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8/6/2019 Negotiation Mistakes
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Negotiation MistakesSrinivas Biranthbail
Roll No 003
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Introduction
During negotiations, six common mistakes candistract you from your real purpose: gettingthe other guy to choose what you want forhis own reasons.Avoid negotiation pitfalls by mastering the artof letting the other guy have your way everyone will win.
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Six common mistakes
Neglecting the other sides problem.Letting price bulldoze other interests.
Letting positions drive out interests.Searching too hard for common ground.Neglecting BATNAs ( best alternative to a
negotiated agreement )Failing to correct for skewed vision.
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Neglecting the other sides problem.
If you don t understand the deal from theother side s perspective, you cant solve hisproblem or yours.
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Example
A technology company that created a cheap,accurate way of detecting gas tank leakscouldn t sell its product. Why? EP A regulationspermitted leaks of upto 5,600 liters, while thisnew technology detected 237ml leaks. Fearingthe device would spawn regulatory trouble,
potential customers said, No deal!
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Letting price bulldoze other interests.
Most deals involve interests besides price.A positive working relationship, crucial in long
term deals.
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Letting price bulldoze other interests.
The social contract, or spirit of the deal ,including goodwill and shared expectations.
The deal making process: personal, respectful,and fair to both sidesP rice centric tactics leave these potential jointgains unrealized.
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Letting positions drive out interests.
Incompatible positions may mask compatibleinterests. Your gain isn t necessarily your
opponents loss.
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Example
Environmentalists and farmers opposed apower company s proposed dam. Yetcompatible interests underlay these seeminglyirreconcilable positions: Farmers wantedwater flow; environmentalists, wildlifeprotection; the power company a greener
image. By agreeing to a smaller dam, water flow guarantees, and habitat conservation,everyone won.
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Example
An acquirer and entrepreneur disagree on theentrepreneurial company s likely future. Tosatisfy their differing interests, the buyeragrees to pay a fixed amount now andcontingent amount later, based on futureperformance. Both find the deal more
attractive than walking away.
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Neglecting BATNAs
BATNA s ( best alternative to a negotiatedagreement ) represent your actions if theproposed deal weren t possible; e.g. walkaway, approach another buyer. Assessing yourown and your partner s BATNA revealssurprising possibilities.
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Example
A company hoping to sell a struggling divisionfor somewhat more than its $7 million valuehad two fiercely competitive bidders.Speculating each might pay an inflated priceto trump the other, the seller ensured eachknew it rival was looking. The division s selling
price? $45 million.
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Failing to correct for skewed vision
Role bias over committing to your own pointof view and interpreting information in self serving ways. A plaintiff believes he has a 70%chance of winning his case, while the defenseputs the odds at 50%. Result? Unlikelihood of out of court settlement.
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Failing to correct for skewed vision
P atrician perceptions painting your side withpositive qualities, while vilifying your
opponent. Self fulfilling prophecies mayresult.Counteract these biases with role plays of the opposition s interests.
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Videos
Links1) Negotiation Skills
2) Short movie clip
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Q& A
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Source : http://www.articlealley.com/article_1884619_15.html