Strategy and tactics of integrative negotiation pdf

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What’s Your Negotiation Strategy?

While that approach may work in a lot of instances, complex deals demand a much more strategic approach. They also get creative about the process and framing of negotiations, ditching the binary thinking that can lock negotiators into unproductive zero-sum postures.

Applying such strategic techniques will allow dealmakers to find novel sources of leverage, realize bigger opportunities, and achieve outcomes that maximize value for both sides. But for complex deals, a proactive approach is needed. Strategic negotiators look beyond their immediate counterpart for stakeholders who can influence the deal.

They intentionally control the scope and timing of talks, search for novel sources of leverage, and seek connections across multiple deals. Tactical negotiating can lock parties into a zero-sum posture, in which the goal is to capture as much value from the other side as possible. They lead to deals that maximize value for both sides. When we advise our clients on negotiations, we often ask them how they intend to formulate a negotiation strategy.

But beyond that, they feel limited in how well they can prepare. Fair enough. For most routine negotiations, a reactive approach is sufficient.

But from time to time dealmakers find themselves in complex negotiations with higher stakes. In those situations they require a much more robust approach. Just like business, political, and military leaders, negotiators need a strategic framework that illuminates the key choices they must make to achieve their ultimate objectives.

Negotiators should start developing them well before the initiation of talks, but the process is dynamic and iterative and should continue until the final deal is inked—and in some cases beyond. People tend to pursue deals with the obvious parties.

But we often overlook many others in the ecosystem surrounding the negotiation: our competitors, suppliers, and customers—and their competitors, suppliers, and customers. We need an approach that encompasses all the parties that can and will help us fulfill our objectives.

Consider how the holder of key patents necessary to play movies and music on DVDs sought to prevent low-cost manufacturers in China from infringing on its intellectual property and competing unfairly with its duly licensed partners.

Initially, it tried to negotiate with those manufacturers, but in most cases it was simply ignored. And even when the Chinese manufacturers were successfully challenged and subjected to a legal process, they would simply close shop and then reopen under a different name.

By helping the importers and distributors recognize the infringement and intellectual property issues, the patent owner got them on the same side of what would otherwise have been a steep uphill negotiation with the unauthorized manufacturers. While viewing counterparts as if they were one monolithic entity is convenient, that attitude regularly leads to analytical and strategic missteps. In the realm of international diplomacy, negotiators have traditionally been somewhat more attuned to thinking about how to influence multiple constituencies when forging deals—be it with the Taliban or the old Soviet Union.

Most often, profits and losses are assessed not only at the enterprise level but by unit, geography, product, and plant. The authority to negotiate contracts is usually though not always delegated accordingly. The supply chain team at a large hospitality and entertainment company took that lesson to heart in negotiations with major beverage suppliers. The team members recognized that bargaining with their sales counterparts over volume discounts would achieve limited value.

It was only by broadening the discussion well beyond discounts and the purview of sales that they learned that other stakeholders within their suppliers had much more value to contribute. The vast majority of negotiators take the fundamental scope of a deal as a given. They may consider a limited set of choices—for instance, shorter- versus longer-term deals—but by and large their tactics are guided by a comparison between their BATNA and how close to some preferred outcome they think they can get.

Jeff Minton. Consider a health care firm that was seeking to renegotiate the terms of a major supply contract with a pharmaceutical company. The health care firm needed much more manufacturing capacity from a major plant owned and operated by the pharma company. The pharma company was loath to offer more capacity than the original contract specified, because it anticipated needing to make more of its own products at the same facility in the future.

However, when the scope of the negotiation was increased beyond altering the existing agreement, and both sides stepped back to reevaluate and share information on their respective global operations including plans for building new plants and growth objectives and associated capital investment needs , they were able to reach an agreement. The new contract rebalanced production and supply across multiple plants and delivered substantially more value to both parties.

Or take the financial services firm that was seeking to renew a contract with a company that owned proprietary data assets and was demanding a hefty price increase. An analysis of the annual report and earnings calls of the data company showed that it was focused on increasing revenue from other products and services—ones the financial services firm was purchasing from several other suppliers.

When confronted with opposing parties who seem to have more leverage, the natural tendency is to look for ways to weaken that leverage—to find walkaway alternatives and issue threats.

Such attempts often come up short or undermine deal success. The lesson here is to offer the other side new opportunities instead of focusing just on the needs that only it can meet for you. Think about how precedents a deal sets may create anchors in future negotiations.

Sometimes the right strategy is even to reduce the scope of the deal. No other distributor had comparable coverage in the region. After considering expanding the scope of the deal, the device maker instead opted to narrow it. It identified alternative distribution channels for some of its products in some segments of the regional market.

Bringing its products to market with a portfolio of smaller distributors would have been prohibitively complex and would have increased costs and reduced revenue. But once the device maker had defined a strategy to narrow the scope of the deal with the incumbent distributor, the negotiations moved to a considerably more even footing.

In fact, the distributor stopped making demands and threats and became willing to engage in a collaborative process. The two sides jointly evaluated where it was especially costly for the distributor to service the device maker business the distributor was actually happy to give up and where it would have been most difficult for the device maker to move to alternative distributors.

The narrower scope made the distributor willing to reduce some of its requirements meant to cover the costs of distributing low-margin products in expensive-to-service segments. For the device maker, the cost of agreeing to much of what the distributor was requesting dropped significantly. All too often dealmakers conflate negotiation power with a strong BATNA and the concomitant ability to hurt the other party. Such a mindset leads to pressure tactics.

It also makes negotiators who lack attractive walkaway alternatives conclude that they have no power, which in turn causes miscalculations and unwarranted concessions. Moreover, their sense of powerlessness can breed fear and resentment—negative emotions that hamper creative thinking about potential avenues to an optimal outcome.

The solution is think beyond walkaway alternatives and consider multiple sources of not only coercive leverage but also positive leverage. By positive leverage, we mean things negotiators can uniquely offer to make the other side desire a deal rather than fear the absence of one. Many technology firms have IP teams that seek to persuade consumer electronics companies such as Apple, Sony, and LG to pay for licenses. The negotiation of IP rights in this market is dauntingly complex.

Patent infringement is pervasive—though often unintentional. Legitimate efforts to collect royalties are vastly complicated by the well-known phenomenon of patent trolls. The IP licensing team at one well-known tech firm had a strong claims portfolio and compelling market data about the rights that other companies were infringing. The team tried to be creative and flexible, offering to blend payments for past infringement, ongoing royalties, and cross-licenses.

And so they did. Those opportunities made it worthwhile for the electronics companies to engage in meaningful negotiations with the team. Though this strategy required a lot of time and effort, the payoff was worth it. Most negotiators focus exclusively on maximizing the value of the deal at hand.

In doing so, they often undermine the success of future negotiations—their own and those of their colleagues. A strategic approach requires considering success beyond the current deal and, in particular, how the precedents it sets will create anchors and shape dynamics in future negotiations.

After all, except with pure sales and purchases of assets, most high-stakes business negotiations are repeat transactions undertaken in the context of long-term relationships. Analyzing links across multiple negotiations can unearth hidden forms of leverage. Consider the case of a global semiconductor company that felt continually squeezed by unreasonable price increases from OEM component suppliers.

A major problem was that negotiations over initial licensing or codevelopment of technology for new products were conducted by one group, whereas subsequent contract negotiations with the same suppliers, but occurring years later were handled by another group, with relatively little coordination between the two.

Meanwhile, negotiations with those suppliers and other third parties for maintenance and repair services and spare parts were handled by yet another group, and all three kinds of negotiations occurred on different timetables. One key to negotiation strategy is putting yourself in the shoes of your counterparts and truly understanding their motivations and likely actions. Of course, most negotiation planning involves analyzing the goals and likely actions of the other side.

In our experience, however, failures of imagination and inevitable human bias tend to limit and distort such efforts. Especially when the stakes are high and power imbalances create fear and resentment, strong emotions stunt thinking and warp rational analysis.

In some cases, simulations might be done as part of strategy development and negotiation planning. By looking at these separate but related negotiations holistically, the semiconductor company was able to alter the power dynamics.

They also shared data about maintenance and repair revenue streams and their growing ability to redirect such business to partners who demonstrated reasonableness and good faith. Now the benefits of increased cooperation and the potential loss of opportunities were tangible to suppliers—and hence persuasive.

Many people seek to speed up or slow down negotiations to put pressure on the other side and extract concessions. But pressure tactics often backfire. Careful consideration of how the other side is likely to respond should guide when to accelerate, slow down, or pause a negotiation.

Several years ago a small technology company was in negotiations to renew a critical deal with an internet behemoth. The small company depended a lot on the revenue the deal produced, and the thought of going without it for even a short time was frightening.

That turned out to be a major miscalculation. That time was well spent. In the end the contract with the behemoth was renewed for a nine-figure value that represented a nearly five-fold increase over the expiring deal. While the passage of time did make the small firm nervous about its dwindling cash reserves, it also gave it the opportunity to substantially alter the landscape in which the negotiation took place. Choreographing the sequence in which you address issues or engage different players is also important.

Resolving some issues may reset the stakes or reframe the remainder of the negotiation. A good example of strategically rethinking sequence in a negotiation comes from the oil and gas industry.

A few years later that second multinational indeed triggered its option and sought to open negotiations on the rate of interest. Instead of discussing how many points above or below LIBOR would be appropriate, the multinational decided to go back to the oil company and negotiate what further terms should apply to the revised deal.

Types of Bargaining Strategies in Negotiation and Conflict

This paper tests the fit of three models of integrative and distributive bargaining using eight hostage negotiation transcripts. Putnam argues that integrative and distributive bargaining processes are best understood through the interdependence model that emphasizes the dynamic nature in which bargainers make transitions between integrative and distributive positions. The separate and the stage models predict more stable patterns of distributive and integrative behavior. To determine the goodness of fit for these three models, this paper compares integrative and distributive strategy use among actual and simulated hostage negotiations. These hostage negotiations, obtained from the FBI and a Midwest state police organization, were transcribed and coded using a scheme designed to tap cooperative and competitive strategy use of both hostage takers and police negotiators. The data reveal that the interdependence model best fits the simulated cases. This fit is evidenced by the major shifts between integrative and distributive orientations displayed by hostage takers and police negotiators.

Understand the basic elements of an integrative negotiation situation. Explore the strategy and tactics of integrative negotiation. Consider the key factors that facilitate successful integrative negotiation. Gain an understanding of why successful integrative negotiations are often difficult to achieve. Introduction Even well-intentioned negotiators can make the following three mistakes: failing to negotiate when they should, negotiating when they should not, or negotiating when they should but choosing an inappropriate strategy.

A Review of Distributive and Integrative Strategies in the Negotiation Process

Analysis of negotiation strategies between buyers and sellers: an applied study on crop protection products distribution. This paper aims to analyze how buyers and sellers use trading strategies considering the relationship between them and the transaction sequence. It also focuses on assessing what are the reasons associated with the use of each strategy. For this, we used a multiple case study method, analyzing the negotiations between distributors of inputs and rural producers. We studied 13 cases with a dyad approach buyer's and seller's view on the same trading.

In many workplaces, two individuals or groups may need to find a solution they can both agree upon. Integrative negotiation can be helpful in this situation, as the parties can work together to find a mutually beneficial solution. Understanding this negotiation technique may help you become a more collaborative team member. In this article, we discuss what integrative negotiation is, show how to use it in the workplace and provide examples of integrative negotiation using a few different techniques.

AN EMPIRICAL EXAMINATION OF THREE MODELS OF INTEGRATIVE AND DISTRIBUTIVE BARGAINING

Distributive bargaining is defined as negotiations that seek to divide up a fixed amount of resources, a win-lose situation. Its most identifying feature is that it operates under zero-sum conditions, i.

AN EMPIRICAL EXAMINATION OF THREE MODELS OF INTEGRATIVE AND DISTRIBUTIVE BARGAINING

Negotiation is a dialogue between two or more people or parties intended to reach a beneficial outcome over one or more issues where a conflict exists with respect to at least one of these issues. Negotiation is an interaction and process between entities who aspire to agree on matters of mutual interest , while optimizing their individual utilities. Negotiators need to understand the negotiation process and other negotiators to increase their chances to close deals, avoid conflicts, establishing relationship with other parties and gain profit [1] and maximize mutual gains. It is aimed to resolve points of difference, to gain advantage for an individual or collective , or to craft outcomes to satisfy various interests. Distributive negotiations, or compromise, is conducted by putting forward a position and making concessions to achieve an agreement. The degree to which the negotiating parties trust each other to implement the negotiated solution is a major factor in determining whether negotiations are successful.

EDU МЕНЯЮЩИЙСЯ ОТКРЫТЫЙ ТЕКСТ ДЕЙСТВУЕТ. ВСЯ ХИТРОСТЬ В МЕНЯЮЩЕЙСЯ ПОСЛЕДОВАТЕЛЬНОСТИ. В это трудно было поверить, но она видела эти строки своими глазами. Электронная почта от Энсея Танкадо, адресованная Грегу Хейлу. Они работали. Сьюзан буквально онемела, когда эта страшная правда дошла до ее сознания.

COMMENT 5

  • While that approach may work in a lot of instances, complex deals demand a much more strategic approach. Katie T. - 04.04.2021 at 15:10
  • Here are four integrative negotiation strategies for value creation that all negotiators should add to their toolkit. Zacharie C. - 10.04.2021 at 10:58
  • Why Integrative Negotiation? Distributive Bargaining (Dominating or Obliging) is a more habitual and well-known method, so a lot of executives use it. Cuasimodo M. - 11.04.2021 at 14:01
  • Arriba 6th edition pdf reporte de evauacion se cundaria pdf Casdoa P. - 12.04.2021 at 17:37
  • an integrative bargaining task. Basic to our research is our conceptualization of tactics and strategies. We define strategies as middle range goals that organize. Marina W. - 13.04.2021 at 16:57

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