date at which particular benefits will be forfeited if the other party (or customer) has not met certain conditions. 2
Diverting/feinting. A means of portraying small concessions as big or important ones, in order to distract the other party away from more important issues. Die-hard bargainers. People for whom every negotiation is a battle. Forbearance. A tactic in which one party stalls instead of giving in immediately to the other party’s request. Integrative negotiation/win-win negotiation. One of two types of negotiation, this type occurs when the parties cooperate to achieve maximum mutual benefit in an agreement. Long-term partnerships and collaborations between colleagues are often characterized by integrative negotiation. Interests. The goals underlying a party’s negotiation position. Multiparty negotiations. Negotiations that involve more than two parties. Such negotiations can differ significantly from two-party negotiations, especially when coalitions—alliances among parties that wield less power separately than they do together—form among the parties. Multiphase transactions/future dealings. Negotiations that will be implemented in phases, or that have the prospect of subsequent involvement in the future. The context of the negotiations allows parties to negotiate based on follow-through and continuing communication. Natural coalition. A group of allies who share a broad range of common interests. Negotiable issues. Issues in a negotiation that can be traded, or around which there is flexibility. Negotiator’s dilemma. The tension caused by the negotiator’s attempt to balance competitive strategies—trying to discern when compete where interests conflict, and when to create value by exchanging the information that leads to mutually advantageous options. Parameters. Set boundaries that define for the negotiator the minimum and maximum offers that will be made. Pareto optimality. In an ideal situation, negotiators are able to maximize the total value that can be derived from a deal or transaction; this is known as achieving "Pareto optimality." A deal is said to be Pareto optimal when none of its terms can be changed to the benefit of one side without diminishing its value to the other side. Partisan perception. The psychological phenomenon that causes people to perceive truth with a builtin bias in their own favor, or toward their own point of view. For example, both teams in a baseball game may perceive that the umpire was unfair to their side. Positions. What the parties in a negotiation are asking for—in other words, their demands. Puffing. When one party seeks to improve or advance its position by exaggerating it. Reservation price/walk-away. The least favorable point at which a party would accept a negotiated deal. The reservation price is derived from, but is not usually the same thing as, the BATNA. Shared interests. Part of an integrative, or win-win, strategy, this tactic involves appealing to interests or goals that are shared by both parties in a negotiation. Single-issue coalition. A group whose members may differ on other issues, but who nevertheless unite 3
(though often for different reasons) to support or block a certain particular issue. Strategy. A planned sequence of how one is going to approach a negotiation, including what the negotiator will offer and ask for (give and get). Tactics. The specific methods for implementing a strategy. Trade off. To substitute or bargain one issue for another; this tactic is often used in sales negotiations. Trial balloon. A tactic that involves resenting a party (or customer) with possible options or hypothetical situations. This is often done to clarify the other side’s position. Wiggle room. The flexibility that may exist in a particular offer, whether it has to do with money or time frame. If you have no wiggle room, you should strongly convey the message that this is your best offer. Winner’s curse. The nagging conviction—after a deal has been reached—that one could have negotiated a more favorable deal. Zero-sum negotiation/distributive negotiation. One of two types of negotiation, this type occurs when the parties compete over the distribution of the benefits of an agreement. The sale of a house, for example, involves two parties who want the best for themselves at the expense of the other. ZOPA. The acronym for the "Zone of Possible Agreement." This is the area in which a potential deal can take place. Each party’s reservation price defines one of the boundaries of the ZOPA. The ZOPA itself exists, if at all, in the overlap between the parties’ reservation prices. About Marjorie Corman Aaron Marjorie Corman Aaron, J.D. is a consultant and trainer with more than 13 years experience in mediation, negotiation, and dispute resolution. She spent four years as Executive Director of the renowned Program on Negotiation at Harvard Law School, from which was born the best-selling book Getting to YES by Roger Fisher. She uses an in-depth understanding of the theory of negotiation as well as the practical experience of having mediated hundreds of business and legal disputes to help managers develop the skills and judgment to be better negotiators. What Would YOU Do? the Mentor
The Big Move When Nathan checked his voice mail, he found another message from Ron, the eager office park developer. Every week, Ron sweetened his offer to Nathan’s company. What would it be this time? Better carpeting? Extra parking? The offer was great, but Nathan didn’t want to move the office. He preferred to stay in their current, downtown location. Their major clients were nearby, and most of the employees preferred to stay where they were. The company’s current lease was up for renewal, and the landlord was demanding almost three times the rent they were paying now. Nathan was pretty sure that no other tenant would pay such a high price, but he did not have much time left to hammer out a deal. He’d looked around the same area, and found some less costly space, but it didn’t suit their needs as well. Luckily, the landlord had no idea how 4
What would YOU do? Negotiating. Lightwave knew it and wanted to revise every single line item." quipped Rick. why else would she want to bow to Lightwave. Rick wasn’t sure how he should proceed. Every time he had asked her to improve the offer. added extra vacation time. What more could Nathan find out that might help him negotiate a lower price? Was there anything else he could do to keep the same location without overpaying? What would YOU do? The Big Shot When Alice started recruiting José. Lightwave was an extremely important client. how to work with another party toward an integrative or win-win result. she’d upped the already high salary. The closest qualified applicant was very eager for the job. Alice preferred José. So far. Then again. Rick had cut the numbers so many times. it was also obvious that if he went ahead with these changes in the bid. he finally pointed out to Rima that vendors are not supposed to pay clients—it’s generally done the other way around. Still. and she knew he’d be expensive. she argued." and he had then asked for more. a manager can do much to ensure a favorable outcome. understanding both sides’ positions. but it is a fact of life. They should make the most of this opportunity. Some people enjoy it and other people find it awkward. But his demands seemed to be getting out of control. but insulting people was against the rules their team had developed. you’ll learn how to identify the information you’ll need to negotiate successfully. and increased the number of stock options.’s demands and rewrite the bid again? The prospective client was the biggest they’d ever approached. Just having them as a reference could help sell other major accounts. Rima assured Rick that this client was promising a lot more work down the road. but she was becoming uncomfortable with his increasing demands. "and the sheriff will show up with the padlocks and a bankruptcy sticker to slap across the front door!" But Rick knew Rima was right in one way. but lacked the experience and prestige that José would bring. and everyone in the industry was eager to get their foot in the door. Managers can be called upon to negotiate anything from a job offer to a contract to the terms of a performance appraisal.much they wanted to stay. Now he was asking for a high level job for his wife and talking about a tempting competing offer from another firm. The Fundamental Framework 5 . Inc. she knew he’d provide the high profile expertise the department needed. and mapping out options in advance. "Any more work at these prices. she had said "yes. In this topic. his company would lose money on the job. Alice thought about her short list. He almost asked her as much. Should she say "no" on principle and risk losing him? Or should she agree to his latest request and hope it was the last? What would YOU do? The Big Sale Rick wondered whether all Rima cared about was getting her commission quickly. to prove themselves. By getting information. and when to walk away from the table.
you seek to negotiate in order to influence that outcome or behavior. But it may just as easily involve a very simple deal or a very messy dispute. and a credible dollar offer is your BATNA. issues. Here is an illustration. Given the money. between the parties’ reservation prices. Any successful negotiation. It may be a formal affair that takes place across the proverbial bargaining table. A buyer has set a reservation price of $275. which is likely to be more profitable. you will walk away and attempt to lease space in a different building.000 (and would like to obtain as much as possible). You agree to negotiate because you believe it is to your advantage to do so. At the end of a lengthy negotiation session. if you are negotiating with a potential client about a month-long consulting assignment. When you don’t have the power to force a certain outcome or behavior. the landlord declares that he will not accept less than $25 per square foot. Your reservation price should be derived from your BATNA. Three concepts are especially important for establishing this framework: BATNA (Best Alternative to a Negotiated Agreement). then your reservation price would be approximately equal to your BATNA. Each party’s reservation price determines one end of the ZOPA. and ZOPA (Zone of Possible Agreement). The seller has set a reservation price of $250. but it is not usually the same thing. you determined that you will not pay more than $20 per square foot in a downtown high-rise. Reservation price Your reservation price (also referred to as your "walk-away") is the least favorable point at which you would accept a deal. BATNA BATNA is the acronym for "Best Alternative to a Negotiated Agreement. and precisely what tradeoffs it is willing to make. ZOPA The "Zone of Possible Agreement" is the area in which a deal can take place. or the complex terms of a partnership venture. reservation price. must have a fundamental framework established by each side knowing • • • what its best alternative to a negotiated deal is what its minimum threshold for a negotiated deal is how flexible it is willing to be. therefore. in which you negotiate over price and performance. But a negotiated solution is advantageous to you only under certain conditions— that is.000 for the purchase of a commercial warehouse (and would like to pay as little as possible). For example. Example: When preparing to negotiate with a commercial landlord over a lease for office space. If more than that is required. If the deal is only about money. and emotions that are regularly involved in negotiations. is the range between 6 . only if you don’t have a better option." Knowing your BATNA means knowing what you will do or what will happen if you do not reach agreement in the negotiation at hand. therefore. your BATNA might be to spend the month developing marketing materials for other potential clients. The ZOPA itself exists (if at all) in the overlap between these high and low limits. even a modest improvement in your negotiating skill can yield a sizable payoff. however. You graciously suggest that the negotiations be terminated and walk away from the deal.Negotiation occurs throughout your professional and personal life. The ZOPA. that is.
unless there were other elements of value to be considered—or one or both sides’ reservation prices changed. if not all. no matter how skilled the negotiators. An integrative or win-win negotiation. The technical term for this is achieving "Pareto optimality.000. you are competing to "claim" value for yourself—to take it away from the other party. the buyer’s goal is to negotiate as low a price as possible. A dollar more to one side 7 . of your negotiations combine elements of both types: there will be some direct competition between the parties’ interests and goals. In a zero-sum negotiation. Often. Two Types of Negotiation There are essentially two kinds of negotiation: • • A zero-sum negotiation.000 while the seller had set a reservation price of $275. This is also known as an "integrative" negotiation.000 and $275. The seller’s goal is to negotiate as high a price as possible. there is only one issue in a zero-sum negotiation: money. in which the parties compete over the distribution of the benefits of an agreement. If the numbers were reversed. Optimizing value In an ideal situation. Zero-sum negotiations Classic examples of zero-sum negotiations include • • the sale of a house. silver. negotiators are able to maximize the total value that can be derived from a deal or transaction.$250. in which the parties cooperate to achieve maximum benefits by integrating their interests into an agreement. and the buyer had set a reservation price of $250. as well as some opportunities to integrate the parties’ interests and preferences. Most. Cooperation and disclosure of information can make you less effective. where the buyer and the seller do not know one another the commodities market." A deal is said to be Pareto optimal when none of its terms can be changed to the benefit of one side without diminishing its value to the other side. But for the purposes of understanding. say.000. let’s examine each type in its pure form right now. or hog bellies. there would be no ZOPA—no overlap in the ranges in which they would agree. No agreement would be possible. in which the vendor and purchaser negotiate over price—of. This is also known as a "distributive" negotiation.
indeed. Learn as much as possible about the other side’s circumstances and preferences— including why they want to make a deal. You will have lost the opportunity to make a deal that would have been better than both sides’ BATNAs. Reveal and explain your preferences among issues or options. the seller and the buyer compete to claim the best deal possible for themselves.is a dollar less to the other. what your real interests or business constraints are. Don’t overshoot. and what your BATNA and reservation price are. cooperation and disclosure of information make you more effective. Thus. remember the following: • • • • • Harness the power of anchoring. Cooperation carries no cost here. Often. A "tug of war" is the underlying negotiation dynamic (whether the parties have friendly or difficult styles). Explain why you want to make a deal. Do not disclose any significant information about your circumstances—including why you want to make a deal. long-term partnerships or other collaborations after financial terms (or the competitive aspects) of a deal have been set among partners or co-venturers who value their long-term relationship between professional colleagues or superiors and subordinates whose long-term interests benefit from the other’s satisfaction. See also Steps. the other side may walk away. In a win-win negotiation. Their task is to arrive at a deal that integrates their interests as efficiently as possible. If you claim aggressively or greedily. the two sides’ interests do not compete at all. Agreeing to more of what one negotiator values does not require the other to take less of anything he or she values. Talk about your real interests or business constraints. opportunities for creativity abound and the relationship between the two negotiators is often highly valued. relationship and reputation are completely irrelevant: the negotiators are not willing to trade value in the deal for value in their relationship with the other negotiator. Similarly. The goal of each negotiator is to "pull" the final deal point as close to the other side’s reservation price as possible (or even beyond it). Integrative or win-win negotiations In business. your task is to "create" as much value as possible for you and for the other side. Consider and reveal any additional capabilities or resources you have 8 . When participating in a win-win negotiation. one that sets the bargaining range. In a win-win negotiation. To achieve success in a zero-sum negotiation. The ability of one to claim or win what one side wants or needs in the deal does not detract from the other’s ability to claim or win just as much. They are competing to claim as much of the value in the ZOPA as possible. Exploit what you learn about the other side in setting your first offer or demand. do the following: • Provide significant information about your circumstances. there are often many items or issues to be negotiated. Studies show that negotiation outcomes often correlate to the first offer. So start at the right place. essentially integrative negotiations are more likely to take place • • • • in structuring complex. and bottom lines define what is possible. what their preferences among issues or options are. what their real interests and business constraints are. The first offer can become a strong psychological anchor. what your preferences among issues or options are.
alleging that keyboards manufactured and shipped by SlingShot were defective." requires difficult strategic choices. See also Steps. what are the real sources of power in negotiation? You want to have the following on your side when you sit down at the bargaining table: • a good BATNA Your Best Alternative to a Negotiated Agreement determines the point at which you can say no to an unfavorable proposal. rather. you can afford to negotiate for more favorable terms. if the parties’ interests are in conflict at all. files suit against SlingShot Computer. what their preferences among issues or options are. The resulting tension. If your BATNA is good. Knowing whether to compete where interests conflict—claiming more instead of less—or to create value by exchanging the information that leads to mutually advantageous options is at the core of the negotiator’s art. it need not determine the outcome. which means balancing competitive strategies that make it hard to cooperate and create value effectively with cooperative strategies that make it hard to compete and claim value effectively. While a supply reserve of resources and capital is rarely a handicap. competitive and cooperative elements are intertwined. Use what you learn to find creative options that will meet both of your interests to the greatest extent possible. Goliath Inc. The reality is that a manager’s need to meet a deadline or other objective may put him at the mercy of the smallest vendor or subcontractor. Learn as much as possible about the other side’s circumstances and preferences—including why they want to make a deal. and could be added to the deal. Real Sources of Power Power "away from the table" doesn’t always translate into power at the negotiating table. it will be hard for him or her to walk away from your proposal. • a lousy BATNA on the other side If the other negotiator doesn’t have a good alternative (or hasn’t thought through their BATNA). In order to recover any damages of significance. If size and money aren’t guarantors of success. In response to Goliath’s demand for payment of high consequential damages in addition to the replacement cost. who may have the ability to solve the manager’s problem. SlingShot explains that it will file for bankruptcy if the settlement or jury verdict is anything close to the demand. what their real interests and business constraints are. it is generally not wise to reveal your BATNA or to state your minimal requirements for a deal. An even greater source of power is your knowledge that the other side’s BATNA is not a good 9 . For example. a sole proprietorship. known as "the negotiator’s dilemma.• • that might meet their interests. and what additional capabilities or resources they have that might meet your interests and could be added to the deal. Goliath must work with SlingShot to set up a payment schedule and take highly discounted replacement keyboards for orders. However. The negotiator’s dilemma Most business negotiations are neither pure zero-sum nor pure win-win situations.
No matter how good your BATNA. Sometimes. Forward and lateral ties. because the other negotiator may be savvy enough not to reveal his or her BATNA and may instead be "puffing" about it. You gain power when you link a negotiation (explicitly or implicitly) to prospects of future business with your company or with others in the industry. preferences. When you aspire to obtain a large share of the deal’s value and to persuade the other side to accept terms favorable to you. but you can also learn much in advance by • • • • • • • contacting sources within the industry checking potentially relevant business publications reviewing annual reports (or public filings) asking questions informally of the negotiator or others within the company imagining what your interests. if you have built a good relationship. which makes it easier for them to walk away from any deal you propose. Many people are willing to adjust their positions for the sake of a good relationship. the better able you will be to find creative ways of meeting their interests (preferably at low cost to you). you project a powerful negotiation presence. analysis and awareness. the first negotiation with the salesman is used to bring you to your bottom line. to push you beyond it. Conversely. Asking questions during the negotiation helps you learn about the other side’s BATNA. the other negotiator(s) will find it difficult to walk away. Preparation. you’ll fall victim to the old "car dealer" trick. But other knowledge is equally important. corporate structure. the other party’s circumstances are either clear or ascertainable.000 question (in 1956 dollars). For instance. industry. Authority—Theirs and Yours Conventional wisdom says you should insist that the negotiator on the other side of the table have full authority. and consciously developing your strategy accordingly. information Knowing the other side’s BATNA lets you know how far you can go.one. • ambitious (but not overblown) aspirations Aspirations strongly influence the outcome of a negotiation: if you don’t aim for high achievement. Otherwise. • a good relationship An obnoxious show of strength or a disrespectful approach to the other negotiator(s) doesn’t make you powerful: it makes the other side defensive and loath to deal with you. analyzing the interests and issues at stake for both sides. In other words. other deals and goals. however. you won’t get there. you won’t be successful if you don’t prepare beforehand. and needs would be if you were in their position. the more you know about the other side’s broader concerns. 10 . he has to check with his manager. where just as you are about to reach agreement with the salesman. How can you get that knowledge? That is the $64. and the second negotiation with the manager.
so that you can plan accordingly. The benefits of the good relationship you have built are likely to be reflected in the deal and its implementation. As a practical matter. try to get another representative to participate in the negotiations as well. always know exactly how much authority you have in a negotiation. Instead of insisting on full authority.There are advantages to negotiating with the person who has the power to sign on the dotted line: • • • • You know that all of your reasoning is heard directly by the decision maker. you may be able to learn this through an informal. When negotiating about dollar issues. As for your side. with significant decision-making powers centered at the top. view this as freedom from the need to commit.) Suggest using the opportunity to discuss your respective interests and to come up with creative options and packages. • • • • Confirm the ground rule that neither side will be committing his or her company in the negotiation. you won’t always be able to negotiate with the individual (or committee) who retains final authority. For example: • • • • Are you authorized only to commit to a predetermined deal for which committee approval has been obtained? What if you can negotiate something better? What would the committee consider to be better? Are you authorized to commit to a deal that meets certain objectives (with freedom to structure the deal in the best way you can)? Would your company prefer that you bring such a deal back for formal review and approval? Is your authority limited on dollar issues but not on other creative options without significant financial implications? Are you authorized to provide information about your company’s needs. and preferences if the other side engages in a good-faith. Is she generally respected and listened to. leave yourself some "wiggle room. Thus." in case the final negotiator pushes harder in a second round. Is it very hierarchical. you shouldn’t have to either. or is it relatively decentralized? how the negotiator is viewed within the organization. You avoid the "car dealer" trick described above. reciprocal exchange? 11 . If there’s no "wiggle room. however: people without formal authority may be freer to discuss their company’s interests and to invent creative options. and request that the other side do the same.) If you learn that the negotiator for the other side has very little formal authority and is not respected or listened to by the decision makers. try to ascertain • • • • • who will be at the negotiating table what her formal title and area of responsibility are how long she has been with the company how the company is structured. If you are dealing with someone who does not have full authority. If you know other players in the industry or business community. This can sometimes be an advantage. interests. it’s more important that you determine the authority level of the person with whom you will be negotiating. or not? (Granted. (If they’re not committing. You are less likely to have disputes or confusion about the interpretation of a particular provision. but it’s well worth digging for. this information may be difficult to obtain. One tactful way to do this is to suggest that you will be bringing a colleague (either with more formal authority or because your joint recommendation will carry more weight). off-the-record phone call or two." strongly convey the message that this is your best offer.
a labor union and a citizen’s nature conservation group might form a coalition to block an anti-union 12 . offer important advantages for parties who are trustworthy and who would like to foster cooperative negotiation behavior. Here again. Multiphase Transactions Multiphase transactions. For example. The need to check back for certain decisions may be strategically helpful. • Multiparty Negotiations Business and professional negotiations commonly involve more than two parties. Early phases allow parties to become familiar with each other’s communication and negotiation styles. The combined power may enable the coalition to push through its preferred proposal. an environmental agency and a citizen’s nature conservation group share basic agendas and will often act in concert to block development initiatives. Such multiparty negotiations can differ significantly from two-party negotiations: coalitions—alliances among parties that wield less power separately than they do together—can form among the parties. you must understand all of the many parties’ goals. and work from there. less authority is sometimes better. in which parties that differ on other issues unite to support or block a single issue (often for different reasons). Protect yourself during the final phase of a multiphase transaction. you may be able to walk away before it is too late. or at least to block one it finds unacceptable. A party’s failure to perform as promised in an early round can serve as a warning signal of the need to create enforcement mechanisms. and may enable you to be more creative in inventing options. or the most difficult to accomplish (most parties will not risk great injury to reputation by failing to perform a relatively insignificant item) never letting the negotiation end by referencing possible future work or the connections between your respective business or professional communities. and certainly more than two people. but at least you won’t unwittingly overstep your bounds. when incentives to breach are the greatest. even without explicit agreement to do so. Just as in a two-party negotiation. If failure to perform in an early round appears to have been intentional or otherwise egregious. For example. and relationships. security provisions. A single-issue coalition of otherwise disassociated parties may be more vulnerable. The challenge of multiparty negotiation is to manage the coalitions.You may be frustrated if you don’t get the authority you seek. or other sanctions against a future nonperformance. to break them apart or keep them together depending on your own party’s interests. interests. There are at least two types of coalitions: • • a natural coalition of allies who share a broad range of common interests a single-issue coalition. or the prospect of future dealings. • • • • Early phases allow parties to build trust by performing as promised. by • • creating enforcement mechanisms against nonperformance or other breach of trust making sure that the last phase is not the most significant in dollars or impact. A natural coalition of allies is hard to break.
Note that this advice holds true whether or not you are from different cultures. say. the ways of women. and genetic inheritance. 13 . We throw up our hands and say. Don’t be trapped by over-attribution. Replay in your mind what has been communicated. styles of communication. how. and you are experiencing problems understanding or dealing with each other. the French national character. thought processes. if the original developer agrees to move the project to a different location. we often think of it as the most influential. adjust your communication style. an Italian engineer may have more in common with a German engineer than with an Italian artist. the unions are likely to withdraw their opposition. when these may not be the cause of the problem. the nature conservation group will cease its protest. A female lawyer may have more in common with a male lawyer than with a female musician. perceptions. "He’s late because that’s how Italians are with time." When you attribute these problems to culture. People often attribute a breakdown or difficulty in negotiation to obvious gender or cultural differences." Or. Difficulties in communication Poor communication renders the simple treacherous and the difficult impossible. But culture does not determine or predict any single individual’s behaviors or choices: there will always be great variations within given populations. try the following steps: • Ask for a break. Or you may fail to pick up on efficiency and production problems at the Italian company. We often apply common cultural stereotypes when making the attribution. the personality of lawyers. Special Problems Differences in gender and culture Our language. gender. and personalities are formed by a dense thicket of culture.developer from building a strip mall in a wooded area. If the tax-conscious mayor finds a different developer and a usage mix more favorable to the unions. What kinds of issues trip you up? What types of misunderstandings have you had? Consider what assumptions each party has brought to the table. and by whom. examine the situation. "The problem is that she’s a woman and can’t deal with confrontation. family dynamics. And so we attribute a particular (usually mystifying) behavior to. accurately observed to be more prevalent in one group than another—is only one of these determinants. The cultural difference merely provides a reasonable and ready set of hypotheses about where the problem might lie. • • • • Look for a pattern to diagnose the problem. Each has different reasons for joining the blocking coalition. Communication problems cause deals to go sour and disputes to ripen. When you suspect that communication is causing the negotiation to go off track. Two British male physicians may have nothing else in common. you may miss the fact that the female negotiator is signaling her company’s resistance point. If you are negotiating with someone from a culture very different from your own. Review any available literature about the other negotiator’s culture and how it compares with yours. Thus. Or. or articulate the differing norms or assumptions you believe to have been the source of the problem. How is it different? Does this explain the pattern of problems you have had? In your next meeting. or even to the culture of a certain company. Although culture—a cluster of tendencies.
Explain your perspective. Does the confusion or misunderstanding arise from a single issue? Did you have assumptions or expectations that were not articulated? Did the other side? After the break. Does a member of your negotiating team seem to infuriate the other side? Switch the spokesperson." How can you alter partisan perception? For yourself: • • • Recognize it as a phenomenon to which we all fall prey. Suggest bringing in a neutral third party or expert to provide unbiased guidance. When emotional needs take precedence. when one side writes up the progress made? Jointly draft key points as you make progress or at the end of each session. loyal fans of either team in a baseball game may perceive that the umpire was unfair to their side. do the following: • • • Ask yourself what is making the other negotiator angry. Has that happened in the negotiator’s dealings with your company? As a result of the dispute? During the negotiations? If 14 . we stop focusing on logic or rational self-interest. Listen actively. How would the issue look to you then? Pose the problem or the issue to colleagues (without telling them which side you are on) and solicit their opinions. Search for clues. Democrats and Republicans watching the same presidential debate may perceive that their candidates "won. Imagine yourself in the other side’s head. Offer to listen while the other side explains its perspective on the issue. and ask how they would view it. Do problems arise between stages of a multiphase negotiation. For the other party: • • • Try to pose the problem as it appears to you. Respond to what seems to be the emotional problem. What does this deal or this dispute mean to him? What is his position in the company? Did he have an emotional or professional investment in the project that is the subject of the dispute? What is the history between this negotiator and your company? Listen very carefully when he gets angry. Use an analogy or a hypothetical situation to frame the problem as you see it. raise the issue in a nonaccusatory way. acknowledging their point of view. Then. or loss of pride and lack of respect. humiliation. Partisan perception "Partisan perception" is the psychological phenomenon that causes people to perceive "truth" with a built-in bias in their own favor. Some people may become angry and emotional in difficult financial transactions. The barriers of emotion and irrationality People tend to assume that emotion and irrationality occur in divorce or other personal negotiations. Remember that people are most often angered and frustrated at a personal level by perceived deception. For example. To overcome the barrier of emotion and irrationality.• • Look for a pattern. Business partnership dissolutions are called business divorces because of the tremendous bitterness and high emotion often involved. or toward their own point of view. try to pinpoint the problem. See also Managing Difficult Interactions: Core Concepts. but rarely in business. Express empathy for what this means to him. Not so.
Anticipate "high-ball" or "low-ball" offers. or if you need to undo the deal that has been negotiated. provide reassurance. you might call for a break in the negotiations. Try to make arrangements to work with a negotiator who is less emotional. escrow arrangement. and don’t be thrown off-balance. Require that they provide back-up documentation. You know they’re bluffing. How should you respond? • • • Emphasize that the deal is predicated on their accurate and truthful representation of the situation. you may want to acknowledge the perception. they’re just telling you what they think is needed for an agreement. for whom every deal is a battle. Be more guarded in the information you disclose. and have no intention of following through on their promises. smaller external or internal stakeholders may have the power to block or sabotage a good deal. If you find dealing with high emotion and psychological baggage too difficult in a business meeting. and proceeding accordingly. their respective interests. ask which they prefer. and why. such as a security deposit. At best. If a deal still makes sense. At least ask about their perspective and then listen actively: it may be a long shot. Ask if it would be better or worse for them if you added or eliminated one of the options. grudging concessions. Die-hard bargainers They are out there: the die-hard bargainers. Otherwise. and bluffing and puffing all the way. Suggest alternative packages or options. Don’t let them unnerve you. Remember that any insults or jabs thrown your way are just part of their game. Insist on enforcement mechanisms. you will have learned something about their preferences. Don’t let this prevent you from analyzing your BATNA and setting your reservation price and aspirations as well as assessing theirs. 15 . and power to affect the agreement and its implementation. You may wish to "sweeten" the deal by including something to benefit stakeholders who would otherwise have the incentive to sabotage. Don’t count on being able to change them. suggest that the negotiations proceed with a neutral facilitator. if that is possible. and/or penalties for noncompliance (or perhaps positive incentives for early performance). or address the grievance. • • Anticipate this problem by mapping out the stakeholders. And so on. and that the terms of the deal be explicitly contingent on its accuracy. An unexpected turn in the road—before or after an agreement Analyze how what has happened affects the decision to go forward. But try not to enter into the negotiation assuring that you're locked into a zero-sum situation. Even if they won’t disclose their interests.so. Disclose only the information that cannot be used to exploit you. Potential saboteurs of a good deal Particularly in multiparty negotiations. "Dirty rotten scoundrels" You suspect the other side is lying. but it could lead them to a more cooperative and reciprocal stance. How can you work with such highly competitive negotiators? • • • • Know their game.
must have a sense of strategy. and the other side is at $30. Assume that you enter a fixed price contract with a general contractor to build new office suites and conference rooms in an older brick building purchased by the company. That is the only number he will pay attention to.000 and seems to be pushing for a deal at approximately $28. Thus. you discover that the bottom floor of the building is sinking and walls are cracking. you need not reveal all the circumstances making you desperate for a deal. due to settling in the foundation. Under your negotiated agreement. You need not mention that the new division president is impossible to deal with or that one or two projects have not turned out well. But after the contract is signed. After several rounds of back and forth on a dollar figure. 16 . What goes around comes around. You could say.000 for a piece of property. Even a cooperative.000 to $25. however. you are at $23. This is not hard bargaining.000 to $23. creative negotiator. If you insist on that term. In certain circumstances. does that mean I can’t bluff or puff at all? One man’s puff is another’s positive spin. As long as what you bring to the table has real value." Revealing your range may make it easier for the seller to accept $25. Lying about a material fact in a negotiation is unethical. Frequently Asked Questions When asked by the other side to name a dollar figure. the contractor is more likely to do a high quality job. If you tell someone that you would pay $20. to discourage the other side from pushing you beyond it. which triples the cost of pear wood.000.000. creating a false impression or failing to disclose material information may be a formal ethical breach and actionable as well. but not above $25. perhaps by shorting the detail work.000. is it okay to state my range? Not unless you can be happy with a deal that is at the least favorable end of that range—or worse. This was not part of the original contract.• • • • • contact the negotiator(s) on the other side immediately acknowledge the unexpected nature of what has happened affirm your commitment to working on the problem (if that is so) jointly discuss the underlying principles and intent of the deal as originally negotiated. "My preferred range walking into this negotiation was $20. and the likely next step on the corporate ladder in your current company.000 because he will feel that he has pushed you to the top. if you are negotiating the terms of a job offer. One woman’s bluff is another’s best foot forward. the contractor is to bear the risk of fluctuation in material cost. If you agree to renegotiate. absorbing some or all of the additional cost (or choosing a different wood). The next month. the contractor may try to make up some of the cost in other ways.000. The suites and conference rooms are to be paneled in a lovely pear wood. rest assured that you will pay at least $25. and it is almost certainly grounds for legal action. a pear wood blight is discovered. it is effective self-advocacy or salesmanship. there is nothing wrong with describing the major projects for which you have been responsible. The only reason to mention a range occurs toward the end of the negotiating process. There is no shame in describing your achievements in a positive light. but you want the contractor to take it on as soon as possible and at a reasonable price.000. Is it okay to bluff or puff during a negotiation? If I do not want to be a positional hard bargainer. and agree upon what issues or provisions are affected pick up the negotiations again.
however. This will give you the necessary flexibility to make value-creating tradeoffs between issues. one at a time. after a deal has been reached? Chances are they’re afflicted with the "winner’s curse": whenever they reach a deal. or agreed-upon ranges. If they insist that they must have this change and no others. set a reservation price. If you cannot reach tentative agreement on the difficult issue(s). you may want to deal with a more difficult issue as a threshold matter. she will have analyzed her BATNA. is it better to reach agreement issue by issue. you can express dismay. she should be able to tease out some of the interests underlying the hard bargainer’s positions. for each issue. dealing with easier issues will build momentum.Should I ever tell the other side my real bottom line? Only if you’ve reached it (or are about to). and you should proceed with the renegotiating. The answer is maybe. Is it better to deal with difficult or easy issues first? In general. cooperative negotiator should be able to do just as well on the competitive issues. then the other side was sincere. cooperative negotiator will be able to "convert" the hard bargainer. What happens when you put an effective. If the cooperative negotiator is effective and resourceful. deepen the parties’ commitment to the process. The real question is whether the effective. In a complex deal. or wait until the end? Every deal is different. and may view that number or proposal as just another step on the way to a final deal. you should express some surprise or disappointment. they become cursed with the thought that they could have gotten more. then they must understand that you will want to open up other issues as well. the other side may not take you seriously. but you must decide whether the 17 . Otherwise. If they reconsider and withdraw the request for change. You agreed to a total package. Once the positional hard bargainer refuses to disclose information and begins to use any disclosures against the cooperative bargainer. A change on one issue affects the whole package. make sure you call it just that. The cooperative negotiator may then suggest different options and packages to meet both parties’ interests. and enable the parties to become familiar with each other’s negotiation and communication styles before hitting the tough stuff. After all. of course). then they were just testing you. and considered opening and first offer strategies. If you do reveal your bottom line. It is also true that once the most difficult issue is resolved. Are they willing to renegotiate other issues? If the answer is yes. smaller issues often fall more easily into place. with appropriate emphasis or firmness. How should I respond if the other side seeks to change something (in its favor. Explain that if they must make a change. but it’s generally better to aim for tentative agreements. In some instances. Even the most recalcitrant hard bargainer can recognize when it benefits his interests to join in creating value. at least sufficiently to create some value in the deal. and to create alternative packages of different options. she will seek reciprocity or refrain from providing additional information. then you will not have wasted time on the smaller issues. cooperative negotiator against a positional hard bargainer? An effective. When the other side seeks to change one item.
After a few moments. If his shouting was intended to get you upset and off-balance. if the negotiation is over a simple issue. he or she can’t correct the impression. ask if there is anything you have done to make him this angry. Don’t respond in kind. the value of the deal. As you get to the door." Get up. Some. Anecdotal evidence indicates that e-mail or other written messages may have a greater tendency to result in disputes and impasses. When can I negotiate over the telephone or by e-mail? Or is it essential to insist on a face-to-face? It is far better to negotiate face-to-face when personal. perhaps because they fear that the other side will detect it. calmly and actively. nonverbal cues will matter. When we are in a face-to-face negotiation. Turn to leave the room. resume the negotiation with a calm voice. How should I react when the other side opens with an incredibly unreasonable number? Should I 18 . explain quietly and calmly that you understand that something has made him terribly angry. and responds in kind. Sit quietly. For example. is this a deal in which the other side might be tempted to lie or shade the truth? Are the parties professionally or emotionally invested in what’s at stake? Some research indicates that people are less likely to lie in person. we pick up the nonverbal cues that indicate something is more important than the other side’s words do. You might also say that you will need time to calm down after hearing his outburst. And some recent research indicates that people are more likely to bluff over the telephone. The original sender is surprised and feels unjustifiably attacked when the return message carries a nasty tone. you might also interject a remark such as. After he has stopped shouting. where personal communication is not likely to matter. it is more cumbersome to throw out creative ideas. Wait a moment. To help him save face. you might contact someone else in the company to suggest that another negotiator be assigned to the deal. we see the sideways glances of the members of the other negotiating team. Say nothing. Suggest that he call you in a day or two if he wants to continue the negotiation. instead. What should I do when the negotiator on the other side has a temper tantrum? You need your counterpart to be rational and in control of his emotions—or else you need a new negotiator. If he was representing his company in the negotiations. The right response will depend upon how angry or upset you feel. The person who receives an e-mail (or fax) may interpret a comment negatively when the sender did not intend it that way. depending upon his status and the company structure. everyone gets jumpy every once in a while. try to help him regain control. we sense when they are becoming uncomfortable. However. you certainly shouldn’t reward the strategy by negotiating in that less-than-top-form condition. You can use and interpret tone of voice to keep communication on track. Dealing with this person in the future may not be worth the headache or stomach acid involved. you may choose to.adjusted deal has sufficient value for you to agree. Suggest that he calm down. but here are some alternatives: • • • Sit quietly. the most efficient method works best. You can’t put them on a chalkboard or easel. Listen. but that you really can’t continue the negotiation thinking that such an outburst might occur again. but not all of these problems are partially solved over the telephone. If you can afford to bypass the deal. and whether it is your choice to proceed. Because the sender is not there to read the facial expression or exclamation. On the other hand. "Oh well.
Think through a good outcome. (You will of course be describing value that would fall in an entirely different ballpark. to a proposal or number you can justify as reasonable. Ask them to explain their credentials. Make your next move in good faith. what is it based on?" Ask how you might justify such a number to your company. ask questions about it. Explain your perspective on the deal—how it might have value to you or others similarly situated. if they are stuck and the only way to make progress is for you to move again. "Why that number. status. I don’t want to bid against myself. You might respond by saying that you appreciate that their concerns mean they view this negotiation as important. and state that it should not be considered a precedent. and that you have parallel concerns. Then.) Let some considerable time and discussion go by. explain your reasoning. "Wait. perhaps through joint brainstorming. you usually aren’t called upon to do so. whichever is better). Are they just trying to make you defensive. Just invoke the rule. consider what 19 . and that is in the favorable end of your range (or close to where you estimate their reservation price. Go back to talking about interests. or authority (whichever they challenged in you). and ask the other side to do the same. If it doesn’t. Ask. Then you might suggest a number or proposal that you can justify as reasonable. status. Is it ever acceptable to bid against myself—to make two moves in a row? It’s not generally a good idea. If you counter with an equally unreasonable number. Steps for Preparing for a Negotiation 1. you will either contribute to the impasse or make the road to agreement longer and more difficult. How should I react when the other side immediately challenges my credentials. but treat it as a serious first move by the other negotiator. or decline to counter at all? Consider one of the two following strategies: • • Clearly state that this number is entirely out of the range you had imagined for the deal. If the question was posed to make you feel defensive. Do NOT refer to their initial number or proposal. If they don’t. To bridge the gap. put you offbalance? Or do they have genuine concerns? The best approach is to assume sincerity and to answer accordingly. A negotiation’s success is judged by its outcome. you seem to be asking me to make another move here. I made the last offer. you may have reached an impasse. Because most people have been taught this rule. you will have demonstrated that such strategies will not be successful. you should announce your awareness of what you are doing. Ignore it. You might bring in a third party facilitator. Clearly state that his number is entirely out of the range you had imagined for the deal. not its process. or authority to make a deal? The question is why they are challenging you. As you prepare.counter with an equally unreasonable number. consider broadening the discussion of the parties’ interests. Ask about a specific issue of some import." This usually elicits at least a token move on the other side. and formulating other creative options. by saying. Then change the subject.
000. All other things being equal (the closing date. When there are other terms and interests to be met. options for improving your BATNA may include pursuing better tentative arrangements with other suppliers of the product or service your are purchasing • seeking to ease one of the constraints that makes your current BATNA unsatisfactory • investing in improved internal capability.000 (and has left the offer open). • • • • • • Make a list of what your alternatives would be if the negotiation ends without agreement.000 or more. Determine your reservation price. 5. for example. you will have to assess the value of the differences between your alternatives. if possible. In a salary negotiation. 4. For example. if you’re negotiating for a specific product or service. and why. You should walk away if this prospective buyer does not offer you $325. however. your reservation price should be $325. you must compare the value to you of the deal on the table and the value to you of your BATNA. your list of alternatives might include remaining in your current job through the impending buyout of the company. your BATNA in this negotiation is the $325. Assess your needs and interests. In most business negotiations.a good outcome would be. 3. so that you or your organization can reduce the need for that product or service. the condition of the house upon sale. if your company is being bought out and you are negotiating the salary for a possible new job. For example. in the hope that you will survive any downsizing and reorganization by new management • remaining in the current job after the buyout and accepting a likely three-to-four-month severance package • quitting your current job to look full-time for another one • accepting a less exciting but more stable job that does not permit a flexible schedule. etc. Improve your BATNA. Identify your BATNA—Best Alternative to a Negotiated Agreement. Ask yourself the following questions: 20 . things are not that simple. and an equally qualified buyer has previously offered you $325.000. you might need a certain minimal salary to provide basic necessities for yourself a salary at a higher level that would give you more discretionary income a certain level of responsibility and challenge an appropriate title that would position you for a move to the next level a flexible schedule so that you can juggle childcare or a marathon training regime agreeable colleagues to work with. • • • • Make a list of what you must have and what you would like to have. Review the list to determine which alternatives would be best. if you are negotiating your salary for a new job. • If you are negotiating the sale of your house with a qualified buyer.). referenced earlier. What do you hope to accomplish through the negotiation? What would the best result look like? What outcomes would not be acceptable? Why would they not be acceptable? 2. • For example.
Assess the other side’s BATNA. 6. Is what you offer easy to find elsewhere? Can it be obtained in time to meet their deadlines? Have they already obtained bids or initiated informal negotiations with anyone else? 8.• • • • How much does it matter to you that the new job will be more challenging? How much less salary would you accept in the new job in order to acquire a better title and more responsibility? How insecure is your current job. or (2) a moderate degree of customization. delivery in 60 days. and the other side’s offer doesn’t give everything you want. 7. If the other side does not have a good BATNA and you know it. you should learn as much as possible about their business circumstances. delivery date. What is their credit rating? What does their annual report show? How strong have quarterly earnings been? Has management dictated any new initiatives relevant to this deal? • the value this deal has to them. does more or less of what you want on one issue give you more or less flexibility on the others? How much of what you want on one issue or term would you trade off against another? Are there different package deals that would be equivalent in value to you? Let’s assume that you are negotiating about the price. you may be able to negotiate a highly favorable deal for your company. Evaluate the tradeoffs between issues and interests. delivery date. • Consider 21 . and how much does that bother you? How compatible do you think you and your prospective colleagues (and particularly your prospective supervisor) will be both at the competitor firm and at the firm with which you are currently negotiating? Your answers to such questions will determine what minimal terms would be equivalent to your BATNA in the deal being negotiated. or customization? How much would greater customization affect what you would be willing to pay? If the delivery is two weeks later than you would prefer. and customization of a product. How important is it? Is it necessary for them to meet a larger objective? • the availability of a replacement. You should be able to answer the following questions: • • • • Which do you care more about—price. and a very high price. ask yourself the following: • • • • Which issue(s) or term(s) do you care most about? Are any of these issues or terms linked? That is. would you require additional customization? How much of a premium would you pay for earlier delivery? If you don’t know the answer to these questions. Assess the other side’s interests. you will be unable to evaluate which alternative proposal best meets your interests: (1) very little customization. delivery in 45 days. To assess the other side’s BATNA. and a low price. To evaluate the other side’s proposals and to make proposals that advance your interests.
even part time. the more effective your own choices will be. if you allow her to stagger the deadlines? Also. You know that she works out of her home. Pay particular attention to the people doing the negotiating for the other side. What is their rank and scope of responsibility? Were they authorized to negotiate only within certain preset limits? How much authority do you have? Must you account for the process and results? Can you bind your organization to any deal you find acceptable. and they will think about the facts differently. Give two people exactly the same facts about a negotiation. You don’t negotiate with companies or "other sides"—you negotiate with people. the more you know about the other negotiators. Learn all you can about the people and the culture on the other side. put yourself in her shoes. establish different preferences and tradeoffs. When trying to assess her interests. open the negotiation differently. does the other side value efficiency above everything else. some knowledge about the other organization’s culture can help you avoid being misunderstood. with limited secretarial support? Would she value the use of your company’s technical support department? Would she accept a lower fee if she were given such support? Would she rather remain an independent contractor or become an employee. and have different negotiating styles. Still. For example. or must you obtain approval? 10. Even with perfect information about someone’s personality. As a small independent. The people in the other organization. Would she be willing to charge a lower rate for the large quantity of work. she might value some flexibility on deadlines. or do they put greater emphasis on creativity? The people negotiating. You want her to redesign all of your company’s internal and external brochures as well as the packaging and promotional materials for your various product lines. For example. and background. you might seek to learn • • • • • • where they are from where they live how long they have been with the organization what their career path(s) have been whether they have families whether they have any notable hobbies or extracurricular activities 22 . Try to determine the formal and informal decision-making authority of the people with whom you will be negotiating.• • • the other side’s broader business objectives and what they need in order to achieve them possible reasons why the other side’s business growth might be hampered what goods or services you have that would benefit the other side. Assume that you are negotiating a significant contract with a graphic designer. Anticipate the authority issue. Although you can’t gather complete information. she may not have any systems or secretarial support in her home office. be comfortable with different types of process choices. style. or how they will react to the other side’s negotiation style or process suggestions. you cannot predict perfectly how they will handle a negotiation. a formal title with your company might interest her. Would she value the opportunity to work from one of the company’s empty offices. 9. or for a specified contract period? If she has aspirations to direct a larger graphic design department someday. but that her award-winning work means that she is in great demand.
try these techniques: • • • Ask open-ended questions about the other side’s needs. Prepare for flexibility in the process—don’t lock yourself into a rigid sequence. concerns. Such information may also help you avoid a faux pas. correct. Strive for fairness by gathering external standards and criteria relevant to the negotiation. during breaks. Don’t start with numbers—try to uncover the other side’s real reservation price by initiating a conversation about interests and concerns. but you are also likely to feel exploited. and they are more likely to feel satisfied about the deal. 11. rather than by trying to anticipate the precise order of events. If you can convince the other side that a certain criterion or formula is fair and reasonable. the information could reveal that the seller is not desperate at all.• what their politics are. thereby leading you to make a lower initial offer than you otherwise might have. External or "objective" criteria are often accepted as establishing what is fair and reasonable. An expression 23 . or parents of toddlers. Don’t make a proposal too quickly because a premature offer won’t benefit from information gleaned during the negotiation process itself. Effective negotiators plan by carefully considering each issue. Both sides want to believe that any deal reached is fair and reasonable. You may share interests as amateur violinists. If you are in desperate circumstances. Don’t assume that the negotiation must proceed according to a predetermined sequence—you’ll be thrown off-balance when events turn out differently. you might capitulate to terms that seem unfair. Every so often. needs. and goals. Because there are often many relevant criteria. Such interests can provide the source of tension-relieving conversation before the negotiation. interests. and the linkage between issues. you will know to avoid religion and politics as small talk. Instead of hastily throwing out offers. If you are the buyer in the negotiation. avid golfers. such information could alert you to the seller’s desperate financial situation. or over meals. thereby preventing you from making a low initial offer that might insult the seller. regardless of whether their BATNA is acceptable or not. If your political and religious convictions are diametrically opposed to those of your counterparts. an important part of preparation is • • • researching which criteria might be applied being prepared to show why those more favorable to you are more relevant being prepared to show why those less favorable to you are less relevant. and interests. Listen closely to the other negotiator’s responses without jumping in to crossexamine. or object. Express empathy for the other side’s perspective. Steps for Getting an Integrative or Win-Win Negotiation Under Way 1. 12. paraphrase these responses or give nonverbal cues to the other side to demonstrate that you have understood her perspective. On the other hand. they will find it harder to reject a proposal incorporating that standard.
and courtesy throughout the proceedings. If you are too empathetic and insufficiently assertive. • Gently probe for the other side’s underlying positions by asking why certain conditions—for example. 24 • . Set ground rules that encourage the participants to express any and all ideas—no matter how wild or impractical. It is just as important to assert what you need and want (and why) as it is to listen carefully to the other side. • Remember that the other side consists of human beings with feelings. • Don’t launch personal attacks. would the other side agree to a reduction in price? Consider joint brainstorming with the other side—it can be a very fruitful way of generating creative alternatives. you risk missing a deal and escalating emotions. what issue(s) does one side care little about? What could you provide cheaply that the other side would value highly? If this product or service could be added to the deal. Then. and finally back to the specific issue. striking a balance between empathy and assertiveness is essential to effective negotiating. If the other side seems uncomfortable with your initial questions. resources. acknowledge the thorniness of the issue. but also state that it may be improved by learning more about your respective interests and concerns. Continue your relationship-building efforts even after the negotiating has begun. • Work to create a two-way exchange of information. Don’t overlook differences in preferences. Spend a bit more time to find a deal that is better for both sides. confirming that you can connect with the speaker and the underlying tensions or emotional issues. • When an issue seems to make another negotiator tense. 2. in which case you’ll need to revisit your strategy quickly. Don’t accuse or blame. Don’t feel pressure to close a deal too quickly. Instead. begin the search for mutually beneficial options. limits. such judgment inhibits creativity. and capabilities. you formulated positions that satisfied your own interests. interests. • Be forthcoming about your own business needs. It takes active listening one step further. you may shortchange your own interests.of empathy is especially important in highly charged situations. respect. a particular delivery date—are important. • Show empathy. Stay flexible about who asks questions and who states concerns first. you are confronted with the other side’s positions. Here are some suggestions for generating win-win solutions: • • • Move from a particular issue to a more general description of the problem. • Adjust your assumptions based on what you’ve learned. But beware of the temptation to close the deal too quickly—when the first acceptable proposal is on the table but little information has been exchanged. Indeed. Be careful not to criticize or express disapproval of any suggestion: at this stage. During the negotiation. But don’t barrage the other side with all of your interests and concerns at once. you come to understand the interests underlying those positions. When preparing for the negotiation. Signal that the proposal on the table is worth considering. then to theoretical solutions. offer to talk about one or two of your most important points—and explain why they are important. generate options that offer mutual gain. 3. For instance. • Maintain a sense of humor. Pay special attention to shared interests and opportunities for cooperation. and concerns. and vulnerabilities. The assumptions that you made about the other side’s interests and circumstances when preparing for the negotiation may be wrong. If you are too assertive and insufficiently empathetic. The challenge now: to arrive at an outcome that satisfies both parties’ interests.
you should recognize and resist its potential power as a psychological anchor. In fact. • If you anchor the negotiation with a first offer. while very little movement signals that the negotiator is approaching her reservation price. they may also. and the other side refers to it again. If you think it suggests an unfavorable or unacceptable bargaining range. 3. or • at the most favorable point that you can justify. concerns." The first offer can become a strong psychological anchor. make sure that you don’t indicate that your initial offer is final have a different line of reasoning ready to support your shift to a less aggressive offer. 4. unless you think it’s a sensible starting point. and you ignore it. • after some time has passed. Steps for Handling an Initial Offer in a Zero-Sum Negotiation 1.making people reluctant to make further suggestions—and more likely to criticize any ideas you volunteer as well. Also. but are not prepared to move much further. 25 . In this case. your first offer or proposal should be at or just a bit beyond what you believe is the other side’s reservation price--if. and generalities. setting the bargaining range. At this point. If it was serious. Harness the power of "anchoring. Don’t let it set the bargaining range. and the other side often expects such a pattern of behavior. and then discover that your estimate of the other negotiator’s reservation price is way off target. you will need to retreat gracefully. be prepared to explain the reason that you are willing to make this significant concession—and expect to have your explanation tested by the other side. So start at the right place. 2. You don’t have to follow these conventions. back-and-forth negotiation over numbers. In a negotiation in which capturing maximum value is the primary goal. • In a traditional. See also Giving and Receiving Feedback: Core Concepts. avoid direct comparison between the two offers. a large movement signals significant additional flexibility. Brace for the weight of the other side’s anchor. people tend to move in increasingly small increments. but you do have to understand them because your offers and counter-offers may be interpreted in this light. • • If the other negotiator makes the first offer. you should say so. you should respectfully ask them to explain why the offer is reasonable. studies show that negotiation outcomes often correlate to the first offer. you can articulate why this offer or proposal is reasonable. If their initial offer was not serious. Don’t drop an anchor without a line. • to the extent possible. Keep in mind the traditional assumptions about concessionary moves. put your initial number or proposal on the table. and only if. steer the conversation away from numbers and proposals. So if you make a substantial move. supported by sound reasoning. Focus instead on interests. of course.
Less obvious sources of value are the differences between the parties. try to adopt their perspective. explaining some of the technical specifications. By trading on differences. Frame your proposal as consistent with this external standard or other common measures of fairness. If the other side asserts a position you believe to be unfair. What seems fair to you is determined largely by your perspective. In addition. you can often infer them by noticing which proposal the other side prefers. Before presenting alternative proposals. plus a percentage of the company’s increased revenues over the next five years. • Steps for Closing the Deal 26 . a retail store and restaurant owner negotiating with an interior designer agrees to pay a somewhat higher price than he planned for the restaurant design in exchange for the designer’s lending him appropriate catalogs. with the current owner providing advice and assisting with marketing and distribution plans. they may compare the proposals to each other instead of to their original goals. assess the value of each option to each side consider whether the diminution of one option would be offset by an enhancement of another • if you determine that you actually prefer one of the alternatives. Then. No one likes feeling exploited. • Offering alternative proposals (two or more) has dual benefits. Value has been created for both sides. The buyer is unwilling to pay the price. For example. the current owner of a business demands a high price because he predicts that the market for his product will increase over time. Listen to their answer. They agree to a base price. • time preference or value • risk aversion and risk tolerance. Look for options that exploit differences. A single proposal on the table may feel to the other side like an ultimatum. • • Fairness and legitimacy have great power—and multiple dimensions. Package options for a favorable deal. look for differences in access to resources. because he believes the market has peaked and may decline over the next five years. First. 7. • capability • future prediction and confidence levels. the power of fairness and legitimacy. when the other negotiators won’t discuss their interests. 6. explain why their position seems unfair to you. People know intuitively to build upon their shared interests. For example. Deals often fall apart when one side is convinced they are being fair while the other side is not. adjust at least one of the proposals so that you feel equally about at least two of them. • ask them to explain why they think it is fair. The owner would not have ready access to this information. But when presented with alternative proposals. people don’t like to feel pushed into a corner. or to the discount—yet they cost nothing to the designer to provide.5. you create value that neither party could have created on its own. and ordering the store fixtures and furnishings at discount. In particular. but don’t be trapped by. Tap into. draw on external criteria that lends legitimacy to an alternative proposal you consider to be fair and favorable for you.
Ask questions about the other side’s preferences." in the final terms. Discourage the other side from seeking further concessions. Tips for Setting the Time and Place Before you meet to negotiate. you will • • • encourage the other side to find a way to get it back increase their aggressiveness in the next negotiation increase the aggressiveness of anyone else who hears the story and later negotiates with you. • If you brag about your great deal. without changes. Write down the terms. not as a threat but as a courtesy. say so. recording the terms of the agreement avoids future disputes and confusion." 4. discourage further "tweaking" in their favor. • Even if your informal agreement is nonbinding. write an informal agreement in principle. good-faith questions arise. it will be a common text for reference by both parties as future. If you have been negotiating back and forth. particularly if the other negotiator seems to expect a lot more movement in his or her direction. to learn what they reveal about their underlying interests. • • If your negotiation time has been well spent. 27 . Explain that adjustment in their favor on one term would have to be balanced by adjustment in your favor on another. Express your willingness to accept the total package. and how much more you would have been willing to give up. • • If you appear to have reached a final deal that is acceptable to the other side (and perhaps also favorable to you). Even if counsel will draft the official documents. Decide whether it is binding or not. "If we open that issue. 2. If you are aware that the other negotiator does not have final authority. contact the other side to discuss when and where you will meet. Don’t gloat. So as you approach the parameters of what you would like to be a final deal. then I’m afraid we’ll have to re-open the whole deal for it to work for me. For example. 3. People’s memories of their agreement will inevitably diverge. Allow flexibility if you anticipate going beyond the final round. don’t risk ruining it by failing to record and sign your agreement. Repeat the warning. showing flexibility on various issues. and then suddenly announce you’re at your bottom line. Consider a final trade you would be willing to make if you end up requesting significant adjustment in the final terms. leave yourself some flexibility. Don’t create so much flexibility that the deal will be rejected by the decision maker. Signal the end of the road before you get there. or "wiggle room. you are likely to be challenged or ignored. and say so in the document. 5.1.
and creature comforts. On the other hand. Some expect proposals to be made at the outset. and may make them feel more comfortable. Even in a zero-sum negotiation. This is a good-faith demonstration that you are prepared to disclose information. small talk helps you get to know the other side better—it makes you better able to judge when the other negotiator is being truthful. Listen carefully to the discussion of process—it will tell you a great deal about the other side’s negotiation style. After the opening remarks. Explicitly discuss the process. as a joint endeavor. Take your cue from what the small talk reveals about the other negotiator’s style and manner. start with the agenda. speak in a more casual way. provided that the exchange is reciprocal. Consider holding the negotiation on the other side’s "turf": it may enable you to learn more about the other side. Tips for Establishing the Right Tone Make sure that coffee. access to information. If the other side is more formal. cooperative. Beware the pressure tactic some negotiators use: delaying the start of the negotiation until right before your vacation or another deadline. soft drinks. e-mail. Test Negotiating. Never underestimate the value of "breaking bread" to establish a working relationship. especially since people often hold different assumptions about how the negotiation should work. Offer to explain some of your interests and concerns first. and more cooperative and communicative. Emphasize your openness to the other side’s interests and concerns.Use the conversation to start the business relationship on the right foot. a neutral site buffers both sides from voice mail. Frame the task positively. or light snacks will be available. and less likely to walk away from a deal. Tips for Getting Off to a Good Start In your opening remarks. Test Yourself 28 . Some assume that there will be haggling. try to relieve the tension that is undoubtedly there: express respect for the other side’s experience and expertise. don’t speak too casually—they may interpret this as a lack of seriousness on your part. perhaps using metaphors with which they are comfortable. make sure both parties have a common understanding of the issues to be discussed. while others expect an open discussion of issues to come first. Choose a facility that offers the necessary technical support. and collegial interruptions. Don’t overlook the importance of small talk at the beginning—it helps make everyone feel less defensive. If the other side is decidedly informal.
I n w h i c h t y p e o f n e g o ti a ti o n d o t h e p a rt i e s c o m p e t e (r a t h e r t h a n c o 29 .
o p e r a t e ) o v e r t h e d is tr i b u ti o n o f t h e b e n e fi ts o f a n a g r e e m e n t ? Zero-sum n It is in a z benefits of 30 .
Why is it important. unless there were other elements of value to be considered—or one or both of you changed your reservation price." A deal is said to be pareto optimal when none of its terms can be changed to the benefit of one side without diminishing its value to the other side. or should you not. disclose significant information about your circumstances? 31 . your BATNA. to know your "BATNA"? Your BATNA is important because it describes the best alternative available to you if the negotiation at hand does not work. The technical term is achieving "pareto optimality. the buyer.000 for a new home and the seller of the home you are interested in has a reservation price of $325. No agreement would be possible. What is the technical term for this? Pareto optimality. The Fundamental Framework. no matter how skilled you both were. See also Negotiating: Core Concepts. To achieve success in a zero-sum negotiation should you.000.A zero-sum See also In an ideal situation. The Fundamental Framework. Your BATNA determines the point at which you can say no to an unfavorable proposal. The Fundamental Framework. negotiators are able to maximize the total value that can be derived from a deal or transaction. What is the ZOPA (Zone of Possible Agreement)? There is no ZOPA in this example. See also Negotiating: Core Concepts. have set a reservation price of $300. means knowing what you will do or what will happen if you do not reach agreement in the negotiation at hand. See also Negotiating: Core Concepts. there is no overlap between the ranges that you and the seller find acceptable. You. you can afford to negotiate for more favorable terms. If your BATNA is good. Knowing your Best Alternative to a Negotiated Agreement. In this situation. in negotiating.
Real Sources of Power. In fact. it will be hard for him or her to walk away from your proposal. See also Negotiating: Core Concepts. Two Types of Negotiation. studies show that negotiation outcomes often correlate to the first offer. you can articulate why this proposal is reasonable. So your first offer ideally needs to be as favorable as possible. You are working to get a win-win negotiation under way in a bargaining session with a 32 . See also Negotiating: Core Concepts. In a zero-sum negotiation.Should not. having less authority in a negotiating scenario is better. and only if. Why is it a source of power for you when you have a good BATNA and know that the other side has a lousy BATNA? If the other negotiator doesn’t have a good alternative (or hasn’t thought through their BATNA). Plus. knowing about the other side’s BATNA lets you know how far you can go. See also Negotiating: Core Concepts. setting the bargaining range." What does this mean? Anchoring means that your initial proposal should be at the most favorable point (for your side) that you can justify. and may help you to be more creative in inventing options. In a zero-sum negotiation. To achieve success in a zero-sum negotiation. Two Types of Negotiation. The first offer frequently becomes a strong psychological anchor. you should not disclose any significant information about your circumstances. Needing to check back for certain decisions can be strategically helpful. See also Negotiating: Core Concepts. Sometimes. What is the "good news" about a negotiating situation in which you don’t have the authority you’d like to have? It can be strategically helpful to need to check back for certain decisions. you are competing to claim value for yourself—to take it away from the other party. Cooperation and disclosure of information may make you less effective. the suggested first step in handling an initial offer is to harness the power of "anchoring. just a bit beyond what you believe is the other side’s reservation price—if. Authority—Theirs and Yours.
While one might question some aspects of this assertion—do you really want to approach little Jessica exactly the same way you do plaid-pants Phil at the used car lot?—basically it’s true. Steps for Getting a Win-Win Negotiation Under Way. you are likely to be challenged or ignored. showing flexibility on various issues. of course. if less obviously. but also. when trying to reach terms with the local ten-year-old on how much TV she may watch. See alsoNegotiating: Steps. September 1996 The Only Four-Page Guide to Negotiating You’ll Ever Need by Walter Kiechel B ooks on how to negotiate almost invariably begin with the same observation: That the reader. If you have been negotiating back and forth. See also Negotiating: Steps. how. As employee expectations chip away at hierarchy. 33 . and by when. When you want to get a win-win negotiation under way.customer. and then suddenly announce you’re at your bottom line. Should you start with a proposal with numbers or not? Don’t start with numbers. Harvard Management Update. or dickering with the boss for a raise. Try instead to uncover the real ZOPA (Zone of Possible Agreement) by initiating a conversation about interests and concerns. Should you first signal that you are ready. don’t start with numbers. You are ready to close the negotiations with an offer. or straightforwardly present the offer in order to persuade the other party of your sincerity? You should signal that you are approaching a final deal. is constantly engaged in the N-activity—when buying or selling a house. whether he or she realizes it. and in the workplace growing more so. Steps for Closing the Deal. old notions of "Just tell ’em what to do" increasingly get supplanted by negotiation in deciding what a so-called subordinate will undertake.
for example. you’re supposed to build a relationship." And so on. The trouble was. lest you be immediately overwhelmed by the other side. over two million copies in print—to The Complete Idiot’s Guide to Winning Through Negotiation. offered her the free use of the word processor in their office. and would be happy to put in some extra time. Which presented the opening for a win-win solution: The lawyer arranged for her to do part-time work for another attorney. and gathering information on what your interests are and what the other party’s might be. expecting. and kept the full-time job that she enjoyed. by contrast. you want to separate the people from the problem. and three times the rate at other law firms.These days what enlightened businessperson would say to an important customer or supplier. but what we turned up was a remarkable degree of consensus across books ranging from the Ur-text Getting to Yesauthors from the Harvard Negotiation Project. . it’s okay to do weird emotional judo on me. and try to figure out where these may overlap with your own. Management Update has surveyed a half-dozen of the guides to negotiating available at your local bookstore. or from. To negotiate. More effort goes into asserting and defending successive positions than arriving at a solution that’s optimal for both parties. You know: "I’ll give you a hundred bucks for it. Once the two parties have explored their respective interests together. as a free-lancer in her spare time she was able to earn an hourly rate five times what he was paying her. In negotiating based on interests. positions. "Here’s the price—take it or leave it"? No. in negotiating it’s critical. But instead of countering with his own position ("The money just isn’t there"). You will need to prepare on two fronts: getting the right attitude. What you want to avoid. even selfless in a Zen sense. and. she grossed more than she would have received from the raise. and hopes that have given rise to those positions. they may well be able to arrive at an outcome not contemplated in either’s initial offer but that satisfies each far better than the result of a long haggle. was approached by his secretary asking for a raise. and that it would cost him three years of the raise just to hire and train a replacement if she left. Before you sit down with the other party. Maybe it’s just our bookstore. detached. What follows is a distillation of the best advice. the point is to get beyond positions to uncover the desires. We deliberately sought a wide variety of approaches. In his book Win-Win Negotiating. It turned out that she really did need more money to get by. He also found out that she liked working for him. a lawyer in solo practice. the enlightened lawyer asked her questions—the key technique in negotiating from interests—to get at what was behind her request. The recommended attitude for negotiating is a bit clinical. tiresomely and unimaginatively. Letting your feelings hang out over the bargaining table is like wearing a sign saying "Hey. offer and counteroffer. While preparing yourself beforehand is a good idea in most endeavors. with a practice skewed toward public interest work—read "not that lucrative"—the lawyer couldn’t afford the increased outlay. is bargaining over. to find collections of nasty tricks for clobbering the other guy that we could compare and contrast to more judicious counsel. Working every other Saturday." "I wouldn’t take less than $50. A friend. Fred E. to sweeten the bargain. She came armed with all sorts of objective data indicating that most legal secretaries in the area made 30% to 50% more than she did. the experts agree. 34 ." The imperative to plumb interests lies at the heart of what distinguishes enlightened negotiating from the other kind. . explore the other party’s interests. Jandt offers a nifty real-world example. in other words. needs. each side trying to arrive at a final number closer to its initial proposal. With the increased importance of the subject in mind. and the first person to separate is yourself. As Getting to Yes co-authors Roger Fisher and William Ury stress. So equipped. didn’t particularly want to go somewhere else.
Youwant everybody’s energies to go into analyzing the issues and arriving at an imaginative. and indeed. Fisher and Bruce Patton. Jandt recommends a strategy called mini-max. respectful. but never at their place if you can avoid it. Where will you be left if you can’t strike a deal? How can you satisfy your interests without the cooperation of the other party? Think hard about this. From the first face-to-face contact with the people on the other side. my current car still runs fine. the greater your negotiating power. Show it by not just listening.In understanding your own interests. usually abbreviated as BATNA (also BATANA). Rather. shake hands. How ready are you to fall back on it? 2. You walk in. says preferably on your own home field. and— carefully—perhaps essay a few words on how the others might be feeling. I’ll save a ton of money. author of The Complete Idiot’s Guide. sit down. Without being totally Esalen about it. feeling offended. or the woman without clear prospects elsewhere? Which suggests an important. talk a little about your own feelings. at a neutral location. try to establish as good a person-to-person relationship as possible. then make sure your worst offer to them is at least some improvement over it. or should you push yours out there 35 . (Fair warning: Some partisans of getting to you-know-what might consider this strategy too positional. ruminate over the other party’s BATNA. the woman with job offers from two other employers in her attaché case. white boards. leave people wanting to do business together again. and in calculating what the books call your "negotiating power. and. at the least. at the end of the negotiation." The stronger your BATNA. too. in any conversations that may precede the formal negotiation." the key is determining your best alternative to a negotiated agreement.") Be polite. Where would the other party feel most comfortable. Fisher’s co-author for the second edition of Getting to Yes. One final detail before sitting down: Where to conduct the proceedings? John Ilich. .) Ask yourself four questions: 1. Scrounge up the two job offers. failing that. mutually beneficial solution. friendly. What’s the minimum you’re prepared to accept? Consult your BATNA. or experts you both will need? Starting off. or any other state of high dudgeon that may get in the way of a reasonable outcome. the point is to get feelings out into the open. Particularly for dealing with a party who’s not inclined to interest-based bargaining. but hanging on their every word. What’s the maximum you can give away. Once you’ve determined your BATNA. if that would serve your purposes? Where are the files. In negotiating to buy a car. What’s the least you can offer without getting laughed out of the room? Here. ("I can imagine that you. "Do you wait for them to make the first offer. the better BATNA is probably not "Gee. . are more flexible. not into posturing. for example. I won’t have the joy of owning this snazzy little roadster that I’ve had my heart set on. flip charts. bullying. if easy to overlook. minimize them as obstacles. What’s the maximum you can ask for without getting laughed out of the room? 3. A standard illustration of the point: Who’s better situated to ask the boss for a promotion. you can use it to help sharpen the guidelines you set for yourself in the negotiation and the proposals you may want to make in starting the discussions. and maybe I can find a vehicle that’s even more fun. You can’t banish emotions from the proceeding. and you smile. the limit beyond which you will not go? 4. you can hope to use them to forge an alliance to speed the work along and. step in preparing to bargain: Go out and improve your BATNA. would like to see a good result from our discussions. acknowledge them. To the age-old question." but rather something like "Well. At best.
" If somebody does have to. dig for underlying interests. To avoid being anchored. perhaps a neutral observer can determine both them and the deal they should give rise to. But what if it’s only you and them. They divided the realtors into four groups. this for their edification as well as yours—"How did you arrive at that offer?" Brainstorm together to devise the proverbial "outside the box" solution. ask a question. If you can’t ask a question. even in response to a question. but can’t agree on what the facts are. let it be the other guy or gal. A couple of our favorite exemplary responses from Getting to Yes. It might even happen that a potential agreement emerges without anybody having to make a "first offer. counsel Bazerman and Neale. In Negotiating Rationally. recognize the other side’s gambit for what it is. and suggest getting back to business: "Wow. ." Moving the process along. dig. But why shouldn’t you set the limit. particularly since the first offer may well "anchor" the rest of the negotiation. the second edition: "Is there a theory behind having me sit in the low chair with my back to the open door?" And "Shall we alternate spilling coffee on one another day by day?" Or kick the discussion up one level from a negotiation on the issues to a negotiation on how both sides will negotiate. the price at which the house was supposedly listed for market. dig for those interests. should you make an observation or an assertion. Setting the anchor yourself works best when the other side hasn’t bothered to gather the necessary facts or to think through its interests. . That is. with the prices estimated by the other groups anchored at successively lower levels by the listing prices provided them. "No thanks. call it. past settlements. other experts retort. perhaps to keep up the human side of things. advises Ilich. ask a question. the group given the highest listing price set the highest "right price" on it. the highest you’ll have to pay or the lowest you’ll be forced to accept. And then immediately tag on a question. Sure enough. Fisher and Patton offer a novel answer: What’s the hurry? Putting a number down too soon may foreclose the exploration of interests that both sides should pursue at first. and gave members of each group packets of information on the house that were identical except for one detail.first?". 36 . Much of the emerging wisdom on how to proceed through a negotiation can be distilled into a foursentence. Shall we go back to looking at prices the market has been setting in situations comparable to ours?" Getting to finished. Fisher and his colleagues are big proponents of bringing independent. particularly if you seem headed for an impasse. fall silent and wait for the other side to step in to end the awkward pause. If both parties are willing to submit to the facts. Bazerman and Margaret A. The experts almost all agree that. . . Their first offer immediately sets the upper or lower limit for the negotiation. don’t make a counteroffer to a ridiculous initial proposal. you should consider submitting your differences to a mediator. Only rarely. I haven’t seen that classic an example of good cop/bad cop for years. Clarify your understanding of what the other side says. Max H. or scientific judgment—and of using questions to try to get the other side to see the value of such standards. he argues. Dig. skewing the final result in its direction. costs. though. and they get nasty or tricky? By now you probably can guess the answer—separate the people from the problem. Neale recount a study they performed asking real estate agents to estimate the right price for a particular house. only semifacetious injunction: To move matters along. Jandt counters that objectivity flies out the window when the bargaining gets serious. let me know when you’re prepared to negotiate seriously. objective standards to bear—benchmarks like market value. Better to say.
Notes and Articles Marjorie Corman Aaron. Tel. 300 pp. ask one more question.95. John Wiley & Sons. Tel. Quotation is not permitted. In your haste. Boston: Harvard Business School Publishing. 2000. Then. If they feel pressured. Jandt (1985. Don’t hurry them or yourself. $12.95. $10.. .95. ever so gently begin herding the doggies in that direction. Neale (1992. Bazerman and Margaret A. talk about the weather. 245 pp. Bantam Books. Ilich recommends a technique he calls funneling: Remind the other side that this particular issue has been settled. 189 pp. The Complete Idiot’s Guide to Winning Through Negotiation by John Ilich (1996. 37 . The way you frame a proposal—what aspect of the subject you choose to focus on. Especially in a complicated negotiation—say. 200 pp. Ury counsels. when there’s more than two parties involved—it may help to write down a draft agreement after every major meeting of the minds: "I know we still have a way to go. 800-323-9872) Getting to Yes by Roger Fisher and William Ury (1991. Frames have the power to both influence and distort. "The Right Frame: Managing Meaning and Making Proposals. Material may not be reproduced in whole or part in any form whatsoever without permission from the publisher. Tel. and stop lobbing interrogatories.. they may blow up over a small point. you may forget to consult your interests one last time in considering the final terms proposed. If you want to learn more . Tel." Harvard Management Communication Letter. . but I thought I’d set down the terms we appear to have settled on so far? Have I misunderstood anything? What changes would you make?" The mere prospect of having to read the draft over one more time may encourage assent. September 1999. "The Necessary Art of Persuasion. 800-225-5945) Copyright © 1996-1998 by the President and Fellows of Harvard College.95. 800-223-2336) Win-Win Negotiating by Fred E. refuse to reopen it. This document may have been reformatted to accommodate electronic format restrictions. and which you choose to obscure—can have an enormous impact on the audience's reaction and the outcome of the proposal or presentation.As soon as the framework for a possible agreement emerges. Ilich suggests "Have we got a deal?" If they say yes. $16. $17..95. and move on to what’s still open. $16.. The Free Press. Should you find yourself at a loss for something to say. 800-957-3529) Getting Past No by William Ury (1993. Tel.. when you think you’re in accord at last. Alpha books. Penguin Books. 196 pp. refresh their recollection of what you agreed on. Jay Conger." Harvard Business Review OnPoint Enhanced Edition. the authors offer advice about how to maximize the power of framing. 800-337-4624) Negotiating Rationally by Max H. shake hands.
Wall. (3) providing vivid evidence for your position. March 2000. In the long run. customers. Universalism. no. The authors evaluate 10 common negotiation tactics in light of various ethical criteria. unethical bargaining may reap short-term. subtle elements in the bargaining process—the "shadow negotiation"—can set the tone for any negotiation. Marketing arrangements are negotiated with distributors. H. How do you improve your chances while negotiating? Start by understanding how you can help or hurt your competition. This article explores two central dimensions of negotiation behavior: empathy and assertiveness. (2) finding common ground. and (3) What are your alternatives? Includes dos and don'ts for navigating negotiation sessions. "The Tension Between Empathy and Assertiveness. will let companies establish closer. Kolb and Judith Williams. He presents four broad changes in practice and perspective that. Answer these three questions: (1) What do you want?. "Turning Negotiation into a Corporate Capability. Taken together." Harvard Business Review OnPoint Enhanced Edition. and (3) appreciative moves alter the tone of the interaction so that the parties can have a more collaborative exchange. through negotiation. and other partners. The authors take these concepts from psychological literature and adapt them to make prescriptions for effective negotiation. Boston: Harvard Business School Publishing. the author argues. 3 (1996). or Good Lubrication?" Business Horizons. tactics. Boston: Harvard Business School Publishing. Coordinating them all seems an overwhelming and impracticable job. This article explains the four essential elements of persuasion: (1) establishing credibility. more creative relationships with suppliers." Harvard Management Communication Letter. sullies reputations. Instead they take a situational view. James A. Product development agreements are negotiated with joint-venture partners. Harvard Business School Publishing. however. and Mary Sue Love. Deborah M. the thousands of negotiations a typical company engages in have an enormous effect on both its strategy and its bottom line. (2) Why should your competition negotiate with you?. perceiving each negotiation to be a separate event with its own goals. "Breakthrough Bargaining. 38 . As they explain. May 1998. Utilitarianism. But few companies think systematically about their negotiating activities as a whole. one-time benefits. Every company today exists in a complex web of relationships formed. The authors provide three kinds of strategies for successful bargaining: (1) Power moves show "the other side" that it's in their interest to negotiate with you. Joseph Reitz." Negotiation Journal 12. Purchasing and outsourcing contracts are negotiated with vendors. and closes the door on future fruitful transactions. such as the Golden Rule. "Ethics in Negotiation: Oil and Water. it is neither. 2000. In reality. Robert Mnookin.Persuasion is a major part of any negotiation. Unspoken. and Distributive Justice. taken together. Scott Peppet. it damages relationships. (2) process moves influence how others view the negotiation. 2001. and measures of success. Danny Ertel. "How to Get What You Want. and (4) connecting emotionally with your audience." Harvard Business Review OnPoint Enhanced Edition. and Andrew Tulumello. one at a time. and how they can help or hurt you.
"Six Habits of Merely Effective Negotiators. Presents two basic principles that underlie the creation of joint gains. event. Teaching Purpose: Can be used as supplementary reading to provide deeper insight into the different types of joint gains. 1996. "Sources of Joint Gains in Negotiation. George Wu. searching too hard for common ground. to avoid conflict. or not telling. The author contrasts good and bad negotiating practice. Books 39 . Boston: Harvard Business School Publishing. most of us believe it is expedient. By concentrating on common interests and knowing your own "hot buttons. and failing to correct for skewed vision." Harvard Business School Case Note. Even seasoned negotiators fall prey at times to six all-too-common mistakes that keep them from solving the right negotiation problem. risk preference. 1996. The anchoring section describes how opening offers serve as an anchor. You should also understand the other party's position before asserting your own.James K." you and your partners in conflict can arrive at an optimal solution rather than a simple compromise. The framing section describes how an alternative description of an object." Harvard Management Update. no. opinion. Williams. drawing from 50 years of research and analysis. or situation can be used effectively in negotiation. "Don't Avoid Conflicts—Manage Them. short and long horizons. This article describes two psychological traps—anchoring and framing—and their roles in negotiation." Harvard Business Review OnPoint Enhanced Edition. that avoiding conflict may hinder managers in achieving their goals. Boston: Harvard Business School Publishing. To manage conflict successfully you need to understand the difference between positions and underlying needs. letting price eclipse other interests. This short and clearly written article sets forth the legal framework for understanding when and why lying will get you into trouble in negotiation. puffing. July 1997. Using case examples. Boston: Harvard Business School Publishing. "Two Psychological Traps in Negotiation. 2002. however. 3 (spring 1991). changing one side's perception of the other side's bottom line and hence the set of possible outcomes. Richard Shell. neglecting no-deal alternatives. Sebenius. and therefore preferable. letting positions eclipse interests. These mistakes include: neglecting the other party's problem. The article uses a real estate scenario to illustrate three common varieties of framing: losses versus gains. "When Is It Legal to Lie in Negotiations?" Sloan Management Review 32. Research indicates." Harvard Business School Case Note. George Wu. it provides guidance for those uncomfortable with the sometimes fuzzy distinctions between lying and bluffing. Four sources of joint gains —differences in interests. and aggregation and segregation. Regardless of our hierarchical position in an organization. and time preference—are discussed. Monci J. and simple examples are provided to illustrate the basic concepts.
or with your colleagues to promote a project. Harvard Business School Publishing. Roger Fisher. Building upon the approach in Getting to Yes. New York: The Free Press. Harvard Business School Publishing. or rejection seem inevitable. Getting Ready to Negotiate: The Getting to Yes Workbook. Professors Bazerman and Neale bring their psychologists' lens to this delightful work on negotiation theory and practice. If you can only read one book and it must be short. William Ury. One of the most difficult issues managers must deal with everyday is negotiation in the broadest sense. New York: Penguin. focus on interests. New York: Penguin. Getting to Yes: Negotiating Agreement Without Giving In. Getting to Yes set up a polemic between "positional bargaining" and "principled negotiation. This book is written for devotees of Getting to Yes who really want a mentor to walk them through the preparation process. this essential interpersonal task produces anxiety and stress in most of us. This book is a treasure trove of useful advice for the hard part of negotiating. Whether it's negotiating for a raise. it shows the reader how to use Fisher and Ertel's forms and approach to prepare for numerous negotiation examples. Roger Fisher and Danny Ertel. 1991. and Bruce Patton. 2d ed. or more formally with other companies to find ways to work together. 1992. Their bottom-line advice is much like that in Getting to Yes and The Manager as Negotiator (see entries below). Harvard Business Review on Negotiation and Conflict Resolution. New York: Bantam Books." The heart of the book articulates a basic prescriptive framework for "principled negotiation" or "negotiation on the merits" (separate the people from the problem. This collection of Harvard Business Review articles offers the best thinking on negotiation practice and conflict management. Negotiating Rationally. Boston: Harvard Business School Publishing. 40 . invent options for mutual gain. insist on objective criteria). The original 1981 edition has had a tremendous impact on everything from international politics to professional schools and executive education courses in negotiation. 2000. 1999. William Ury. not positions. but they also weave in explanation and insight from psychological research and literature. Harvard Business Review Paperback Series. Getting Past No: Negotiating Your Way from Confrontation to Cooperation. Boston: Harvard Business School Publishing.Max Bazerman and Margaret Neale. this is it. 1995. Harvard Management Update Collection. The Manager's Guide to Negotiation and Conflict Resolution. It is particularly insightful about how to recognize and handle your own reactions so that they don't get in the way. From quick prep to more detailed prep. 1991. objection. it suggests ways to deal with the other side when confrontation. The toolkit contains blank forms for the reader's negotiation.
and stronger support from your own boss and senior management (persuasion).Richard J. negotiation and persuasion skills. Online program. YES! The Online Negotiator. and decision theory grapple with strategic uncertainty and the question of how to make good decisions. 41 . Boston: Harvard Business School Publishing. Other Information Sources Roger Fisher. and activities for immediate application at work. statistics. 1996. greater cooperation from your peers (lateral leadership). It brings Fisher's work to life and makes it easy to apply to your managers' own situations. Harvard Business School Publishing. Through interactive cases. 2000. 2001. the classic reference tool on which the entire workshop is based an engaging audiocassette that challenges concepts and reinforces ideas from the video a Viewer's Guide (6 copies) that provides succinct overviews of the content and links to the book and videos • a Facilitator's Guide that helps you use the workshop components most effectively with groups or individuals—even if you're not a professional trainer. Have you ever noticed how some people seem to have a natural ability to stir people to action? Influencing and Motivating Others provides actionable lessons on getting better results from direct reports (influencing performance). measure motivation skills. and James K. and Bruce Patton. Managers will learn the secrets of "lateral leadership" (leading peers). Games. William Ury. Leading scholars in economics. Keeney. Zeckhauser. Boston: Harvard Business School Publishing. Boston: Harvard Business School Publishing. The papers in this collection address topics such as individual decision making under uncertainty. Getting to Yes! Video Workshop on Negotiation. This video workshop is the next best thing to having Roger Fisher as your managers' personal negotiation trainer and coach. Influencing and Motivating Others. expert guidance. Online program. Boston: Harvard Business School Press. Wise Choices: Decisions. and Negotiations. psychology. 1991. Videocassette. The workshop gives you everything you need to help your managers become more powerful negotiators: Seven video segments that bring you step-by-step through the key elements of successful negotiation and act as a springboard for role play: • • Getting to Yes. • eLearning Programs Harvard Business School Publishing. eds. games of strategy in which one player's actions directly influence another's welfare. Ralph L. and the process of forging negotiated agreements. You'll see more than a dozen vignettes that vividly illustrate how to turn adversarial negotiations into mutual problem solving. and enhance employee performance. Sebenius. this program helps managers to assess their ability to effectively persuade others. and how to distinguish between effective and ineffective motivation methods.
and expert advice from Roger Fisher and other experts. 42 . see the consequences of your choices play out. this program helps you build strategies for effective negotiation and conflict resolution. You'll negotiate in realistic scenarios. feedback. Getting to Yes.Based on the proven techniques developed by world-renowned negotiation expert Roger Fisher and the Harvard Negotiation Project. and detailed in the best-seller. and receive coaching.
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