NEGOTIATIONS
, CH 1: Introduction to Negotiation
Negotiation: an interpersonal decision-making process necessary whenever we cannot achieve our
objectives single-handedly. Negotiation is your key communication and influence tool in most relationships.
Relationships vs Economics
Economic Value People
Money and scare resources Relationships and trust
(We negotiate in long-term relationships with people who have short-term memories)
Satisficing vs Optimizing
Satisficing Optimizing
Doing just enough to reach ones minimum goals (take Capture all of the potential gain in a situation (set high
shortcuts and do not maximize their potential goals) aspirations and attempt to achieve as much as possible)
When people satisfice, they settle for something less than
they could otherwise have
Short vs Long-Term Relationships
Short Term Long Term
The intuition is that if a person believed the negotiation assume that the details of their negotiation communication
was a single-shot situation, they might behave differently and behaviour will be accessible for anyone who might be
(perhaps more aggressively) than if they anticipated interested, and consequently, to act as though all
interacting with the counterparty in the future negotiations have long-term implications.
Intra vs Inter-Organizational Negotiations
Intra-Organizational Inter-Organizational
Inside one’s own organization People not employed by one’s own organization
Low vs High Stakes Negotiation
Low Stakes High Stakes
Do not heavily impact the organization Heavily impact the organization
NEGOTIATION SITUATIONS
Win-Win Negotiations: both negotiators optimize the potential joint gains. In this sense, they have captured
all the possible value in the relationship. Also referred to as integrative agreements because the outcome is
one that creatively combines parties’ interests in a way that maximizes the joint economic value. Win–win
agreements are typically variable-sum as opposed to fixed-sum situations.
, Win-Lose Negotiations: situations in which one party prevails at the other party’s expense. This may be
because one party has threatened the other party or that one party has capitulated to the other party. (one
party has gained at another parties expense)
Lose-Lose Negotiations: situations in which both parties have made sacrifices that are ultimately unwise or
unnecessary, resulting in an outcome that both parties find less than satisfying.
NEGOTIATION AS A CORE MANAGEMENT COMPETENCY
Knowledge Economy Because the nature of knowledge work changes rapidly, managers of all ages are continuously
negotiating their professional identity, acquiring new skills, and moving into new jobs, industries,
and markets.
Specialized Expertise The increasing degree of specialization and expertise held by businesspeople indicates that
people are more and more dependent on others. However, other people do not always have
similar incentive structures, so managers must know how to promote their own interests while
simultaneously creating joint value for their organizations.
Information Information technology has created a culture of 24/7 availability. With technology that makes it
Technology possible to communicate with people anywhere in the world, managers are expected to
negotiate at a moment’s notice
Globalization Managers need to develop negotiation skills that can be successfully employed with
people of different nationalities, backgrounds, and personalities.
NEGOTIATION TRAPS
Leaving money on the (also known as “lose–lose” negotiation) occurs when negotiators fail to recognize and
table capitalize on their win–win potential.
Settling for too little (also known as “the winner’s curse”) occurs when negotiators make a too-large concession,
resulting in a too-small share of the bargaining pie.
Walking away from the occurs when negotiators reject terms offered by the other party that are demonstrably better
table than any other option available to them. Sometimes this shortcoming is traceable to hubris
or pride; other times it results from gross miscalculation.
Settling for terms that are (also known as the “agreement bias”) occurs when negotiators feel obligated to reach
worse than your best agreement even when the settlement terms are not as good as their other alternatives.
alternative
BECOMING AN EFFECTIVE NEGOTIATOR
Successful negotiation strategies involve preparation, strategy at the negotiation table, and then, post-
negotiation behaviours.
Investigations of contract negotiations consider four key objectives in assessing the quality of contracts:
(1) how to maximize the likelihood of reaching a good agreement
(2) how to reach an agreement that fulfils the intended purpose
, (3) how to reach an agreement that will last
(4) how to reach an agreement that will lead to subsequent negotiations.
Three major negotiation skills: creating value, claiming value, and building trust.
Feedback: improves negotiation skills. Feedback helps to grow ones experience. People with more
experience grow more confident, but the accuracy of their judgement and the effectiveness of their behaviour
do not increase in a proportionate fashion. Negotiators who received feedback about the counterparty’s
interests immediately following a negotiation showed the greatest improvement in subsequent negotiations.
- Overconfidence: may be detrimental because it may lead people to take unwise risks
DEBUNKING NEGOTIATION MYTHS
MYTH 1: Negotiations are fixed- Most negotiations are variable-sum (not fixed-sum), meaning that if parties
sum work together, they can create more joint value than if they are purely
combative.
MYTH 2: you need to e either The truly effective negotiator is neither “tough as nails” nor “soft as pudding,”
tough or soft but rather, principled.38 Effective negotiators follow an “enlightened” view of
negotiation and correctly recognize that to achieve their own outcomes they
must work effectively with the other party (and hence, cooper-ate) but must
also leverage their own power and strengths.
MYTH 3: Good negotiators are Most excellent negotiators are self-made. In fact, naturally gifted negotiators
born are rare.
MYTH 4: Good negotiators rely on Intuition does not serve people well. Effective negotiation involves deliberate
intuition thought and preparation and is quite systematic.
, CH 1: Introduction to Negotiation
Negotiation: an interpersonal decision-making process necessary whenever we cannot achieve our
objectives single-handedly. Negotiation is your key communication and influence tool in most relationships.
Relationships vs Economics
Economic Value People
Money and scare resources Relationships and trust
(We negotiate in long-term relationships with people who have short-term memories)
Satisficing vs Optimizing
Satisficing Optimizing
Doing just enough to reach ones minimum goals (take Capture all of the potential gain in a situation (set high
shortcuts and do not maximize their potential goals) aspirations and attempt to achieve as much as possible)
When people satisfice, they settle for something less than
they could otherwise have
Short vs Long-Term Relationships
Short Term Long Term
The intuition is that if a person believed the negotiation assume that the details of their negotiation communication
was a single-shot situation, they might behave differently and behaviour will be accessible for anyone who might be
(perhaps more aggressively) than if they anticipated interested, and consequently, to act as though all
interacting with the counterparty in the future negotiations have long-term implications.
Intra vs Inter-Organizational Negotiations
Intra-Organizational Inter-Organizational
Inside one’s own organization People not employed by one’s own organization
Low vs High Stakes Negotiation
Low Stakes High Stakes
Do not heavily impact the organization Heavily impact the organization
NEGOTIATION SITUATIONS
Win-Win Negotiations: both negotiators optimize the potential joint gains. In this sense, they have captured
all the possible value in the relationship. Also referred to as integrative agreements because the outcome is
one that creatively combines parties’ interests in a way that maximizes the joint economic value. Win–win
agreements are typically variable-sum as opposed to fixed-sum situations.
, Win-Lose Negotiations: situations in which one party prevails at the other party’s expense. This may be
because one party has threatened the other party or that one party has capitulated to the other party. (one
party has gained at another parties expense)
Lose-Lose Negotiations: situations in which both parties have made sacrifices that are ultimately unwise or
unnecessary, resulting in an outcome that both parties find less than satisfying.
NEGOTIATION AS A CORE MANAGEMENT COMPETENCY
Knowledge Economy Because the nature of knowledge work changes rapidly, managers of all ages are continuously
negotiating their professional identity, acquiring new skills, and moving into new jobs, industries,
and markets.
Specialized Expertise The increasing degree of specialization and expertise held by businesspeople indicates that
people are more and more dependent on others. However, other people do not always have
similar incentive structures, so managers must know how to promote their own interests while
simultaneously creating joint value for their organizations.
Information Information technology has created a culture of 24/7 availability. With technology that makes it
Technology possible to communicate with people anywhere in the world, managers are expected to
negotiate at a moment’s notice
Globalization Managers need to develop negotiation skills that can be successfully employed with
people of different nationalities, backgrounds, and personalities.
NEGOTIATION TRAPS
Leaving money on the (also known as “lose–lose” negotiation) occurs when negotiators fail to recognize and
table capitalize on their win–win potential.
Settling for too little (also known as “the winner’s curse”) occurs when negotiators make a too-large concession,
resulting in a too-small share of the bargaining pie.
Walking away from the occurs when negotiators reject terms offered by the other party that are demonstrably better
table than any other option available to them. Sometimes this shortcoming is traceable to hubris
or pride; other times it results from gross miscalculation.
Settling for terms that are (also known as the “agreement bias”) occurs when negotiators feel obligated to reach
worse than your best agreement even when the settlement terms are not as good as their other alternatives.
alternative
BECOMING AN EFFECTIVE NEGOTIATOR
Successful negotiation strategies involve preparation, strategy at the negotiation table, and then, post-
negotiation behaviours.
Investigations of contract negotiations consider four key objectives in assessing the quality of contracts:
(1) how to maximize the likelihood of reaching a good agreement
(2) how to reach an agreement that fulfils the intended purpose
, (3) how to reach an agreement that will last
(4) how to reach an agreement that will lead to subsequent negotiations.
Three major negotiation skills: creating value, claiming value, and building trust.
Feedback: improves negotiation skills. Feedback helps to grow ones experience. People with more
experience grow more confident, but the accuracy of their judgement and the effectiveness of their behaviour
do not increase in a proportionate fashion. Negotiators who received feedback about the counterparty’s
interests immediately following a negotiation showed the greatest improvement in subsequent negotiations.
- Overconfidence: may be detrimental because it may lead people to take unwise risks
DEBUNKING NEGOTIATION MYTHS
MYTH 1: Negotiations are fixed- Most negotiations are variable-sum (not fixed-sum), meaning that if parties
sum work together, they can create more joint value than if they are purely
combative.
MYTH 2: you need to e either The truly effective negotiator is neither “tough as nails” nor “soft as pudding,”
tough or soft but rather, principled.38 Effective negotiators follow an “enlightened” view of
negotiation and correctly recognize that to achieve their own outcomes they
must work effectively with the other party (and hence, cooper-ate) but must
also leverage their own power and strengths.
MYTH 3: Good negotiators are Most excellent negotiators are self-made. In fact, naturally gifted negotiators
born are rare.
MYTH 4: Good negotiators rely on Intuition does not serve people well. Effective negotiation involves deliberate
intuition thought and preparation and is quite systematic.
