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Topic 5


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Topic 5

  1. 1. Creativity and Problem Solving in Negotiations
  2. 2. What’s The Importance of Creativity in Negotiations ? The creative aspect of Negotiations is often ignored by negotiators Creativity in Negotiations is seeking a win –win enterprises Creativity in Negotiations enlarges the pie and extend problem solving strategies
  3. 3. What is Your Mental Model ? HagglingTwo dogs fighting over one bone Cost/Benefit AnalysisRational, decision making model, Maximize the returns Game PlayingChess game model, transfers fighting in the streets to battle of wits PartnershipEmbraced by Companies, treating clients as partners Problem solvingThe task of defining and solving a problem
  4. 4. What are the characteristics of creative negotiations agreements Fractionating Problems into solvable partsCreating multiple- issue negotiations from what appear to be single issue Finding Differences : Issue Alignment and RealignmentAlign issues in such a way that permits the issues to be negotiated independently and ideally traded off. Expanding the PieIt creates integrative agreements, it is not viable option all situations
  5. 5. What are the characteristics ofcreative negotiations agreements? Cont BridgingCreates new alternatives that meet parties underlying interests Cost- CuttingMake the other party satisfied by reducing the party’s costs Nonspecific CompensationOne party receives what he/she wants and the other is compensated Structuring ContingenciesContradictory beliefs about future events or outcome, contingents contracts can provide a way out
  6. 6. Why Contingency Contracts are rejected in many business negotiations ?? People are unaware of how to construct contingency contracts. They are often seen as a form of gambling, high-risk project. No systematic way of thinking about the formulation of such contract is usually available. Many negotiators have a “getting to yes” bias .
  7. 7. What are the six benefits of Contingency Contracts ?Build on their differencesManage decision making biasesSolve problems of trustdiagnose the honesty of other sideReduce the risk through risk sharingIncrease the incentive of the parties to perform at orabove contractually specified levels
  8. 8. What are the three key criteria forassessing the viability of contingency contracts in negotiation? Contingency contracts require some degree of continued interaction between the parties Parties need to think about the enforceability of the contingency contract Contingency contracts require high degree of clarity and measurability
  9. 9. What are the threats to effective problem solving & creativity?The Inert Knowledge ProblemThe inability to access relevant knowledge when most neededAvailability HeuristicThe more common group is judged to be, the easier it’s forpeople to bring instances of this group to mindRepresentativenessBased on stereotypes of people, which often has basis of realitybut are frequently wrongAnchoring & AdjustmentPeople use a reference point as an anchor & then adjust thatvalue up or down as supposed appropriate
  10. 10. What are the threats to effectiveproblem solving & creativity? - Cont Belief Perseverance The tendency of people to continue to believe that something is true when it’s revealed to be false Illusory Correlation The tendency to see invalid correlation between events, while in fact no relationship exists between the two Just World Most people believe the world is fair place Hindsight Bias Human tendency to conclude a process once the outcome is known
  11. 11. What are the threats to effectiveproblem solving & creativity? -Cont Functional Fixedness When people have mental block against using an object in a new way to solve a problem Set Effect Prior experience can have negative effect in new problem solving situations Selective Attention Bombarded with the counterpartys physical appearance, nonverbal behavior and so on
  12. 12. What are the threats to effectiveproblem solving & creativity? -Cont Overconfidence Judgments of likelihood for certain types of events are often more optimistic than is warranted The limits of short-term memory The part of our mind that holds the information currently in the focus of an attention and conscious processing
  13. 13. What are The Creative Negotiations Strategies? Multiple Roads lead to RomeFeedback and Negotiation PerformanceIncubationRational Problem Solving ModelFluency ,Flexibility and OriginalityBrainstorming
  14. 14. What are the Different Types of Creative Thinking and Reasoning ?Convergent ThinkingDivergent ThinkingInductive ReasoningDeductive Reasoning