Understanding Negotiation Strategies and Tactics

Types of Negotiation

• Distributive Negotiation: Parties compete to determine a fixed sum of value. The focus is on who will claim the most value (win-lose scenario).
• Integrative Negotiation: Parties integrate their interests into an agreement, aiming for a mutually beneficial outcome (win-win scenario).
• Multi-Phase Negotiation: Negotiation takes place over several sessions or phases.
• Multiparty Negotiation: At least two negotiators in each group, and there can be more than two groups involved.

Distributive Negotiation

Getting the Other Side on the Table

1. Offer Incentives: Such as money, time, service, or support.
2. Put a Price on the Status Quo: Highlight the costs or disadvantages of not negotiating.
3. Enlist Support: Use allies to facilitate communication.

Making a Good Start

• Respect the other side.
• Frame the task positively.
• Show openness to the other side's interests and concerns.

Tactics for Win-Lose Negotiation

• Anchoring: Gain an advantage by putting the first offer on the table (psychological advantage).
• Counter-anchoring: If you believe the anchor is unfair, change the subject and return later with your price/offer.
• Be prepared for concessionary moves. Have a BATNA (Best Alternative To a Negotiated Agreement).
• The Ticking Clock: The buyer and seller should state the time frame. For example, 'You have to make a deal by tomorrow.'
• Package Options for a Favorable Deal: Offer alternative proposals (two or more).

Closing the Deal

1. Signal the end of the road before you get there.
2. Allow flexibility if you anticipate going beyond the final round.
3. Discourage the other side from seeking further concessions.
4. Write down the terms.

Integrative Negotiation

In integrative negotiation, we listen and want to hear the other side, aiming for a win-win outcome.

Look for options that exploit differences, such as:

• Access to resources
• Future expectations
• Time preference
• Risk aversion

Framing: Consider the situation as half-empty or half-full.

Preparation -> Negotiation -> Outcomes and Information -> Evaluation

Relationship (Why?)

1. Future transactions of real value are anticipated.
2. Reciprocity by the other side is expected.
3. Trust.

How Perception of Relationship Value Affects Negotiations

It influences how you deal with the other side in the future, along with the potential future benefits of the deal.

Negotiating for Others

Consider independent and non-independent agents (employees).

Negotiation Skills

• Provide training and resources.
• Clarify goals and expectations.
• Establish a BATNA.
• Capture and reuse lessons learned.

Broad Set of Measures for Evaluating Negotiator Success

• Relationship
• Communication
• Interests
• Options
• Legitimacy
• BATNA
• Commitment

Effective Negotiation: Aligns negotiating goals with organizational goals.