Negotiation
104 flashcards by MentisLibrary
BATNA, ZOPA, anchoring, and the difference between interests and positions, plus the tactics people will use on you and how to counter each one. From salary talks to vendor contracts.
- BATNA
- Your Best Alternative To a Negotiated Agreement: what you will do if this deal does not happen.
- Why is your BATNA your real source of power?
- Because leverage comes from your ability to walk away, not from how much you want the deal.
- WATNA
- Your Worst Alternative To a Negotiated Agreement: the downside case if no deal is reached.
- Reservation price
- The least favorable point at which you would still accept a deal.
- ZOPA
- The Zone Of Possible Agreement: the range between the two sides' reservation prices, where a deal is possible.
- Aspiration point
- The ambitious but justifiable outcome you are aiming for.
- Target versus resistance point
- Your target is what you are aiming for; your resistance point is where you stop.
- Distributive bargaining
- Negotiation over a fixed resource, where a gain for one side is a loss for the other.
- Integrative bargaining
- Negotiation that looks for arrangements that create additional value for both sides.
- Value claiming versus value creating
- Claiming is dividing the pie; creating is enlarging it.
- The fixed pie bias
- The assumption that the other side's interests are directly opposed to yours across the board.
- Interests versus positions
- A position is what someone says they want; an interest is why they want it.
- Principled negotiation
- Fisher and Ury's approach: separate the people from the problem, focus on interests not positions, invent options for mutual gain, and insist on objective criteria.
- Separate the people from the problem
- Treating the relationship and the substance as two tracks, so you can be hard on the problem and soft on the person.
- Objective criteria
- Standards independent of either side's will, such as market rates, precedent, appraisals, or published benchmarks.
- Logrolling
- Trading concessions across issues, giving on what you care less about to gain on what you care more about.
- Pareto efficiency in a deal
- An agreement is Pareto efficient when no change could make one side better off without making the other worse off.
- Contingent agreement
- A deal whose terms depend on a future event, used when the parties disagree about what will happen.
- MESO
- Multiple Equivalent Simultaneous Offers: presenting two or three packages of equal value to you but different in composition.
- Expanding the pie
- Adding issues, timing, volume, scope, or non monetary terms so more trades become possible.
- Preparation, as the main determinant
- Most negotiation outcomes are shaped before anyone speaks, by research, alternatives, and clarity about goals.
- Scoring the issues
- Assigning relative weights to the issues so you know what a concession actually costs you.
- Improving your BATNA before you negotiate
- Developing a real alternative, such as a second offer or a workable in house option.
- Estimating their BATNA
- Working out what the other side will do if there is no deal.
- Deciding who speaks first
- Whether to make the opening offer, which depends on how much you know about the value at stake.
- Choosing the channel
- Whether to negotiate in person, by video, by phone, or in writing.
- Anchoring
- The tendency for an initial number to pull subsequent judgments toward it.
- Should you make the first offer?
- If you have good information about the value, going first usually pays through the anchoring effect. If you are poorly informed, going first risks anchoring below what they would have offered.
- Countering an extreme anchor
- Name it, decline to counter on that basis, and reset with your own justified number or with objective criteria.
- The precise number effect
- Research suggests precise offers, such as 4,850, are taken as better informed and are met with smaller counteradjustments than round ones.