Chap 2 - Language of Negotiation

24/12/2016 C2-The Language of Negotiation 1
Lecturer: MBA | Trần Khánh

Email: tg_trankhanh_qtkd@tdtu.edu.vn
Handphone: 0946512667
CHAPTER 2
The Language of
Negotiation
Chapter Objectives
1. Identify the issues that would constitute the
bargaining mix in a variety of negotiations
2. Apply proper terminology when preparing for
and executing a negotiation
3. Identify opening offers and target and
resistance points
Chapter Objectives
4. Understand the role of a negotiator’s Best
Alternative to a Negotiated Agreement (BATNA)

and its impact on negotiation
5. Assess the impact of framing in negotiating and
resolving conflict
6. Understand the role of reciprocity in negotiations

1. Core I 7 – first Chip Generation – 750 Gb
2. 1st Owner bought at 22 millions by 2015
3. All Interesting Ideas  Helps Seller ( Me ) to
discover the values inside

2.1 Bargaining Mix
•The Bargaining Mix: all of the issues involved in

the negotiation
•Example: For a job offer, could include individual
priorities and alternatives, salary level, the
‘package’ including benefits – insurances, bonus,
retirement, etc.
• The more issues in the mix the greater the
likelihood both parties will walk away happy that
they secured the best overall deal
2.1 Bargaining Mix
•Too many issues makes the negotiation unwieldy
• Expanding the pie – key principle of integrative
negotiation – creating more value for everyone

involved in the negotiation
2.2 Initial Offers
• Also known as: opening offer - anchors the
negotiation and sets a boundary to it; can give

an advantage to the party who makes it
• From the seller’s perspective: it is the asking or
list price
• From the buyer’s perspective: it is the first offer
made
2.2 Initial Offers
• Who makes the first offer depends on the

negotiation, usually the seller, except in an
auction
• Good negotiators:
• Send a signal with their offer
• Leave some room to negotiate
• Research their offer
2.3 Target Point
•Target point (or aspiration) is the best outcome
each party can reasonably expect

• Target points for monetary issues should be
quantified in advance and based on researched

factual information
• Target points for non-monetary issues should be
based on as much factual information as possible

2.3 Target Point
Good negotiators:
•Set challenging goals – a target point for each issue

•Keep their target point quiet at first
•Share the information strategically
2.4 Resistance Point
• Good negotiators have a resistance point or
“reservation” amount below which they will not

go
• It is the reference point during the negotiation to
decide whether to reject or consider an offer

2.4 Resistance Point
• Typically not revealed to the other party or might
be called the “final” offer

• Not all buyers/sellers will have the same
resistance point
2.5 BATNA
(Best Alternative to a Negotiated
Agreement)
• Literally the most ideal outcome one party could get
without negotiating
• The better the alternatives, the stronger the
negotiator’s bargaining position and more likely to

make the first offer
• Thoroughly investigate all alternatives to put
yourself in the best possible negotiation position

2.6 WATNA
(Worst Alternative to a Negotiated
Agreement)
• Literally the worst outcome one party could face
if they don’t come to a negotiated agreement

• Always consider WATNA before the negotiation
2.7 Bargaining Range
• Between parties’ resistance points, also known
as the settlement zone

• If there is overlap between the points, the range
is positive and settlement is likely if sufficient

information is exchanged to indicate this
2.7 Bargaining Range
• If the resistance points match, the bargaining
range is zero and settlement is less likely due

to level of information exchange
• If there is no overlap, the zone is negative and
there will be no settlement unless one or both

parties adjust their resistance point
2.8 Settlement Point
• Is what the parties actually agree upon
• For multi-issue negotiations there is a settlement
point for each issue

• But, the parties must remember to discuss all the issues
• Overlooking issues can damage relationships when
expectations are mismatched

2.9 Approaches to Negotiating and

Resolving Conflict
• Comparison of approach to negotiation models

Resolving Conflict
• Each person approaches negotiations differently
• People approach different negotiations differently
– changing their approach depending on

circumstances
• Personality also influences the approach

Resolving Conflict
• Two types of negotiation approaches:
• Distributive – generally involve more
competitive behavior, winner and loser, little
concern for the relationship after the negotiation
ends
• Integrative – more cooperation, meeting the
needs of both parties, more concern for
maintaining the relationship after the negotiation
ends
2.11 Framing
 A frame is the lens through which one views a
negotiation
 A frame influences negotiation behaviors
 A positive frame leads to more successful outcomes
 A negative frame leads to less successful outcomes

2.11 Framing
 The more negatively an issue is framed, the more
likely there is to be escalating conflict

 It is also possible to reframe a negotiation
 Example: purchasing a house that needs
repairs, but seller maintains that it is in good

condition – reframe to focus on repairs that
are needed as part of negotiating a discount
2.12 Reciprocity
 Reciprocity can lead to concessions in a
negotiation session
 A hardline approach or bad behavior can result
in mirroring behavior eventually leading to a

complete breakdown in a negotiation

Chap 2 - Language of Negotiation

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24/12/2016 C2-The Language of Negotiation 1

Lecturer: MBA | Trần Khánh

1. Identify the issues that would constitute the

bargaining mix in a variety of negotiations

2. Apply proper terminology when preparing for

and executing a negotiation

3. Identify opening offers and target and

4. Understand the role of a negotiator’s Best

Alternative to a Negotiated Agreement (BATNA)

5. Assess the impact of framing in negotiating and

6. Understand the role of reciprocity in negotiations

1. Core I 7 – first Chip Generation – 750 Gb

2. 1st Owner bought at 22 millions by 2015

3. All Interesting Ideas  Helps Seller ( Me ) to

discover the values inside

2.1 Bargaining Mix

•The Bargaining Mix: all of the issues involved in

2.1 Bargaining Mix

•Too many issues makes the negotiation unwieldy

• Expanding the pie – key principle of integrative

negotiation – creating more value for everyone

2.2 Initial Offers

• Also known as: opening offer - anchors the

negotiation and sets a boundary to it; can give

2.2 Initial Offers

• Who makes the first offer depends on the

2.3 Target Point

•Target point (or aspiration) is the best outcome

each party can reasonably expect

quantified in advance and based on researched

based on as much factual information as possible

2.3 Target Point

•Set challenging goals – a target point for each issue

2.4 Resistance Point

• Good negotiators have a resistance point or

“reservation” amount below which they will not

decide whether to reject or consider an offer

2.4 Resistance Point

• Typically not revealed to the other party or might

be called the “final” offer

negotiator’s bargaining position and more likely to

yourself in the best possible negotiation position

• Literally the worst outcome one party could face

if they don’t come to a negotiated agreement

2.7 Bargaining Range

• Between parties’ resistance points, also known

as the settlement zone

is positive and settlement is likely if sufficient

2.7 Bargaining Range

• If the resistance points match, the bargaining

range is zero and settlement is less likely due

there will be no settlement unless one or both

2.8 Settlement Point

• Is what the parties actually agree upon

• For multi-issue negotiations there is a settlement

point for each issue

• Overlooking issues can damage relationships when

expectations are mismatched

2.9 Approaches to Negotiating and

2.10 Approaches to Negotiating and

• Each person approaches negotiations differently

• People approach different negotiations differently

– changing their approach depending on

2.10 Approaches to Negotiating and