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  1. 1. Negotiation Techniques MIM Course 2003 Jorge Correia Jesuino Kennedy, G. (1998). The new negotiating edge: The behavioral approach for results and relationships. London: Nicholas Brealey Publishing.
  2. 2. Negotiation as a Universal Process
  3. 3. Negotiation defined behaviorally <ul><li>The process by which we search for the terms to obtain what we want from somebody who wants something from us. </li></ul>
  4. 4. Key elements of negotiation <ul><li>Interdependence </li></ul><ul><li>Some perceived conflict </li></ul><ul><li>Opportunitic interaction </li></ul><ul><li>The possibility of agreement </li></ul>
  5. 5. Definition <ul><li>Negotiation is a process of potentially opportunistic interaction by which two or more parties, with some apparent conflict, seek to do better through jointly decided action than they could otherwise.” </li></ul><ul><li>Lax & Sebenius (1986). The manager as negotiator . NY: Free Press. </li></ul>
  6. 6. Negotiation is central to the manager’s job <ul><li>Dealing outside the chain of command </li></ul><ul><li>Indirect management </li></ul><ul><li>Dealing with subordinates </li></ul><ul><li>Commands </li></ul><ul><li>Management systems </li></ul><ul><li>The cooperative approach </li></ul><ul><li>Beyond pure command, </li></ul><ul><li>systems and cooperation </li></ul><ul><li>Dealing with superiors </li></ul>
  7. 7. Some ways we make decisions <ul><li>Persuasion </li></ul><ul><li>Giving in </li></ul><ul><li>Instruction </li></ul><ul><li>Coercion </li></ul><ul><li>Litigation </li></ul><ul><li>Problem solving </li></ul><ul><li>Chance </li></ul><ul><li>Arbitration </li></ul>“ We deserve a break” “ Ok, you deserve a break” “ Give me a break” “ Give me a break – or else!” “ I’ll sue to get a break” “ How can we both get a break?” “ Heads I get a break” “ Which of us deserves a break?” Source: The Negotiate Trainer’s Manual, 1996, Negotiate Ltd, Edinburgh, p.4
  8. 8. When to negotiate <ul><li>When we need someone’s consent </li></ul><ul><li>When the outcome is uncertain </li></ul><ul><li>When the time and effort of negotiating are justified by the potential outcome </li></ul>
  9. 9. Not the Bedford truck drivers’ insurance policy <ul><li>Years ago, truck drivers were offered what appeared to be good deal by an insurance company. </li></ul><ul><li>They could insure their life for a single shilling and their family would receive the equivalent of their annual wage if they were killed while driving a Bedford truck. </li></ul><ul><li>The small print revealed that their family was only eligible for the award if they were killed by another Bedford truck. </li></ul>
  10. 10. The tasks of the four phases <ul><li>Phase </li></ul><ul><li>Prepare </li></ul><ul><li>Debate </li></ul><ul><li>Propose </li></ul><ul><li>Bargain </li></ul>Source: The Negotiate Trainer’s Manual, 1996, p.4 Task What do we want? What do they want? What wants might we trade? What wants will we trade?
  11. 11. Attitudes, Beliefs, and Behaviors of Negotiators
  12. 12. A simple model Beliefs Attitudes Behavior
  13. 13. The red-blue continuum 10 5 0 5 10 Extreme Red Extreme Blue
  14. 14. Points on the continuum No. red No. blue Point on continuum 10 0 Red 10 9 1 Red 4 8 2 Red 3 7 3 Red 2 6 4 Red 1 5 5 0 4 6 Blue 1 3 7 Blue2 2 8 Blue 3 1 9 Blue 4 0 10 Blue 10
  15. 15. A basic (red) assumption of negotiation “ In a successful negotiation, both parties gain – but one gains more than the other.” Source: Colin Robinson (1990). Winning at Business Negotiations: A Guide to Profitable Deal Making, Kogan Page, p.33.
  16. 16. Extreme red attitudes “ We recognise that, far from being honest, negotiation is a web of ever more delicate lies. A skilled negotiator will appear friendly if this is the role he considers to be most effective, but will never sacrifice profit for friendship in his business dealings. He will never help unless that is the way to get what he wants and then only if it gives him more than it costs. He will never co-operate if he can avoid it, since this implies giving up something, or worse still, sharing a gain.”
  17. 17. Red attitudes <ul><li>Be aggressively competitive and non-cooperative. </li></ul><ul><li>Dominate your opponents. </li></ul><ul><li>Seek always to win. </li></ul><ul><li>All deals are “one-offs”. </li></ul><ul><li>Use ploys and tricks. </li></ul><ul><li>Bluff and coerce. </li></ul><ul><li>Exploit the submissive. </li></ul>Source: The Negotiate Trainer’s Manual, 1996, p.55.
  18. 18. Blue attitudes <ul><li>Be co-operative – even with aggressive partners. </li></ul><ul><li>Show respect to all partners. </li></ul><ul><li>Seek to succeed. </li></ul><ul><li>All deals lead to others. </li></ul><ul><li>Eschew manipulation. </li></ul><ul><li>Be open and play it straight. </li></ul>Source: The Negotiate Trainer’s Manual, 1996, p.55.
  19. 19. Extreme blue style “ What makes Win-Win negotiators important, both socially and historically, is that, in modifying their perception of what they need to win, they have redefined what winning means. They consider not just their own goal, but the other person’s goal and the common goal. They know that negotiating is not solely a question of how much they will win, but how much the loss will afect the other person. They have no desire to live in an unstable environment of a few winners and a multitude of embittered losers. In short, they don’t have to win it all; what’s there can be shared.” Source: Tessa A. Warschaw (1981). Winning by Negotiation, McGraw-Hill, p.62.
  20. 20. The prisoner’s dilemma Two prisoners, Slug and Gripper, are under arrest on suspicion of having committed a major crime. They are in separate cells and cannot communicate with each other. The authorities do not have enough evidence to convict them of the crime for which they were arrested. Instead, the prosecutor speaks to each of them separately and offers them the same deal: “ If you confess to the crime and turn state’s evidence, you will go free and your former associate will receive a 10-year sentence. If you do not confess but your associate does, then he will go free and you will receive a 10-year sentence. If you both confess, you will receive 5 year each. If neither of you confesses, you will each be charged with the misdemeanour and receive a 1-year sentence.”
  21. 21. Player’s choices and pay-offs <ul><li>Players’s choices </li></ul><ul><li>Both play blue </li></ul><ul><li>Both play red </li></ul><ul><li>One plays blue, </li></ul><ul><li>other plays red </li></ul><ul><li>Pay-offs </li></ul><ul><li>+ 4 points each </li></ul><ul><li>- 4 points each </li></ul><ul><li>Blue player loses 8 points (-8) </li></ul><ul><li>Red player gains 8 point (+8) </li></ul>Source: The Negotiate Trainer’s Manual, 1996, p.11.6
  22. 22. Naive blue plays in red-blue <ul><li>Round </li></ul><ul><li>1 </li></ul><ul><li>2 </li></ul><ul><li>You </li></ul><ul><li>Blue </li></ul><ul><li>Blue </li></ul>Them Red Red
  23. 23. Recommended play in red-blue <ul><li>Round </li></ul><ul><li>1 </li></ul><ul><li>2 </li></ul><ul><li>3 </li></ul><ul><li>You </li></ul><ul><li>Blue </li></ul><ul><li>Red </li></ul><ul><li>? </li></ul>Them Red ?
  24. 24. The negotiators dilemma <ul><li> Stone’s Choice </li></ul>Create Claim Claim Create Ward’s Choice Mediocre Mediocre Terrible Great Great Terrible Good Good