Organisational Behaviour Notes

Structure of Negotiation

Congruent Aspect:

• Identical preferences
• Bring strategic advantage if you know which issues are congruent but your counterpart does not.
• Ie: benefit by offering to concede on the congruent issues in exchange for preferable terms on another non-congruent issues

Distributive Aspect: (Positional bargaining)

• Two parties have opposing preferences (equal intensity)
• Ie: Monetary (Buyer want less)
• Zero sum approach require one party to lose in order for the other party to benefit
• Involves back and forth offers and counter offers
• To maximise their gains by focusing on a specific idea & arguing for it irrespective of the underlying interests/ needs  
• Shell (2006): Preparing, exchanging info, bargaining, committing and concluding

Integrative Aspect: (Principled negotiation)

• Parties engage in creative problem-solving that aims to have a mutually beneficial outcome
• Place relationship at the higher degree of importance → TRUST
• Seeking win-win outcomes
• Involve research & gather info
• Aware of their Best Alternative to a Negotiated Agreement (BATNA) & WATNA (solution evaluation and measurement of success)

BATNA: Know minimum you are willing to accept & your walk away point

• Benefit: Stronger BATNA provides you with a basis to persuade them to accept a specific agreement
• Fisher, Ury & Patton (1991): Emphasis the need for clear communication regarding the needs of both parties

BATNA’s 4 Principles

Separate people from the problem

• Focus on problem solving
• Listen actively, suspend judgement and acknowledge substance
• Ask relevant questions & build relationship

Focus on interests, not positions

• Focus on what they need (interest), instead of what they want
• Be specific and use examples
• Better understand the problems

Invent options for mutual gain

• Being tough on the problem & create space for collaboration
• Brainstorm together and make a long list of possible solutions
• No criticism & no judgement

Use objective criteria

• Jointly agree on which objective criteria will be used
• Include news, precedents, professional standards/ knowledge

Claiming Value:

Lax & Sebenius (1986): Doing what is necessary to claim the largest piece possible; self-interest (Distributive approach)

Tactic:

• Raiffa (1982): Establish a reservation price (min acceptable value & smallest pie you’re willing to accept)
• Leant other people RP & push them
• Anchoring

• When initial offer made become a mental reference point against which other possible solutions are judged
• Being the first to make offer

Creating Value: