FSU MAN 4441 - Chapter 1 The Nature of Negotiation

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Negotiation Exam 1 Study Guide Chapter 1 The Nature of Negotiation Negotiation is something that everyone does almost daily You should not do an all or nothing business in the first negotiation Negotiations Negotiations occur for several reasons 1 To agree on how to share or divide a limited resource 2 To create something new that neither party could attain on his or her own 3 To resolve a problem or dispute between parties If frito lay and firehouse subs are in a negotiation firehouse subs does not need frito lay but frito lay might need firehouse subs because they have 600 location But it is in their best interest to work together because frito lay is a well known brand to put in firehouse subs Bargaining describes the competitive win lose situation One party wins one party loses Negotiation win win situation such as those that occur when parties try to find a mutually acceptable solution to a complex conflict Ex Frito lay and firehouse subs working together both parties benefit Characteristics of a Negotiation Situation There are 2 or more parties There is a conflict of needs and desire between 2 or more parties There needs to be a conflict Parties negotiate because they think they can get a better deal than by simply accepting what the other side offers them Parties expect a give and take process Parties engage in the process voluntarily When you go buy a house for example at 250 000 asking price do not buy that house at the asking price most people expect to buy that house at a lower price That is a starting point If you re the seller and you get you asking price on something maybe you did not ask enough Parties search for an agreement rather than Fight openly Capitulate Break off contact permanently Take their dispute to a third party Successful negotiation involves 1 Management of tangibles Tangibles You can touch it its real 2 Resolution of intangibles Intangibles something you cant touch Ex Emotions winning losing saving face Interdependence In negotiation parties need each other to achieve their preferred outcomes or objectives this is interdependence Interdependent parties are able to meet their own needs without help or assistance from others Dependent parties must rely on others for what they need Interdependent goals are an important aspect of negotiation Win lose I win you lose Win win Opportunity for both parties to gain both parties win Ex Firehouse subs with frito lay is a win win situation Interdependent parties are characterized by interlocking goals But sometimes both parties do not want the same thing A mix of convergent and conflicting goals characterizes many interdependent relationships Types of Interdependence Affect Outcomes Zero Sum or distributive negotiation one winner the other loses Most likely a one time negotiation Non Zero Sum were working together mutual gains situation Alternatives Shape Interdependence Evaluating interdependence depends heavily on the alternative working together The desirability to work together is better for outcomes BATNA Best Alternative to a Negotiated Agreement Ex Sports agents work with the same general managers many times they understand that without the franchises ability to make a profit there would be no need for the athlete or the agent Ex When you go in to buy a car you have BATNA s there are thousands of cars out there car dealers also have BATNAS s But a car dealer wants to sell that car more than you want to buy it Mutual Adjustment Mutual Adjustment the give and the take Agree on what is fair Ex You the buyer offer 900 the seller offers 1000 the mutual adjustment would be at 950 Adjusting the price Mutual Adjustment and Concession Making When one party agrees to make a change in his her position a concession has been made Concessions restrict the range of options When a concession is made the bargaining range is further constrained Bargaining Range the difference between the preferred acceptable settlements I want this you want that I am willing to give up this Ex The bargaining range is when your position is 900 the buyers is 1000 the bargaining range is between 900 and 1000 The deal is going to be made somewhere between 900 and 1000 Two Dilemmas in Mutual Adjustment Dilemma of Honesty concern about how much of the truth to tell the other party You shouldn t lie but you don t have to tell the other person everything Throughout the negotiation you shouldn t talk too much you can give position power away Dilemma of Trust concern of how much should negotiators believe what the other party tells them Two efforts help to create trust the perceptions of outcomes and the perception of the process This is where satisfaction of the negotiation is derived You need to trust people but not trust people completely because then you wont be able to negotiate anything You should work with people you can trust Value Claiming and Value Creation Claiming Value result of zero sum or distributive situations where the object is to gain largest piece of resource Your at a car dealership you want the best deal they want the best deal Creating Value result of non zero sum or integrative situation where the object is to have both parties do well firehouse subs and frito lay situation Distributive vs Integrative Distributive Bargaining Accepts the fact that there can only be one winner and pursues the appropriate course of action This results in the negotiators using win lose tactics Integrative Negotiation attempts to create value attempts are made to find solutions so all parties can do well and achieve their objectives Negotiators use win win tactics Ex In real estate the person selling the house wants to sell it for the most money possible for more commission The buyer wants it for the least money But the buyers realtor wants the buyer to buy it for a higher price so the realtor gets more commission you need to watch out Most Negotiations use both methods Negotiators must be able to recognize situations that require more of one approach than the other Generally distributive bargaining is most appropriate when time and resources are limited and when there is little likelihood of future negotiations Negotiators must be versatile in their comfort and use of both major strategic approaches Not only must negotiators be able to recognize which strategy is most appropriate they must be comfortable using both approaches Negotiator perceptions of situations tend to be biased toward seeing problems as more distributive competitive than


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FSU MAN 4441 - Chapter 1 The Nature of Negotiation

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