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Negotiating Power …

Negotiating Power
Prof Katia Tieleman
Although people often think of boardrooms, suits, and million dollar deals when they hear the word “negotiation,” the truth is that we negotiate all the time. For example: ask your boss for a raise or a training, make important business decisions with your team… These are all situations that involve negotiating! This workshop will give you an understanding of the phases of negotiation, tools to use during a negotiation, and ways to build win-win solutions for all those involved.

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  • 1. © Vlerick Business School
  • 2. NEGOTIATING POWERPROF KATIA TIELEMAN#EXPERIENCEVLERICK
  • 3. 3 © Vlerick Business School Prof. dr. Katia Tieleman
  • 4. 1.NEGOTIATION PARAMETERS
  • 5. PARKER GIBSON HALF LOT WILLOW STREET5 © Vlerick Business School Negotiaton to create value
  • 6. ASPIRATION BASE (AB) – A HIGH ASPIRATIONBASE  Consistently outperforms a low aspiration base.  Consistently outperforms a low aspiration base.  Yet leaves enough room for necessary concessions to  Yet leaves enough room for necessary achieve a win more-win more outcome. concessions to achieve a win more-win more  Promotes positive psychological energy. outcome.  Communicates confidence and negates irrational negotiation  Promotes positive psychological energy. behaviour.  Pressurises the other party to  Communicates confidence and negates use more energy to lower your aspirations, so they irrational negotiation behaviour. concentrate less on promoting their own aspirations.  Pressurises the other party to use more energy  “Anchors" the negotiation.  Beware, an AB could be seen to lower your aspirations, so they concentrate as a position - use a range rather than a firm number. less on promoting their own aspirations.  Parties must aspire to a shared AB that meets their  “Anchors" the negotiation. shared interests best.  Beware, an AB could be seen as a position - use a range rather than a firm number.  Parties must aspire to a shared AB that meets their shared interests best.6 © Vlerick Business School Negotiaton to create value
  • 7. REAL BASE (RB) - MINIMUM REQUIREMENT FORAGREEMENT  Point beyond which an agreement is no longer meaningful.  If you don’t understand or know your real base:  It will most likely lead to a point where a mutually beneficial outcome is not longer possible.  It makes it impossible to establish the contracting zone because this rests between the RB’s of the parties.  You can be exploited because you don’t know the point where you should withdraw from a negotiation.  Beware, RB can cause thought closure and a positional stance.7 © Vlerick Business School Negotiaton to create value
  • 8. BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT(BATNA)  Reduces dependency on the other party’s agreement.  Ensures the other party does not over-inflate its position.  The stronger the BATNA the greater the negotiating power.  The more readily a negotiator can walk away from a negotiation, if necessary, the greater the negotiators ability to influence the negotiation.  Knowing the alternatives available to the other side is essential to prepare for a negotiation.  A BATNA protects a negotiator from  accepting an agreement that is unfavourable  accepting an agreement that is only in the counterpartys best interests  Knowing your BATNA is knowing what to do when the negotiation fails.  The decision to reveal or not reveal a BATNA must be based on the strength of the BATNA and whether disclosing it is likely to weaken the counterparty’s negotiation stance.8 © Vlerick Business School Negotiaton to create value
  • 9. CONTRACTING ZONE Sellers Best AB SELLER Scenario Buyers BATNA Buyer RB Worst Scenario Contracting Zone / Zone of Possible Agreement (ZOPA) Sellers Worst RB BATNA Seller Scenario BUYER Buyers AB Best Scenario9 © Vlerick Business School Negotiaton to create value
  • 10. TAKEAWAYS Power - Information is power. - Time is power. - First offers act as an anchor. Relations - Negotiation as an event is different from the process of the negotiation. - Victims become aggressors - Walkaways are better when soft.10 © Vlerick Business School Negotiaton to create value
  • 11. 2.FROM BARGAININGTO VALUE CREATION
  • 12. FROM BARGAINING TO VALUE CREATION I versus I To achieve value creation one Win-Lose must: bargaining • Verify assumptions • Change positions • Explore interests We Value creation12 © Vlerick Business School Negotiaton to create value Win - Win
  • 13. TO WIN MORE- WIN MORE: FOCUS ON COMPLEMENTARY INTERESTSWe Interests can be: OPPOSITE COMPLEMENTARY Joint SIMILAR Problem Solving Value creation Win - Win Win more – Seemingly opposed positions are not always Win more opposed when it comes to the underlying interests, they could be compatible. Joint Don’t just split the pie in half. Make concessions Opportunity Finding on those issues that are not important to you, but valued by the other party. 13 © Vlerick Business School Negotiaton to create value
  • 14. FEEL LIKE SOME MORE? Negotiating to Create Value (24 April 2013) Executive MBA (September 2013)14 © Vlerick Business School #experiencevlerick
  • 15. THANK YOU!