Chapter 4

NEGOTIATION:
STRATEGY AND PLANNING
GOALS, STRATEGY AND PLANNING
DEFINE THE PROBLEM ISSUES

• Define the issues

• Assemble the issues and define the bargaining mix

• The bargaining mix is the combined list of issues

• Define your interests

• Why you want what you want
What is the Bargaining Mix?

Bargaining Mix: The combination of all issues and interests under

negotiation.

• Primary Issues: Core essentials (e.g., price, terms, delivery)

• Secondary Issues: Enhancements (e.g., warranties, services)

• Trade-offs: Elements for potential adjustment

Bargaining Mix Example: Job Offer Negotiation
Primary Issues:
Salary: Base pay and bonuses

Start Date: When to begin

Job Title: Role responsibilities

Secondary Issues:
Benefits: Health insurance, retirement plans
Vacation Time: Paid days off

Remote Work Options: Flexibility

Trade-offs:
Salary vs. Vacation: More vacation for lower salary
Start Date vs. Bonus: Earlier start for signing bonus

Remote Work vs. Office: Balance flexibility with requirements

GOALS – THE FOCUS THAT DRIVES NEGOTIATION
STRATEGY

• Determining goals is the first step in the negotiation

process
• Negotiators should specify goals and objectives
clearly
• The goals set have direct and indirect effects on the
negotiator’s strategy
THE DIRECT AND INDIRECT EFFECTS OF GOALS
ON STRATEGY
Direct effects
• Wishes are not goals
• Goals are often linked to the other party’s goals
• There are limits to what goals can be
• Effective goals must be concrete/specific
Indirect effects
• Forging an ongoing relationship
DIRECT AND INDIRECT EFFECTS OF GOALS ON
STRATEGY IN SALARY NEGOTIATION

You aim to negotiate a 20% salary increase.

• Direct Effect: Research industry standards, prepare a list of

achievements, and plan negotiation tactics.

• Indirect Effect: Increased confidence, improved relationship

with your employer, potential for future promotions.
STRATEGY VERSUS TACTICS
Strategy: The overall plan to achieve one’s goals in a
negotiation
Tactics: Short-term, adaptive moves designed to enact or
pursue broad strategies
• Tactics are subordinate to strategy
• Tactics are driven by strategy
Planning: The “action” component of the strategy process;
i.e. how will I implement the strategy?
 STRATEGY VS. TACTICS IN NEGOTIATION
Negotiation Goal: Secure a long-term supply contract with a key supplier at a favorable price.

Strategy Name: Competitive Advantage Strategy.

• Tactic 1: Start with a high initial offer ("Highball") to anchor the negotiation in our favor and create
room for concessions.

• Tactic 2: Assign one team member to play the "Good Guy" (building rapport and appearing
reasonable) while another plays the "Bad Guy" (applying pressure and making demands) to create
psychological contrast and influence the supplier's perception.

• Tactic 3: Identify a minor issue that is not crucial to us and present it as a major concern ("Bogey").
 APPROACHES TO STRATEGY
Unilateral Strategy – chiến lược đơn phương
• A strategy made without active involvement of the other party.
• Example: A company decides to increase product prices without
consulting suppliers or distribution partners.
Bilateral Strategy – chiến lược song phương
• A strategy that considers the impact of the other’s strategy on
one’s own.
• Example: In salary negotiations, you consider your request based
on the employer’s capabilities and feedback.
APPROACHES TO STRATEGY
• Objectives: What do you want to achieve?
• Interests: What are your underlying needs and motivations?
• BATNA & WATNA: Your best and worst alternatives.
• Negotiation Style: Collaborative, competitive, etc.
STRATEGIC OPTIONS

Per the Dual Concerns Model, choice of strategy is

reflected in the answers to two questions:
1. How much concern do I have in achieving my desired
outcomes at stake in the negotiation?
2. How much concern do I have for the current and future
quality of the relationship with the other party?
THE DUAL CONCERNS MODEL

Avoidance: Don’t negotiate

Competition: I gain, ignore relationship
Collaboration: I gain, you gain, enhance relationship
Accommodation: I let you win, enhance relationship
THE NONENGAGEMENT STRATEGY: AVOIDANCE

• If one is able to meet one’s needs without negotiating at all, it

may make sense to use an avoidance strategy

• It simply may not be worth the time and effort to negotiate

• The decision to negotiate is closely related to the desirability

of available alternatives
ACTIVE-ENGAGEMENT STRATEGIES

• Competition – distributive, win-lose bargaining

• Collaboration – integrative, win-win negotiation

• Accommodation – involves an imbalance of

outcomes (“I lose, you win”)
 What is BATNA?

• BATNA (Best Alternative to a Negotiated Agreement): Your best option

if the negotiation fails.

• Represents your walk-away point: The point at which you're better off
not reaching an agreement.

• Determines your reservation price: The lowest offer you're willing to

accept.
 WHAT IS LEVERAGE?
Leverage: Your power to influence the other party to agree to your terms.
Stems from your ability to provide or withhold something the other party values.
Types of leverage:
• Positive leverage: Offering something beneficial (e.g., access to a new market).
• Negative leverage: Threatening something undesirable (e.g., walking away from the deal).
• Normative leverage: Appealing to fairness or industry standards.
 Key Differences: BATNA vs. Leverage
Feature BATNA Leverage

Your best alternative if no agreement is

Definition Your power to influence the other party.
reached.

Your ability to impact the other party's

Focus Your options outside the negotiation.
decision.

Source Your preparation and alternatives. Your resources, information, and BATNA.

Determines your reservation price and Strengthens your negotiating position and
Impact
willingness to walk away. ability to achieve your goals.
RELATIONSHIP BETWEEN BATNA AND LEVERAGE

• A strong BATNA enhances your leverage: If you have attractive

alternatives, you're less dependent on the current negotiation.

• Leverage can improve your BATNA: By using leverage effectively, you

might be able to create new and better alternatives.

• Example: Having multiple job offers (strong BATNA) gives you more
leverage when negotiating salary with a potential employer.
BUILDING A STRONG BATNA
• Identify potential alternatives: Explore all possible options.

• Evaluate the value of each alternative: Consider pros and cons.

• Improve your best alternative: Take steps to make it more

attractive.

• Keep your BATNA confidential: Don't reveal it to the other party

unless strategically advantageous.
USING LEVERAGE EFFECTIVELY

• Understand the other party's needs and priorities: What do they

value most?
• Identify your sources of leverage: What can you offer or withhold?
• Use leverage strategically: Don't overuse it or make threats you can't
back up.
• Be prepared to walk away: If your leverage isn't sufficient to achieve
your goals.
THE PLANNING PROCESS: KEY STEPS
1. Define the Negotiation Context: Understand the situation,
stakeholders, and power dynamics.
2. Develop a Detailed Plan: Outline specific actions, timelines, and
responsibilities.
3. Prepare Your Team: Assign roles, provide training, and ensure
alignment.
4. Gather and Organize Information: Collect data, research the
other party, and anticipate their moves.
5. Develop Communication Strategies: Plan your messaging,
channels, and responses to potential scenarios.
DEFINE THE NEGOTIATION CONTEXT

• What is the specific issue being negotiated?

• Who are the key stakeholders involved?

• What is the power dynamic between the parties?

• What are the potential risks and opportunities?

DEFINE THE NEGOTIATION CONTEXT

Issue:
• What is the specific topic or problem being negotiated?
• Examples: Salary, contract terms, resource allocation

Stakeholders:
• Key parties directly involved
• Indirectly affected groups
• Examples: Negotiators, decision-makers, influencers
ANALYZING POWER DYNAMICS
Power Sources:
• Information, expertise, resources
• BATNA and alternatives
• Relationships

Power Imbalance:
• Is one party significantly stronger?
• Impact on negotiation outcomes
ASSESSING RISKS & OPPORTUNITIES

Potential Risks:
• Impasse, damaged relationships

• Missed opportunities

Potential Opportunities:
• Mutually beneficial agreement

• Strengthened relationship, value creation

THE SOCIAL CONTEXT OF NEGOTIATION: “FIELD” ANALYSIS

A - Actors:
Definition: Identify all the relevant parties involved in the negotiation.
Examples: Negotiators, stakeholders, influencers, and any other key participants.

B - Behavior:
Definition: Analyze how the identified actors interact and behave within the negotiation
context.
Considerations: Communication styles, negotiation tactics, and cultural influences.

C - Context:
Definition: Understand the external environment and circumstances surrounding the
negotiation.
Factors: Organizational culture, industry norms, economic conditions, and legal constraints.

D - Dynamics:
Definition: Examine the power relations and shifting dynamics between actors.
Aspects: Power balance, alliances, conflicts, and changes in negotiation positions.

E - Environment:
Definition: Consider the broader social, economic, and political environment impacting the
negotiation.
Influences: Market trends, regulatory landscape, and societal expectations.
INFORMATION NEEDED TO PREPARE EFFECTIVELY FOR
ENGAGING THE OTHER PARTY

Know your limits and alternatives

Set your objectives (targets) and opening bids (where to start)
• Target is the outcome realistically expected
• Opening is the best that can be achieved

Assess constituents and the social context of the negotiation

INFORMATION NEEDED TO PREPARE EFFECTIVELY FOR
ENGAGING THE OTHER PARTY

1. Resources, issues, and bargaining mix

2. Interests and needs
3. Walkaway point and alternative(s)
4. Targets and opening bids
5. Constituents, social structure, and authority to make
an agreement
6. Reputation and negotiation style
7. Likely strategy and tactics
DEVELOP A DETAILED PLAN

Define the protocol to be followed in the

negotiation
• Where and when will the negotiation occur?
• Who will be there?
• What is the agenda?
DEVELOP A DETAILED PLAN

• Specific Actions: What steps will you take to achieve your

objectives?

• Timelines: When will each step be completed?

• Responsibilities: Who is responsible for each action?

• Contingency Plans: What will you do if the negotiation stalls or

breaks down?
LOCATION AND TIME

Location: Choose a neutral location that is

convenient for all parties involved.

Time: Determine the start and end times, as

well as break times.
Note: Consider time zones, schedules of the parties, and the time
needed to complete the negotiation.
NEGOTIATION PARTICIPANTS

• Clearly identify the representatives of

each party involved.

• Ensure that the representatives have the

authority to make decisions.

• Consider the role of other stakeholders

(e.g., lawyers, consultants).
AGENDA

• Create a list of topics to be discussed in order of

priority.

• Allocate time for each topic.

• Ensure that the agenda is agreed upon by all

parties.
PREPARE YOUR TEAM

• Assign Roles: Negotiator, note-taker, observer, subject

matter expert.

• Provide Training: Negotiation skills, communication

techniques, cultural awareness.

• Ensure Alignment: Shared understanding of objectives,

strategy, and roles.
GATHER AND ORGANIZE INFORMATION

• Collect Data: Relevant facts, figures, and supporting

evidence.

• Research the Other Party: Their interests, needs, past

behavior, and constraints.

• Anticipate Their Moves: Develop scenarios and potential

responses.
ANALYZE INFORMATION

Analyze the other party

• Why do they want what they want?
• How can I present my case clearly and refute the
other party’s arguments?
DEVELOP COMMUNICATION STRATEGIES

Present the issues to the other party

• Messaging: Craft clear, concise, and persuasive messages.

• Channels: Choose appropriate communication methods (face-to-

face, email, phone).

• Responses to Potential Scenarios: Prepare for different outcomes

and objections.
REHEARSE AND REFINE
• Practice your opening statement, key arguments, and
responses to potential questions.

• Role-play different scenarios with your team to identify

potential weaknesses and refine your approach.

• Seek feedback from experienced negotiators or mentors.

UNDERSTANDING THE FLOW OF NEGOTIATIONS:
STAGES AND PHASES
• How does the interaction between parties change over time?

• How do the interaction processes relate to inputs and

outcomes over time?

• How do the tactics affect the development of the negotiation?

UNDERSTANDING THE FLOW OF NEGOTIATIONS:
STAGES AND PHASES

Negotiation proceeds through distinct phases or stages

• Beginning phase (initiation)

• Middle phase (problem solving)

• Ending phase (resolution)

NEGOTIATION PROCESS:
Beginning Phase (Initiation)
Setting the Stage:
• Building rapport and establishing a positive tone.
• Clarifying the purpose and objectives of the negotiation.
• Defining the scope and agenda.
Information Gathering:
• Exchanging initial information and perspectives.
• Identifying common ground and areas of disagreement.
• Understanding each other's interests and needs.
NEGOTIATION PROCESS:
Beginning Phase (Initiation)
Building Rapport:
• Create a positive atmosphere: Use friendly
greetings, small talk, and find common ground.
• Establish trust and respect: Demonstrate active
listening, empathy, and a willingness to
understand their perspective.
NEGOTIATION PROCESS:
Beginning Phase (Initiation)
Clarifying Objectives:
• State your goals clearly: Define what you hope to
achieve in the negotiation.
• Understand their objectives: Ask questions and listen
carefully to their desired outcomes.
• Identify shared goals: Highlight areas of common
interest and potential for mutual gain.
NEGOTIATION PROCESS:
Beginning Phase (Initiation)

Defining Scope and Agenda:

• Set boundaries for the negotiation: Determine the
specific issues to be discussed.
• Agree on a timeline and process: Establish a
framework for how the negotiation will proceed.
 NEGOTIATION PROCESS:
Beginning Phase (Initiation)

Information Gathering:
• Ask open-ended questions: Encourage them to share their
perspectives and needs.
• Actively listen and summarize: Demonstrate that you understand
their position.
• Share relevant information: Provide data and insights that
support your perspective.
NEGOTIATION PROCESS:
Middle Phase (Problem Solving)
Exploring Options:
• Brainstorming potential solutions and alternatives.
• Evaluating the feasibility and benefits of each option.
• Identifying trade-offs and areas for compromise.
Bargaining and Persuasion:
• Making offers and counteroffers.
• Presenting arguments and evidence to support your position.
• Addressing concerns and objections.
NEGOTIATION PROCESS:
Middle Phase (Problem Solving)
Exploring Options:
• Brainstorm creatively: Generate a wide range of potential
solutions without judgment.
• Consider different perspectives: Encourage input from all parties
involved.
• Evaluate feasibility and benefits: Analyze the pros and cons of
each option.
NEGOTIATION PROCESS:
Middle Phase (Problem Solving)
Bargaining and Persuasion:
• Make clear and concise offers: State your proposals in a way that is easy to
understand.
• Provide rationale and evidence: Support your offers with data, logic, and persuasive
arguments.
• Listen to their counteroffers and objections: Seek to understand their concerns and
find ways to address them.
• Use negotiation tactics strategically: Employ techniques like framing, anchoring,
and reciprocity to influence the outcome.
Middle Phase (Problem Solving):
Concessions in Negotiation
Concessions: Re-evaluating previous positions and adapting to the
current situation.
• Negotiations always involve concessions, but aim for fewer, more
impactful ones.
• Three key questions for each concession:
 When: Strategic timing is crucial.
 How much: Determine the appropriate level.
 What's gained: Ensure reciprocal concessions from the other party.
• Make conditional concessions: "I can offer a 5% discount if you place
a bulk order."
THE ZONE OF POSSIBLE AGREEMENT (ZOPA):
THE HEART OF NEGOTIATION

• All offers and concessions revolve around the "Zone of Possible

Agreement (ZOPA)" – the core of the negotiation process.

• The ZOPA is the overlapping area between the negotiating ranges of

both parties. It represents the range of possible outcomes where both
sides can find a mutually acceptable agreement.

• Represents the limits between the maximum and minimum goals of each
party involved in the negotiation. It defines the acceptable outcomes for
each side.
THE ZONE OF POSSIBLE AGREEMENT (ZOPA)

Sources: [Link]
NEGOTIATION PROCESS:
Ending Phase (Resolution)
Reaching Agreement:
• Finalizing the terms of the agreement.
• Ensuring mutual understanding and commitment.
• Documenting the agreement in writing (if necessary).
Implementation and Follow-up:
• Putting the agreement into action.
• Monitoring progress and addressing any issues that arise.
• Building a strong relationship for future interactions.
NEGOTIATION PROCESS:
Ending Phase (Resolution)
Reaching Agreement:
• Summarize the agreed-upon terms: Ensure that both parties have
a clear understanding of the final agreement.
• Address any remaining concerns: Resolve any outstanding issues
or misunderstandings.
• Obtain formal commitment: Get verbal or written confirmation of
the agreement.
NEGOTIATION PROCESS:
Ending Phase (Resolution)
Implementation and Follow-up:
• Develop a plan for implementation: Outline the steps needed to put the
agreement into action.
• Assign responsibilities and timelines: Ensure that everyone understands their
roles and deadlines.
• Monitor progress and address issues: Track the implementation process and
resolve any problems that arise.
• Maintain communication and build relationships: Foster ongoing collaboration
and trust for future interactions.
KEY STEPS TO AN
IDEAL NEGOTIATION PROCESS
KEY STEPS TO AN
IDEAL NEGOTIATION PROCESS CONT.
1. Preparation
• What are the goals?
• How will I work with the other party?
2. Relationship building
• Understanding differences and similarities
• Building commitment toward a mutually beneficial set of outcomes
3. Information gathering
• Learn what you need to know about the issues
KEY STEPS TO AN
IDEAL NEGOTIATION PROCESS CONT.
4. Information using
• Assemble your case
5. Bidding
• Each party states their “opening offer”
• Each party engages in “give and take”
6. Closing the deal
• Build commitment
7. Implementing the agreement
Thank you
Nguyễn Công Hòa (MBA)
Mobile: 0949.288.786
Email: hoanc@[Link]