1. Sally’s Negotiation Dynamics

2. What were each side’s alternatives?
Opera’s?
Sally’s?

3. Negotiation Dynamics? Sally wants about $25K minimum
$15K $20K $25K $30K $35K $40K $45K
Zone of Agreement
Sally wants about $25K minimum
Lyric will pay up to about $35K max

4. Lesson one A bad alternative does not necessarily equal a bad outcome…
Why would the Opera not push Sally as far as it could?
Why wouldn’t Sally squeeze the Opera, if she could?
Other forces often drive deals
Relationship
Interests
Principles
But if one side has strong leverage and doesn’t care…it will be decisive R

5. The impact of relationships
Others may consider them primary, especially in other cultures
Likely to make fairness more important
How to establish/enhance?
Stress similarities, connections
Use gifts as a signal
ID a mutual friend or other stake in being trustworthy
Distinguish working from personal relationships

6. Objective Standards for Compensation?
$0K $5K $10K $15K $20K $25K $30K $35K $40K $45k
35K
What Lyric is willing to pay to get Sally to sing
What Original Soprano would have been paid
$30K
What neophyte soprano might be paid
< $28K
$25K
What title role was paid last year
$24K
What Sally thinks title role paid last year
$22K
What Sally received 4 years ago for title role
What Sally has sung secondary roles for
$10K to $18K • •
$12.5K
What Lyric paid Sally last year
$25K What Sally would be willing to take

7. Impact of principles Principles are important
They influence both us and opponents
We want to be, and appear, consistent
Principles are useful
Legitimize your position
Minimize emotional reactions
Substitute for relying on alternative
Give basis for asking for information
Allow moving w/o slippery slope

8. Selecting an effective principle
Should not be under your influence
Consider industry customs, model clauses, cases, well-known organizations, tradition
OK to use a standard that benefits you, if a neutral person might accept it
Best to use standard that other side has already accepted: this creates “normative leverage”
If you can ID a principle to justify a concession, easier for them to move

9. Integrative (“Win-Win”) Bargaining
Good negotiators change style to fit the situation, but integrative bargaining is preferable.
Key: What does a party want other than or in addition to money? The answer is its interests.
Faced with a position, ask why do they want that?
Easier to divide a large pie than a small one

10. What matters, other than money?
Personal interests: Being treated with respect, valued as a person
Process interests: Telling my story, using fair, predictable rules
Economic interests: Getting the best possible value from the deal
External interests: Issues from a context outside the negotiation

11. How To Prepare?
ID your own interests clearly, and rank your preferences
Ask yourself what their interests may be: use role reversal
Ask whose interests? Those of bargainer and client may differ
ID contrary interests: Why might they say no?
Ask: how can I satisfy their goals at a low cost? 6

12. How to bargain with interests?
Competitively: Haggle, often one issue at a time
Cooperatively:
ID range of issues
Exchange info re: relative importance to each side
Propose packages
Offer adjustments + trade pairs or groups of issues
Continue to seek out more information
Work to be creative; don’t rush just to be friendly
Faced with a position, ask why do you need that?
Copyright 2006 Dwight Golann

13. Compare $30K in cash to Sally $0 in special advertising
$30K total cost to Lyric to
$25K in cash to Sally
$5K in special advertising

14. What Solutions in Sally Soprano?
Opera:
Pay -- How much? When? Risks?
Sally:
Advertising -- How much? Form helpful to both?
Other PR: Master classes
Star Status: Limos, roses, dressing room, tribute Future Performances
Other ideas?

15. Why Is It Hard?
We instinctively view world from our own lens: we assume they want what we want, and would reject what we oppose. Not true!
Bargaining fosters competitiveness: We want to “win” and be tough
Openness can hurt you when dividing the gains