...Definitions BATNA (BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT) = This refers to what, as the seller, you think you could do with another party (being realistic) in terms of selling your content or product, if this deal fell apart. For the buyer, it's what you think you could do in terms of replacing the content or product, and the price involved, if the deal fell through. RESERVATION PRICE = the maximum or minimum--depending on whether you're the buyer or seller--at which you would be indifferent between doing the deal, and not doing the deal If you are the seller, this is the minimum price that you'd take; it's one at which you're indifferent to whether the deal gets done. If it's a dollar less, you'd prefer to walk; if it's a dollar higher, you'd do the deal. If you're the buyer, it's the maximum price you'd pay, and you'd be indifferent to doing the deal at that price point. Again, if it's a dollar higher, you walk; if a dollar lower, you'd take the deal. ZOPA (ZONE OF POSSIBLE AGREEMENT) = When the parties are "in the same ballpark" with respect to terms and pricing. Final Assignment We're going to analyze a real, albeit slightly older, deal here from the perspective of the main players (and there are several). Hopefully those players (at least their companies) and the property is familiar to you; this deal negotiation took place in 2001. The case in question is on the Harvard Business School Press site; access it (at a cost of $3.95) using this link. Here...
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...each issue to you? □ (a) List all of the issues of importance from step 2. □ (b) Rank order all of the issues. □ (c) Assign points to all the issues (assign weighted values based on a total of 100 points). □ (d) List the range of possible settlements for each issue. Your assessments of realistic, low, and high expectations should be grounded in industry norms and your best-case expectations. □ (e) Assign points to the possible outcomes that you identified for each issue. □ (f) Double-check the accuracy of your scoring system. □ (g) Use the scoring system to evaluate any offer that is on the table. □ 4. What is your “best alternative to negotiated agreement” (BATNA)? □ 5. What is your resistance point (e.g., the worst agreement you are willing to accept before ending negotiations)? If your BATNA is vague, consider identifying the minimum terms you can possibly accept and beyond which you must recess to gather more information. B. About the Other Side □ 1. How important is each issue to them (plus any new issues they added)? □ 2. What is their best alternative to negotiated agreement? □ 3. What is their resistance point? □ 4. Based on questions B.1, B.2, and B.3, what is your target? C. The Situation □ 1. What deadlines exist? Who is more impatient? □ 2. What fairness norms or reference points apply? □ 3. What topics or questions do you want to avoid? How will you respond if they ask anyway? D. The Relationship between the Parties □ 1. Will negotiations...
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...BATNA - Best Alternative Having available options during a negotiation is a good alternative which empowers you with the confidence to either reach a mutually satisfactory agreement, or walk away to a better alternative. "Don't put all your eggs in one basket." It's an old saying which has stood the test of time. Some of you urbanites, sitting in your cubicles, may be scratching your heads and wondering, 'What in the name of Hades does this mean?' Meanwhile, back out there in the countryside, a ruddy faced farmer, is likely rolling his eyes and patiently explaining, that should you trip on the way back to the kitchen, eggs are no longer on the breakfast menu. To a negotiator, this wise old proverb illustrates that if you bring only a single proposal to the table, you may likely end up with a rotten deal, or no deal at all. You need to have an alternative plan waiting in the wings. It should be fairly obvious that not every negotiation is going to get tucked away in a nice, neat settlement package. This is where BATNA comes to the rescue for those of you sensible enough, to have heeded the sage advice of that old farmer who coined the above proverb many ages ago. BATNA means 'Best Alternative to a Negotiated Agreement'. This is your alternate plan when the talks start to wobble out of control. It can also be your trump card to make the deal happen to your advantage, or walk away from it altogether. Let's illustrate BATNA by using a simple example. In the first scenario...
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...Pacific Oil Company Gene Arnold Negotiation Strategy Oklahoma Wesleyan University Pacific Oil Company The Pacific Oil Company went into negotiations with Reliant Manufacturing, and its goal was to sign a new long-term agreement. Pacific assumed that the new contract would be signed with no major obstacles, and that the principal point of negotiation would be price. Jean Fontaine, who is the marketing vice president for Pacific, went into a negotiation process with Reliant. Fontaine started the process three years before Reliant Manufacturing’s current contract was up, hoping to best his competition by offering Reliant a lower price and getting them to agree to a five year contract extension. Fontaine did not adequately research his client’s needs or sufficiently project the outcome of these negotiations. Due to this error Pacific was not prepared to address the concerns and requests that Reliant brought up during the negotiation. Both parties wished to renew the contract in a timely manner, but Fontaine slowed down the negotiations because he did not have a complete negotiation strategy that included a contingency plan or best alternatives. The negotiators for Pacific were not prepared for all the changes that Reliant would ask for at each meeting, and they had no power to make any key decisions to settle the negotiations. Reliant’s negotiators used Pacific’s lack of preparation to negotiate a far better contract. (Lewicki, Saunders, Minton, & Barry, 2015). Analysis ...
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...The Art of Negotiation: Best Practices for Success April 2010 © 2010 Denali Group Introduction This whitepaper closely examines techniques that are key to In-Flight Negotiations. Specifically, we will address critical components of successful negotiations, including: 1. 2. 3. 4. 5. 6. The Negotiation Process Key Principles Strategy and Tactics Best Practices Lessons Learned Conclusion 2. The Negotiation Process There are two distinct phases and four critical steps to a successful negotiation process, as illustrated below. Preparation is key to the process to ensure that you are negotiating from a position of strength. The old adage “knowledge is power” certainly holds true when it comes to leveraging timely market intelligence to achieve cost reductions in negotiations. Do More With Less Learn more about how Denali Group can fast track your Procurement Transformation. © 2010 Denali Group 2. Key Principles There are several key principles to consider when engaging in successful negotiations. Understanding these principles beforehand, and knowing the concessions you are and are not willing to make, can provide clear parameters during the process. • It is important to define clear negotiation targets, such as: • LAA – Least Acceptable Agreement • MDO – Most Desired Outcome • BATNA – Best Alternative to a Negotiated Agreement Start LOW! No “presents”, give concessions only with something in return Look for multiple creative concessions to enlarge the pie ...
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...NEGOTIATIONS Patience Kayira KEZZIE MKANDAWIRE POLYTECHNIC MALAWI NEGOTIATION SLYLABUS 1. Negotiations Overview Definition, and Types; Goals and Objectives; Tactics and Ploys; and Team Versus Individual negotiation approaches. 2. The Negotiation Process Pre – Negotiation; Actual Negotiation; and i. Post- Negotiation. 3. Achieving Success in Negotiation i. Qualities of a successful negotiator; ii. Preparing and planning for negotiation; and iii. Designing a BATNA (Best Alternative To a Negotiated Agreement). 4. Conflict Management in Negotiation i. Types of negotiation conflict; ii. Causes of conflict in Negotiation; and iii. Conflict resolution and management strategies. 5. Negotiation in different Product Portfolios (Krajlic Matrix) i. Establishing negotiation goals and objectives for each product portfolio; ii. Choice of techniques and tactics for use in each portfolio; and iii. Challenges faced when negotiating in different portfolios. 6. Negotiation Variables i. Time, Power and Information; and ii. Other variables i.e. terms, delivery 7. Evaluation of Negotiation Performance i. Criteria for measuring negotiation performance; and ii. Negotiation performance improvement strategies. 8. Emerging Issues in Negotiation i. Ethics in Negotiations; ii. Culture in Negotiations; iii. E – Procurement negotiation; and iv. Negotiations in Public Procurement. PRESCRIBED TEXTS Purchasing Principles and Management by Baily P, Farmer D, Jessop D and Jones D. Purchasing and...
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...used car lot. ________________________________________ 3. Negotiating parties always negotiate by __________. ________________________________________ 4. There are times when you should _________ negotiate. ________________________________________ 5. Successful negotiation involves the management of ____________ (e.g., the price or the terms of agreement) and also the resolution of __________. ________________________________________ 6. Independent parties are able to meet their own ____________ without the help and assistance of others. ________________________________________ 7. The mix of convergent and conflicting goals characterizes many ____________ relationships. ________________________________________ 8. The ____________ of people's goals, and the ____________ of the situation in which they are going to negotiate, strongly shapes negotiation processes and outcomes. ________________________________________ 9. Whether you should or should not agree on something in a negotiation depends entirely upon the attractiveness to you of the best available _______. ________________________________________ 10. When parties are interdependent, they have to find a way to ____________ their differences. ________________________________________ 11. Negotiation is a ____________ that transforms over time. ________________________________________ 12. Negotiations often begin with statements...
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...Ethics in Negotiation: 1. Define Ethical Negotiation. Why do ethics matter? How would you apply ethics within the context of your Negotiation Final Project for this course? Ethics are the social principles or gauge whether some body is following the set social standards or not. The role of these social or ethical standards is very important in any type of negotiation for both parties. This gives the chance for both parties to know the tactics which are being used are deceptive, ethical or unethical and then help them examining the ethical tones and aid them in decision making. This also help both parties distinguish among different criteria, or standards, for judging and evaluating a negotiator’s actions, particularly when questions of ethics might be involved. In my final project, I will choose and react to the other party by keeping in mind the following mix of approaches. • Choose a course of action on the basis of results I expect to achieve (e.g., greatest return on investment). • Choose a course of action on the basis of my personal convictions (e.g., what my conscience tells me to do). 2. What motivates unethical behavior in negotiations? What are the potential consequences? How can negotiators deal with the other party's use of deception? When one party or individual want to secure his own establish outcome ignoring other party interest motivates unethical behavior. The unethical behavior outcome also depends on how high are the party stakes, competitiveness...
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...Global Negotiation Article Analysis Shalee K. Kekawa MGT 445 Nov. 21, 2011 Dr. Sanrdra Sessoms-Penny Globalization and technology have played a big part in negotiations and the article that I chose to write about is just one of the many negotiations that globalization has influenced the outcome of negotiations. First, one must know what Globalization is. Globalization is a process of interaction and integration among people, companies and governments of different nations. This process has effects on the environment, on culture, on political systems, as well as on economic development and prosperity that affects societies and people all over the world. Globalization also opens up the boundaries that have existed in the past between countries and provides new opportunities for business ("Cross-Cultural Blog", 2009). Technology also plays a huge role in negotiations and just like globalization; it too has helped influence the outcome of negotiations. With the ever changing tools of technology, machines and systems, negotiations happen every day throughout the world and outcomes often happen through the use of technology. Technology makes businesses able to operate by changing relationships between suppliers, producers, retailers and customers. Gone are the days where negotiating a contract meant that you sat down face –to–face with someone and talked about contracts, and deals. Now days, a negotiation can be met and done in a matter of real time minutes. Technology...
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...FORMAT FOR NEGOTIATION CLASS CASE ANALYSIS (Note: Information in italics is background information for you as you answer the questions. There is not a need to respond directly to this background information in your analysis.) • What is your BATNA (Best Alternative to a Negotiated Agreement)? o Explain why it is the “best” alternative. What are some other possible alternatives? o How acceptable your BATNA is to you? What are the implications of this acceptability for the way you approach this negotiation? o Remember that the ideal BATNA: ▪ Does not require the negotiation counterpart’s participation or permission. ▪ Is a “sure thing” or very close to it. o Specifically in a case (but not in real life), a BATNA cannot include asking a third party to do something they have not yet done. (The third party is not going to appear in class; therefore, you won’t be able to ask them.) • Does it seem (initially) that one party is more dependent on getting a deal than the other party is? If so, what are the implications of this potential imbalance? • Decide what the relevant issues are that you want to negotiate. o List the issues. (Attempt to avoid one-issue negotiations.) o Set your priorities. (Rank them or group them.) • Choose resistance point(s) and target point(s) for quantitative issues. The resistance points should be based on the BATNA. ...
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...UWA Business school | A Negotiation Script | EMPL8514 - Negotiation and Dispute Resolution | | | OCTOBER 2012 | | INTRODUCTION Individuals get involved and participate in negotiation, mediation, and dispute or conflict resolution virtually every day of their lives, without realizing they are doing so. Nonetheless, this occurs much too often without consciously understanding or knowing the process. Traditionally, even if we do think we have an understanding, it is typically a competitive view that sees one party win and the other one loose after intense confrontation. When people prepare for bargaining encounters, they spend hours on the factual issues but usually no more than ten minutes on their negotiation strategy. When they begin their interaction, they think of where they plan to begin, where they hope to end up and their walkaway point. Between their opening offer and the conclusion of their encounter, most get lost because the interaction was entirely unstructured. If we understand how structured bargaining transactions are, then we know what to do during each stage of the process. There is therefore an evident need to consider the various phases of the negotiation process, gathering a conceptual thought of how a negotiation will reveal itself which will in turn guide what we do and how we will react in each specific moment. There is a necessity to conceptualise a new script to replace the competitive one. This new script cannot be a ‘cooperative’...
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...Article Review 7.1: Best Practices in Negotiations Article Review HR595 Negotiation Skills Course Instructor: Wendy Chung April 14, 2010 Week 7 Submitted by Bob Figone What is the problem or issue that necessitates such an article be written? This article comes directly out of both textbooks (Chapter 12 in Essentials of Negotiation, page 256 and Article 7.1 in Negotiation – Readings, Exercises and Cases, page 485) we have used for this course. It is a summary of what we have learned about the field of negotiation. It reminds us that negotiation is intrinsic in our lives and confronts us many times each day. This article is a reflection by the author’s using a broad view of best practices for negotiators to focus on in order to improve negotiation skills and techniques. What strategies or techniques are used to solve the problem or address the issue? The article lists Ten Best practices for Negotiators in a table and continues to explain the importance of each. The table from the text is as follows: |Ten Best Practices for Negotiators | |1. Be prepared | |2. Diagnose the fundamental structure of the negotiation | |3. Identify and work the BATNA ...
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...from expectancy theory or unbalance inputs and outputs. © James Berry 2013 3 Negotiations The Basics Dr. James Berry Lecturer University College London james.berry@ucl.ac.uk © James Berry 2013 4 Negotiation Skills © James Berry 2013 5 Objectives • • • • Briefly review what negotiation is Highlight why it might be important Review your BioPharm/Seltek negotiations Key things to know (BATNA, Reservation Price, ZOPA, Target Price) • Negotiate Case: Recruit © James Berry 2013 6 Negotiation is… • The process where two or more parties decide what each will give and take in the context of their relationship . . . © James Berry 2013 7 Negotiation is… • A bargaining and influence process designed to reach agreement about a decision or outcome • A core leadership and management competency • Most people are not effective negotiators – Over 80% of corporate execs and CEOs leave money on the table – Even effective negotiators have skills that can be sharpened and bad habits that can be broken © James Berry 2013 8 Matters...
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...CORE NEGOTIATION CONCEPTS Rex Mitchell Opportunities and requirements for negotiation (and persuasion) are everywhere, everyday Negotiation: * Conferring with another so as to arrive at the settlement of some matter (dictionary) * Negotiation is a basic means of getting what you want from others. It is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are ...opposed. (Fisher & Ury) Negotiation myths (first four from Thompson 1998): 1. Good negotiators are born - they are self-made, requires study and practice 2. Experience is a great teacher - experience can improve negotiation skills to some extent, but have to learn from the experience - not unaided, unreflected, without feedback. Experience tends to improve our confidence, but not our accuracy/effectiveness 3. Good negotiators take lots of risks - while this may work in the movies, it isn’t in the script for real negotiations. Some negotiators may do this occasionally, but after carefully considering risks & potential benefits. They know how to evaluate a situation and make an optimal choice given the information available. 4. Good negotiators rely on intuition - Effective negotiators are self-aware and very conscious of what they are doing and why. Most of the important work of negotiation takes place before meeting (preparation). 5. Negotiations are always win-lose - a vast majority can be win-win. 6. The only negotiations are formal...
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...BATNA - Best Alternative Having accessible choices amid an arrangement is a decent option which engages you with the certainty to either achieve a commonly palatable understanding, or leave to a superior option. "Don't put all your eggs in one basket." It's an old saying which has stood the test of time. Some of you urbanites, sitting in your work spaces, may be scratching your heads and pondering, 'What for the sake of Hades does this mean?' Meanwhile, pull out there in the field, a bronzed confronted agriculturist, is likely feigning exacerbation and persistently clarifying, that if you stumble in transit back to the kitchen, eggs are no more on the breakfast menu. To a negotiator, this insightful old saying delineates that in the event that you convey just a solitary proposition to the table, you might likely wind up with a spoiled arrangement, or no arrangement by any means. You need an option arrangement holding up in the wings. It ought to be genuinely evident that not each arrangement is going to escape in a decent, perfect settlement bundle. This is the place BATNA acts the hero for those of you sufficiently sensible, to have paid attention to the wise guidance of that old rancher who authored the above precept numerous a long time prior. BATNA means 'Best Alternative to a Negotiated Agreement'. This is your substitute arrangement when the discussions begin to wobble crazy. It can likewise be your trump card to make the arrangement happen further bolstering...
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