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The LAO is the least acceptable result you will accept from the negotiation. If the outcome of the negotiation is anything less than your least acceptable outcome, it would be better to terminate the negotiation. Planning is important so the LAO is established before the negotiation. Of course, both the LAO and MSO also reflect primary, secondary short-term, and long-term considerations. An outcome frequently is complex and includes more than one aspect. Since the least acceptable outcome (LAO) and the maximum supportable outcome (MSO) are the guideposts for negotiation, their terms must be clear before you enter any negotiation. It is a critical error (and possibly the most common) for a person to modify either of these two points after the negotiation has begun. Doing so suggests your adversary is influencing you unduly. Keep in mind throughout our discussion of LAO and MSO that the terms are reversed for your adversary in the negotiation. Consider the example of a sales manager for a clothing distributor who is negotiating the price of 100 new suits with the purchasing manager of a clothing store. Table 11-1 demonstrates how the two see the terms differently. It is important to keep this "reversal of terms" in mind when studying the following material. One outcome may be desirable to one person, but undesirable to another. In negotiation, as with other aspects of communication, individual perception and frame of reference are important to remember. Sales ManagerPurchasing ManagerMaximum supportable $15,000 Least acceptable outcome (MSO) outcome(LAO) Least acceptable $11,500 Maximum supportable outcome (LAO) outcome (MSO)TABLE 11-1 Reversed Terms
Finding the LAO and MSO Because the guidelines provided by the least acceptable outcome and the maximum supportable outcome are so critical, give careful thought to finding these outcomes. The LAO is probably easiest to establish. This is the point below which nothing could be accepted because of the potential loss. In effect, when a negotiator commits to this point, loss is unlikely. The LAO is both objective and subjective, a combination of the facts surrounding the situation and the value placed on them. Because it is subjective, no magical formula determines the LAO. Thus, make every effort to separate what is acceptable from what is wanted. In determining exactly what your LAO is, it is worthwhile to develop some kind of decision worksheet to ensure a systematic and objective process. Table 11-2 presents an example for determining the LAO of a job offer. Any format that helps you think through the process is of value. Of course, we would all prefer to be at the other extreme of the range, the MSO. The MSO is the furthest point from the LAO that the negotiator can reasonably justify.