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MODULE 1
FOCUSES ON THE FIRST STEP IN THE NEGOTIATION PROCESSPLANNING FOR A
NEGOTIATION.
AFTER COMPLETING THIS MODULE, YOU WILL BE ABLE TO:
(1) Decide if a negotiation is position-based or interest-based
(2) Decide if a negotiation is dispute-resolution or deal-making
(3) Complete a negotiation analysis, including: setting a reservation price and stretch goal, identifying
alternatives to a deal, and finding the zone of potential agreement
(4) Use a decision tree to determine your BATNA
(5) Conduct cross-cultural negotiations
(6) Resolve ethical issues in negotiations
(7) Decide if you should use an agent in a negotiation
ASSESSING YOUR NEGOTIATING STYLE
To assess your negotiation style while preparing for negotiations, complete the following three steps:
1. Complete the attachment to assess and understand your negotiating style.
2. Use the assessment to assess the style of the other side. This is especially important in crosscultural negotiations. Remember that there can be considerable variation in negotiation style within
a culture.
3. Do a gap analysis. Locate the major gaps between your style and the style of the other side. Focus
on these gaps when preparing for the negotiation.
Additional tip: After completing the gap analysis, try a role reversal exercise where you use the style of
the other side. This will enable you to better understand the other sides style.
Instructions: Listed below are ten important traits of a persons negotiating style and approach. Each
trait demonstrates a wide range of variations, which can be organized along a continuum, as has been
done below. With respect to each trait, indicate
with an X where your own negotiating style and approach in business negotiation falls along each
continuum:
1. Goal: What is your goal in business negotiations: a binding contract or the creation of a relationship?
2. Attitudes: What is your attitude toward negotiation: win/lose or win/win?
3. Personal Styles: During negotiations, is your personal style informal or formal?
4. Communications: Is your communication style in negotiation direct (for instance, clear and definite
proposals and answers) or indirect (for instance, vague, evasive answers)?
5. Time Sensitivity: In the negotiation process, is your sensitivity to time high (for instance, you want to
make a deal quickly) or low (you negotiate slowly)?
6. Emotionalism: During negotiations, is your emotionalism high (that is, you have a tendency to
display your emotions) or low (you hide your feelings)?
7. Agreement Form: Do you prefer agreements that are specific (that is, detailed) or general?
8.Agreement Building: Do you view negotiation as bottom up (reach agreement on details first) or top
down (begin with agreement on general principle)?
9. Team Organization: As a member of a negotiating team, do you prefer having one leader who has
authority to make a decision or decision making by consensus?
10. Risk Taking: Is your tendency to take risks during negotiations high (for instance, your opening offer
to sell is extremely high) or low?
CHECKLIST OF ETHICAL STANDARDS AND GUIDELINES
Perhaps more than any other human activity, negotiations raise challenging ethical dilemmas. Some
ethical standards are required by law; others are voluntary. Select one or more of the voluntary
standards or guidelines before you begin a negotiation.
- Required by Law:
1. No Fraud. (Do not lie.)
2. Uphold your fiduciary duty. (If there is a fiduciary relationship with the other side, you owe the
highest duty of trust and loyalty.)
3. Dont act in an unconscionable manner. (When you are in a dominant position of power, try to
reach an agreement that is fair to the other side.)
MODULE 2
FOCUSES ON TWO ESPECIALLY IMPORTANT TOOLS IN NEGOTIATION: POWER AND
PSYCHOLOGICAL TOOLS
The psychological tools are also traps that you want to avoid when they are used by the other side.
Some of these tools are useful beyond negotiation when making leadership decisions and financial
decisions.
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This checklist of psychological tools you can use during future negotiations (remember that these tools
can become traps when the other side uses them):
Dont assume that you are negotiating over a fixed pie (and avoid reactive devaluation).
Use anchoring in developing a first offer strategy.
Avoid overconfidence when making negotiation decisions.
Frame the other sides choices to your advantage.
Look beyond easily available information.
Look at all negotiations from the other sides perspective.
Encourage reciprocity from the other side.
Use the contrast principle.
Dont lose sight of the big picturethe gorilla in the room.
MODULE 3
FOCUSES ON THE NEGOTIATION THAT TAKES PLACE IN A BUSINESS DEAL AFTER
REACHING AN INITIAL AGREEMENT THE NEGOTIATION TO CREATE A BINDING
CONTRACT.
AFTER COMPLETING THIS MODULE, YOU WILL BE ABLE TO:
(1) Decide if you need a lawyer, or can act as your own lawyer*, for contract creation
(2) Use a checklist of key contract issues in negotiations
(3) Handle contract negotiations, which are often longer and more adversarial than the initial
negotiation to create an agreement
*The legal principles are generalizations and there might be variations within certain countries. The
videos should not be construed as providing legal advice.
CONTRACT LAW CHECKLIST
Negotiations take place within the shadow of the law. Even when hiring an attorney to review your
final contract, you should use the following checklist during negotiations to ensure that you your
agreement will be enforceable.
1. Are you using a preliminary document? (If you are using a preliminary documentoften called a
letter of intent, memorandum of understanding or agreement in principlestate in the
document that it is for negotiating purposes only and not a final contract.)
2. Have you reached a final agreement? (After the other side makes an offer, be careful when
adding terms to your acceptance. A counteroffer can terminate their offer.)
3. Have both sides given up something? (This is the consideration requirement. Be especially
careful to meet this requirement when you are amending a contract.)
4. Is the agreement legal? (Remember that legality requirements extend beyond violation of
criminal law and can include violations of public policy.)
5. Is the agreement in writing? (Even when not required by law, it is sound practice to put all your
agreementsincluding contract modificationsin writing.)
6. Does your written contract include all the terms that you negotiated? (Although the law varies
from country to country, there is a risk that courts will not enforce agreements that are not part
of the written contract.)
7. Are there any implied terms that are not part of the written contract? (In addition to implied
terms, courts might also review your courts might look at your past dealings with the other side
when interpreting the contract.)
MODULE 4
THIS MODULE FOCUSES ON PERFORMING AND EVALUATING YOUR AGREEMENT.
If both parties perform as expected, there is no problem. But if they fail to perform, the dispute
resolution processes that we cover in this module is important - especially mediation and arbitration.
5. Business and career goals. Do you have any plans to start a business or move to a new job?
6. Relationship goals. Do you anticipate any changes in your personal relationships?
7. Service goals. Any plans to increase your community service?