NAB- Mid Term
1. Dual Concern Model (Slide 8)
The Dual Concern Model explains that every negotiation involves two
underlying priorities: the importance of the substantive outcome and the
importance of the relationship outcome. These two concerns shape the
negotiator’s behavioural orientation. When the substantive outcome is
highly important, the negotiator is focused on getting results, maximizing
gains, and protecting their interests. When the relational outcome is more
important, the negotiator focuses on maintaining goodwill, trust, and long-
term collaboration. The model shows that people balance these two
concerns differently depending on the context, power positions, future
interactions, and emotional stakes.
When both the substantive outcome and the relationship are important,
the negotiator tends to adopt a collaborating style. In this style, both
parties work together to expand the pie and create joint value. If the
substantive outcome is important but the relationship is unimportant, the
negotiator chooses a competing style, where the primary objective is to
win even at the cost of conflict. When the relationship is important but the
substantive stakes are low, negotiators choose an accommodating style,
willing to give up claim value to protect the relationship. When neither the
outcome nor the relationship is significant, negotiators may choose an
avoiding style, withdrawing from the negotiation entirely. The
compromising style emerges when both concerns are moderate; parties
settle for middle-ground solutions without deep exploration of interests.
Overall, the Dual Concern Model provides the psychological foundation for
choosing negotiation strategy.
2. Mapping the Process (Slide 9)
Mapping the negotiation process involves visually representing all the
elements that influence the eventual agreement — specifically BATNA,
Reservation Values, Aspiration Values, Initial Offers, Counteroffers, and the
ZOPA. The slide shows two parties, A and B, each having their own BATNA
and Reservation Value (RV). The Reservation Value is the point at which
the negotiator is indifferent between walking away and accepting the
deal. Party A and Party B also have Target or Aspiration Values (AV/SV),
which represent the ideal outcome each party hopes to achieve.
In the mapping diagram, ZOPA—the Zone of Possible Agreement—
emerges as the overlapping space between the two parties’ acceptable
ranges. Negotiation occurs through a series of moves within this ZOPA.
Each side begins with an initial offer, and the counterpart responds with a
counteroffer. These offers gradually converge toward the ZOPA, where an
agreement may be reached if both Reservation Values are aligned.
Mapping the process allows negotiators to make rational decisions, avoid
emotional reactions, and manage concessions strategically. It also
highlights the importance of understanding both your own and the other
party’s BATNA, because the strength of your BATNA determines your
negotiating power within the mapped range.
3. Inter-Dependency (Slide 10)
Inter-dependency refers to the mutual degree to which each party needs
the other in order to achieve their goals. Negotiation exists only when
both parties have some level of dependence on each other. If either party
can completely fulfil their objectives without the other, a negotiation
would not occur. The essential question behind inter-dependency is: “Who
needs whom more, and by how much?” This determines relative
bargaining power.
The slide emphasizes that the degree of inter-dependency directly
influences the overall negotiation strategy. If one party is significantly
more dependent on the other, that party holds less power and must
design a strategy that focuses on value creation, relationship
preservation, or creative concessions. If dependency is equal, negotiations
tend to be more collaborative since both sides benefit from cooperation.
Inter-dependency is dynamic, meaning it changes depending on
alternatives, market conditions, timelines, and internal pressures.
Understanding inter-dependency is crucial because it shapes the choice
between competitive or cooperative strategies, affects framing decisions,
and influences the negotiator’s expectations and behaviour.
4. DOID — Degree of Inter-Dependency (Slide 11)
The Degree of Inter-Dependency (DOID) quantifies how much one party
depends on the other. It measures the relative necessity and value each
party places on the negotiation. DOID determines the power balance: the
party with lower dependency generally has higher power, because they
have more alternatives or weaker consequences for walking away. DOID is
not just a gut feeling; it is based on concrete factors such as alternatives,
urgency, switching costs, availability of substitutes, internal deadlines,
relational history, and long-term consequences.
The slide shows DOID as a ratio—such as 60:40 or 70:30—to indicate that
the party with the higher dependency percentage must approach
negotiation carefully. A higher DOID for you means you must focus on
value creation, reframing, expanding the bargaining mix, and designing
compelling offers. A lower DOID means you have more room to push for
claim value or adopt competitive postures. DOID also helps determine
your Generic Strategy (compete, collaborate, accommodate, compromise,
or avoid). In practical terms, analyzing DOID helps negotiators avoid
unrealistic expectations and enables smarter decision-making about
concessions, anchors, and walk-away points.
5. 8 Stages of Pre-NAB Preparation (Slides 12 &
13)
1. Understanding the case through the 9 Key Elements (KE)
This stage requires a deep reading of the entire negotiation context
through nine analytical elements such as stakeholders, facts, constraints,
risks, interests, timelines, alternatives, and process conditions. Here the
negotiator transforms raw case material into a strategic understanding of
what is really happening, who is affected, what each party wants, and
which hidden factors may influence decisions. Without mastering these 9
elements, all further stages will rest on weak assumptions.
2. Converting data into information and intelligence
Data alone does not help the negotiator. It must be interpreted and
converted into insights. This means analysing numbers, deadlines, costs,
benchmarks, or past behaviours and transforming them into meaningful
intelligence. Intelligence includes insights such as power balance,
pressures on the other party, potential motivations, and likely walk-away
points. This conversion helps build a more complete and realistic mental
model of the negotiation landscape.
3. Identifying the Value Drivers
Value drivers are the underlying factors that create or destroy value in a
negotiation. These may include cost, speed, quality, reliability, risk,
volume, payment terms, or psychological factors. Identifying them helps
you understand what the negotiation is truly about—not just price or
surface issues. These drivers reveal opportunities to create value rather
than merely divide it.
4. Creating the Value Scenarios based on each Value Driver
Once value drivers are known, you create alternate “value scenarios,”
each representing a different combination of terms based on how value
drivers interact. For instance, “high price + extended warranty” or “lower
price + no after-sales support.” These are possible future deal structures
that you can use to evaluate which scenario gives the highest mutual
benefit.
5. Doing “What-If” analysis and scenarios based on interests of all parties
Here the negotiator systematically tests different possible outcomes by
asking “What if this condition changes?” This analysis reveals which
combinations of variables create advantages or disadvantages for both
sides. It helps anticipate how the other party may react and prepares you
with alternatives in case negotiations move in different directions.
6. Knowing the ZOPA for each Value Scenario – Values on the table
Every value scenario has its own potential Zone of Possible Agreement
(ZOPA). This step requires estimating the reservation values, aspiration
values, and ranges for agreement under each scenario. Knowing the ZOPA
for each scenario helps negotiators understand which structure is
workable, which is high-value, and which should be discarded early.
7. Doing Value Creation and Maximisation for each Scenario
This stage focuses on increasing joint value, not just dividing it. It means
finding ways to expand the bargaining mix through logrolling, adding new
issues, contingency contracts, creative structuring, or trading across
differences. The goal is to maximise total value so that agreement
becomes easier and more beneficial for both parties.
8. Assessing the Degree of Interdependency (DoID) & deciding Generic
Strategy
Based on the Dual Concern Model and relative inter-dependency, the
negotiator chooses whether the negotiation requires a competitive,
collaborative, accommodating, avoiding, or compromising strategy.
Degree of interdependency (DoID) reveals who needs whom more, and
thus determines how assertive or cooperative one can afford to be.
9. Deciding the Frame(s) and finalizing Strategic Approach
Framing is how you psychologically position the negotiation to the other
party—whether it appears as an opportunity, a risk, a partnership, or a
problem. After selecting the generic strategy, the negotiator picks frames
that support it. Frames help shape perceptions, expectations, and
reactions.
10. Deal Design – CVP, SET-UP, Tactics
Deal design integrates all previous analysis into a final offering structure.
The Compelling Value Proposition (CVP) must show why your proposal is
superior. SET-UP determines the sequence and method of presenting the
deal so that the counterpart views it favourably. Tactics include anchoring,
concessions, leverage, timing, and communication style.
11. Detailed Action Plan using 5W1H
This stage translates strategy into executable actions. It specifies Who will
negotiate, What steps will be taken, Where it occurs, When, Why each
action matters, and How tactics will be implemented. It also assigns roles,
scripts, emotional triggers to watch out for, and decision checkpoints.
12. Role-Play
The final step is rehearsal. Role-play simulates the actual negotiation so
the team can test their strategy, refine scripts, anticipate resistance, and
correct mistakes before meeting the real counterpart. It is a critical step
because it transforms planning into practical readiness.
6. Value Creation > Maximization
1. Identifying value drivers and building scenarios with ZOPAs
Value creation begins by identifying the factors that drive value for both
sides—such as price, speed, risk-sharing, warranties, quality, or flexibility.
Once identified, negotiators create different value scenarios by varying
how these drivers are combined. Each scenario reflects a potential deal
structure and has its own ZOPA based on both parties’ reservation and
aspiration values. The goal here is to determine which scenario generates
the highest possible joint surplus and therefore becomes the basis for a
mutually beneficial negotiation.
2. Unbundling interests into a Bargaining Mix
After selecting promising scenarios, the next step is to break down broad
interests into smaller, negotiable components. This transforms a single-
issue negotiation (usually price) into a multi-issue bargaining mix. By
unbundling issues such as delivery dates, service levels, payment terms,
guarantees, and regulatory requirements, negotiators increase the
opportunities for trade-offs. A richer bargaining mix dramatically increases
the potential for integrative solutions.
3. Adding needs and issues to maximise the Bargaining Mix
Once a base bargaining mix exists, negotiators deliberately expand it by
adding additional issues or sub-issues that represent either functional or
psychological needs. These new issues could include long-term
partnership opportunities, credit terms, exclusivity clauses, training
support, or brand visibility. The more issues added, the more room
negotiators have to create value. This is where creativity matters—
identifying elements that one party values highly but cost very little for
the other to provide.
4. Conducting CNWDT analysis
CNWDT analysis evaluates each item in the bargaining mix in terms of
Concerns, Needs, Wants, Desires, and Trade-offs for both parties. It forces
negotiators to assign importance levels and understand relative
valuations. This analytical step clarifies which issues are critical, which are
flexible, and where concessions can be strategically deployed. CNWDT
converts qualitative preferences into structured, actionable insights.
5. Log-rolling using CNWDT and cross-party differences
Logrolling is the heart of value creation. Using the insights from CNWDT,
negotiators trade issues that the other party values more but cost them
relatively little. Since each party values issues differently, these
differences can be exploited to expand the pie. For example, one party
may highly value faster delivery while the other values longer contract
duration. Trading these preferences leads to mutual gains. Logrolling uses
differences, not similarities, to generate value.
6. Developing contingency contracts for future uncertainties
Contingency contracts address uncertainties by creating conditional
agreements. These contracts specify what happens if certain future
events occur (e.g., demand increases, prices shift, performance
improves). They align incentives and allow negotiations to proceed even
when parties disagree about future projections. Contingency contracts
reduce risk, promote fairness, and allow deal structures to adapt to
changing realities.
7. Configuring the package offer (Deal Design) as a bundle
The final step is to combine all elements—bargaining mix, logrolling
outcomes, contingency clauses, and high-value scenarios—into a single,
comprehensive package deal. This bundle presents the other party with a
carefully engineered value proposition that maximises total value. A well-
designed package offer is more persuasive and harder for the counterpart
to reject than isolated, issue-by-issue proposals. It is the culmination of
entire value creation work and provides the basis for persuasive
negotiation.