SESSION 2 : Negotiation Preparation

Mr. Ta Wei CHAO

Former Executive Director of ESSEC IRENE Asia-Pacific
E-mail: chao@essec.edu

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 THE ZONE
OF POSSIBLE AGREEMENTS

AV for buyer RV for buyer

ZOPA
RV for seller AV for seller

RV: Reservation Value

AV: Aspiration Value

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 THE « NO-ZOPA CASE »

AV for buyer RV for buyer

RV for seller AV for seller

RV: Reservation Value

AV: Aspiration Value

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 ANCHORING FIRST?

• Reason of anchoring first?

– Operates "anchoring" for the other
– Becomes a reference for the "negotiation danse"
• Reason of not anchoring first?
– Risk of asking "less" than what the other is ready to offer
• Too pessimistic aspiration
– Risk of asking "more" than what the other considers reasonable
• Excessive aspiration (out of ZOPA or out of the market)
• Solution?
– Get as much information as possible first
• in the preparation
• at the table
– Then if you decide to anchor first, anchor above your aspiration value, still being
able to justify this with an objective criteria, and while measuring the risks of
excessive anchoring

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PREPARING FOR A NEGOTIATION
Lempereur & Colson, First Things First (ch. 2)

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 THREE DIMENSIONS

• PEOPLE - Who?
– Interpersonal Relationship
– Vertical Relationship: the Mandate
– Stakeholder Mapping
• PROBLEM - What?
– Core Motivations
– Solutions at the table (options)
– Justifications
– Solutions away from the table (alternatives, plan B)
• PROCESS - How?
– Organization
– Communication
– Logistics
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 WHO?

• Interpersonal Relationship
– There are TWO people in a negotiation
– The other cannot ignore me, and vice versa
– We must have at least a working relationship
• Vertical Relationship: the Mandate
– My authority/ Their authority
– Power to decide or not?
• Stakeholder Mapping
– People or institutions away from the table, but interested in the deal
– Who can either help, or impede, implementation of the deal

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 WHAT? Motivations

• Interests (general/private, rational/emotional), needs

– What underlies a position: why/why not?
– What is really important to a person
– Mine, yours, theirs
• Relevant Categories of Interests
– Shared & compatible
– Similar & incompatible
– Different & complementary
– Different & contradictory

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 WHAT?
Solutions At the Table (SAT)

• Not ONE solution, but several

• Concrete, multi-variable solutions
– What satisfies the interests
– What answers the motivations
– What solves the various dimensions of the problem
• Three steps:
– Quantity: create as many solutions as possible
– Quality: check & select them
– Tactics: decide in which order to present them

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 WHAT?
Justifications or Criteria

• What may help you justify a solution

• What may “objectively” anchor a solution
• What increases legitimacy beyond power struggle
• Examples:
– A principle, some data, or analysis, or demonstration
– The law, some rules, or professional standards
– The market, the value, the costs,
– A precedent, a contract
– An expert’s or mediator’s opinion, an arbitrator’s decision

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 WHAT?
Solutions Away From the Table
(SAFT)
• Everything I/the other can do UNILATERALY if there is no
agreement
– What helps each party judge any possible solution at the table
– What increases my/their power in a negotiation
– What needs to be worked on (not fixed)
• Among these alternatives, know your BATNA
= The Best Alternative to a Negotiated Agreement

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 HOW?
Organization

Structure time
Go through the 5 following questions (the “Five P’s”)
• Why? P urpose of the meeting
• Who? P eople at the meeting
• How? P rocess/methods of the meeting
• When? P lanning, agenda
• What? P roduct of the meeting

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 HOW?
Communication

• Stating/Framing the Problem

– The formula Vs. the details
• Processing Information Exchange
– What to share
– What NOT to share
• Dialogue
– Listening & asking the good questions
– Speaking & giving the good answers

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 HOW?
Logistics

• Where does the meeting take place?

• Which language?
• The table
– Shape?
– Who is there?
• The materials
– A computer? A flipchart?
• Transportation

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 THE 10 POINT PREPARATION PLAN
1. Personal Relationships 2. Mandates 3. StakeholdersMap
Ours Theirs
WHO ?

4. Core Motivations
Ours Theirs

5. Solutions at the table 7. Criteria of Legitimacy

WHAT ?

6. Solutions Away From the Table

Ours Theirs

8. Process 9. Communication 10. Logistics

Questions to ask Information to share
HOW ?

© Lempereur & Colson, 2004

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