Chapter 2: The Language of Negotiation

All of the issues involved in a negotiation

The area between parties’ resistance points

The most ideal alternative outcome one party to a negotiation could get without negotiating with the other party. The better the alternatives, the stronger the negotiator’s bargaining position and more likely to make first offer. Thoroughly investigate all alternatives to put yourself in the best possible negotiation position

The lens through which you view a negotiation either positive or negative. How an issue is framed influences your behavior in a negotiation. It is possible to reframe a negotiation.

The first offer made by a party in a negotiation

The notion that if someone does something for you, you owe them. Can lead to concessions in a negotiation session. A hardline approach or bad behavior eventually leading to a complete breakdown in a negotiation.

A negotiator’s bottom line; the point beyond which they will not go. The reference point during the negotiation to decide whether to reject or consider an offer.

What the parties actually agree upon

The best outcome each party can reasonably and realistically expect to obtain as a result of the negotiation

The worst outcome you might face if you do not come to a negotiated agreement. Always consider WATNA before the negotiation.

1. The more issues, the greater the likelihood both parties will walk away happy that they secured the best overall deal
2. Too many issues makes the negotiation unwieldy
3. Expanding the pie – key principle of integrative negotiation – creating more value for everyone involved in the negotiation

The initial offer from the seller’s perspective

The initial offer from the buyer’s perspective

1. Send a signal with their offer
2. Leave some room to negotiate
3. Research their offer

Depends on negotiation, usually seller, except in an auction

Should be quantified in advance and based on researched factual information

Should be based on as much factual information as possible

1. Set challenging goals – a target point for each issue
2. Keep their target point quiet at first
3. Share the information strategically

1. Have a reservation amount below which they will not go
2. Not revealed to the other party or might be called the final offer
3. Not all buyers/sellers will have the same point

When there is overlap between the points, settlement is likely if sufficient information is exchanged to indicate this

When the resistance points match, the range is zero and settlement is less likely due to level of information exchange

When there is no overlap, the zone is negative and there will be no settlement unless one or both parties adjust their resistance points

1. Settlement point for each issue
2. Parties must remember to discuss all the issues
3. Overlooking issues can damage relationships when expectations are mismatched

Depends on level of assertiveness and concern for substantive issues and the relationship with the other party and concern for their outcomes. Two types: Distributive and Integrative

Involves more competitive behavior, winner and loser, little concern for the relationship after the negotiation ends

More cooperation, meeting the needs of both parties, more concern for maintaining the relationship after the negotiation ends

Leads to more successful outcomes

Leads to less successful outcomes; the more negative, the more likely there is to be an escalating conflict

Social psychologist that believed that reciprocity was the most powerful negotiation principle

A model that identifies several approaches to a negotiation or conflict situation. The dimensions are assertiveness/concern for one’s own outcomes and cooperativeness/concern for other’s outcomes, and the approaches to handling conflict are referred to as avoiding, accommodating, competing, collaborating, and compromising.

A model that identifies several approaches to a negotiation or conflict situation. It identifies the dimensions as concern for one’s own outcomes and concern for the other party’s outcome. The possible approaches are called inaction, yielding, contending, and problem solving.