Preparation for Negotiation n The Four Phases of

Preparation for Negotiation n The Four Phases of negotiation l Phase One: how to prepare l Phase Two: how to debate l Phase Three: how to propose l Phase Four: how to bargain Slide 1

Epilogue Slide 2

Trading potatoes… Slide 3

Preparation… n Preparation does not eliminate surprises, nor does it cause both parties to stick to the agenda, or even the topic under discussion. l What is does is allow you to anticipate likely stances and demands, and to focus your attention on the potential for trade. l If you are thinking about the potential for trade you are thinking about the potential solution, and this alone increases your effectiveness as a negotiator Slide 4

What do we need to do first? n Textbook example – Royale Multinational Components l Plant is undergoing a four year total quality improvement l Special and very expensive machines are used to produce computer chips l Uptime – time available for production has fallen below 70 %, while 80 -90 % was expected l Jack Duval has asked the manufacturer to visit the plant and discuss how they can ensure a permanent improvement in the uptime performance Slide 5

Exercise Slide 6

Answers n “In God we trust; all others must use data” n “It does not really matter what it is that you are planning to negotiate about, if you do not have data you cannot do much but hope for the best n “Without data we are negotiating about impressions, feelings and assumptions, non of which provide a firm basis for effective decision making Slide 7

Uptime rates for five machines Slide 8

What are we negotiating about? n Kennedy writes: l The negotiators are guided by their wants by identifying their interests and from these interests selecting the issues that will achieve those interests, and for all issues they would need to decide their positions, or preferably a range of positions that they would like to achieve Slide 9

Royale Multinational Components n Interest arise from the data – the profitability of chip making is enhanced significantly when high uptime rates are achieved (their interest) n Royale wants to increase uptime (the issue) n The degree to which they want to increase the uptime is their position Slide 10

Interests and wants n Interests are found by asking “why” you want something to happen l Why do I want this problem solved? l Why do I want the problem solved in this or that particular way? l Why is it necessary to adopt this or that position? l Fear, hopes and concerns Slide 11

Examples of interests n Raising living standard n Becoming more profitable n Reduce crime in order to feel safer n Satisfying your customers Slide 12

Interests and wants n Next question – what issues and positions will deliver our interests? l Issues and positions – anything over which you can trade. Anything a negotiator can trade is a tradable l Tradables unlocks deadlocks l Tradeables have different values for each negotiator Slide 13

Mustafa wants to buy a PC Slide 14

Tradables for Mustafa Slide 15

Royale Multinational Components n Suppose that the Royale project team concludes that the following elements would satisfy their wants An agreed minimum acceptable uptime of the machines greater than the current average performance l Some form of self financing incentive scheme for the manufacturer if these minimum uptime rates were achieved l Some range of stiff penalties on the manufacturer if he fails to reach or sustain the minimum acceptable uptimes l Slide 16

Negotiable tradables Slide 17

What is most important n After the tradables have been identified we must decide on their priorities – not everything contributes to the overall objective to the same extent n People have different wants and hence trade is possible n Each tradable is assigned as being of l High, Medium or Low importance Slide 18

Tradables prioritised Slide 19

Tradables prioritised Slide 20

What does the manufacturer want? Slide 21

Is there a basis for trade? Slide 22

Comparative valuations n Both place high value on uptime and medium on time of acceptable uptime n Not everything is equally prioritised Slide 23

Can we trade? Slide 24

Negotiable Ranges Slide 25