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Practical Negotiations LEAP (Day 1)
Transcript of Practical Negotiations LEAP (Day 1)
- 5 minutes to read
- 10 minutes to bargain
- write down your result
- wait where you are until I say How? Becoming a
Better Negotiator The Basics Why? When? Intro & Basics
Integrative Day One Power
Screwing up Day Two http://www.sallyslc.com/images/coffee_cup.gif Recent research by Babcock, Gelfand, Small and Stayn (2006) revealed some telling statistics; among graduating MBA students 87% of women and 48% of men did not negotiate within their last job offer $64K $60K Over these careers this gap will increase due to raises, bonuses, and pension being tied to initial salary (Gerhart & Rynes, 1991). What precedent
have you set? Bargaining Zones A rational deal exists whenever the maximum a buyer is willing to spend exceeds the minimum that the seller is willing to accept. Bargainers who use their reservation price as their point of reference, rather than an optimistic aspiration (such as by considering the reservation possibilities of the other side), stand to take home less (e.g., Galinsky, Mussweiler, & Medvec, 2002) Reference Points Source: Paulson 2010 Distributive "Claiming value", the result of zero-sum or distributive situations where the object is to gain largest piece of resource "Creating value", the result of non-zero-sum or integrative situation where object is to have both parties do well Integrative Preps (10%)
Participation (15%) Grades Sooner or later? Mixed Motives In practice, almost all situations have elements of both Prepare
Patience 1st Move? Sale Price: $899.99
Compare at: $1,599.99
PRICING IS FOR THE 5 PC DINETTE. Fundamentals The best reasonable
can envision If I had eight hours to chop down a tree, I'd spend six sharpening my axe - Abe Lincoln 1. the issues & mix price?....delivery, storage, credit, contract length? importance, priorities? brainstorm & research Opening What is your opening request for each issue? Priorities Interests and needs Reputation Estimate their ranges 5. the Other Party Issues 4. strategy & planning integrative vs distributive importance, priorities? presenting the facts the other person? chart, figures? anticipated objections counter arguments? 2 elements:
cost AND value 3. Defining your ranges Preparation strategic concessions According to a recent meta-analysis (Orr & Guthrie 2008)
Every $1 increase in initial anchor...
Amatuers: 50c increase in final settlement
Experts: 37c increase Walkaway Minimally acceptable before you walk to your next best option... Aspiration 2. interests & positions “The fellow who says he’ll meet you halfway usually thinks he’s standing on the dividing line.” Battista, Orlando A. Ego Perspective taking 19% 42% 75% Why do I want that?
Why is that important to me?
What will achieving that help me do? protocol? why, where, when, who? agenda home vs away
vs neutral Assuming the fixed-pie is the most common mistake 1. Build trust & share some info 2. Ask questions 4. Make multiple equivalent offers at the same time Source: Bazerman, 2000 $1m software, 30 days payment
$1.5m package, 120 days payment
$1.35m enhanced package, 30 days payment Source: Medvec & Galinsky, 2005 A greater proportion of multi-issue offers;
A greater likelihood of logrolling low priority issues
Higher outcomes (individual & joint outcomes) Greater temporal distance resulted from an event being negotiated resulted in: Source: Henderson, Trope, and Carnevale (2006) What did the NBA do? NEVER give a concession without getting something back Appear weak when you are strong, and strong when you are weak ALL IN? Dilemma of:
Trust vs Honesty Silence is golden 1. Let them talk
2. Helps them underestimate you
3. Emphasis Concede in haste, regret at your leisure INFORMATION 1. Notetaker 2. Invite only people you need (i.e. not Lebron) 3. At their convenience? 4. Volunteer to write it up 6. adapt! 3. Logroll - how did you acquire the bowl?
- what did you hope to get?
- what was your backup plan?
- what was the least you would accept? Sellers - what did you hope to pay?
- what was your backup plan?
- what was the most you would pay? Buyers Perspective taking
what did you find out about the other side?
Did you consider their potential price points? “Handshake Vector” July 1st 29, 2011 via DragonArtzDesigns, Creative Commons Attribution. http://dragonartz.wordpress.com/2009/07/27/handshake-vector/ smells like desperation