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MANAGEMENT (11)MANAGEMENT (11)NegotiationNegotiation

CCătălinaătălina RADU, MBA, PhD.RADU, MBA, PhD.BucharestBucharest UniversityUniversity ofof EconomicEconomic StudiesStudies

NegotiationNegotiation – – Proposed QuotesProposed Quotes

GROUP 917:GROUP 917: “ “Negotiation is not a policy. It's aNegotiation is not a policy. It's atechnique. It's something you use when it's totechnique. It's something you use when it's toyour advantage, and something that you don't useyour advantage, and something that you don't usewhen it's not to your advantage.when it's not to your advantage.”” - - John Bolton John Bolton 

GROUP 920:GROUP 920: “I “In business as in life ou don't et  n business as in life ou don't et   what you deserve, you get what you negotiate.what you deserve, you get what you negotiate.”” – – ChesterChester Karras Karras 

GROUPS 918, 919, 921 and 922: – 

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Negotiation StylesNegotiation Styles

 – – QuickQuick

 – – DeliberateDeliberate

 – – MiddleMiddle -- compromisecompromise

Quick Style versusQuick Style versusDeliberate StyleDeliberate Style

Quick styleQuick style

Negotiate in a hurryNegotiate in a hurry

Useful for a nonUseful for a non--repetitive negotiationrepetitive negotiation – – GetGetthe best deal without regard to the other side’sthe best deal without regard to the other side’s “win”  “win” 

e era e y ee era e y e Useful for long term relationship; involvesUseful for long term relationship; involves

cooperation and relationship building to reachcooperation and relationship building to reachagreementagreement

Needs much preparationNeeds much preparation

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OutcomesOutcomes

 – – Both sides satisfied, winBoth sides satisfied, win--win situationwin situation

 – – Usually results from deliberate styleUsually results from deliberate style

 Acceptable Acceptable

 – – Likely to result from quick styleLikely to result from quick style

 – – Something is better than nothingSomething is better than nothing

WorstWorst – – When people are too stubborn to be flexibleWhen people are too stubborn to be flexible

 – – Usually results from quick styleUsually results from quick style

ExampleExample -- GameGame

44 teams, two options, four differentteams, two options, four differentcombinationscombinations

PrisonersPrisoners’ dilemma’ dilemma -- game theorygame theory -- why twowhy twourel "rational" individuals mi ht noturel "rational" individuals mi ht not

cooperate, even if it appears that it is incooperate, even if it appears that it is intheir best intereststheir best interests to do soto do so

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Principles of NegotiationPrinciples of Negotiation

There are no clear rules;There are no clear rules;

Establish an agenda;Establish an agenda;

Everything is negotiable;Everything is negotiable;

 Always ask for a better deal; Always ask for a better deal;

e creat ve;e creat ve;

Learn to say “NO”.Learn to say “NO”.

 Values of a Motivated Values of a MotivatedNegotiatorNegotiator

EnthusiasmEnthusiasm   Social SkillsSocial Skills

 – – ConfidenceConfidence

 – – EngagedEngaged

RecognitionRecognition

 – – Accomplishment Accomplishment

 

 – – Enjoy peopleEnjoy people

 – – Interest in othersInterest in others

Teamwork Teamwork 

 – – Better as a teamBetter as a team

 – – Praising, rewardsPraising, rewards IntegrityIntegrity

 – – EthicsEthics

 – – TrustworthinessTrustworthiness

 – – Self Self--controlcontrol CreativityCreativity

 – – Always looking for Always looking forways to completeways to completethe dealthe deal

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Negotiation ModelNegotiation Model

InvestigationInvestigation

PresentationPresentation

BargainingBargaining

 Agreement Agreement

InvestigationInvestigation

What do you want?What do you want?

What does the other side need?What does the other side need?

Decide on styleDecide on style

 

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PresentationPresentation

Prepare other side’s casePrepare other side’s case

Present the reasons for your side betterPresent the reasons for your side better

Planning sheetPlanning sheet

 – –

 – – Realistic, possible and worst scenariosRealistic, possible and worst scenarios

BargainingBargaining

When in doubt, ask questions!When in doubt, ask questions!

Open questionsOpen questions

Reflective questions (i.e. “What do youReflective questions (i.e. “What do you

wan o ac eve y…wan o ac eve y… TacticsTactics

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 Agreement Agreement

 Arrangements should be neutral and Arrangements should be neutral andcomfortablecomfortable

Pay attention to what the other party saysPay attention to what the other party says

Screen out all visual distractionsScreen out all visual distractions

  --

Listen to responsesListen to responses

Proactive versus reactiveProactive versus reactive behaviourbehaviour

Reservation Point andReservation Point andBargaining Range (1)Bargaining Range (1)

 Point 

 to a Negotiated Agreement (the BATNA)becomes preferable to starting orcontinuing a negotiation. In a sale - or inany negotiation - this is the pointbeyond which a party will not go.

BargainingRange 

T e istance etween t e reservationpoints of the parties. This range can bepositive or negative. If it is negativethere will be no settlement unless one orboth the parties changes reservationpoints.

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Reservation Point andReservation Point and

Bargaining Range (2)Bargaining Range (2)

Expanding the PieExpanding the Pie

 negotiation which help one or both sides tonegotiation which help one or both sides togain moregain more -- a result from making negotiationsa result from making negotiationsmore integrative (even if they appear to bemore integrative (even if they appear to bedistributive).distributive).

It is about elements that are valued differentlIt is about elements that are valued differentl by each party and often they have theby each party and often they have thecharacteristic that one side will gain a little,characteristic that one side will gain a little,give up nothing or suffer only a small loss ingive up nothing or suffer only a small loss inreturn for a great gain to the other.return for a great gain to the other.

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ProposedProposed DicussionsDicussions

Cultural differences in negotiationCultural differences in negotiation

Women versus menWomen versus men – – do the ne otiatedo the ne otiatedifferently?differently?

*** QUOTES ABOUT OUR COURSE ****** QUOTES ABOUT OUR COURSE ***

Let’s look again!Let’s look again!

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NegotiationNegotiation – – Proposed QuotesProposed Quotes

GROUP 917:GROUP 917: “ “Negotiation is not a policy. It's aNegotiation is not a policy. It's atechnique. It's something you use when it's totechnique. It's something you use when it's toyour advantage, and something that you don't useyour advantage, and something that you don't usewhen it's not to your advantage.when it's not to your advantage.”” - - John Bolton John Bolton 

GROUP 920:GROUP 920: “I “In business as in life ou don't et  n business as in life ou don't et   what you deserve, you get what you negotiate.what you deserve, you get what you negotiate.”” – – 

ChesterChester Karras Karras 

GROUPS 918, 919, 921 and 922: – 

THANK YOU.THANK YOU.

……