Negotiations CH1

Question 1

Define negotiation?

Answer 1

Interpersonal decision making process necessary whenever we cannot achieve our objectives single handedly.

Question 2

Negotiations is not only about money but also?

Answer 2

Relationships and trust

Question 3

Negotiations traps /shortcomings ?

Answer 3

1. Leave money on the table /lose-lose negotiation

negotiator fails to recognise /capitalise win-win potential

2. Settling for too little / winners curse

N make too large concession , too small share in bargaining pie

3. Walking away from the table

N rejects terms by other party even tho it’s better out of pride / miscalculation

4. Settling for terms worse than your best alternative (agreement bias)
   N feel obligated to reach an agreement even if it’s not as good as alternatives

Question 4

Why people are ineffective negotiators?

Answer 4

1. Egocentrism
2. Confirmation bias
3. Satisficying
4. Self-reinforcing incompetence

Question 5

Negotiation myths ?

Answer 5

• negotiations are fixed sum such as whatever is good for one person must be bad for the other party
• you need to be either tough or soft
  must be principled , follow an enlightened view of negotiation and know thy must work effectively with other party to achieve outcomes
• good negotiators are born with the skill
  Good N engage with people daily, experience is helpful but not sufficient
• life experience is a great teacher
• good negotiators take risks
• good negotiators rely on intuition
  ”N must be research driven , systematic, prepared and deliberate” good N are not guided by intuition rather deliberate planning

Question 6

How to improve negotiating skills?

Answer 6

• diagnostic feedback - allows you to learn from experience
• strategy -analysis of success/failure of negotiation
• focused practice (practice via simulation)

Question 7

Mind of negotiator?

Answer 7

Development of rational /thoughtful strategies for negotiation, designed to maximise economic value

Question 8

Heart of negotiators?

Answer 8

Care about relationships and trust

Question 9

I’m any negotiation 2 things are at stake ?

Answer 9

1. Economic value (money /scarce resources)
2. People (relationships & trust)

Negotiations must enhance economic value and relationships

Question 10

Satisficing ?

Answer 10

Doing just enough to teach one’s minimum goals

Can be detrimental to a company

• negotiators take shortcuts and don’t max potential gains
• settling for something less that they could otherwise have

Question 11

Optimising ?

Answer 11

Capturing all potential gain in a situation

-important to optimise one’s strategies by setting high aspirations and attempt to achieve as much as possible

Question 12

Short term relationships?

Answer 12

If person believed negotiations was a single shot situation they may be more aggressive than if they anticipated interacting with the counterparty in future

Question 13

Long term relationships ?

Answer 13

assume details of negotiation communication and behaviour will be accessible for anyone who might be interested

Act as tho all negotiations have long term implications

Question 14

Intra VS inter organisational negotiation ?

Answer 14

Internal negotiations may go more smoothly/ collaboratively than external ones (not always true)

• envy & internal competition may loom larger when people negotiate internally vs externally

Question 15

Low stake negotiation?

Answer 15

Not committed to win-win

Question 16

High stake negotiation?

Answer 16

Committed to win-win

Question 17

Win-win negotiations ?

Answer 17

Situations where both negotiations optimise the potential joint gains

• they have captured all possible value in relationships
• integrative agreements= outcome is one that creatively combines parties interests in way that maximises joint economic value

-typically variable -sum as opposed to fixed sum situations

Question 18

Win-lose negotiations?

Answer 18

Situations in which one party prevails at the other’s expense

• can become one has threatened the other or one capitulates the other

Question 19

Lose-lose negotiations ?

Answer 19

Situations in which both parties have made sacrifices that are unwise or unnecessary , resulting in an outcome that both find less satisfying

Question 20

Why are negotiation skills important?

Answer 20

1. Knowledge economy
2. Specialised expertise
3. Information technology
4. Globalisation

Question 21

1. Knowledge economy ?

Answer 21

Managers constantly negotiate on matters involving acquiring new skills, professional identity, moving new jobs and entering new industries and markets

• millennials are the largest group of professionals in the workforce
• job hopper is not simply in pursuit of higher wages ,willing to take pay cuts for the right job in positive work culture and career growth

Question 22

2. Specialised expertise ?

Answer 22

interdependence across fields , incentive structures force managers to promote their own interests while creating joint value for firm

Question 23

3. Information technology

Answer 23

Availability means people can always negotiate- tech has made it faster (created a culture of 24/6 availability) anywhere in the work and require more responsiveness

-provides special opportunities and challenges for negotiators

Question 24

4. Globalisation ?

Answer 24

Managers need to develop negotiation skills that can be successfully employed world wide (cultures , nationalities, backgrounds , personalities)

• challenge = different norms of communication
• broader negotiation skills to work with different people or suffer
• skills should be specialised enough to provide meaningful behavioural strategies in a given situation

Question 25

Successful strategies involve ?

Answer 25

- Preparation - Strategy at negotiation table - Post negotiation activities

Question 26

4 key objectives when negotiating?!

Answer 26

1. How to maximise the likelihood of reaching a good agreement 2. How to reach an agreement that fulfils the intended purpose 3. How to reach an agreement that will last 4. How to reach an agreement that will lead to subsequent negotiations

Question 27

3 major negotiation skills ?

Answer 27

**creating value** **claiming value** **building trust**