Negotiation TEST 2 02 19 2013 Reading 1 2 Selecting a Strategy Chart online on blackboard as negotiation chart with descriptions of relationship importance compared to importance of outcome https campus fsu edu bbcswebdav pid 5551393 dt content rid 31776188 2 courses MAN4441 01 sp13 MAN4441 01 sp13 ImportedContent 20121212030049 Negotiation 20Chart pdf That link should work Reading 1 1 Three Approaches to Solving Disputes Scenario An employees boots were stolen at work Does the employer pay for the loss Or would that set the precedent that the employer will always pay for things that are stolen The employee gets a fellow employee to go on strike with him 3 Ways to Solve the Problem 1 Reconcile Interest What do they want out of this 2 Figure out who is right 3 Who has the most power OPTIONS Lump it Drop your claim Withdraw Quit the Company Cost Of Disputing Who is less dependent who has more power Reconciling Interest LEAST expensive MOST satisfaction When determining who is right we use THIRD PARTY arbitration Transaction cost ex Cost to buy boots or pay for the strike minimize transaction costs Satisfaction with the outcome treated fairly throughout the process Effect on the Relationship Disgruntled employee Reoccurrence Sometimes we cannot reconcile because it sets a forever standard precedent Rights and Power player Reading 2 3 When your thoughts work against you about Matt Harrington the baseball Scenario Matt Harrington was drafted pretty early on in the MLB draft and was offered 4 million dollars He and his agent agreed he should not take the offer because he wanted 4 9 million and felt he was better than that He turned it down and played independent league baseball for the year The next year in the draft he was offered 1 25 million over 4 years Him and his agent agreed once again to turn it down and wait another year because they felt he was better then that The following year he was only offered around 300 000 Mistakes Chris Harrington Made 1 Viewing Negotiation as a fixed pie SOLUTION share information 2 Anchoring on the first offer SOLUTION reject anchors don t lock yourself in have realistic expectations 3 Escalating Commitment strong psychological need to justify your actions SOLUTION Don t dwell on the past 4 Feeling too Confident SOLUTION Consider the opposite seek out info that might prove you wrong Focusing too narrowly on the issues SOLUTION ask questions and make multiple offers Reading 1 7 Negotiation Techniques 4 P s of Negotiation 1 Preparation 2 Practice 3 Patience 4 Persistence 3 Phases of Negotiation 1 Information Phase Good negotiators try to get the other party to speak The order of presentation is important Blocking technique answer a question with another question Determining what the other party wants is very beneficial 2 Competitive Phase You want to claim value in this phase Principle Offers and Concessions Make a case and back it up with facts Argument articulate your side and make your case Threats and promises When you put something out for what you want you better justify why it is reasonable Must back up threats OR you lose all the power Affirmative promises are much better than negative threats TACTICS Silence in Patience Say what you have to say and then be quiet It makes situations awkward and opponent is more likely to give in Limited Authority getting a commitment from you before you get approval Anger maintain emotions at all times Uproar trying to gain an advantage by threatening dire consequences Dire Consequences what s the likelihood their threat would occur If it occurs how bad will it be Buldwearism take it or leave it tactic well you have done Mutten Jeff Good cop bad cop Braer Rabbit you care more about how poorly your opponent has done more than how Belly up claim to lack in negotiating skills and you ask for mercy from your opponents 3 Cooperative Phase Once the agreement is reached is there anything else that can be done to enhance the outcome Reading 1 8 The Secrets of the Power of Negotiating The art of winning but letting the other person feel like they have won Ask for more than you can get Maximum plausible position The less you know about your opponent the higher the initial offer should be Most or least you can ask for or offer while still credible without insulting someone Never say yes to the first offer A lot of the time your opponent will have 2 negative thoughts 1 I could have done better 2 Is something wrong No haggle pricing EXAMPLE Real estate company Magazine buyer was offered a deal for 2000 This was actually a great deal However the buyer was able to get the seller to go down to 800 just by haggling and getting him to go down to the best price Flinch Expression when price is thrown out Avoid confrontation NO lawyers involved if possible Feel felt found FORMULA I know how you feel This is how I felt This is what I found Play reluctant buyer or seller Vice Technique You re going to have to do better Well how much better Don t worry about price people WANT to pay more People want to know they are paying for the very best DON T split the difference let them throw out the first offer Gain agreement and consensus Art of Concession Avoid a pattern don t become predictable Don t make the final offer a big one Make time your ally POWERFUL MOST DANGEROUS MOMENT Buyer s remorse When nibbling occurs What else would you like MOST POWERFUL NEGOTIATION TECHNIQUE BEING ABLE TO WALK AWAY Guest Speaker 2 18 13 Bob Crabtree Undergrad at University of Virginia FSU Law School 1979 Insurance Defense work Civil Trial on the defense side Who get s sued is the business Construction defect type Product Liability work way down Most cases settle out in mediation Most cases 6 people juries Murder trials 12 person juries NHL went to mediation New Orleans Saints sent to mediation settlement YOU CANNOT LOSE WITH MEDIATION TRIALS 20 years ago he would be doing 2 3 civil jury trials PRESENTLY the number has gone MEDIATION a neutral person chosen as a mediator to try and bring the parties to a Over 90 of cases are settled with mediation Trial and litigation are expensive Jury trials are very uncertain giant lottery Same case different jury s can have very different outcomes Lawsuits drag on years and years Many advantages to settling cases and using mediation KEY FACTOR FOR NEGOTIATION Preparation Who are your opponents What motivates them KNOWLEDGE is power Know your own goals Arbitration Respect your opponents Make the person an offer that