What affects negotiation process

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What you will learn today

• What affects negotiation process outcome
• Theoretical Understanding
• Lecture on AOME Thompson Leonardelli Reading
• Practical Application
• Do Negotiation Exercise
• Discuss learning from Exercise

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Factors affecting Negotiations
Type of Relationship between parties
Type of Emotions
Negotiation
Perceptions of Parties
Ability to Invent Options
Best Alternative to Negotiated Agreement BATNA
Bargaining Style
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Negotiation
Ability to Invent Options
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What is Inventing Multiple Options

• Expanding the pie
• Students orally give examples of negotiation with
  multiple Options
• Car Sale Negotiation
• Salary Negotiation
• Union-Management Negotiation
• Using multiple options leads to win-win solutions

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Factors affecting Ability to Invent Options
Fixed Pie Perceptions
Ability to Invent Options
Negotiation Outcome
Pre-mature judgments
Search for a single answer
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Ability to invent options
Fixed pie perception
Negotiation Outcome

• Studies supporting the link
• When people believe that the gain made by one
  party is a loss for the other party, they are
  less likely to expand the pie
• E.g., salary negotiation car sales negotiation

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Ability to invent options
Time pressure
Premature judgments
Studies supporting the link

• Premature judgmentscommit to a course of action
  find it difficult to change that course even if
  change could yield mutually beneficial outcomes
• Time pressure increases premature judgments,
  prevents use of new information

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Ability to invent options
Search for single answer
Negotiation Outcome

• Studies supporting the link
• When negotiators translate their interests into
  different constellations of offers where each
  offer is equivalent to other offers (e.g.), then
  they are better able to conceive of different
  types of outcomes that would be equally
  acceptable and therefore have improved outcomes

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What affects the ability to invent options?

• Fixed pie perceptions
• Belief that gain for one is loss for other
  results in poorer joint outcomes

• Time pressure
• Leads to commitment to a course of action or not
  reacting to new information resulting in poor
  outcomes

• Search for a single answer
• Having multiple equivalent offers results in
  better outcomes

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Whats next How BATNA affects Negotiation
Ability to Invent Options
Negotiation
Type of Best Alternative to Negotiated
Agreement BATNA
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What are BATNAs

• BATNAbest alternative to negotiated agreement
• Students orally give examples of BATNAs in
• Car Sale Negotiation
• Salary Negotiation
• Union-Management Negotiation

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Negotiation Outcome
Type of BATNA
Anchor point
Studies supporting the link Negotiators agree
to outcomes close to the value of their BATNAs
bec BATNAs give an anchor point
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Three factors affecting negotiation
Type of Relationship between parties
Type of Emotions
Negotiation
Perceptions of Parties
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Type of Relationship b/w parties
Negotiation Outcome
Negotiation Process
Studies supporting the link 1. Friends are less
competitive with each other than they are with
strangers 2. Friends are more willing to
compromise fail to invent options for mutual
gain than are strangers
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Type of emotions
Negotiation Outcome
Negotiation Process
Studies supporting the link 1. Happy
negotiations are more cooperative identify
options for greater mutual gain 2. Negotiators
are less demanding and concede more with
opponents who are angry
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Perceptions of negotiating parties
Negotiation Outcome
Negotiation Process
Studies supporting the link 1. Negotiators
perceive concessions made by opponents as
benefiting opponents and therefore devalue those
concessions
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Perceptions of negotiating parties
Negotiation Outcome
Negotiation Process
Studies supporting the link 2. When
negotiators evaluate proposals not knowing that
opponents made those proposals, they are more
likely to perceive such proposals positively
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How the three factors affect negotiation

• Type of Relationship between parties
• Friends are more conceding, less competitive,
  often resulting in less optimal mutually
  beneficial outcomes

• Type of Emotions
• Happy people are more cooperative and identify
  mutually beneficial outcomes

• Perceptions of Parties
• People devalue offers proposed by the other
  party

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Whats next How bargaining style affects
negotiation
Type of Relationship between parties
Type of Emotions
Negotiation
Perceptions of Parties
Ability to Invent Options
Type of BATNA
Bargaining Style
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Two Personality Dimensions affecting negotiation
Extraversion
Agreeableness
Negotiation Process Outcomes
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What is extraversion agreeableness

• Extraversion
• talkativeness
• assertiveness
• positive affect
• Agreeableness
• cooperative
• generous

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Extraversion Agreeableness
Negotiation Outcome
Negotiation Process

• Studies supporting the link
• Friendly, gregarious styles..
• Less likely to claim resources at table
• Were more susceptible to anchoring effects due to
  other partys extreme first offers and therefore,
• Obtained worse outcomes

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Review
Type of Relationship between parties
Type of Emotions
Negotiation
Perceptions of Parties
Ability to Invent Options
Type of BATNA
Bargaining Style
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Applying what you learned

• What affects negotiation process outcome
• Theoretical Understanding
• Lecture on AOME Thompson Leonardelli Reading
• Practical Application
• Do Negotiation Exercise
• Discuss learning from Exercise