Negotiation A process in which 2 or more parties exchange goodsservices and

Negotiation a process in which 2 or more parties

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Negotiation = A process in which 2 or more parties exchange goods/services and attempt to agree on the exchange rate for them (AKA “ Bargaining ”). o 2 General Approaches to Negotiation : 1) Distributive Bargaining = Negotiation that seeks to divide up a fixed amount of resources; a win-lose situation. The identifying feature is that it operates under zero-sum conditions – that is, any gain I make is at your expense, and vice versa. Fixed Pie = The belief that there is only a set amount of goods or services to be divvied up between the parties. When you are engaged in distributive bargaining, make the first offer, and make it an aggressive one (shows power). 2) Integrative Bargaining = Negotiation that seeks one or more settlements that can create a win-win solution. Builds long-term relationships. The Negotiation Process : 5 steps. o 1) Preparation and Planning = Gather info Determine your and the other side’s BATNA (Best Alternative To a Negotiated Agreement) (this determines your lowest value acceptable for a negotiated agreement). o 2) Definition of Ground Rules = Parties will exchange their initial proposals/demands. Parties A and B represent 2 negotiators. Target Point = Defines what he would like to achieve. Resistance Point = Marks the lowest acceptable outcome – the point beyond which the party would break off negotiations rather than accept a less favorable settlement. Aspiration Range = Area between these 2 points. Settlement Range = Where there is overlap between A’s and B’s aspiration ranges.
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o 3) Clarification and Justification = You and the other party will explain, amplify, clarify, bolster, and justify your original demands. o 4) Bargaining and Problem Solving = The essence of the negotiation process – where both parties need to make concessions. o 5) Closure and Implementation = Formalizing your agreement and developing procedures necessary for implementing and monitoring it. Effectiveness of individuals to negotiate influenced by 4 Factors . o 1) Personality = Personality and negotiation are weakly related. Best : Competitive but empathetic personality. Worst : Gentle but empathetic personality. o 2) Mood/Emotions = Related to negotiation depending on emotion and context. Only show anger when you have power greater than or equal to your counterpart. Negative emotions matter most to negotiations. o 3) Culture = People negotiate better within same culture. o 4) Gender = Women hold a higher value for compassion and altruism (relationship-oriented), while men tend to place a higher value on status, power, and recognition (economically-oriented) Mediator = A neutral 3 rd party who facilitates a negotiated solution by using reasoning, persuasion, and suggestions for alternatives. Arbitrator = A 3 rd party to a negotiation who has the authority to dictate an agreement.
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