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MGMT 3140

NEGOTIATION
Prof Stephen W. Nason PhD Adjunct Associate Professor of Management

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SESSION 1

NEGOTIATION INTRODUCTION

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Who Likes Negotiating?


Why is Negotiation Important? Negotiation is something that everyone does, almost every day

Most People are Bad Negotiators


CLASS NOTES: Effective Negotiation
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Most People are BAD Negotiators!


Investigations show that people do not negotiate well

Less than 4 percent of managers reach win-win outcomes when put to the
test (Nadler, Thompson, & Van Boven, 2003)

Even when negotiators are privately in perfect agreement, they fail to realize it 50 percent of the time (Thompson & Hrebec, 1996)

CLASS NOTES: Effective Negotiation


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Why are people such BAD Negotiators?

Faulty Feedback
After most negotiations people never know what would have happened if
negotiated differently Never know what others might have achieved in the same situation

Satisficing and Excessive Optimizing


Satisficing- accepting a satisfactory result
Excessive Optimizing by refusing to accept anything but the best result you end up with nothing

Self-Reinforcing Incompetence
Most negotiate poorly, and with experience, they become even better at negotiating poorly

CLASS NOTES: Effective Negotiation


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Common Negotiation Errors:

Leaving money on the table (lose-lose negotiation)

Settling for too little (the winners curse)


Walking away from the table Settling for terms worse than your alternative (the agreement bias)

CLASS NOTES: Effective Negotiation


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Common Negotiation Myths:

Myth 1: Negotiations are fixed-sum

Myth 2: You need to be tough


Myth 3: Good negotiators are born Myth 4: Experience is a great teacher Myth 5: Good negotiators take risks Myth 6: Good negotiators rely on intuition

CLASS NOTES: Effective Negotiation


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What is the best way to develop negotiation skills:

Experience

Listen to the wisdom of your professor

Neither work well


Experience with

Comparison of outcomes Comparison of approaches Experimentation Discussion CLASS NOTES: Effective Negotiation
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Course Learning Objectives

Improve your ability to negotiate successfully


Science (Mind)
Heart (Emotions) Art of Negotiation

General strategy for successful negotiation


Enlightened model of negotiation

CLASS NOTES: Effective Negotiation


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Negotiation Outline: Where are We Going?


Negotiation
Fundamentals Nature of Negotiation Distributive Negotiations Integrative Negotiations Strategy & Tactics Disputes Coalitions & Multiple Parties Processes Perception & Biases Contexts Salary Negotiations Ultimatums International Negotiations Groups Remedies Difficult Negotiations Video Analysis

CLASS NOTES: Effective Negotiation


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Negotiation Fundamentals Outline: Where are We Going Today?


Negotiation Fundamentals
The Negotiation Process

Course outline

Two or more parties


Interdependence Mutual Adjustment Perception and Biases

Sat. Structure Structure


Grading

Syllabus

CLASS NOTES: Effective Negotiation


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Negotiations: Definition
When two or more parties have different preferences but need to reach a

joint decision they enter into a negotiation

CLASS NOTES: Effective Negotiation


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Negotiation Research from:

Psychology

Economics
Law Political science Communications Sociology Anthropology Labor relations CLASS NOTES: Effective Negotiation
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Some Characteristics of the Negotiating Process:

Two or more parties

Parties have different or competing interests


Both parties think they can influence the other Interdependence Mutual Adjustment Success involves managing psychological and perceptual as well as obvious aspects of negotiating

CLASS NOTES: Effective Negotiation


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Interdependence
Both Parties can Benefit from Working Together Somehow

Distributive negotiations (Zero Sum):


Goals are completely conflicting The more one wins the more the other looses

Integrative (Win-Win):
Both parties can achieve their goals together Together both parties can create something that neither could create on its own

CLASS NOTES: Effective Negotiation


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Mutual Adjustment
Your success depends on the actions of the other party in the negotiation

Dilemma of honesty:
How truthful should you be?

Dilemma of trust: How much do you believe the other party?

Both Parties Will Need to Adjust Their Behavior in Response to the Others Actions
CLASS NOTES: Effective Negotiation
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Psychological Aspects of Negotiation

Need to look good Esteem Fear Desire to win

Culture Values Expectations Power

Emotions

Control

CLASS NOTES: Effective Negotiation


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Perception vs. Truth

Reality is less important than peoples perception of reality

CLASS NOTES: Effective Negotiation


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Negotiation Syllabus

Must participate in negotiations

If miss negotiations will miss the learning


Do not come to class late!!!! Come at the right time! Come prepared Try your best

Must openly discuss what worked and did not work in class Must accept slides after class, not before CLASS NOTES: Effective Negotiation
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MGMT 235: Negotiations


Course Web Page: http://lmes2.ust.hk

Office Hours: By appointment

In general Tues & Thur 4:30 6:00 is a good time

Course Negotiation Materials

Handed out each week

You must pay HK $275


If you do not pay, you do not pass CLASS NOTES: Effective Negotiation
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Negotiation Grading
Exam 1 Exam 2 Negotiation Results Negotiation Quizzes Participation Discussion Attendance 35% 35% 5% 5% 10% 10%

100%

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Name: Student ID: E-mail: Major: Where are you from:

Something interesting about yourself

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Stephen Nasons

Personal Background

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