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1. Closing the DealClosing the Deal

2. Agree or Walk Away?Agree or Walk Away?
 Classic conflict – at least twoClassic conflict – at least two
interdependent parties, with incompatibleinterdependent parties, with incompatible
goalsgoals
 What to do when negotiating isn’t workingWhat to do when negotiating isn’t working
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3. Negotiating SkillsNegotiating Skills
 Skill 10.1: Create anSkill 10.1: Create an agreement templateagreement template
 Skill 10.2:Skill 10.2: Claim or retain valueClaim or retain value at the endat the end
of a negotiationof a negotiation
 Skill 10.3: Identify theSkill 10.3: Identify the causes forcauses for
stalematestalemate and techniques to move pastand techniques to move past
themthem
 Skill 10.4: Learn how to avoid or eliminateSkill 10.4: Learn how to avoid or eliminate
bargaining trapsbargaining traps
 Skill 10.5:Skill 10.5: Build a relationshipBuild a relationship in ain a
negotiationnegotiation
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4. Chapter Case: To Agree or NotChapter Case: To Agree or Not
to Agree, That Is the Questionto Agree, That Is the Question
 Four-party agreement on the operation of aFour-party agreement on the operation of a
multimillion dollar public hospital came down tomultimillion dollar public hospital came down to
final signatures on the dealfinal signatures on the deal
 Governor wanted one more concession from cityGovernor wanted one more concession from city
and county officialsand county officials
 Parties could not legally agree with finalParties could not legally agree with final
demand, so agreed to use “best efforts” to issuedemand, so agreed to use “best efforts” to issue
$12 million in bonds$12 million in bonds
 Closing went forward on dealClosing went forward on deal
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5. Agreement TemplateAgreement Template
 Document that includes critical issuesDocument that includes critical issues
 Memorializes important aspects of dealMemorializes important aspects of deal
and “what-ifs”and “what-ifs”
 Includes: parties, intent, roles,Includes: parties, intent, roles,
consequences, exit strategyconsequences, exit strategy
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6. Put It in WritingPut It in Writing
 Written deal serves three purposesWritten deal serves three purposes
 CommunicationCommunication – make sure all heard– make sure all heard
the same dealthe same deal
 CommitmentCommitment – signing the deal shows– signing the deal shows
investmentinvestment
 ContractContract – evidence of deal may be– evidence of deal may be
bindingbinding
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7. Tactics at End of NegotiationTactics at End of Negotiation
 To avoid concessionsTo avoid concessions
 SilenceSilence
 WalkawayWalkaway
 Promise an exchangePromise an exchange
 To exact concessionsTo exact concessions
 Nickel and dimingNickel and diming
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8. Moving Past StalemateMoving Past Stalemate
 Review the concessions both parties haveReview the concessions both parties have
already madealready made
 Utilize a third partyUtilize a third party
 Handle emotionsHandle emotions
 Move to informal negotiationsMove to informal negotiations
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9. Traps to AvoidTraps to Avoid
Handling EmotionsHandling Emotions
 Label your opponent’s behavior to yourselfLabel your opponent’s behavior to yourself
 Acknowledge your own emotionsAcknowledge your own emotions
 Recognize emotions may make youRecognize emotions may make you
uncomfortableuncomfortable
 Identify what’s causing the emotionIdentify what’s causing the emotion
 Express your emotions appropriatelyExpress your emotions appropriately
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10. Tactics for Success:Tactics for Success:
Asking the Right QuestionsAsking the Right Questions
 Use open-ended questions to elicit creative thinking:Use open-ended questions to elicit creative thinking:
“Do you think?”“Do you think?”
 Use window question that calls for opponent toUse window question that calls for opponent to
explain position: “What were you saying about . . .?”explain position: “What were you saying about . . .?”
 Use series of questions to promote dialogue: “ExactlyUse series of questions to promote dialogue: “Exactly
what . . .? Is there flexibility. . .?”what . . .? Is there flexibility. . .?”
 Question to uncover hidden concerns: “Am I missingQuestion to uncover hidden concerns: “Am I missing
something?”something?”
 Question to enhance creativity: “Have youQuestion to enhance creativity: “Have you
considered. . .?”considered. . .?”
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11. Bargaining TrapsBargaining Traps
 Conflict spiralConflict spiral occurs when one party initiates aoccurs when one party initiates a
contentious communication and the other partycontentious communication and the other party
responds in kind; which elicits anotherresponds in kind; which elicits another
contentious communication and so oncontentious communication and so on
 How to break conflict spirals?How to break conflict spirals?
 Refocus negotiations byRefocus negotiations by
not reciprocatingnot reciprocating
 Respond with mix of contentiousRespond with mix of contentious
and noncontentiousand noncontentious
 Label behavior as unproductiveLabel behavior as unproductive
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12. Bargaining Traps (cont’d)Bargaining Traps (cont’d)
 Psychological entrapmentPsychological entrapment occurs when a partyoccurs when a party
escalates commitment to a previously chosen,escalates commitment to a previously chosen,
though failing, course of action and becomes sothough failing, course of action and becomes so
invested in reaching agreement, no longer caresinvested in reaching agreement, no longer cares
if it’s a good agreementif it’s a good agreement
 To avoid psychological entrapmentTo avoid psychological entrapment
 Make sure to establish BATNA at startMake sure to establish BATNA at start
 Be willing to walk away rather than give into anythingBe willing to walk away rather than give into anything
less than original BATNAless than original BATNA
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13. Joint Problem Solving toJoint Problem Solving to
Avoid Bargaining TrapsAvoid Bargaining Traps
 Diagnose the problemDiagnose the problem
 Reexamine goals to set realistic targetReexamine goals to set realistic target
 Reframing a change as “new direction” notReframing a change as “new direction” not
as “giving in”as “giving in”
 Reduce targetReduce target
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14. Other Barriers toOther Barriers to
AgreementAgreement
 Ideologically based conflictIdeologically based conflict
 More difficult because tradeoffs andMore difficult because tradeoffs and
compromises are seen as selling outcompromises are seen as selling out
 One sees one’s own position as “fairer”One sees one’s own position as “fairer”
because based on one’s idealsbecause based on one’s ideals
 Often results from one representing his or herOften results from one representing his or her
own “group” against othersown “group” against others
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15. Other Barriers toOther Barriers to
Agreement (cont’d)Agreement (cont’d)
 Decision-making conflict arises whenDecision-making conflict arises when
parties mustparties must
 Communicate needs without revealing tooCommunicate needs without revealing too
muchmuch
 Assimilate information quicklyAssimilate information quickly
 Understand the needsUnderstand the needs
of the other partyof the other party
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16. Barriers to AgreementBarriers to Agreement
(cont’d)(cont’d)
An irrational opponentAn irrational opponent
 Assume your opponent is not really irrational andAssume your opponent is not really irrational and
proceed rationallyproceed rationally
 Recognize it as a strategy and respond by beingRecognize it as a strategy and respond by being
cooperativecooperative
 Treat your opponent as irrational and be prepared toTreat your opponent as irrational and be prepared to
walk awaywalk away
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17. Building a RelationshipBuilding a Relationship
 Use skilled negotiatorsUse skilled negotiators
 Follow up on agreement after it is implementedFollow up on agreement after it is implemented
 Establish face-to-face meetings as agreement isEstablish face-to-face meetings as agreement is
being implementedbeing implemented
 Recognize may need to renegotiate some partsRecognize may need to renegotiate some parts
of dealof deal
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