R2. Creating value in negotiation - Chapter 2.pdf

This discussion also highiights an important

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This discussion also highIights an important distinction between logrolling and compromise. Many negotiators, including sorne sea- soned dealmakers, believe that negotiation is about compromise. This is not true. Negotiation often entails compromise, but it is not about compromise. For example, when our executive students negotiate Moms.com) they often compromise across all issues. "We started at four runs versus eight runs," someone might argue, "and compro- mised at six runs, which is a win-win outcome that makes both peopIe happy." Yet both parties could have been happier if they had been so- phisticated enough to realize that logrolling to achieve eight runs is better for both parties than compromising to achieve six runs. Our goal here is not simply ro heIp you reach agreements that both parcies
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64 NEGOTlATlON GENIUS consider to be "win-win"; our goal is to help you maximize value. ~hat does that require? As it turns out, even a desire to make the other side happy is not enough ro help maximize value creation. People in close relationships (such as spouses) often negotiate worse outcomes than do people who care less about their counterpart. 3 Why? Because those in close rela- tionships compro mise across the board in order to avoid being per- ceived as greedy or overly self-interested. As a result, they often ignore opportunities for logrolling and, instead, destroy value rather than create it! Excellent partners-in personal and business relationships alike-master the ability to communicate openly and share informa- tion about their real needs and priorities. In doing so, they identify all of the potentially relevant issues and cooperate to create maximum value. And, once you have created the conditions for value maximiza- tion, you can focus on capturing as much of that value for yourself as you deem appropriate given your relationship with the other party and your desire to be fair. Adding issues to the negotiation may be most critical when the deal is centered on one divisive issueand no one is willing to compromise. Por example, in the United States in the early 1800s, when the northern and southern states were embattled over the issue of slavery, they ar- gued over whether states newly admitted to the Union would be "free" states or "slave" states. In 1819, the country was in balance (numerically, certainly not morally), with eleven free and eleven slave states. But when Missouri petitioned to join the Union, a major dispute arose between . pro-slavery and anti-slavery forces. Because giving numerical dominance ro one side on the issue of slavery would upset the balance of power in the U.S. Senate, no deal seemed possibIe. Eventually, a deal was structured-the "Missouri Compromise"-but only after Maine peti- tioned ro join the Union in 1820. The two issues were purposely linked: both sides agreed ro allow Maine ro enter as a free state and for Missouri ro enter without restrictions on the issue of slavery.
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