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Negotiation as a business skill
James Thomas
NegotiationDefinition
A discussion or process of treaty with another (or others) aimed at reaching an agreement
Oxford English Dictionary
Why negotiate if the terms are acceptable?
Psychology
Process
Negotiation
How do you want the other party to feel after the negotiation?
What is fairness?
Make as much money as you can
Player A proposes the split of £100. Minimum offer to other party must be at least £1
Player B accepts or rejects offer by responding ACCEPT or REJECT
Possible outcomesACCEPT - both players keep their respective sums.REJECT - neither party makes any money
Note: only one bid is allowed. There shall be no re-negotiation.
Humans have inbuilt sense of fairness Thirsty people would turn their nose up at a glass of water if they thought the amount they were being offered was too little, a study has shown.
Dr Nick Wright of the Wellcome Trust Centre for Neuroimaging at University College London said: 'These findings show that humans, unlike even our closest relatives chimpanzees, reject an unfair offer of a primary reward like food or water ' Photo: Alamy
5 common mistakes of negotiators
• Talking too much• Soft language• Justifying • Trying to win• Splitting the difference
The balance of power
The Bargaining Zone
£10
BUYER
SELLER
Buyer’s walkaway £40
Seller’s walkaway £30
Bargaining Zone
Opening Position £10
Opening Position £60
Open ambitiously
Bargaining PreferencesCo
ntro
l
Co-operation
Competitor Collaborator
Compromiser
Avoider Accommodator
Ref: Thomas-Kilmann conflict styles
Gender differences (Ref: Eckerl; De Oliveira; Grossman), Negotiation Journal, Harvard Law School, 2008)
• Females more egalitarian than men and tended to ask for less• Females were more likely to reach agreement• Stereotypes appeared to exist in this particular exercise• Helps or hinders negotiation outcomes depending on the
outcomes
