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Preparation: What to Do Before

Negotiation
MGS 4311

April 27, 2015

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April 27, 2015

The Fixed-Pie Perception

Most negotiators usually take one of three suboptimal
approaches when preparing for negotiation:
Resignation to capitulating to the other side (soft
bargaining)
Preparation for attack (hard bargaining)
Compromise

April 27, 2015

MixedMotive Enterprise
BOTH: Cooperation + Competition !!!
thus,
Effective Preparation -> Three Abilities

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April 27, 2015

Preparation: Self-Assessment (I)

What do I want (target or aspiration)?

What is my alternative to reaching agreement
in this situation (BATNA)?
Determine your reservation point
Be aware of focal points
Be aware of sunk costs
Do not confuse your target point with your
reservation point

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April 27, 2015

Preparation: Self-Assessment (II)

Identify the issues in the negotiation

Identify the alternatives for each issue
Identify equivalent packages of offers
Assess your risk propensity (strategic, BATNA,
contractual)

Endowment effects
Am I going to live to regret this?
Violations of the sure thing principle
Overconfidence effect

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April 27, 2015

Preparation: Assessing the Other

Party

Who are the other parties? (Hidden table)

Are the parties monolithic?
Issue mix
Others interests and positions
Other negotiators BATNAs

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April 27, 2015

Preparation: Assessing the

Situation (I)
Is the negotiation one-shot, long-term, or repetitive?
Do the negotiators involve scarce resources, ideologies,
or both?
Is the negotiation one of necessity or opportunity?
Is the negotiation an exchange or dispute situation?
Are there linkage effects?
Is agreement required?
Is it legal to negotiate?
Is ratification required?
Are there time constraints or other time-related costs?

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April 27, 2015

Preparation: Assessing the

Situation (II)

Are conflicts official or unofficial?

Where do the negotiations take place?
Are negotiations public or private?
Is third-party intervention a possibility?
What conventions guide the process of negotiation (such
as who makes the first offer)?
Do negotiations involve more than one offer?
Do negotiations communicate explicitly or tacitly?
Is there a power differential between parties?
Is precedent important?

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April 27, 2015

Effective preparation places the negotiator at a

strategic advantage at the bargaining table!!!