Negotiation101

Negotiation 101 with an Emphasis on Women

In 2000, 76.8 percent of women aged 25 to 54 worked outside the home.
Women's earnings relative to men's have stagnated at 73.2 percent.
2.5 x > more women than said they feel "a great deal of apprehension”
Men initiate negotiations about four times as often as women.
will pay as much as $1,353 to avoid negotiating the price of a car
typically ask for and get less when they do negotiate—on average, 30 percent less than men.
20 percent of adult women say they never negotiate at all

lose more than $500,000 by age 60 if don’t negotiate first salary
eight times as many male MA’s from Carnegie Mellon negotiated their salaries..
women who consistently negotiate salary increases earn a $1 million more during their careers than women who don't.
Women own 40 percent of all businesses in the U.S. but receive only 2.3 percent of the available equity capital. Male-owned companies receive the other 97.7. percent.
Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs
men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

Male Bargaining Advantages
Feel bargaining advantage
Feel entitled to more rewards
Less likely to back down
Use more distributive tactics
Feel entitled to information
Seen as stronger speakers than women
Seek more power
Intimidate

Female Bargaining Advantages
more likely to follow a set of rules or steps to get to a final outcome
take a broad or 'collective' perspective
view elements in a task as interconnected and interdependent
see the big picture and come up with a systematic plan on how to solve it.
work through steps by sharing experiences while figuring out what both sides can gain to achieve an integrated outcome.
more concerned about how problems are solved than merely solving the problem itself
Instead of concentrating on what they want or need to get out of the negotiation women focus on what both sides need and how both parties can get what they want

That whole mars/venus thing

Identify Value = precedent, relationships, reputation, political appearance, fairness, profit, future opportunities, survival, praise, fulfillment (personal or corporate)
Create value by locating and identifying all of your own and your bargaining partner’s interests (preferences, priorities, needs, desires, fears)
Claim value by making a case for your entitlements, trading differences, finding commonalities
Reap value by crafting durable agreements
OptimalNegotiated Outcome

Relative Benefits v. Absolute Numbers

Agreement possible
Better than walking away
BATNA
Achieved through compromise
“Win win”
Meets interests of both parties better than compromise would
Achieved through identifying interests, identifying and/or creating value
Pareto-optimal
Best possible negotiated outcome for both

Distributive Bargaining
The process by which the parties distribute between themselves what they believe to be a fixed “pie” of money, goods or services
A Zero Sum exchange in which whatever one side gains, the other side loses
Parties move toward resolution through a series of concessions

Positions
What you want
best goods, price, service
close deal, future business, successful partnership
Interests
Why you want it
Make more money; acquire customers; drive competitors out of the market
independence, satisfaction, adventure, creation
Issues
What you disagree about
Quality, price, future benefits
What you’re competing about/for
Market position, survival
Stakeholders
Everyone interested in outcome
Shareholders, workers, executives, customers, suppliers; family
Grammar of Negotiation

INTERESTS
Potential future business opportunities
Competitive market advantages
Protecting market position
Gaining competitive advantage
Acquiring a Piece of the Action
Securing Future
Avoiding Risk
Creating a Trading Partner
Gaining Synergies
Expanding Customer Base
TERMS
Service/guarantees
third party sources of recovery
Timing of payments
Metrics for satisfactory performance
Method of payment
Exchange rates
Letters of credit
Bargaining Chips

DiagnosticQuestions
What are my intended outcomes and interests?
Preferences, priorities, needs, desires, fears, aspirations, bottom line
What are their possible interests and outcomes?
Put yourself in their shoes
What are the options?
Potential points of agreement
Differences that might be dove-tailed

A good hockey player plays where the puck is.
A great hockey player plays where
the puck is going to be.
Know
Competitor’s strengths, weaknesses
motivations, concerns, preferences, desires, needs, priorities, risk tolerance, optimism/pessimism about the future
Your Best Alternative to a Negotiated Agreement (“BATNA”)
Plan
Opening Offer/Demand
Number of Bargaining Moves (concessions) you’re willing to make in Advance

Dance ends at Midpoint Between First Two Reasonable Offers
Each Concession tends to be half the size of the previous concession and takes twice as long to be made
short-circuit dance &your bargaining partner will use mid-point offer to claim more value
Extreme Offers
Make them soft
Monitor response
Anticipate making concessions
Reasonable offer
Demonstrate commitment
Make only modest concessions
Stress merit
TheDance

A Reason and a Number
Resource Materials Part I, page 49

ANCHORING
The party making the first reasonable offer should prevail over his bargaining partner who must respond in the range set by that party.

Set false anchor
Frame the “deal”
Nature of problem deal is capable of resolving
Characterize deal in way favorable to your strengths
Routine extension of old rather than new “deal”
View sale of biz as stand-alone vs. synergy created by acquisition by buyer
Focuses on future rather than present
Focuses on value to BOTH parties
Lax & Sebenius 3-D Negotiation at 199-201
Using, Resisting & Creating (Meta) Anchors

Framing
Present Losses as Gains
Strong tendency to prefer avoiding losses over acquiring gains
competitor’s deal would be a loss because – mired in bureaucracy; can afford to fail; product not as good
Use language that emphasizes your position & frames information in your favor
fewer rather than greater – greater attention to needs; partner in place; more dedicated, motivated, faster

Competitive Bargaining
make high initial demands
maintain those high level demands throughout the course of the negotiation
make few (and small) concessions
adhere to a high level of aspiration for one's own "side."
obtain as much information from the other side as possible
give as little information about one's own position away
bluff
mislead
threaten retaliatory action if the other side does not comply.

Concessions & Reciprocity
Make contingent concessions, i.e., we’ll drop price to $1.9 million if you provide letter of credit or increase initial payment, etc.
Creates appearance of increase in their number
Almost risk free
Label concessions & demand reciprocity
Stress difficulty in making concession
This will cut our profit razor thin
If we make this concession, you should be willing to pay in dollars rather than yen (or every 30 rather than 60 days or with interest)

McNamara’s First Rule of War
Empathize with your enemy
The man able to put himself into Kruschev’s shoes was the only one able to suggest a way for Kruschev to back down AND save face, i.e., ignore the second hard-line message and respond to the first.
Cooperative Responses to Competitive Bargainer
sub-divide concessions by dividing issues into smallest parts & offer concessions only on sub-parts;
make hypothetical offers that can be disowned later;
demand principled justifications for positions; and,
respond tit-for-tat, i.e., to intransigence with intransigence and cooperation with cooperation.
Mutual problem-solving inquiries include:
what the parties believe would be a "fair" solution to the problem;
whether the parties can agree on criteria for a "fair" settlement;
and, what priorities each party has, i.e.,
which issues are most important to each party and
which unimportant.

"When others sense your willingness to
walk away, your hand is strengthened.
Sometimes you are better off not getting to yes.“
Robert Rubin, Chairman of Citigroup Executive Committee, former Secretary of the Treasury

Distributive vs. Integrative Bargaining
Dividing Fisher and Ury’s Famous Orange
Interest Based Solution
Distributive Solution

Creating Value
Compatibility (identifying issues for which parties don’t have a conflict of interest)
logrolling, or trading off concessions on low-priority issues for gains on higher priority issues
trading differential time preferences, or allocating more initial outcomes to the more impatient party and greater profits over a longer period to the more patient party
adding issues, or adding to the agreement issues not inherent in the initial negotiation framework
contingent contracts, or bets based on different expectations regarding a future event.
Research reveals that negotiators often fail to implement these strategies and to reach integrative agreements

The Central Question
How can we address our interests
While at the same time addressingyour interests
in a way that satisfies? our common interests
With thanks to mediator Sam Imperati

http://www.negotiationlawblog.com	1512
http://translate.googleusercontent.com	6
http://www.linkedin.com	2
http://www.slideshare.net	1
http://translate.yandex.net	1
http://131.253.14.66	1

Negotiation101

by Victoria Pynchon

Accessibility

Upload Details

Usage Rights

6 Embeds 1,523

Statistics

Negotiation101 Presentation Transcript