N04: Negotiation: Strategy and Planning

 

 

Business negotiations should always start with a plan. Planning and preparation will help lead you to success. Before you choose any negotiation tactics or specifics, you must start with your negotiation strategy. Planning your negotiation strategy should always come before selecting negotiating tactics. Your negotiation strategy serves as the foundation for the approach and techniques that you use to achieve your goals.

 

In any kind of negotiation the planning stage is probably the most important. Too often we go in badly prepared and end up giving concessions that reduce the overall profitability of the final deal. The importance of planning is in having a very clear idea before entering into the negotiation.

 

            Discussed the importance of setting clear goals, based on the key issues at stake. They then presented a model of negotiation strategy choice, returning to the familiar framework of the dual concerns model. A negotiator who carefully plans will make an effort to do the following

            1. Understand the key issues that must be resolved in the upcoming negotiation.

            2. Assemble all the issues together and understand the complexity of the bargaining mix.

            3. Understand and define the key interests at stake that underlie the issues.

            4. Define the limits – the point where we will walk away or stop negotiating.

            5. Define the alternatives – other deals we could do if this deal does not work out.

            6. Clarify the target points to be achieved and the asking price where we will be the discussion.

            7. Understand my constituents, what they expect of me, and the social context.

            8. Understand the other party in the negotiation – their goals, issues, strategies, interests, limits, alternatives, targets, openings, and authority.

            9. Plan the process by which I will present and “sell” my ideas to the other party (and perhaps to my own constituency)

            10. Define the important points of protocol in the process – the agenda, who will be at the table or observing the negotiation, where and when we will negotiate, and so on.

            When negotiators are able to consider and evaluate each of these factors, they will know what they want and will have a clear sense of direction on how to precede. This sense of direction, and the confidence derived from it, is a very important factor in affecting negotiating outcomes.

Question

1. How to do when you know you have a negotiation coming up?

You should do a lot of planning before you meet the other party. Part of this planning is to establish a clear idea of what you want to achieve. Research the other party it is critical in negotiation to know who you are dealing with. If you don't know anything about the other party you are at a severe disadvantage.

 

You should at least know these details about the other party:

- Who you will be dealing with?

- Their track record.

- How badly they need what you have to offer?

- What alternative parties are accessible to them?

- The major strategy they are expected to use.

- Their likely opening demands.

- Their strengths and weaknesses.

 

2. What’s “The Dual Concern Model”?

The Dual Concern Model assumes that parties’ preferred method of handling conflict is based on two underlying dimensions: assertiveness and empathy. The assertiveness dimension focuses on the degree to which one is concerned with satisfying one’s own needs and interests. Conversely, the empathy (or cooperativeness) dimension focuses on the extent to which one is concerned with satisfying the needs and interests of the other party. The intersection points of these dimensions land us in different conflict styles. It’s always helpful not only to realize your own conflict style, but to appreciate the style that your opposite number is using.

 

3. Explain Active-Engagement Strategies?

1. Collaboration – integrative bargaining, win-win (I win, you win)

Integrative bargaining is about searching for common solutions to problems that are not exclusively of interest to only one of the negotiators. Positive sum situations are those where each party gains without a corresponding loss for the other party. The law of win-win says “Let’s not do it your way or my way; let’s do it the best way”

 

2. Competition – distributive bargaining, win-lose (I win, you lose)

Distributive bargaining refers to the process of dividing or distributing scarce resources

            - Two parties have different but interdependent goals

            - There is a clear conflict of interests

 

3. Accommodation – involves an imbalance of out comes (I lose, you win)

The negotiator wants to let the other win, keep the other happy, or not to endanger the relationship by pushing hard to achieve some goal no the substantive issues.

 

            Accommodation is often used;

            - When the primary goal of the exchange is to build or strengthen the relationship and the negotiator is willing to sacrifice the outcome.

            - If the negotiator expects the relationship to extend past a single negotiation episode.