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Getting to YES!!
Transcript of Getting to YES!!
Pre - Assignment Review
Getting to YES !
Planning Negotiations – BATNA & ZOPA
• Be able to strike better deals and contracts
• Create a strong negotiation position
• Adjust your style for different negotiation situations
• Deal with difficult negotiators
• Improves reputation and relationships
• Avoid being cheated
What is Negotiation?
Discussion between two or more disputants who are trying to work out a solution to their problem.
Kindly switch your phones to silent mode
Lead - Inspire - Develop
Learn and let others learn too
World is a stage of NEGOTIATION
Please write a one sentence definition of Negotiation
& few traits of a negotiator
Types of Negotiation
A distributive negotiation is type of negotiation in which the parties compete over the distribution of a fixed pool of value.
A single issue to be negotiated.
Distributive negotiation is also sometimes called win-lose because of the assumption that one person's gain results in another person's loss
The idea of integrative negotiation is to work together to find the outcome that best helps both sides.
Two or more issues to be negotiated.
Also known as a "win-win solution.“
It can be difficult, as it tends to require a considerable amount of compromise on both sides.
It usually involves a higher degree of trust and a forming of a relationship.
A win-win game is a game which is designed in a way that all participants can profit from it in one way or the other
WIN - WIN
Three Phases of Negotiation
1. Information exchange
2. Developing a bargaining position
3. Closing - Agree and exchange
Skills for Effective Negotiation
Collaboration and Teamwork
Decision Making Ability
Good Interpersonal Skills
Ethics and Reliability
Establishing WATNA, BATNA & ZOPA
In most negotiations, the parties are influenced by their assumptions about what they think are the alternatives to a negotiated agreement. Often the parties have an unrealistic idea of what these alternatives are, and they are unwilling to make concessions because they think they can do just as well without negotiating
Best Alternative to a Negotiated Agreement (Fisher & Ury, 1981)
It is the best you can do if other person refuses to negotiate with you.
E.g. If you are offered a used car for Rs.700, 000, but there's an even better one at another dealer for Rs. 650, 000--the Rs. 650, 000 car is your BATNA.
Having a good BATNA increases your negotiating power. If you know you have a good alternative, you do not need to concede as much
Knowing your BATNA gives you additional confidence in the negotiating process.
It is easier to break off negotiations if you know where you are going should the negotiation fail.
Develop your BATNA
Invent a list of actions you might take if no agreement is reached;
Improve some of the more promising ideas and convert them into practical alternatives; and
Select, tentatively, the one alternative that seems best.
E.g. If you do not receive an attractive job offer by the end of the month from Company X, what will you do? Inventing options is the first step to determining your BATNA. Should you take a different job? Look in another city? Go back to school?
The “WATNA” can be useful in evaluating whether to walk away from an agreement.
If the “WATNA” is better than the current proposed resolution, a party may be inclined to take the risk and walk away
Worst Alternative to a Negotiated Agreement
Your Walk away Point
It is the area in which the final price will sit, and within that ZOPA you will ideally end up with a price closer to their WAP than yours.
The range in which a deal that satisfies both parties can take place (Getting to Yes).
ZOPA--also called the "bargaining range“ exists if there is a potential agreement that would benefit both sides more than their alternative options do.
Zone of Possible Agreement
In order for disputing parties to identify the ZOPA, they must first know their alternatives, and thus their "bottom line" or "walk away position.“
Alternatives: Parties must determine what alternatives they have to any agreement. "BATNA" or “WATNA”
For example, Asad might have two potential buyers for his car. Umar is willing to pay Rs. 690,000. Asad is now negotiating with Fareed. If Fareed will pay more than Umar (Asad's BATNA), he will sell to Fareed. If Fareed won't pay that much,he'll sell to Umar. Likewise, if Fareed has found another car he likes for Rs. 650,000 then he won't pay more than that for Asad's car...maybe even a bit less. So Fareed's BATNA is Rs. 650,000.
Bottom Lines or Walk-Away Positions: BATNAs determine each side's bottom lines. If you have an alternative car available for Rs. 500,000, the that Rs. 500,000 is your bottom line. If you can sell your car for Rs. 690,0000 that is your bottom line. If you don't do better than that in the negotiation, you'll walk away.
Foundations of ZOPA
Zopa in Distributive & Integrative Negotiations
In a distributive negotiation, in which the participants are trying to divide a "fixed pie," it is more difficult to find mutually acceptable solutions as both sides want to claim as much of the pie as possible.
There is a winner and a loser.
There is no overlap of interests between the parties; therefore, no mutually beneficial agreement is possible. The best one can do--sometimes--is split the desired outcome in half.
For example, two people may be competing for one job. In the simplest case, there is no ZOPA because both people want the full-time job. So this is the prototypical win-lose outcome.
Integrative negotiations involve creating value or "enlarging the pie.“
In this case, the parties can combine their interests and trade off among multiple issues to create joint value.
That way both parties can "win," even though neither gets all that they originally thought they wanted.
In the example above, if rewriting the job description could create an additional job, then the distributive negotiation would change into an integrative negotiation between the employer and the two potential employees.
If both applicants are qualified, now they may both get jobs.
The ZOPA, in this case, exists when two jobs are created and each applicant prefers a different one of the two.
Inspired by W. Ury & R. Fisher
Creative - Strategic - Go Getter
Establishing Common Ground
Begin by discussing what you and the other party AGREE on.
Tackle issues that are close to agreement FIRST!
Move on to tougher issues, on which both parties have the most conflict
Establishes positive tone for negotiation by enabling parties to think in terms of SHARED INTERESTS
Have you sincerely seen and established common ground?
What opportunities are there to improve your methods?
Not reaching a joint decision
management and a labor union negotiating a contract
Setting the right time and place can give advantage
Conducting a negotiation on your home turf will give you control over most things
Setting the Right Place & Time
Factors hampering successful negotiations
Q & A Session
Negotiation plays a major role in all aspects of our professional and personal lives.
Easier to negotiate when the two sides have some shared interests and some opposed.