National-Louis University 1 Christopher C. Multhauf Executive Dean College of Management and Business National-Louis University June 17, 2008.

National-Louis University1

Christopher C. MulthaufExecutive DeanCollege of Management and BusinessNational-Louis UniversityJune 17, 2008

National-Louis University

Negotiation SkillsNegotiation Skills

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Win-win strategies offer a positive and most effective means to influencing

others to accomplish new initiatives or resolving conflict. In this session, you

are introduced to fundamental techniques in how to achieve positive outcomes through win-win scenarios.

National-Louis University3

Latin from negotium business, from neg- not + otium leisure

to deal with some matter or affair that requires ability for its successful handling manage : to arrange for or bring about through conference, discussion, and compromise (negotiate a treaty)

"negotiate." Merriam-Webster Online Dictionary. 2008.Merriam-Webster Online. 16 June 2008 http://www.merriam-webster.com/dictionary/negotiate

ne·go·ti·ate ne·go·ti·ate


NegotiationNegotiation

Personal Marriage Parenting Everyday Life

Business Buying & Selling Legal Proceedings International Relations

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..is a dialogue intended to resolve disputes, to produce agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests


Basic ElementsBasic Elements

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Negotiation = process + behavior + substanceProcess = who negotiates (parties), how people negotiate (tactics)and staging or sequencing;

Behavior = relationship between/among parties, their communication and their style

Substance = what the negotiation is over : issues, interests, agenda, options and final agreement


Basic Negotiation TypesBasic Negotiation Types

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Win-Lose = One person’s gain comes when the other loses

Relies on the assumption that the amount of pie is fixed;

generally true only if a single issue needs to be resolved


Basic Negotiation TypesBasic Negotiation Types

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Win-Win = the agreement reached cannot be improved further; there is no value left on the table and all creative options have been thoroughly explored and exploited.

Relies on the assumption that the amount of pie is not fixed;

generally true only if multiple issues need to be resolve


What Win – Win is notWhat Win – Win is not

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1. … always appropriate2. … compromise3. … about durable relationships4. …taking more time



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1. … always appropriate. • When dealing with a counterparty

who look at you from a win-lose point of view.

• When you're negotiating the purchase of a widely available commodity type product or service that makes neither a strategic impact upon your business, nor carries a large price tag.



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2. … compromise means 'A settlement of a dispute in which two

or more parties agree to accept something less than they originally wanted.'

If one or both parties agree to lower their aspirations, this is not a win-win outcome.



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3. … about durable relationships

while this might be nice it does not guarantee that you will walk out of the negotiation with a win-win agreement to hand. Mutual relationships are the ideal, with each side creating value for their organization and for the other's organization.



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4. …taking more time, studies show that extra time does not make much difference to the quality of the negotiated agreements.


Win – Win is: a deliberate outcomeWin – Win is: a deliberate outcome

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Understanding process + behavior + substance

Process = who negotiates (parties), how people negotiate (tactics) and staging or sequencing

How/Tactics Where Staging Sequencing

Direct U.S & Europe Direct, Explicit. Linear, rational, factual

Indirect Asia & Latin America

Indirect, Implicit

General Principles; Emotional; Spiraling


What Win – Win is: a deliberate outcomeWhat Win – Win is: a deliberate outcome

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Understanding process + behavior + substance

Relationship Where Decision Making Style

Deference

Egalitarian U.S & Europe Participative None

Hierarchy Asia & Latin America

Autocratic Low Status to High Status

Behavior = relationship between/among parties, their communication and their style

Determine how to show respect in their culture


What Win – Win is: a deliberate outcomeWhat Win – Win is: a deliberate outcome

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Understanding process + behavior + substanceSubstance is what the negotiation is over : issues, interests, agenda, options and final agreement

1. Position2. Interests3. Priorities4. Key Facts5. Substantiation6. BATNA


Substance Substance

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Substance What is it? How do you use it?

Position Opening Offer Aggressively

Interests Your needs and reasons Reveal them

Priorities Importance of issues to negotiator

Very important for maximizing the ‘pie’

Key Facts Info that relates to quality/value of issues to be negotiated

Failure to reveal may cause you to over/undervalue a resource

Substantiation How you support your argument/attack theirs

Carefully, could reduce likelihood of Win-Win

BATNA


Substance Substance

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BATNABestAlternative To aNegotiated Agreement


Substance Substance

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BATNAPLAN B

The deal happens to your advantage or you walk awayMore powerful than a predetermined bottom line You know what the ‘walk-away- alternative isYou have more power because you have a well thought out alternative to the current negotiation


Determining Your BATNADetermining Your BATNA

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•Create a list of all available alternatives that could be considered if negotiations fail•Choose the most promising alternatives and expand them into attainable alternatives•Keep these as your fall back during negotiations

This gives you the willingness to break off negotiations


Substance Substance

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Substance What is it? How do you use it?

Position Opening Offer Aggressively

Interests Your needs and reasons Reveal it

Priorities Importance of issues to negotiator

Very important for maximizing the ‘pie’

Key Facts Info that relates to quality/value of issues to be negotiated

Failure to reveal may cause you to over/undervalue a resource

Substantiation How you support your argument/attack theirs

Carefully, could reduce likelihood of Win-Win

BATNA Plan B You should not reveal it

The Mind and Heart of the Negotiator, Third EditionLeigh Thompson


BATNA GuidelinesBATNA Guidelines

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•If other parties need you in order to reach their objectives, then your BATNA is strong•BATNA is dynamic and can change during the course of negotiations as you get more information•If both parties have strong BATNA, there may be little incentive to reach an agreement•BATNA doesn’t come in a package. It comes from planning and preparation•Most people overestimate their own BATNA, and •Underestimate the other side’s BATNA


BATNA StrategyBATNA Strategy

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High Low

High No Deal Our Deal

Low Their Deal Deal

BATNA Them

Us

Remember: BATNA Evolves during the process!


BATNA DevelopmentBATNA Development

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For yourself and for the other party answer the following questions:1.What do you want from the negotiations?2.What issues do you need to discuss?3.What are your alternatives if you don’t reach an agreement?4.What is the minimum that you need to reach an agreement?5.What sources of power and persuasion do you have?


Understanding the other party’s BATNA

Understanding the other party’s BATNA

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“ You want to understand what the other person’s interests are, but you don’t want to

sacrifice your own interests.”A large amount of empathy can actually impair the ability of people to reach a creative deal”

Adam GalinskyNorthwestern University


Putting It All TogetherPutting It All Together

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“Genius: one percent inspiration and 99 percent perspiration."

Thomas Alva Edison


The FundamentalsThe Fundamentals

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1. Preparea. Determine issues and alternativesb. Prioritize issuesc. Determine your BATNA and improve itd. Assess the other guy’s BATNA

The Mind and Heart of the Negotiator, Third EditionLeigh Thompson



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2. Expand the Piea. Build trust and share informationb. Ask diagnostic questionsc. Listen to the answersd. Provide information about your prioritiese. Negotiate issues simultaneously, not sequentiallyf. Make multiple offers simultaneouslyg. Suggest post settlement settlementsh. Leverage differences, make it look hard



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3. Go for your slicea. Don’t reveal your BATNAb. Set high aspirationsc. Open first, if you’re preparedd. Re-anchor if other party opens firste. Watch magnitude of concessions


ConclusionConclusion

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Basic Elements of Negotiation: Process, Behavior, SubstanceWin/Lose versus Win/Win

NegotiationsWhat Win/Win is and isn’t

BATNAPutting it all together

National-Louis University 1 Christopher C. Multhauf Executive Dean College of Management and Business National-Louis University June 17, 2008.

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