02 Strategy in Negotiation

Question 1

Direct effects of goals on strategy

Answer 1

• wishes are not goals
• goals are often linked to the other party’s goals
• there are limits to what goals can be
• effective goals must be concrete/specific

Question 2

Indirect effects of goals on strategy

Answer 2

forging an ongoing relationship

Question 3

Strategy Definition

Answer 3

The overall plan to achieve one’s goal in a negotiation

• Unilateral: made without the active involvement of the other party
• Bilateral: considers the impact of the other’s strategy on one’s own

Question 4

Tactics Definition

Answer 4

• Short-term, adaptive moves designed to enact or pursue broad strategies
• tactics are subordinate and driven by strategy

Question 5

Planning Definition

Answer 5

The “action” component of the strategy process, i.e. how will I implement the strategy?

Question 6

Four pillars of effective negotiation

Answer 6

I. Build a productive relationship

II. Pursue outcomes, not points

III. Seek solutions, avoid blame

IV. Focus on fairness

Question 7

Pillar I. Build a productive relationship

Answer 7

• have their interests in mind
• they do not necessarily care about what you want
• understand, anticipate, connect

Question 8

Pillar II. Pursue outcomes, not points

Answer 8

• Why do I want this? What will it help me to achieve?
• Does it conflict with any of my goals?
• Can these terms be implemented?
• If these terms became public, what negative repercussions might they set off?

Question 9

Pillar III. Seek solutions, avoid blame

Answer 9

• problem-solving is a great asset
• both/and solutions rather than either/or contests

Question 10

Pillar IV. Focus on fairness

Answer 10

• most agreements fall because one of the parties feels they were taken advantage of
• at different levels (outcomes, process, relationship)

Question 11

Dual concern model

Answer 11

• Avoidance: Don’t negotiate
• Competition: I gain, ignore relationship
• Collaboration: I gain, you gain, enhance relationship
• Accommodation: I let you win, enhance relationship

Question 12

Avoidance

Answer 12

• non-engagement strategy
• if one is able to meet one’s needs without negotiating at all
• if it simply may not be worth the time and effort to negotiate
• decision to negotiate is closely related to the desirability of available alternatives

Question 13

Accommodation

Answer 13

• active-engagement strategy
• involves an imbalance of outcomes (I lose, you win)
• focused on building/strengthening the relationship
• short-term strategy
• can encourage increased interdependence

Question 14

Competition

Answer 14

• active-engagement strategy
• distributive, win-lose bargaining
• Critical factors:
  
  • well-defined bargaining range
  • a good alternative
  • tactics used (e.g. bluffing, being aggressive, threatening)
• Drawbacks:
  
  • costly and time-consuming
  • often comes with underestimation of the other party
  • may lead to self-fulfilling prophecies

Question 15

Collaboration

Answer 15

• active-engagement strategy
• integrative, win-win negotiation
• Critical factors:
  
  • understanding the other party’s goals and needs (what & why)
  • providing a free flow of information (willing to give) - finding the best solution(s) to meet both parties’ needs
• Obstacles: If a party…
  
  • … doesn’t see the situation with a potential for cooperation
  • … is motivated only to accomplish its own ends
  • … is historically (wants to be/is accountable to) competitive

Question 16

Compromise

Answer 16

• active-engagement strategy
• most situations are mixed
• is usually seen as ‘adequate for most occassions’
• Reasons to adopt:
  
  • when a true collaborative strategy does not seem possible
  • when parties are short of time or other critical resources
  • both parties gain something (or not lose something)

Question 17

When to choose which strategy?

Answer 17

Decisive factors:

• situation
• preferences
• experience
• interactions between styles
• perceptions and past experience

Question 18

Key Phases in Negotiation

Answer 18

Phase 1. Preparation - What are the goals and how will I work?

Phase 2. Relationship building - What are the differences and similarities? Can we commit to a mutual benefit?

Phase 3. Information gathering - What can I learn about the issue at stake?

Phase 4. Information using - assemble the case

Phase 5. Bidding - Opening offer. Give and take process

Phase 6. Closing the deal

Phase 7. Implementing the agreement

Question 19

Planning Process

Answer 19

1. Define the issue
2. Assemble the issues and define the bargaining mix (bargaining mix = combined list of issues; what are the most and least important issues and are they linked?
3. Define your interests (why you want what you want)

4/5. Know your limits (resistance point) and alternative (BATNA)

6. Set your objectives (targets) and opening bids (where to start) (target - outcome realistically expected; opening - best possible settlement)
7. Assess constituents and the social context of the negotiation (who is on my side, who is on the other side, who is watching)
8. Analyze the other party (e.g. how can I present my case clearly and refute the other party’s argument?)
9. Define the protocol to be followed in the negotiation (e.g. what might be done when the negotiation fails? how will I keep track of what is agreed on?)
10. Present the issue to the other party

Question 20

Principled Negotiation Model

Answer 20