Negotiation Skills MRC 4073

Assignment # 1

Submitted to: Tan Sri Prof. Dr. Muhammad Zulkifli B.

Submitted By: Aamir Iqbal MR091168

Due Date: 27-02-2011

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1. Mythical fixed pie mind-set In the negotiation there are two most occurring situations, Win-Lose situation and WinWin situation. These two situation are clear by their names, as in win-lose situation one party will win and the next will lose the negotiation, while in other situation of win-win situation, both parties will get some.

Now when we take a look at mythical fixed pie mind set, it is a situation in which one party can paralyze the other party into a fixed mindset, and can fix the hosts vision on one point that the party cannot see anything else other than what is fixed on the negotiation table. This kind of negotiation tactic is worst carried out in negotiation progress, because in this way of negotiation the pie of resources is fixed. Most of the mythical fixed pie mind-sets lead toward win-lose situation. But if the negotiator who like to make it beneficial for both of the parties, they can grow the pie of values and through mutual beneficial tradeoffs among the issues, then it can change the situation in a win-win position. Due to this kind of behavior of mythical fixed pie mind set, many of the negotiation become unsuccessful.

2. Distribution negotiation

Distribution negotiation is a kind of negotiation in which the focus of the parties should be one. In other words we can say that, this is the term which can describe the meaning of a deal which is negotiated on one issue, price or a conflict in which how much the party would pay and how much they can get.

A distributive negotiation, normally involve the people who never ever had any experience of negotiation or who are not going again into this negotiation process, simple everyday examples, in which people are involved in buying house, car or anything. These kind of simple purchasing products are the simplest examples where this distributed negotiation is frequently employed. Remember, even often friends or business associates can have a hard negotiation just like any stranger.

In distributive negotiation parties set a target of a fix pie of resources and would negotiate how to achieve that pie or cut of the pie. For this I want to give an example, suppose a buyer wants to buy something from a shopping mall, and he/she will look the opportunity for bargaining. Suppose he/she want to buy a pair of sun glasses, while they find sun glasses of their style even they need to make their negotiation plan. When they got the offer for the product of $30, make the mind to make offer for $15 and make a stand on that. After that seller will give a offer less then original offer, suppose he/she give offer of $25, the buyer again make a new offer of $20, and finally both agreed and sale has been performed.

3. Integrative negotiation

The concept of integrative negotiation is to involve more than two parties into the negotiation process. Theoretically, this comprises of many co operations or a joining different forces for achieving something together. Mostly it is used for forming of a relationship or involving a higher degree of trust. Both of the involved parties wish to walk out with the hope that they achieved something which creates value for them. Preferably it is a dual process.

In the real world, the results mostly would not in favor of one party, because it is not so possible that both parties come with a strong strength when they begin talks. Nonetheless, but when the both parties take cooperative approach for problem solving, and then both parties can gain advantage.

4. The impact of framing on negotiation

Basically framing is a process and organize information, which can be lead to the issues which can be used to help decision making or provide the prospective of problem. This is commonly used to understand the importance of the problems or fact to determine the possible result. People mostly use framing for developing rationale that why they acquire any kind of service or product.

There are some effects that framing have on negotiation. 1. A frame presents a point of view by managing the position of the observer in relation to an issue. 2. A frame helps observer to make focus on a particular feature of any problem or issue. 3. A frame controls succeeding decision in that it organized and modifies information to fit into it. 4. Framing will let the negotiator consider the all available possible gains and losses and accessible alternatives for any problem or issue.

5. BATNA

BATNA is term which is coined by Roger Fisher and William Ury in their bestseller, Getting to Yes: negating without giving in. BATNA is stands for Best Alternative to a negotiated agreement. BATNAs are very much critical for negotiation, because with your alternatives you are unable to make decision to accept any agreement. BATNA is essential for both of the parties which can protect to prevent to accept the terms which are too unfavorable and reject the term which would be favorable for both parties.

In more simple words, if the suggested agreement is better than your BATNA then accept otherwise, if agreement is less than your BATNA then you should reopen the negotiation. If you cannot improve the agreement then you should consider you alternative and withdraw from negotiations.

6. ZOPA

ZOPA stands for Zone of Possible Agreement. This is actually a range or area both parties can be satisfied in the process of negotiation, in other term ZOPA can be determined as Contracting Zone. ZOPA is essentially range between the bottom line or base line of the each party and it can overlap in the low or high range which each party wants to pay or thinks that is acceptable in negotiation.

7. Bargaining Range

Bargaining is a way to reach an agreement through some give and take, more often it is called negotiation. Bargaining range is where in single issue negotiation, the overlap range of solutions where both parties like to make the deal or no deal is called bargaining range.

For example party A has a house to sell in RM 1,500,000 but party is willing to sale at minimum prize of RM 950,000, where party B want to start their offer from 900,000 but they are willing to buy up to RM 1,000,000. This is a clear picture of a bargaining range, where it shows the range of the buyer and seller.

8. Prisoners dilemma

Basically prisoners dilemma is a situation where parties get locked in such a competition where they pit self interest against collective interest. These arguments want to show that, individuals are more motivated to their own interest rather than a collective goal.

9. Social dilemma

In such Circumstances where, a partys quest of self-interest clashes with the common good of a communal to which the party belongs can be described as social dilemma. In these mutually dependent situations, inducements guide individuals to obtain from the common set of resources, but the extra that individuals get, the more quickly the resource vanishes. The

common concern is to assist to preserve the resource. However, of course the dilemma creates cooperation a negotiation clash.

10. Winners curse

The winners curse is when a hopeful negotiator sets very low targets of their objectives when negotiation is in process, and that negotiation will be quickly accepted and turned into agreement. In simple words we can say that, the winners curse is an offer which is immediately accepted by the other party. This shows that either the offer is accepted, but the person who was making the deal looses to get a good deal as good as it was possible.

11. Trade off

Instinctively, a trade-off is where one party lowers its value on some negotiation problems and at the same time demands more on others while upholding a constant on the whole contract utility. This sequentially, should make agreement further likely and enhance the competence of the contracts.

We focus on trade-offs since they are an important characteristic of bargaining behavior and cannot be accomplished with any rational degree of knowledge about an opponent. In building a trade-off a mediator admits on one concern and demands more on an additional. Generally, the aim is for the mediator to maintain the same utility for itself, but add to the utility of the opponent, therefore building the trade-off more probable to be accepted by the opponent.

12. Win-win situation

Win-win situation is one of the best outcomes in the negotiation, when both parties leave the negotiation thinking that they have achieved something valuable to them. Normally in many negotiations, negotiators focus on one issue (Money), this can lead the negotiation to the winlose situation. Where only one party can gain and other not. So avoiding this problem, parties should need to focus on other issues as well, like time, quality, services etc. furthermore, another factor which can affect this win-win situation is that, negotiators think that other partys goal are same as their goal. By thinking like this, negotiator think that other partys win is their loss. So with this kind of attitude or mindset it is difficult to create a win-win situation.

References:

http://www.negotiations.com/articles/negotiation-types/ http://www.beyondintractability.org/essay/batna/ http://www.beyondintractability.org/essay/ZOPA/ http://hubpages.com/hub/Negotiation-Skill-Dilemma http://www.negotiations.com/definition/winner-curse/ http://www.negotiatormagazine.com/article224_1.html