Overview

Books like “Winning through Intimidation” May get a better deal some of the time. Damage Relationships Miss creative agreements Make a deadlock Win-Lose

Books like “Getting to Yes” Focus on creativity Have better relationships May give up achievable gains especially against tough negotiators Win-Win

Find opponents weak spots Who makes first offer Make demands Overcome objections Threaten Using tactics Win-Lose Playbook

Build trust Communicate clearly Probe for real interests Find common ground Brainstorm new options Cross-cultural communication Counter tactics Win-Win Playbook

Are you more of a win-win or win-lose negotiator? Question

1. Tactics 2. Deal Design 3. Set-up 3-D negotiation

Drawing Board metaphor – Creativity, invention and fresh thinking Find hidden sources of economic and non-economic value. e.g. include risk sharing provisions Focus on substance and outcomes. Deal Design

Finding common ground and also analyzing differences. Egypt and Israel, Mount Sinai boundary negotiation Egypt – Sovereignty Israel – Security Solution – DMZ with Egyptian flag. Deal Design

Understanding differences can help to separate different parts and give each party what it wants at least cost to the other. An entrepreneur and a buyer have different forecasts for the future of a company. Buyer can pay based on future performance. Risk, Patience, costs, deal image. Deal Design

Negotiation moves away from the table that set-up the most promising situation once you’re at the table. If the set-up is not right they take action away from the table to make it better. Set-up

Right parties Right Sequence Right Issues Right set of interests Right table Right time Right expectations Right Consequences for walking away Set-up

Staples founder Thomas Stemberg wanted a second round of financing from venture capitalists. The VCs refused to value the company as highly as he hoped. How could he “break the VC cartel?” Ask who are the potential “high value players” and approach them directly to set-up the right players and interests. Set-up

Your negotiating objective should be to create and claim value for the long term by crafting and implementing a deal that is satisfactory for both or all parties One-shot negotiations - reputation Long-term relationships – parties live up to their side of the bargain Creating and claiming value

What kind of things can create value? Question

Discounted cash flow Precedent Relationships Reputation Political Appearance, Fairness Self-Image Creating value

Competitive side of negotiations where one side gets a bigger slice of the value pie. Claiming value

What are the barriers to creating value? What are the barriers to claiming value? Creating and claiming value

Preparing for a negotiation

Should we negotiate?

Have you ever tried to negotiate about a price where you normally don’t e.g. A restaurant or a department store? Question

Try to negotiate a lower price when purchasing something. It cannot be a place like a market where negotiating is normal. Tell us how you got on. Assignment

How do you feel when negotiating? Question

A negotiation professor buys a big screen TV, he does lots of research on different models and on dealer costs. He visits several dealers, and he packages, he bundles the price of the TV with installation, satellite dish and other features. And he obtains a last price concession, by mentioning a competitors offer and as a result he saved $120. Now, what do you think about this? Question

Some people love to negotiate, some peo ple have no problem with this. Other peopl e might ask, is this the way we want to sp end our brief time on Earth

A college offering a job to a professor, and she replies by , granting some of the following provisions would make my decision whether to accept your job offer easier. Let me know what you think for example, she wondered if they would consider a higher salary, and she wondered if they would consider no more than three new class preparations per year for the first three years. Well, the college search committee received her and replied immediately, we have decided to withdraw the offer of employment to you Case

You have to consider the risks, and balance those against the benefits. You have to consider your feelings about negotiating in general Do a cost benefit analysis of the rewards Summary