1 A HARD BARGAINER IS A PERSON WHO: Opens negotiations with an extreme competitive offer/solution Frames the negotiation as “my win is your loss” Uses a number of tactics to create doubt for the opposition Makes diminishing incremental concessions over time Creates tensions/impasses If the last gap is reached splits the difference or adjourns
A HARD BARGAINER IS A PERSON WHO:. Opens negotiations with an extreme competitive offer/solution Frames the negotiation as “my win is your loss” Uses a number of tactics to create doubt for the opposition Makes diminishing incremental concessions over time Creates tensions/impasses - PowerPoint PPT Presentation
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
A HARD BARGAINER IS A PERSON WHO: Opens negotiations with an extreme competitive
offer/solution Frames the negotiation as “my win is your loss” Uses a number of tactics to create doubt for the
opposition Makes diminishing incremental concessions over
time Creates tensions/impasses If the last gap is reached splits the difference or
adjourns
2
AN “EFFECTIVE” HARD BARGAINER?
Is not one who “wins”! Is a person who regularly achieves for his/her
clients, short term and long term commercial and personal goals, despite the risks attached to the “hard bargaining” process.
3
“A careful examination of the behavior of even the most forthright, honest, and trustworthy negotiators will show them actively engaged in misleading their opponents about their true position…. To conceal one’s true position, to mislead an opponent about one’s true settling point, is the essence of negotiation.”(White, James J., Machiavelli and the Bar: Ethical Limitations on
Lying in Negotiation, 1980 AM B Found Res J. 926-930)
4
“On one hand the negotiator must be fair and truthful; on the other he must mislead his opponent. Like the poker player, a negotiator hopes that his opponent will overestimate the value of his hand. Like the poker player, in a variety of ways he must facilitate his opponent’s inaccurate assessment. The critical difference between those who are successful negotiators and those who are not lies in this capacity both to mislead and not to be misled…”
(White, James J., Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation, 1980
AM B Found Res J 926-930)
5
TEN RULES TO BE AN EFFECTIVE HARD BARGAINER 1. DIAGNOSE CAREFULLY (ie pick your fights).2. PREPARE, PREPARE, PREPARE (especially BATNA).3. Prepare colloquial catalogue of “DOUBTS” to lower
expectations.4. CONTROL PROCESS5. KNOW and TEACH “the DANCE”.6. ASK QUESTIONS.7. DISCLOSE INFORMATION SELECTIVELY.8. UNITE and DIVIDE “TEAMS”.9. SELECTIVELY USE “TACTICS”.10. KNOW and AVOID the COMMON MISTAKES AND
PSYCHOLOGICAL TRAPS.
6
RULE 1 – DIAGNOSE CAREFULLY AND CONTINUALLY
BEWARE OF COMPETITIVE/HARD BARGAINING WHERE:
○ CONTINUING RELATIONSHIPS are important○ SPEEDY OUTCOME is necessary○ WATNAS and BATNAS are uncertain or risky○ The “opposition” are TIME RICH ZEALOTS ○ ESCALATION or LONG TERM BITTERNESS are FEARED○ “VALUE IS SLIPPING OFF THE TABLE”○ LEGISLATION and CASE LAW IMPOSE SANCTIONS○ IT CROSSES VAGUE BUT EXPANDING ETHICAL
GUIDELINES
7
HARD BARGAINING – “A PUDDLE IN THE SUN”
IN AUSTRALIA? (Cavanagh)
“NORMAL” COMPETITIVE
BEHAVIOUR
Informed Customers
Trade PracticesAct
Ethics
Meaning of “Good Faith”
Duties ofDisclosure
Legislation
ProfessionalDiscipline
8
THE MORAL CODE OF PROFESSIONAL RESPONSIBILITY(ADAPTED BY ABA)
A LAWYER SHALL NOT: KNOWINGLY ADVANCE A CLAIM OR DEFENCE THAT IS
UNWARRANTED UNDER EXISTING LAW EXCEPT HE MAY ADVANCE SUCH A CLAIM OR DEFENCE IF IT CAN BE SUPPORTED BY GOOD FAITH ARGUMENT FOR AN EXTENSION, MODIFICATION OR REVERSAL OF EXISTING LAW.
CONCEAL OR KNOWINGLY FAIL TO DISCLOSE THAT WHICH HE IS REQUIRED BY LAW TO REVEAL.
KNOWINGLY USE PERJURED EVIDENCE OR FALSE EVIDENCE. KNOWINGLY MAKE A FALSE STATEMENT OF MATERIAL FACT
OR LAW. NB: A LAWYER GENERALLY HAS NO AFFIRMATIVE DUTY TO
INFORM AN OPPOSING PARTY OF RELEVANT FACTS.
9
“UNDER GENERALLY ACCEPTED CONVENTIONS IN NEGOTIATION, CERTAIN TYPES OF STATEMENTS ARE NOT TO BE TAKEN AS STATEMENTS OF A MATERIAL FACT. ESTIMATES OF PRICE OR VALUE PLACED ON THE SUBJECT OF A TRANSACTION AND A PARTY’S INTENTION AS TO ACCEPTABLE SETTLEMENT OF A CLAIM ARE IN THIS CATEGORY”
(COMMENTS ON ABA MODEL CODE OF PROFESSIONAL RESPONSIBILITY)
10
NEGOTIATORS ADOPT COMPETITIVE STRATEGY WHEN:
1. One believes (s)he has “nothing to lose”2. Need to preserve a “tough” reputation to avoid
floodgate3. Needs to be consistent with past decisions4. Substantial emotion and grief exists5. There is no concern for the future relationship
between the parties6. There is perceived benefit in delay7. One perceives (s)he has bargaining “power” (strong
WATNA and BATNA) and can dominate the other
11
RULE 2 - NEGOTIATION PLANNING INSTRUMENT
“PROBLEM” DEFINITION – I must negotiate with ……………….…….. to solve the following problems.
(1) (2)
(3) (4)
PARTY
GOALS, INTERESTS and PRIORITIES
Positions (SOLUTIONS)
1.Insult
2.Target
3.Reservation
PERSUASIVEPROPOSITIONSand LEVERS
APPROACH TO NEGOTIATION
OPENING and CONCESSIONS
CREATIVE OPTIONS/PACKAGES
‘OUTSIDE’ ALTERNATIVES (BATNA; WATNA)
OWN SIDE
OTHER SIDE
12
INSULT TARGET RESERVATION ZONE ZONE ZONE
RESERVATION TARGET INSULT ZONE ZONE ZONE
RESPONDENT
CLAIMANT
13
RULE 3 – PREPARE “DOUBTS”CREATING DOUBT IN NEGOTIATION AND
MEDIATIONCONCEPT APPLICATION?
1. FACTS – “I have different facts….”
2. EVIDENCE – “I have a document to show….”
3. CREDIBILITY – “who is more likely to be believed….?”
4. RULES – “You are applying the wrong rules….”
5. RULES – Insider knowledge: “That is not how the system works here….”
6. PUBLICITY/REPUTATION – “What happens when this becomes public?”
7. DELAY –“If we don’t agree today….”
8. COSTS (Direct) – “The predicted costs of lawyers and accountants are….”
9. COSTS (Indirect) – “How much time away from business….”
10. STRESS – “How much sleep….?”
14
11. INCONVENIENCE FOR THIRD PARTIES – “How will your children, boss, friends, feel when subpoenaed, notified….?”
12. NOTHING TO LOSE – “(S)he will eventually wear you out/stone in shoe….”
13. POWERFUL – “My client has money and connections”
14 FLOODGATE – “I cannot create a precedent for ….”
18. EXPERTISE – “Our expert knows more X than yours”
19. LOSS OF CONTROL and ESCALATION – “If we don’t reach agreement, this is the likely scenario….”
20. RATIONALITY – “You seem to assume that the court, club, system, is wise and rational….”
21. OTHER?
15
TRYING TO “CREATE DOUBT” FOR “THE OPPOSITION” “Predictably, I disagree with everything that Jane said except for her fourth
comment.” “Bill has suggested that there are 7 risks for us. I would like to respond at an
appropriate time to each one of these.” “I have a one-page document here which has anticipated everything Mary has just
said, and gives our responses in point form.” “We have heard all of this before and responded in detail in the letters, pleadings
dated….” “We have never heard any of this before. Why?” “David has suggested that my client carries some risks. I agree. But we say that
these are miniscule compared to the four burdens you carry.” “Joanne has suggested that my client carries 5 risks. In fact, she has missed 3
others. We have carefully weighed these up in our written risk analysis.” (waves paper)
“People who live in glass houses should be careful about throwing lists of risks.” “I would like to put our responses up on butcher’s paper so that they are clearly
visible for the rest of this meeting.” “Thank you for those comments, I’d like to move on now….”
16
RULE 4 – CONTROL THE PROCESS
1. Pre-conditions for negotiation2. Schedule meetings at your convenience3. Lower expectations early4. Speak first and politely; “I can help”5. Reduce expenses of inevitable adjournments6. Regular breaks with team7. Ask “opposition” to prepare documents/witnesses8. Make alternative offers9. When faced with aggression, revert to process and calmly
discuss needs and interests10. Don’t walk out; always get something (eg documents; next
meeting)
17
RULE 5 – KNOW AND TEACH ‘THE DANCE’
1. Be polite and clear2. Start high/soft on edge of insult zone3. Objective criteria4. Ask many questions5. Create doubt6. Never made a concession without getting something in
exchange7. Each concession takes twice the time; and is half the
previous one8. Don’t try to shortcut the dance9. Near resistance point, ask, the “apart from money?”
question10. Break pattern at your resistance point11. Adjourn (get something); or use standard methods to cross
last gap
18
NEGOTIATION PROCESS * PREPARE IN WRITING; Practise Roles* Introductions* Discuss/Suggest Procedure* IDENTIFY Agenda Items (Interests; Problems; Questions)* IDENTIFY any easy common aspirations/agreements* FIRST OPENING/OFFERS
- High Soft / Low Soft- Reasonable FIRM- Problem Solving
* RESPONSES- High Soft / Low Soft- Reasonable FIRM- Problem Solving
* JAM; STRESS; CREATE DOUBT; RESTATE and REASSESS GOALS and INTERESTS; BATNA; ASK QUESTIONS; BREAK
* MORE OFFERS, “WHAT IF…”; GRADUAL CONCESSIONS* PARTIAL or COMPLETE AGREEMENT; HOMEWORK?
FINETUNE IN WRITING
19
RULE 6 – ASK QUESTIONS
Why?1. To discover opposition’s current target and
resistance points2. To lower oppositions current target and
resistance points (create doubt)3. To avoid “group think” in your own team on
WATNAS and BATNAS4. To search for extra chips5. To demonstrate empathy
20
RULE 7 – DISCLOSE INFORMATION SELECTIVELYExerciseWrite out at least three methods whereby “effective” negotiators you have met make “selective
RULE 8 – UNITE AND DIVIDE TEAMS/CONSTITUENTS/TRIBES
CLIE
NT 1
CLIE
NT 2
HAWKS 1
MODERATES 1
DOVES 1
HAWKS 2
MODERATES 2
DOVES 2
“NO TEAM IS UNITED”
22
RULE 9 – SELECTIVE USE OF TACTICS
making an extreme opening offer using threats, rudeness, hostility, rigidity and
intolerance to intimidate using silence strategically issuing ultimatums stalling withholding concessions and information claiming lack of authority stretching the facts playing good guy/bad guy, adding “irrelevant” give-away chips
RULE 10 – KNOW AND AVOID THE COMMON MISTAKES AND PSYCHOLOGICAL TRAPS
DECISION-MAKING SHORTCUTS AND TRAPS (FOR NEGOTIATORS AND OTHERS)
The ANCHORING TRAP: Over relying on first thoughts The SUNK-COST TRAP (ENTRAPMENT): Protecting earlier choices Mythical FIXED-PIE beliefs The STATUS-QUO TRAP: Keeping on keeping on The CONFIRMING EVIDENCE TRAP: Seeing what you want to see The FRAMING TRAP: Triggering a premature answer with the wrong question EASILY AVAILABLE INFORMATION TRAP: “What an impressive chart!” The WINNER’S CURSE: “Perhaps we could have done better?” The OVER CONFIDENCE TRAP: Being too sure of your knowledge and ability The BASE-RATE TRAP (The Law of Small Numbers): Neglecting relevant
information SELF-SERVING BIAS: Environment versus personality IGNORING OTHERS’ INTERESTS AND PERCEPTIONS: “Let’s get down to
business” REACTIVE DEVALUATION: Ridiculing “opposition’s” ideas and behaviour
(See Lewicki (2003); Smart Choices 1999)
25
STANDARD COMMENTS THAT HINDER NEGOTIATIONS “It’s only money!” “The other side won’t take the risk” “We can agree on the facts” “Let’s not dwell on the past” “It’s not personal” “We don’t apologise” “Leave it to me” “I’m in the box seat here” “Don’t talk to the other side” “Our expert will win for us” “I’ve just come here to listen” “Get an offer from the other side first” “This is an open and shut case”
26
EFFECTIVE RESPONSES TO POSITIONAL BARGAINERS1. Discover reputation beforehand2. Detailed risk-analysis; BATNA and WATNA3. Must have planned alternatives4. Withdraw all existing offers5. Make transparent first offer; problem-solving or insult zone6. Ignore offer; or name strategy7. Lower speed expectations of our clients and team (“normalise”)8. Hand over written list of common goals; your strengths; their
perceived weaknesses9. Split their team, several lines of communication10. Only conditional and reciprocal concessions11. Minimise expenditures12. Suggest independent expert with joint facts13. Occasionally, respond with tactics14. File early for benefits of information exchange and door-of-court