MGT 459 Negotiation

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MGT 459 - Negotiation

• Instruction 1 The Nature of Negotiation

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Introduction to Negotiation

• However much you think negotiation is a part of
  your life, youre underestimating (Inc., 8/1/03,
  p. 76).
• Let us never negotiate out of fear. But let us
  never fear to negotiate. - John F. Kennedy

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Outline for Instruction 1

• Major negotiation skills
• Understanding negotiation
• Building negotiation skills

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Major Negotiation Skills

• Creating value
• Claiming value
• Building trust
• Whats missing?
• Intimidating your opponent
• Tricking your opponent
• Beating your opponent

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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Defining Negotiation

• A core management competency
• An interpersonal decision-making process
  necessary whenever we cannot achieve our
  objectives single-handedly.
• Interpersonal
• Decision making
• Used when individual achievement of objectives is
  impossible
• Interdependence
• Interlocking goals

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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Characteristics of Negotiation Situations

• Two or more parties (focal, target, hidden, etc.)
• Parties have a conflict of interest
• Each party believes in ability to influence
• Each party volunteers to negotiate
• Each party prefers to search for agreement
• Each party expects give and take
• Tangibles and intangibles involved

Source Lewicki et al., Essentials of
Negotiation, 2004
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Mutual Adjustment

• Clarify and Share Information
• Concessions
• Dilemma of Honesty
• Dilemma of Trust

Source Lewicki et al., Essentials of
Negotiation, 2004
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Most People are Ineffective Negotiators

• Most people overrate their ability to negotiate
  well
• Factors contributing to low ability
• Absent or faulty feedback
• Satisficing
• Self-reinforcing incompetence

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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Debunking Negotiation Myths

• Myth 1 Negotiations are fixed-sum
• Myth 2 You need to either be tough or soft
• Myth 3 Good negotiators are born

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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Debunking Negotiation Myths

• Myth 4 Experience is a great teacher
• Myth 5 Good negotiators take risks
• Myth 6 Good negotiators rely on intuition

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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Four Deadly Sins of Negotiating

• Leaving money on the table
• Settling for too little
• Walking away from the table
• Settling for terms that are worse than the
  alternative

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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When NOT to Negotiate

• When youd lose the farm
• When youre sold out
• When the demands are unethical
• When you dont care
• When you dont have time
• When they act in bad faith
• When waiting would improve your position
• When youre not prepared

Source Levinson, Smith Wilson, Guerilla
Negotiating, 1999
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The Mind and Heart

• Mind
• Developing deliberate, rational, thoughtful
  strategies
• Science
• Learn by studying
• Heart
• Building relationships and trust
• Faith
• Learn by feeling

Source Adapted from Thompson, The Mind and Heart
of the Negotiator, 2005
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The Mind and Heart ( Feet)

• Feet
• Putting it into practice
• Art
• Learn by doing