MAN 4441 Test 1 Study Guide Chapters 1 3 1 Chapter 1 Understand Why Negotiations Occur o Negotiations occur for several reasons To agree on how to share or divide a limited resource such as land or property or time To create something new that neither party could do on his or her own To resolve a problem or dispute between the parties Understand Difference Between Bargaining And Negotiation o Negotiation is a form of decision making in which two or more parties talk with one another in an effort to resolve their opposing interests Bargaining refers to the competitive win lose situations such as haggling over price that happens at a yard sale flea market or used car lot Negotiation refers to the win win situations such as those that occur when parties are trying to find a mutually acceptable solution to a complex conflict Know The Characteristics Of A Negotiation Situation o A process by which two or more parties attempt to resolve their opposing interests o A conflict of needs desires between the parties involved what one person wants is not necessarily what the other wants o The parties negotiate by choice They negotiate because they think they can get a better deal by negotiating than by simple accepting what the other side will voluntarily give them o Expect a give and take process to occur o Parties prefer to search for an agreement rather than fight openly Negotiation occurs when the parties prefer to invent their own solutions for resolving the conflict o Negotiation involves the management of tangibles the price or the terms of the agreement and also the resolution of intangibles Intangible factors are the underlying psychological motivations that may directly or indirectly influence the parties during negotiation Examples A The need to win or beat the other party or avoid losing to the other party B The need to look good competent or tough to the people you represent C The need to defend an important principal or precedent in a negotiation 2 Understand Different Degrees Of Dependence o Interdependent parties are characterized by interlocking goals the parties need each other in order to accomplish their objectives For instance in a project management team no single person could complete a complex project alone For the group to accomplish its goals each person needs to rely on the project team members to contribute their time knowledge and resources and to synchronize their efforts o Dependent parties must rely on others for what they need For example If an employee is totally dependent on an employer for a job and salary the employee will have to either do the job as instructed and accept the pay or go without a job o Independent parties are able to meet their own needs without the help and assistance of others They can be relatively detached indifferent and uninvolved with others Understand Different Characteristics Structures Of Negotiation o Zero Sum Distributive situations occur when the goals of two or more people are interconnected so that only one can achieve the goal For example Running a race in which there will be only one winner This is a competitive situation in which individuals are so linked together that there is a negative correlation between their goal attainments Zero Sum Distributive situations are also present when parties are attempting to divide a limited or scarce resource such as a pot of money or a fixed block of time To the degree that one person achieves his or her goals the other s goal attainment is blocked o Mutual Gains Non Zero Sum or Integrative situations occur when parties goals are linked so that one person s goal achievement helps others to achieve their goals If one person is a great music composer and the other is a great writer of lyrics they can create a wonderful Broadway musical together To the degree that one person achieves his or her own goal the others goals are not necessarily blocked and may in fact be significantly enhanced Understand Mutual Adjustment And Concession Making o Mutual Adjustment occurs when parties are interdependent and have to find a way to resolve their differences Both parties can influence the other s outcomes and decisions and their own outcomes and decisions can be influenced by the other This mutual adjustment continues throughout the negotiation as both parties act to influence the other 3 o Concession Making Negotiations often begin with statements of opening positions Each party states its most preferred settlement proposal hoping that the other side will simply accept it but not really believing that a simple yes will be forthcoming from the other side If the proposal is not readily accepted by the other negotiators begin to defend their own initial proposals and critique the others proposals Each party s rejoinder usually suggests alterations to the other party s proposal and perhaps also contains changes to his or her own position When one party agrees to make a change in his or her position a concession has been made Concessions restrict the range of options within which a solution or agreement will be reached When a party makes a concession the bargaining range the difference between the preferred acceptable settlements is further constrained o Two Dilemmas In Mutual Adjustment Dilemma Of Honesty concerns how much of the truth to tell the other party On the one hand telling the other party everything about your situation may give that person the opportunity to take advantage of you On the other hand not telling the other person anything about your needs and desires may lead to a stalemate Dilemma Of Trust concerns how much should negotiators believe what the other party tells them If you believe everything the other party says then he or she could take advantage of you If you believe nothing that the other party says then you will have a great deal of difficulty in reaching an agreement How much you should trust the other party depends on many factors including the reputation of the other party how he or she treated you in the past and a clear understanding of the pressures on the other in the present circumstances o Value Claiming is the process in a negotiation in which you do what eves is necessary in order to claim the reward gain the lion s share or gain the largest piece possible An example of this type of negotiation is purchasing a used car or buying a used refrigerator at a yard sale Value claiming occurs in all negotiations including integrative negotiations o Value Creation is