Chapter 1
Open Rubric
Part One Negotiations Essentials
Like it or Not, You are a Negotiator…
Negotiation is…
• Your key communication and influence tool.
• An interpersonal decision-making process necessary
whenever we cannot achieve our objectives single-
handedly.
• Not just about resources – it is equally about
relationships and trust.
The Mind and Heart (1 of 4)
• Across the sections of The Mind and Heart of the
Negotiator, we focus on the mind of the negotiator as it
involves the development of deliberate, rational, and
thoughtful strategies for negotiation.
• We also focus on the heart of the negotiator, because
ultimately we care about relationships and trust.
• We base all our teaching and best practices on scientific
research in the areas of economics and psychology,
reflecting the idea that both the bottom line and our
relationships are important.
The Mind and Heart
Relationship vs. Economics
Satisficing vs optimizing
Short- vs Long-Term Relationships
Intra vs Inter-organizational negotiation
Low- vs High-Stakes negotiation
The Mind and Heart
Relationship vs. Economics
To focus only on the economic side now, and want to
build relationship in future – not advisable , people tend
not to forget if you were rude to them – work on both
The Mind and Heart
Satisficing vs. Optimizing
• Satisficing refers to doing just enough to reach one’s
minimum goals, not pushing to maximize one’s potential
gains.
• Optimizing negotiators capture all of the potential gain in a
situation.
The Mind and Heart (3 of 4)
Short vs . Long-Term Relationships
• Negotiators often struggle with which strategy they should
use in a single-shot negotiation versus negotiations that
could potentially recur with the same party again in the
future.
• All negotiators should assume that the details of their
negotiation will be accessible for anyone to view and that
all negotiations have long-term implications.
The Mind and Heart (4 of 4)
Intra- vs. Inter-Organizational Negotiation
• At first blush, it would seem that internal negotiations
might go more smoothly and collaboratively than external
negotiations.
• However, envy and internal competition may in fact loom
larger when people negotiate internally versus externally.
The Mind and Heart
Low- vs. High-stakes Negotiation
• Low stake - not committed to win-win
• High-stakes - committed to win-win
Win-Win, Win-Lose, and Lose-Lose
Three types of negotiations:
Win-Win Negotiations
• …are also known as integrative agreements
• Win-Lose negotiations
• Lose-Lose negotiations.
Negotiation as a Core Management Competency
Key reasons effective negotiation skills are important:
• The knowledge economy
– Nature of knowledge
– Millennials
• Specialised expertise
– Interdependent
– Co-operation and competition
• Information technology
– Communication
– AI
• Globalisation
Cross border
Negotiation Traps
The four major shortcomings between disputants in a
negotiation:
• Leaving money on the table
– Lose-lose
• Settling for too little
– Winners curse
• Walking away from the table
• Settling for terms that are worse than your best alternative
– Agreement bias
Becoming an Effective Negotiator (1 of 3)
Investigations of contract negotiations consider four key
objectives when assessing the quality of contracts:
• What is the likelihood of reaching a good agreement?
• Does the agreement fulfill its intended purpose?
• Will the agreement last?
• Will the agreement lead to subsequent negotiations?
Becoming an Effective Negotiator (2 of 3)
Exhibit 1-1 Evaluating the Success of Negotiation
Prior to Negotiation Negotiation Post-Negotiation
Initiate negotiation Strategy Post-deal implementation
• Opening Durability
Preparation • First offer(s) Reputation
Willingness to negotiate again
• Planning worksheet • Counter-offers Trust
• Assess BATNA • Substantiation and
• Develop reservation price persuasion
• Develop target price • Concessions
(aspiration) Agreements
• Efficiency
• Economic value
• Individual gain
• Joint gain
Relational value
• Satisfaction
• Fairness
Becoming an Effective Negotiator (3 of 3)
There are three key elements to improving your
negotiation skills:
• Diagnostic feedback
• Analysis of success/failure of negotiation
• Focused behavioral practice
Debunking Negotiation Myths
Example:
Myth 1: Negotiations are fixed sum.
Myth 2: You need to be either tough or soft.
Myth 3: Good negotiators are born with the skill.
Myth 4: Good negotiators reply on their intuition.
Summary
• Improve your ability to negotiate successfully.
• Form your general strategies for successful negotiations.
• Pursue negotiations from an enlightened model which
assumes that the other person you are negotiating with is
every bit as motivated, intelligent, and prepared as you
are.