Transcript Sample

Chapter 5
Choosing Your Strategy
Win-lose strategies: Recap
• Also known as bargaining,
haggling or positional
bargaining
– Get what you want using power
– Power generates resistance as
reaction
– Conditions: big power difference &
short-term concern
– Riskier on average than win-win
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The bargaining process
• Simple, well-known, intuitive
• “TAKE IT OR LEAVE IT” (“Tioli”)
POSITION A
POSITION B
or No Deal
or No Deal
Final Offer
or No Deal
Final Offer
or No Deal
Last Offer
or No Deal
Last Offer
or No Deal
Final
Last Offer
or No Deal
Final
Last Offer or
No Deal
Compromise or
No deal
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The bargaining styles
Hard (alternatives):
power used to intimidate
Soft (commitments):
relationship above all else
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The bargaining tension
• Hard party: Tries to
squeeze the most possible
value
• Soft party: Tries to build a
relationship at any cost
Any combination sacrifices value:
Still “take it or leave it”
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Win-win strategies: Recap
• Get what you want independently from power
• Collaboration and communication: no resistance
• Tit-for-tat: proactive, clear communication
towards a value-focused process
• Higher value at lower risk than win-lose
Value
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Win-win processes
Strategy
Focus
Risk
Interest-based
Interests X Positions
Discuss few interests and still
fall into a bargaining trap
Mutual gains
Options to benefit
everyone
Create too many options and
still bargain to split them
Principled
Win-win choices
Overwhelming number of
decisions and lose focus
Value Negotiation
Value
Adopt win-lose if failure to
consider ways towards value
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Negotiation: More than one
• Boulwarism: negotiation strategy from 1950s
• Two main steps:
1) Data analysis to determine maximum wage
2) Present “first, last and best offer” on a “take-it-orleave it” basis
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The three negotiations
• Boulwarism did not consider all 3 negotiations:
NEGOTIATION
RELATIONSHIP
SUBSTANCE
COMMUNICATION
Trust
Value
Process
Unilateral approaches create a power play perception:
RISKY!
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The three win-lose negotiations
• Win-lose strategies treat each negotiation as a
different power source
NEGOTIATION
RELATIONSHIP
SUBSTANCE
COMMUNICATION
Manipulation
Power differences
Information
asymmetry
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The three win-win negotiations
• Win-win strategies explore all three negotiations
to unlock their value potential
– Independent
NEGOTIATION
– Simultaneous
RELATIONSHIP
SUBSTANCE
COMMUNICATION
Trust
Value
Process
– Parallel
– Interconnected
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The three win-win negotiations
• Ultimate purpose of relationship &
communication negotiation:
– To maximize the substance negotiation value
NEGOTIATION
RELATIONSHIP
SUBSTANCE
COMMUNICATION
Trust
Value
Process
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The three negotiations in detail
The win-win
directive
to…
makes it
harder to…
and tempts
us with…
so we
persistently
…
Substance
Focus on
value
Focus on
power
Easy power
opportunities
Promote the
dialogue
pattern
Relationship
Negotiate the
three
negotiations
autonomously
Manipulate
Relationship
over value
Avoid trading
between
negotiations
Communication
Promote
learning
Exploit
information
asymmetry
Complacency
Proactively
diagnose
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Substance negotiation
Strategic
derivative
• Focus on value, not power
Trade-off
• Forego easy power
opportunities
Temptation
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• Identifying easy power
moves
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Focus on value
• Demonstrates to the other party that there is no
need for a race for power
• Can be difficult in two situations:
1) The only thing they concentrate on is power
2) Easy power moves continuously present themselves
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Promote the dialogue pattern
• A balancing effort to reduce power differences
• Reduces or eliminates unilateral moves
• Every move can be a value or power move
• When reciprocating value-focused moves:
Reward Good Behavior
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Relationship negotiation
Strategic
derivative
• Negotiate 3 negotiations
autonomously
Trade-off
• Forego getting value for
free
Temptation
• Relationship over value
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Negotiate autonomously
• Mixing the 3 negotiations rewards bad behavior
• Example: FARC in Colombia
– The president gave away piece of land (substance) in
hopes of starting a relationship + communication
process
– Established a negative negotiation pattern of unilateral
substance demands
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Avoid trading between negotiations
• Separate and negotiate substance and
relationship through different channels
“Hard on the problem, soft on the person”
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Communication negotiation
Strategic
derivative
• Promote learning
Trade-off
• Reduce ability to use
information asymmetry
Temptation
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• Complacency
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Promote learning
• Learn as much as possible from the available data
– Boulwarism failed the hardest: Did not learn what the
unions’ interests really were
Learning reduces information asymmetry and the
temptation to bargain.
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Proactively diagnose
• Seek further information to make the best
possible decision
• DIAGNOSE to clarify before deciding
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