Roadblocks in Negotiation

Today’s Agenda
• Midterm info
• Preparation in negotiation
• Efective communication
• Biases in negotiation
• Negotiate El Tek
 Exam
• Takes place in class
• Partners assigned at random
– Will receive role on paper and START
partner email address HERE
• 30 minutes to prepare
– No use of computer allowed
during this tme
• 30 minutes to negotate
(over messenger)
• 20 minutes to report results
– Cut and paste messenger text
into google form
– Answer questons
Eltek Debreif
 ElTek
• 2 Parts of a single organizaton
• No special provisions for coordinaton
between divisions
• Lef up to two managers
– Beneft for the individuals
– Beneft for the organizaton
Opton Number Months Ac or Eltec Compettors Transfer Payment Net Proft Audio Net Proft Magnetcs

3 6 No AC compettors for 6 months (other divisions ok) 30 55 10

3 12 Eltec Compettors 45 75 75
3 6 El Tec 50 75 80
3 6 AC 12 37 128
4 6 Both 26 33 90
5 12 Ac 57 45 63
5 12 AC compettors 20.5 0.5 99
5 12 AC 27 57 93
5 12 internal and external 14 54 96
5 12 AC 30 48 90
5 12 AC 14 54 96
5 12 AC 30 60 90
5 12 Audio 2 . 118
5 12 Eltec compettors 57 87 .
5 12 AC 45 75 75
6 12AC/6 ELT AC 36 61
6 12AC/6 ELT Ac and eltex resectvely 14 45 76
7 12 Both 30 62 90
8 20 Ac 10.7 45.7 .
8 20 AC compettors 30 65 .
8 20 Eltec compettors 30 35 77
 Why so many diferent results?
• Diferent interpretatons
• Diferent tactcs
• How did you fgure out what your partners’
preferences were?
 Optons
• What is best for one division may not be best
for the company as a whole

• Reasonable for both partes:

– 3, 5, 8, 11
– 11 not appealing for both partes
Did you know you
got the optmal
soluton? How?
Others? What
stopped you from 3?
 What is a Win Here?
• Mutual win?
• Individual win?
• Not having to go “upstairs”
Preparation in Negotiation
Preparation in negotiation
• Largely determines success or failure

• Can be a source of power

• Don’t allow others to prepare for you

– Know what you want out of the
negotiation, don’t rely upon others’
wants
 Preparing beyond the
outcome
• Consider the situation you are in
– Are there competitive elements of the situation?
– How will issues be addressed?
– What responses will help me achieve my goals?
• Consider the relationship (in integrative
negotiations)
– Is there trust and cooperation in the relationship?
– What is the other party’s reputation?
– What will we discuss in this particular
negotiation?
 Efective communication
• You can communicate the same thing
in many diferent ways
– Strategies of infuence can aid you in
persuading the other side…and yourself
 Efective communication
• You can communicate the same thing
in many diferent ways
– Strategies of infuence can aid you in
persuading the other side…and yourself
• Communication can also act as a
roadblock
– By not having a clear understanding of what you
want, your communication may be misleading
– Lack of face-to-face communication can
increase confict
Email
Which shape is Larger?
Which shape is Larger?
Which Side of the Strip is Darker?
 Biases in negotiation
• Mental shortcuts that are developed
over time
• Used without conscious awareness
• Particularly problematic in negotiation
– Escalate confict
– Prohibit integrative strategies
• We are susceptible to many biases in
negotiation
– Competitiveness, representativeness,
illusion of transparency
 Cognitive Biases in
Negotiations
- Confict bias:
- antcipate confict based on experience
- Tendency toward distributve negotatons

- Representatveness:
- Perceived similarity to other situatons
- Use memory to guide behavior
- Routnes obfuscate opportunity

- Illusion of transparency
- assume that individuals understand
- leaves out important details that make our message unclear
- Remember: communicatng, remember that communicaton
includes listening, not just talking.
Cognitive Biases in
Negotiations
Story of Mat Harrington

- At 18 he was picked as #7 and ofered $4 million

with half a million signing bonus by Colorado.
He turned it down- and felt like it showed a lack
of respect for his talent.
- Next year drafed as #58 by the Padres for $1.25
million with $300000 signing bonus. He turned
it down.
- Next year, he was drafed as #374 and ofered
less than $100,000. He turned it down
- The next year he was drafed by the Reds as
#711, but the ofer fell through
- In 2004, he was drafed by the Yankees as pick
1089 but no ofer ever worked out
- Now he for a minor league team (Long Beach
Breakers) for $1500 a month
 Cognitive Biases in
Negotiations
• Above average efect:
– We want to like ourselves
– Amplify our relatve ability
– Many negotatons require telling people that they are not worth as much as
they believe they are

• Escalaton of commitment
– Even though acton doesn’t make sense…we keep going
– Save face

• Confrmaton bias:
– Seek out informaton that confrms our expectaton
– Ignores informaton that could be used for a more balanced perspectve
 Can I Overcome these
Biases?
• Recognize the biases you are susceptible to
• Perspective taking
– An understanding of where the other side is coming
from
– Focusing on interests rather than positions in the
confict
• Perspective taking is about understanding, not
sympathy
• Ofers a way to bridge what you want and what
the other party wants though a focus on
interests