Manhattan Elite Prep Notice Negotiation Decision Chapter 3.3 5.4

Negotiation and Decision Making 13
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3.3 Negotiation Scenarios
Normal Situations
In a distributive negotiation which starts with a fair offer, the discrepancies between various
points are smaller and the bargaining zone is narrower.
There could be many scenarios where each point lies on the spectrum. The chart below
demonstrates what could typically happen in a situation where sellers may have more power over
buyers based on market demand.
Resistance
Point
(Seller)
→
Initial
Offer
(Buyer)
→
Asking
Price
(Seller)
→
Target
Price
(Buyer)
→
Resistance
Point
(Buyer)
→
Target
Price
(Seller)
ß-------------------------Bargaining Zone – Seller (Acceptable Outcome)------------------------------à
ß-------Bargaining Zone – Seller (Acceptable Outcome)------à
If the Buyer is Hard Bargainer
Buyer can afford a higher price but start with a very low offer, even below the seller’s resistance
point. The buyer has a greater bargaining zone than the seller.
Initial Offer
(Buyer) →
Resistance
Point
(Seller)
→
Asking
Price
(Seller)
→
Target
Price
(Buyer)
→
Target
Price
(Seller)
→
Resistance
Point
(Buyer)
ß-------Bargaining Zone – Seller (Acceptable Outcome)------à
ß-------------------------Bargaining Zone – Buyer (Acceptable Outcome)------------------------------à
If the Seller is Hard Bargainer
Seller can accept a lower price but start with a very high offer, even above the buyer’s resistance
point. The seller has a greater bargaining zone than the buyer.
Resistance
Point
(Seller)
→
Initial Offer
(Buyer) →
Target
Price
(Seller)
→
Target
Price
(Buyer)
→
Resistance
Point
(Buyer)
→
Asking Price
(Seller)
ß-------------------------Bargaining Zone – Seller (Acceptable Outcome)------------------------------à
ß-------Bargaining Zone – Buyer (Acceptable Outcome)------à

3.4 Key Strategies
Many of the strategies, including the following, in distributive bargaining scenarios involve a
calculated method of sharing information. If the buyer/seller can influence the information sent
(or the opposition’s perception of the information), that party will benefit. This can also be called
persuasion.
3.4.1 Communicating and Assessing Information
The concept of communication within a negotiation can be complicated. There are certain facts
and contingencies that both parties want to know, but cannot be permitted to know. Additionally,
some facts can be contrived to assist in persuading the other party. Communicating with the
goal of persuasion and secrecy is a strategically difficult thing to do.
Information to Keep Secret
- Emotional vulnerabilities
- Information about a strategic position, resistance points, and target outcome.
Alternatively, you will want to discover this information relative to the competing party
- Push for the lowest (or highest) settlement by making offers that are somewhat
unreasonable. You can determine the buyer/sellers range to some degree of accuracy.
Information to Share
This is where the true complexities arise:
- What factual information to share, and
- What information to contrive
- The goal of the contrivances is to influence the other party’s position and understanding
of the situation
How much the other party knows about your bargaining zone and the effects of the
negotiation upon you or your business is a major factor in how well you will do in the
negotiation.
Sound communication strategies set you in the right direction for a winning result. However, you
need to be able to form sound judgment by correctly assessing all the information exchanged
during the communication process. You must be able to:
(1) Assess the possible outcomes and the values the other party places on those outcomes
(2) Assess the costs of delayed or terminated negotiation

Indirect Assessment
The process of indirect assessment attempts to discover what information the other party used to
set their target and resistance points thereby estimating their actual resistance point. It can be
done by research and consultation. The trouble with that method is that you are relying on
interpretations. Sometimes, you are relying on many disparate interpretations and the result can
be an inferred resistance point that is wildly different from reality.
Direct Assessment
Direct Assessment can happen when one party gives detailed and accurate information about
their resistance point and how they arrived at that point. This could happen because one party
wants a quick and easy settlement, or if an outcome above their resistance point is particularly
problematic. That sort of information is usually not as easy to get directly and those scenarios do
not happen as often as we would like. Sometimes, direct information can be gained in covert and
unethical ways that we do not recommend.

3.4.2 Influencing Perceptions
Influencing the Other Party’s Perception of Your Bargaining Zone
Information Presentation
At the beginning of the negotiation process, it is best to give away as little information as
possible. Answer their questions with more questions to avoid giving too much information. Pay
attention to your body language. The other party could notice a fidget and infer that a particular
question made you nervous, thereby making a conclusion about your position.
In a team negotiation situation, all communication can be through one particular person. This
leaves little room for slips by a member of the team to reveal too much information.
When using a representative in part of the process, you can use a technique where you do not
give the representative enough information to be able to answer the other party’s questions.
There representative cannot leak information nor can they provide data or make decisions. This
may cause tension by delaying the process.
A final technique is to bring so many issues to the table that the other party becomes
overwhelmed and cannot distinguish which issues are of actual importance.
Present facts selectively to strengthen your position. One of the related methods is to present
only the positive facts related to your position, rather than all the facts that may reflect on some
of your weaknesses. You can also form an argument based on the facts you collect, which
supports why the other party’s proposal would not be fair or viable. Importantly, it is of no
consequence whether or not the other party agrees with you. These methods will help you control
how the other party perceives you and your position and what outcomes you value most or least.
Another way of influencing the other party’s perception is to manage your own emotional
reaction to a proposal or a statement that the other party has made. Emotional management can
either be in the form of controlling your true emotional reactions, or to even provide a grossly
exaggerated or fake reaction. Yelling, anger, or obvious disappointment will tell the other party
that something is particularly important. Boredom will show that something is unimportant.
Also, if you carefully and systematically go through a proposal or details surrounding a proposal,
the other party may think that that particular element is very important. If you are casual, you can
display unimportance or lack of interest.

Influencing the Other Party’s Perception of Their Own Bargaining Zone
You can influence the opposition’s perception of certain elements in their own bargaining zone
such as objectives, costs, and the desirability of an outcome. One way to do it is to make their
suggested outcome less attractive or make the cost involved seem much higher. Another
approach is not to disclose certain information positively impacting their bargaining zone if you
have no obligation to do so.
A Word of Caution
Beware: In implementing some of the above strategies, it is easy to venture into unethical
behavior. Carefully selecting and presenting facts is standard practice in distributive bargaining,
but fabricating facts or “acting” in the negotiation room can be seen as dishonest and create an
entirely negative negotiation atmosphere. If one is overzealous in his/her tactical approach, the
other party may discover the tactics being used and use them in kind.

3.4.3 Influencing the Resistance Point
It is central to your strategy to locate the other’s resistance point and the possible range between
that point and your own
- There are many factors that influence the resistance point:
- The combination of the value and costs of an outcome for either party
- The effects of the elements of the bargaining mix, and
- The negotiation itself.
- In attempt to influence the other party’s resistance point, you should consider
o The effects of a lengthy negotiation or an aborted negotiation
o How much they value a particular outcome
o Convincing them that their product is not worth what they are asking thereby
lowering their resistance point or your product is worth much more than what
they are willing to pay thereby increasing their resistance point
o Convincing them that in order to make the negotiation proceed with an
overlap/positive range between two parties, they need to change their resistance
point. You may need to modify yours as well.
In sum, let us look at how the following factors can affect the bargaining process.
Delay or Abortion of Negotiations
If party A knows that party B needs a quick settlement, A will be able to push B into a situation
that is favorable to A. Party A needs the negotiation to end as quickly as possible, otherwise they
will not be able to maintain an advantage with their resistance point.
Alternatively, if party B can convince party A that a long negotiation will be costly, they can
influence party A to lower their resistance point.
Existence of BATNA
If party B knows that their alternative(s) is satisfactory, they will be able to maintain a high
resistance point. If party B has an idea that party A does not have a desirable alternative, they
will be able to hold onto their high resistance point ever more strongly.

Settlement Possibility
If party A can convince party B that party B’s position will not yield a desirable outcome, party
B may not be able to hold on to their high resistance point.
The resistance point is directly related to the target outcome. If a particular perceived outcome is
less desirable to party A, party A’s resistance point may change. If party A place a particularly
high value on a certain outcome, party B will have a difficult time getting party A to lower their
resistance point. If party A’s resistance point is outside the range of party B’s, party B may
adjust their resistance point to achieve a positive bargaining scenario and avoid a stalemate.
Meantime, if you increase the cost of not reaching a settlement, you may influence the other
party to adjust their position to reach a settlement faster. Beware of this technique because
conflict can escalate between two parties.
Involvement of Other Parties
You can create pressure on the other party by threatening to find an ally in another party against
the competing party.
Scheduling
You can schedule negotiations at a time when the other party will not be able to effectively
negotiate such as early in the morning or immediately after they arrive after a long trip. Also,
you can schedule negotiation at the very end of a long meeting where there is not enough time to
effectively negotiate.

3.4.4 Controlling Relative Positions
The initial position the bargainer takes may change or stay the same throughout the process. It
might change because of new information released from the other party or observations made
throughout the process. The dynamic nature of a “position” holds for the other party as well.
Opening Offer
The constraints that exist concerning the opening offer are similar to the ones that exist
concerning tactical and strategic decisions that we discussed earlier. Those include how high or
low the offer should be and how close to the resistance point they should be. As more
information becomes available, it will be easier to make the opening offer without too much risk.
There are pros and cons associated with both.
- It is possible to get a better settlement with a very aggressive opening offer but you risk
“putting off” the other party.
- If you make a less aggressive offer, you are being careful and the negotiations are likely
to continue, but your eventual settlement may not be very satisfactory.
Typically, a good opening offer is one that provides room for the party who is making the offer.
If the offer is very high and you are the seller, you likely will not settle at that number but it
provides an upward limit. Any number under that number may be reached.
Opening Stance
Your stance can be thought of as your attitude. You can be congenial and moderate, or you can
be extreme and argumentative, fighting at every chance you have. You must consider how your
stance may be countered when deciding on it. Typically, the best way to deal with an aggressive
negotiator is to reciprocate the aggressive style
Should you make the opening offer?
Consider the following:
§ Will the other party walk away if your opening offer is not what they expected?
§ Are you confident that you can “anchor” (set a benchmark in) the negotiation?
§ Is market information easy to collect or not?
§ Are issues easy to value precisely?
§ Is the other party better prepared than you?
§ Did you develop all the evidence and arguments to support your opening offer? The main
goal is to get closer to the opposition’s end of the bargaining zone.

3.4.5 Managing Concessions
Concessions
After the initial offer is made and then a counter offer is made, both sides will usually begin to
make concessions. Concessions are important to the bargaining process for many reasons.
- They are symbolic in that their presence and magnitude convey a certain attitude by the
concession maker
- The character and quality of the concession can expedite the process. If concessions are
not made, the process can stalemate or a party may withdraw
The combination of the offer, the attitude and the concessions form a package that shows the
other party your negotiating style. They also determine the length and quality of the negotiation.
Not making any concessions shows that you are firm and possibly unnecessarily too firm. You
are showing that you do not respect the other party’s position and are not willing to effectively
negotiate. This can sometimes work but will usually backfire.
Making concessions requires care and thought. Too large a concession can indicate weakness
and too small may be akin to not making one at all. Reciprocating a concession also requires
care: to not make one at all would be tantamount to ending the negotiation. Your must also be of
a similar magnitude and importance to the first party.
Some concession techniques include making connections between different concessions and
packaging various concessions.
Concession Patterns
Understanding concession patterns is important in trying to glean information about another
party’s position. If they at first made a large concession and their subsequent concessions are
becoming smaller and smaller, you may think that they are reaching their desired settlement or
resistance points. As a party gets closer to those points, there is less room to maneuver meaning
each concession will be of a smaller and smaller magnitude. The pattern of the concessions you
make can show the other party what you have to work with and vice versa.
Making Concessions
Making concessions can be tricky business. Concession making requires skill and finesse to
make the right ones at the right times.
Research – Know what items you can give up easily but will be important to the other side.
Timing – Don’t give up concessions too quickly. You should wait until you are deeper into the
negotiation. Being too quick with a concession can be a sign of weakness that is easily
exploitable.

Reciprocity – Never give a concession without asking for one in return. The other side should be
able to give you something of equal or greater value. If you don’t ask, they will continue to
expect concessions from you without giving anything back
Start Small – Making large concessions early in the negotiation can be a sign of a few things.
First, it shows that you have a lot of room to come down. Second it shows that you started too
high and tried to take advantage of the other side
Decrease each time – Each concession you make should be smaller than the one prior to it. This
will show the opposite of the above – that your initial position was credible and you have little
room left for maneuvering
Don’t give up too much – Sometimes a great negotiator will ask you for many small
concessions. At the end of the process you have given away everything you possibly could have.
Avoid the issue by asking them what else they are interested when they start asking for many
different concessions.
Set up a Structure – This can help negotiations for people who do not have a strong sense of
business ethics and for negotiating with people from other cultures. Make it clear that if you
concede an item, you expect the same in return
Don’t Say No – Instead, make the concession work for you by knowing what you will get from
them
Know Your Bottom Line – Don’t give something away if it doesn’t make sense to do so.

3.4.6 Managing Commitments and Final Offer
Commitments
Some negotiators use commitments in one or more ways. Making a commitment occurs at the
positioning stage and states that if a certain goal is not met, future action will be taken. For all
intents and purposes, this is a threat. For example, a labor union will state that if a certain salary
and benefits package is not produced by the management, the labor union will organize a strike.
When using a commitment, you are obligating yourself to a course of action and an initial
position. It will be very difficult to change your position and to not follow through on the
commitment will be damaging to future negotiations.
If you choose to establish a commitment, be sure that you make it clear that your commitment
is not a bluff. Establishing commitments requires precision. Some negotiation theorists describe
a commitment as having three properties: Finality, Specificity, and Consequence. Those
properties necessitate the close-ended nature of a commitment.
There are many ways to make a commitment more effective. Some of the following methods
may be extreme and irrelevant to the everyday business negotiation scenarios that will be faced
in one’s career.
- Making the commitment public
- Finding allies – forming committees
- Creating a written statement
- Reinforcing the commitment with preparations
Keeping the Other Party from Making a Commitment
If a commitment can work in one party’s favor, it can also work in the other’s favor. It is
important for a negotiator to pay attention to the other party to keep that party from forming a
committed position.
Some ways to keep the other party from committing are:
- Not giving them enough time to form a sound commitment
- To ignore the commitment statement or not take it seriously
Abandoning a Committed Position
If you are planning a committed position, you should also plan a way to get out of it. If you have
a written statement, you can include clauses that make the commitment valid under certain
conditions. Or if certain conditions change, you or the other party can “rethink” an earlier

position. This can work in your favor for getting out of a position, or for causing the other party
to abandon theirs.
Some other ways include:
- One can also state his/her commitment in general terms so that there is more “wiggle
room” in the commitment for you to get out of it.
- Make a new proposal that concerns the committed position while ignoring your previous
proposal. Some authors have called this “letting the issue die silently”.
Final Offer
When you are approaching the end of the negotiation or the desired end you have a few options:
- You can state “this is my final offer”
- You can cease conceding anything else, signaling that you cannot or will not give any
more to the other party
Neither of the above two options is the best decision. The first may be too abrupt and
unbelievable, though it is important to show that you have made your final offer. The second can
be misinterpreted easily. If the other party continues to try to make concessions, unaware of the
fact that you have made your final offer, they may resent your firmness.
It is possible to make your final offer substantial enough to signal that you want to reach a
settlement. It should also indicate that you have very little if anything more to give. We have had
the experience in trying to get deals where a salesperson says “I spoke with my manager and…”
The salesperson is trying to indicate that they got you a special deal and it is probably the final
one.

3.5 Hardball Tactics
3.5.1 Identify Hardball Negotiators
In your career, you may come across hardball negotiators whose goal is to make you play by
their own rules and pressure you into a deal. Hardball negotiators often use underhanded tactics
and play head games to get the deal that they want.
You can identify those negotiators somewhat easily:
- They are unwilling to compromise.
- They aggressively pursue win-lose outcomes.
- They are very rigid in their thinking.
Hardball tactics in negotiation are designed to put so much pressure on a party that they are
convinced to do something that under normal circumstances they would not do. These tactics in
many cases do not work because they are overly aggressive and can motivate retaliation but they
can sometimes work when used against an unprepared or inexperienced negotiator. Since
hardball tactics are not recognized as legitimate in business negotiation, we do not recommend
their use although they are important to examine.
It is somewhat realistic that someone will eventually try to high- or low-ball you. This tactic
starts with the negotiator making an unreasonable offer, either too high or too low. If you do this,
the negotiations could end immediately. In some cases, a weak negotiator, after being high/low-
balled will re-evaluate his position in a way that is favorable to the hardball negotiator.
You may come across a negotiator who will use intimidation as a bargaining tactic – It will
usually involve the use of anger to make you feel fearful of them. Intimidation tactics can also
involve a negotiator attacking your character to make you feel guilty.
There are many other hardball tactics, some more thrilling and dramatic than others. It is not
necessary to make a detailed list. When there is extreme behavior being exhibited, you should be
aware that you are dealing with a hardball negotiator. You have a variety of options for what to
do in these scenarios:

§ Highball/Lowball – Related to Opening Bids
o Aimed to push the opposition party to reassess his bargaining zone and move
resistance point in the desired direction.
§ Bogey – Related to Issues Being Negotiated
o Identify an issue that is important to the opposition but of trivial value to you
o Present this issue as quite important to you first
o Make concessions on this issue then
o In return ask for major concessions on a different issue that is truly important to
you
§ Nibble – Related to Issues Being Negotiated
o Ask to include a clause that has not been discussed previously before closing the
deal
o The item is not significant enough to re-start or halt the process
o May lead to negative impressions for future negotiations with relevant parties
§ Chicken/ Commitment – Related to Posturing
o Combine a serious bluff with a high-stakes threat to pressure the other party to
cave in (chicken out)
§ Intimidation/ Aggressive Behavior – Related to Posturing
o Employ extreme emotions such as anger and fear
o Question the opposition’s trustworthiness to create guilt
o Present an unnecessarily larger group in a meeting or larger documents to frame
the opposition’s mentality in an effort to change his resistance point
§ 3rd Party Commitment/ Ambiguous Authority – Related to Posturing
o Highlight the need of receiving approval from a higher authority or agreement
from another party
o Use their response (true or not) as a way to control the negotiation
§ Phony Facts/ Lying – Related to Posturing
o Present untrue facts
o Lead to immediate loss of credibility if proven lying intentionally
§ Good Cop/ Bad Cop – Related to Team Negotiation
o The bad guy takes a primary role in negotiation when the negotiation is not in the
wanted direction
o The good guy takes the lead in an effort to close the deal sooner

3.5.2 Hardball-Countering Tactics
If you encounter hardball negotiators you will need to alter your approach to counter their tactics.
You must cast aside your value and just respond tactically.
1. Stick to your resistance point – don’t be intimidated into a deal that is bad for your
business
2. Assess all of the risks before you reach a deal. Question yourself about the
consequences and implications of the deal. Ask yourself if you really want to be a part of
the deal.
3. Don’t become competitive. Hardballers like to become competitive about small issues.
You don’t want to get caught up in unimportant details.
4. Watch out for those negotiators who strive to win without necessarily reaching a
successful deal. Success for them is a “win.” For them to win, you must loose.
As stated earlier, you must adjust your approach when negotiating with a hardballer. Much of the
technique involves not acknowledging their approach and treating the situation as if it was a
normal negotiation.
- Do not fight with them. Acknowledge their approach.
- Avoid becoming emotional and walking away from the deal.
Out of all the possible approaches to dealing with a hardballer, the only way to come out
successful is to actually negotiate with them.
1. Don’t go head to head. Instead, defuse the conflicts.
Going head to head with a hardballer will almost always give you a loss. Avoid the conflict they
are trying to start by stepping aside. Ask them questions about what they are looking for. Again,
treat them like they are a normal negotiator and do not engage in their tactics. It also will not
help to confront them about their tactics.
2. Understand their interest.
Similar to other negotiations, ask a lot of open ended questions to find out what they value and
what items are most important to them. Letting them talk about themselves and their business
can develop trust and give you information about how the deal could end up.
- Make sure to avoid trying to prove them wrong
- Make sure to avoid “you” statements that can put them on the defensive
- Listen actively by asking questions that reiterates information about them

3. Deal with hardball tactics.
§ Nibble – Related to Issues Being Negotiated
o Ask to include a clause that has not been discussed previously before closing the
deal
o The item is not significant enough to re-start or halt the process
o May lead to negative impressions for future negotiations with relevant parties
How to deal with it?
- Do not agree to the concession. Do not respond with a “yes” or “no” answer.
- Instead, ask “if I could do that for you, would you please do this for me?” Ask for
something that will offset your concession to a similar degree.
- Or say “This is entirely unexpected as we both have invested a lot of time and effort
to get this far. We may have to reassess the entire negotiation if time allows. Or we
have to revise it at a later day to incorporate new changes.”
- In any case, always prepare for those last-minute requests by planning a few counter-
nibbles and arranging them in order of importance in advance.
§ Bogey – Related to Issues Being Negotiated
o Identify an issue that is important to the opposition but of trivial value to you
o Present this issue as quite important to you first
o Make concessions on this issue then
o In return ask for major concessions on a different issue that is truly important to
you
- Do not respond with a “yes” or “no” answer.
- Always test to see if it is real.
- Ask the opposition to list out all the major issues in order of importance.
- Reframe the deal by introducing other options to address the same concern.
§ Intimidation/ Aggressive Behavior – Related to Posturing
o Employ extreme emotions such as anger and fear
o Question the opposition’s trustworthiness to create guilt
o Present an unnecessarily larger group in a meeting or larger documents to frame
the opposition’s mentality in an effort to change his resistance point
- Look confused. Do not show that you have been intimidated.

- Respond this way: This is not we have expected or experienced. Other parties have
been happy with similar proposals. Can you let me know what thresholds you are
comparing us to?
- Suggest a later time to reconvene with the opposition in order to show you more
supporting facts
- Indicate that you are not in a rush to finalize the deal. You are here as long as it
takes.
- Always check the opposition’s track record to see how frequently similar tactics have
been employed
- Arm yourself with a long list of your past successful proposals for similar situations
4. Close the hardball deal.
Closing the deal can be the most difficult part of any negotiation – especially when dealing with
a hardballer. You will have to make them feel like a winner, and make sure they look good
to their boss or company if you want to walk away with a deal that works for your
business.
- Show them why it works. Give them data and examples from the past.
- Get them involved – ask them for their opinion and input to improve the deal
- Make them give you data to take to your boss. Have them explain why the deal works for
both of you.
- Don’t box yourself into anything until the deal is complete. Do not give the hardballer
ammunition for the end of the deal.
To some extent, it may seem like you have to play games to deal with the hardballer. You must
make them look good by recognizing the strong points of their ideas. Find out what their values
are so you can work with them to keep them feeling like they are winning.

Chapter 4 Integrative Negotiation
Distributive negotiations involve more win-lose situations because there is only a certain amount
of something to be had – both sides cannot have the same amount. It can also be called as “Fixed
Resource” negotiations.
Integrative negotiations can be identified as “Expanded Resource” negotiations. They deal with
situations where it is possible to problem solve in such a way that both sides can get more of
something than previously imagined. Both sides have to opportunity to win simultaneously. This
is called “Enlarging the Pie”.
Some experts believe that there are necessary conditions for a successful integrative negotiation.
1. The terms of the deal are relatively broad.
2. The discussions are about scarce resources or unique situations.
3. It is better for both parties to negotiate than to not negotiate.
In particular non-distributive negotiations require:
1. An open exchange of knowledge
2. Understanding and Empathy with the Desires and Goals of the Other Party(s)
3. Stressing Agreement and NOT discrepancies
4. Seeking Resolution satisfying the goals of both (all) parties
Remember that an integrative negotiation is a process of mutual problem solving and not a
sparring match.
To maximize mutual benefit, both sides must
1. Strive to understand each other
2. Demonstrate strong willingness to mutually solve problems
3. Be flexible and focus on “enlarging the pie” as supposed to “dividing the pie”
4. Aim for win-win outcomes

4.1 Outline Problems and Underlying Interests
In this step, two parties identify their problem, defining it together, in a way that encompasses
the agendas of both groups.
Steps in the Process Keep in Mind
This requires more than
locating the dilemma of one
party. It requires locating the
dilemma faced by both
parties.
Be sure that the dilemma is stated in a
way that promotes mutual concerns. It
is best to state it in the 3rd
person (he,
she, it, they) rather than in the 2nd
person (you).
Be sure not to state the dilemma in a
complicated manner. Simplicity is key.
REMEMBER: The reason parties
negotiate is that they in effect need the
other to arrive at a resolution.
Be sure not to move the process along
too quickly. These things take time.
It’s the foundation of your process. If
there is necessary, consider bringing
in a thoughtful mutually inclusive
negotiator to orchestrate the process
and move the negotiation forward
step by step effectively.
Make sure you consider all of the
needs and alterations that the other
party may encounter during the
negotiation. Be as honest as possible
in this process.
↓
Then the dilemma must be
stated in a way in which the
desires of both parties are
represented and respected.
↓
Restate the problem as an
objective. Let it be known
clearly what you seek out of
your negotiation.
Focus on issues, not
personalities.
Separate defining problems
from searching for solutions.
There are several different types of interests that may be present in a negotiation.
• Fundamental Interests – Economic and Financial Issues
• Strategic Interests – Impact on relationship with competitors, customers and suppliers, etc.
• Relationship Interests – The value each party attributes to mutual relationships
• Process Interests – Preference for certain ways of negotiation, communication and
execution
• Ethic Interests – A particular set of principles each party adheres to in business and in life

4.2 Create Possibilities for Resolution
This is in some ways a careful and thoughtful brainstorming process undertaken with the
intention of producing a variety of refined options from which to select a solution to the
identified dilemma.
In creating solutions, it is
crucial to be creative and
thorough to include all
possibilities.
How might both groups
achieve their desired ends?
Is there a limited supply of
something?
Can we increase the
availability of resources?
Do not limit them to two
alternatives - one desired
by one party and the other
by the second party. Be as
inclusive as possible.
↓
Define priorities. What is
most important for each
party?
What is most important to
each party respectively?
What is least important to
each party respectively?
Can I separate parts of the
problem from the whole?
↓
useful to consider whether
disagreement in financial
compensation might turn one
party away entirely. Also
consider if other forms of
compensation might promote
greater willingness to
compromise.
What objectives does each
party have respectively?
What could my party give
up or how might it
compensate the other?
↓
useful to consider ways in
which the parties might
compromise.
What concrete or essential
musts does each group
have? How can these be
satisfied?

4.3 Assess Possibilities and Choose the Best Resolutions
This is the step in which we select the solution to the problem.
Through the previously created
listing of possible solutions and
choose those that are well-liked by
either party. Eliminate other options.
Be sure to analyze options on
the basis of previously
created lists of priorities and
objectives for each group.
Be prepared to offer concrete
reasons for particular
inclination. More than: “I
don’t know, it does seem
better.” At the same time,
remain conscious of the fact
and try your best to quantify
or specify it. Some
preferences may be hard to
explain, yet key to a viable
resolution.
Be open to working on a
solution in small groups.
Allow more open discussion
in which no one feels
particularly pinned down.
↓
Then consider which of the existing
possibilities is most feasible, most
satisfactory, most likely to be agreed
to by those that will actually put them
into practice.
Evaluate the remaining options
against relevant benchmarks. It may
be helpful to have certain historical
or contemporary cases in which a
similar resolution has worked.
↓
Remember previously defined
priorities and objectives for each
group.
↓
Take breaks.
↓
Consider which group seems to be
taking the larger risks. Seek to
minimize or compensate for these
extra risks.
↓
Consider timetable options.
↓
Once a clear agreement is reached,
do not announce it until all details
etc. are fully confirmed in writing.

4.4 The End Result of Integrative Negotiation
The integrative negotiation process is certainly a difficult one. It requires listening to the needs
and wants of the other party, difficult choices, open and honest discussion, and coming to trust
the other group. Yet, the reward comes when each party finds satisfaction, when risks are offset
by compensation, when both groups reach a conclusion that would have originally appeared
impossible.

4.5 Common Myths
In order to become more successful negotiators in an integrative negotiation, we must do away
with some common negotiating myths and negative traits.
Competitiveness
A major goal of negotiations is to make both sides feel as though they got something positive out
of the deal. Achieve this through cooperativeness and not competitiveness.
Bargaining
A bargaining agreement will not last because there is always a loser. Integrative negotiations are
not supposed to create a loser but two winners. They can also foster long-term business
relationships.
Compromise
A compromise entails that both sides lost out on something they originally wanted. That does not
need to be the case in an integrative negotiation. You can compromise on one item but gain on
another while making the entire resolution package create a better result for both parties.
Tactics and Trickery
In engaging in integrative negotiations, you should stay away from using tactics unless necessary
as a countering method. Tactics, if apparent or noticed, can cause bad blood and distrust.
- Being flexible, rather than rigid, is key to a successful negotiation
- Integrative negotiations can be defined in a number of ways, but it all boils down to
effecting change in a relationship to create a win-win outcome for both sides.

Chapter 5 General Tips
5.1 Important Steps to a Good Deal
5.1.1 Understanding/Problem Solving
Prior to engaging in a negotiation, it is important to get to know the scenario and “the playing
field”.
The scenario is composed of various elements
Time – The pressure created by time can cause negotiators to make mistakes. Therefore, if you
know how to use your time wisely and plan well, you can achieve a better outcome from you
negotiation.
Information – Having more information or access to more information can create the leverage
you need for a successful negotiation. Information allows you to create more opportunities and
alternatives.
Power - Power is in many ways purely the perception of the other side. You must appear to have
power even if you really don’t
Passion - Passion will be the final factor that puts you ahead of your opponent. The more passion
you have, the greater your ability will be to get the deal
There are certain facts that you must know about the other side to engage in a mutually
successful negotiation.
- Their goals and objectives broadly
- What they want out of this particular negotiation
- Pressures on them
- Who makes the final decision
- Their possible bargaining zone
Please check with our Pre-Negotiation Assessment Chart to be sure that you cover all the
elements.
The above will necessitate research on your part. You must have ample information available
before you try and successful negotiate. There are many tools available.
- Internet
- Publications
- Vendors
- Employees

- Customers
- Public information (financial reports etc.)
Not only know what you are negotiating about, but know who you are negotiating with. Without
proper research before hand you will not be successful in your negotiations. By having
information, you will be able to test them on their level of honesty. You can ask questions about
their situation and if you know the answer and are being lied to, you will be able to assess their
negotiation style rather quickly.
5.1.2 Planning
Some authors recommend outlining some possible outcomes
- Best Possible Outcome
o This is the best possible, but not necessarily realistic outcome
- Worst Possible Outcome
o The worst and least acceptable outcome
- Expected Outcome
o A likely and somewhat acceptable outcome
- Resistance Point (Walk-away Point)
- BATNA (Best Alternative to a Negotiated Agreement)
5.1.3 Building Communication
- Share information: Hiding all of the details creates a negative environment
- Active Listening: Show that you want to know about their position and what are their needs
and wants of the negotiation
- Acknowledge their Needs: Show them that your business can help them and give them what
they want. If you don’t they will turn to someone else.
- Ask questions so you can discover their needs and decide whether or not you can meet them.
5.1.4 Controlling the Negotiation
The more control you have over certain aspects of the negotiation, the more likely you will be to
gain an advantage. Here are some ways to gain control
1. Speak First – In many instances, if you speak first you will control the tone and tempo of
the rest of the negotiation
2. Ask Questions – By asking questions you will control the content of the negotiation. By
asking questions, you are also finding ways to come to an agreement
3. Don’t Argue – The key to negotiations is sharing information and not being combative.
4. Prepare to meet the other person’s needs – fully understand the other side’s position,
motivations and needs and be ready to meet them
5. Listen – The more you understand of the questions you ask, the more control you will
have on the outcome of the negotiation

5.1.5 Solving Their Problem
When you are researching, you will have to find out ways to solve the other side’s problem as
well as your own.
Those include their values and the outcomes that they are looking for. Also discover some
negatives in their business past.
1. All of those bits of information require asking them open-ended questions in the negotiation
process. Ask things like “how will this help you” and “tell me more about that”.
Instead of getting an answer and moving on, keep asking to make sure you fully understand. That
technique will also create a positive environment and show that you want to listen to their
problems and needs.
2. In real life, often times there are no absolute distributive or integrative negotiations. Rather,
they are a combination with varying degrees of each type. So you may always be able to find
some ways to “enlarge the pie”:
- Gather as much information as possible
- Identify items of value
- Do not become competitive or force compromise. Compromising detracts from both sides
- Focus on the desired outcome for both sides
5.1.6 Let the Other Person Win
Identify Common Issues – Increase communication by showing how you are similar to the other
person. It will increase trust and build a relationship
Maintain the Relationship – When something negative comes up, associate it with the terms of
the deal and not the other person.
Show how the deal helps them – Be ready to prove that your deal will help their business. Be
able to show them and not just tell them.
5.1.7 How to Derive Those Numbers
Many high-ranking business professionals quantify information and develop precise formulas to
determine outcomes. If the other side does this, pay attention to the rationale and the formulas
they have developed. Know how the other side reached their conclusions. Their method is likely
to stay fixed, but the outcomes and numbers are not necessarily going to stay the same because
they are more easily changed.
Rules to follow when trying to get at the final numbers:
- Know the guidelines, the goals and who is involved with the deal

- Strive for communication – Ask questions about items you understand
- Question numbers and assumptions – do not accept everything they give you
- Establish your uniqueness – Show why your product is better than the cheaper product and
how it will help the other’s bottom line and business overall
- Focus on risks and benefits – Do not threaten or put pressure on the other side, but remind
them of the risks of going with a competitor tactfully and through questioning rather than
direct statements
5.1.8 Achieving Results
Several methods help to achieve the results you desire AND maintain or improve your
relationship with the other party.
Find Objective Methods of Determining the Benefits of Solutions.
This will allow both parties to trust and value the terms to be agreed upon.
Concentrate on What You Want to Achieve, Not Where You Stand on an Issue.
This is a means of opening your mind to other options and modes of achievement. These would
be less likely to automatically preclude the success of the other party.
Focus on Issues, Not Personality.
Avoid personal attacks. Your interest is in improving a relationship and achieving your desired
results, not frustrating or offending the other party.

5.2 How to Say No without Saying No
Sometimes in negotiation you will need to establish that your side is not pleased with something.
The ways of doing so vary according to cultural contexts or your degree of dissatisfaction with a
particular element of their proposal.
With a line, motion, or phrase indicating your disapproval, you alert the other party to the fact
that something is wrong. Sometimes you will do so more directly, other times more delicately.
Gentle
I need your help on this.
This will be difficult for us.
Do you have any flexibility on it?
Can we work together on this?
Harsh
I am a bit disappointed with that.
We are not on the same page.
We have a problem.
We are miles apart.
In response to a disapproving response, you will need to respond with a question likewise gently
or harshly.
Gentle
How can we rework this?
What can you work with?
What will make it work with your budget?
Harsh
This is a giant setback.
We have never done that before.
Sometimes you can respond wordlessly by shaking your head, furling your brow or just
remaining silent.

5.3 Common Negotiating Mistakes
There are many possible mistakes that can end up killing your deal and wasting your time. To
become a successful negotiator, you must learn to recognize those possible mistakes and
eliminate them from you negotiation procedure.
Too Fast – Many business people engage in a negotiation with the goal of ending it as quickly as
possible. Cutting to the chase, as some will call it, is not necessarily in your best interest. If you
reach your bottom line too quickly you may have failed to explore all of you alternatives.
Difference Between Acceptable and Unacceptable – You must know clearly and precisely
what deals are acceptable and what is unacceptable. If you don’t, you could get pulled into a deal
that is bad for your business.
Different Perspectives – You must understand that the other side probably does not look at the
deal in the same way you do – a good outcome for you may not be a good one for them.
Different Ways of Proving Them Wrong – There are many ways to prove someone wrong. If
you are insensitive to how to get your message across to the other people, you may invite dislike
and unwillingness to cooperate.
Lack of Internal Coordination – You have to make sure that all of your people are on the same
page so that whoever is running the negotiation will not have his/her authority undermined. That
will also undermine your legitimacy and effectiveness.
Know When to Stop – Your timing must be precise on everything. Asking for last minute
concessions can be aggravating to the other side and may disrupt the deal going through. Also
take note of how to properly make concessions and when to ask for them from the other side

5.4 Getting Better at Negotiation
Mastering the following keys to the puzzle of negotiation will certainly improve your skills,
whether you are on the road to expertise or just beginning.
• Establishing clear understanding of the other party. Understand not only what they think but
why they think so. Understand and test your understanding.
• Increase possibilities, rather than limit them
• Pursue and analyze multiple solutions, before selecting one
• Make sure that your team members are on the same page at each step of the negotiation
• Put ideas and agreements in writing at each stage
• Don’t give in to everything the other party wants at once. This way you leave yourself
leverage.
• Be aware of common tricks. Don’t take them too seriously. However, you should be
prepared to identify and counter those tactics effectively. Avoid proactively using
underhanded or manipulative tactics. The best negotiators are or at least appear to be
upfront and honest. Know your limitations
• Don’t lower yourself. Even if the other party argues, shouts, and screams, don’t do so
yourself.
• Don’t make discussion about personal victory. Instead, focus on proposals.
To further improve your negotiation skills, begin by recognizing the following key points:
1) Never go into a negotiation with a preset notion that you have to seal the deal. You need to
at least appear to have flexibility with other options. When you have options, you have the real
power. Develop viable options or appear to have options readily available.
2) Good negotiation skills are built not in single sitting, at a single place and time, but rather
through a multiplicity of encounters in various places under various circumstances. You must
build upon each encounter, learn from your mistakes and successes, and through such a
process improve. This is also important to recognize as corporate leader. One must value
experience and help to further it through education, both in the form of practice and training.
3) Just as expertise is important so is warming up your skills. Even an expert negotiator should
engage in role play before a sitting. Prepare well and be flexible to the ideas of others.
4) The best negotiation works to create a solution in which all parties gain. If you focus too
much on your own goals or on compromise, you have already risked the possibility of creating a
positive result for all.
5) The best negotiators listen. If it helps try to listen two or three times as much as you speak
yourself. Listening and the understanding that comes from good listening allow a negotiator to
develop deeper understanding of the bargaining zone of the other party and conduct a more
effective and respectful negotiation.

Manhattan Elite Prep Notice Negotiation Decision Chapter 3.3 5.4

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