The document discusses creativity and problem solving in negotiations. It describes different mental models negotiators can take, such as seeing negotiations as problem solving or partnership. Creative negotiations aim to expand options and find win-win agreements. Contingency contracts can help manage risks if they are clearly defined and parties can enforce them. However, cognitive biases like anchoring can limit creativity. The document provides strategies and techniques for overcoming these barriers to creative thinking and problem solving in negotiations.

1. Creativity and Problem Solving
in Negotiations

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. What is Your Mental Model ?
Haggling
Two dogs fighting over one bone
Cost/Benefit Analysis
Rational, decision making model, Maximize the returns
Game Playing
Chess game model, transfers fighting in the streets to battle of wits
Partnership
Embraced by Companies, treating clients as partners
Problem solving
The task of defining and solving a problem

4. What are the characteristics of
creative negotiations agreements
Fractionating Problems into solvable parts
Creating multiple- issue negotiations from what appear to be
single issue
Finding Differences : Issue Alignment and Realignment
Align issues in such a way that permits the issues to be negotiated
independently and ideally traded off.
Expanding the Pie
It creates integrative agreements, it is not viable option all
situations

5. What are the characteristics of
creative negotiations agreements?
Cont
Bridging
Creates new alternatives that meet parties underlying interests
Cost- Cutting
Make the other party satisfied by reducing the party’s costs
Nonspecific Compensation
One party receives what he/she wants and the other is
compensated
Structuring Contingencies
Contradictory beliefs about future events or outcome, contingents
contracts can provide a way out

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. What are the six benefits of
Contingency Contracts ?
Build on their differences
Manage decision making biases
Solve problems of trust
diagnose the honesty of other side
Reduce the risk through risk sharing
Increase the incentive of the parties to perform at or
above contractually specified levels

8. What are the three key criteria for
assessing 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. What are the threats to effective
problem solving & creativity?
The Inert Knowledge Problem
The inability to access relevant knowledge when most needed
Availability Heuristic
The more common group is judged to be, the easier it’s for
people to bring instances of this group to mind
Representativeness
Based on stereotypes of people, which often has basis of reality
but are frequently wrong
Anchoring & Adjustment
People use a reference point as an anchor & then adjust that
value up or down as supposed appropriate

10. What are the threats to effective
problem 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. What are the threats to effective
problem 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 counterparty's physical appearance,
nonverbal behavior and so on

12. What are the threats to effective
problem 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. What are The Creative Negotiations
Strategies?
Multiple Roads lead to Rome
Feedback and Negotiation Performance
Incubation
Rational Problem Solving Model
Fluency ,Flexibility and Originality
Brainstorming

14. What are the Different Types of Creative
Thinking and Reasoning ?
Convergent Thinking
Divergent Thinking
Inductive Reasoning
Deductive Reasoning