Now What….. I want the last remaining orange and so do you

Focus on interests, not positions: Behind opposed positions lie shared and/or compatible interests Each side likely has multiple interests that may be valued differently by each party Find these compatible interests and then make trade-offs Complete satisfaction for both parties

Mythical Fixed-Pie Assume that there can only be one winner and one loser (distributive bargaining approach) However, only a small percentage of organizational negotiations are purely distributive, involving just one resource or just one issue Consider: Price, delivery date, financing, service, relationships

Continued Assumption that our interests conflict with the other side “What’s good for them must be bad for us” Terms that appear beneficial when suggested by your side often seem disadvantageous when proposed by the other side The fixed-pie mentality is prevalent

SALT (U.S. & Russia) “I have had a philosophy for some time in regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in their best interest, it can’t be in our best interest” Floyd Spence, U.S. Congress

Arms Reduction Proposal The same proposal was reviewed by two groups of people in the U.S.A. Group 1: The arms reduction proposal was offered by Russian President Gorbachev How favorable was it to Russia, the U.S.? 56% said it strongly favored Russia 16% said it favored the U.S. 28% said it favored both sides equally

Group 2: The arms reduction proposal was offered by U.S. President Reagan 27% said it favored the USSR. 27% said it favored the US 46% said it favored both sides equally

Finding the trade-offs: Easy or not so easy? Pairs were presented with a negotiation involving multiple issues. On two of these issues, the opposing sides had compatible interests (similar to an interest in the orange peel versus an interest in the fruit) What percentage of the time did the negotiators fail to trade-off? 40% Instead of realizing the gains, they tended to compromise on each one

Two students in a library, one wants the window open, the other wants it closed. A loud argument breaks out. How might this be resolved? Fixed-pie assumptions and Anger closes our minds to alternative solutions Expand the pie There may be just ONE way to satisfy a position, but there are MULTIPLE ways to satisfy interests. Inventing options for mutual gain

Interest in helping the other party to achieve its goals Interest in achieving OWN goals Compromising Negotiation & Conflict- handling Styles CollaborationCompetition AccommodationAvoidance Low High

Common Negotiation Styles Competing (distributive mind-set) Your gain is my loss Compromising (the middle ground) “Let’s split the difference” Seems like a good strategy: Isn’t it better than no deal at all? However, the middle ground results in incomplete satisfaction for both parties “Leaving money on the table”

Distributive vs. Integrative Bargaining DistributiveIntegrative Characteristics BargainingBargaining Available resources: Primary MINDSET: Primary interests: View of relationships: Fixed amount of resources to be divided I win, you lose Opposed to each other Short term Variable amount of resources to be divided I win, you win Convergent with each other Long term

Principled Negotiation: Reaching Agreement, Without Giving In Focus on interests, not positions Do you know your interests? Identify and value your sides interests Ranking process is one way to start Consult with team to help valuation process

Presentation Approaches Option 1: “I want that orange because I am interested in baking an orange cake and I need the peel” Option 2: “I am interested in baking an orange cake and I need the peel, that’s why I want that orange” How are these options the same? Different Which approach will most effectively convey your interests to the other side? Why?

Find out the other party’s interests and preferences Ask questions Listen to the response!

Concessions Find an issue of lower value to you and offer a concession on that issue Other party will typically reciprocate Contingent concessions I can give here if you can work with me on another issue

Make multiple offers simultaneously Each is different, yet results in the same level of profitability for you

Emotional Strategy Benefits of a good mood More creative, more ideas Found most trade-offs for joint gain Highest level of value Detriments of anger Found fewest trade-offs Least value

Expressed emotion “Put on a happy face” Your smile is often reciprocated by the other side Positive feelings and behaviors Finding trade-offs Offering concessions

Where do we start? A. Start with the easy issues first! B. Start with the most difficult ones first! C. Either A or B: It depends D. None of the above

Principled Negotiation: “Getting to Yes” Separate the people from the problem Perceive yourself working side by side with the other party to resolve the issue Resist the temptation to “attack” people Physically/actually sit on the same side of the table Together we can attack this problem

Insist on objective criteria Search for a standard such as market value, expert opinion, law This way, neither party is “giving in” to the other and a fair agreement is possible We are asking for $200,000 in fees How did you arrive at that figure? Is it supported by market data?

“It’s company policy – there is nothing I can do”

Where do we start? A. Start with the easy issues first! B. Start with the most difficult ones first! C. Either A or B: It depends D. None of the above

Issues in Negotiation Anchoring Putting too much weight on an initial offer