Week 1 - preparation for Week 2

I will sum up the reading given for the week 2 and give an account of the week 1 class negotiations.

SUM UP THE WEEKLY READINGS

* Text : Four keys concepts

The article highlight at first the importance of knowing our BATNA when entering a negotiation.
BATNA: Best Alternative To a Negotiated Agreement. In other words, it's the solution we would chose if we don't come to an agreement. So that's the point at which we would refuse a deal with unfavorable terms. Good to know: most people don't estimate BATNA value well: we have to try to be more objective!
Then to improve our position, 3 solutions are explained: improve our BATNA, identify other side's BATNA and weaken the other party's BATNA.
When we have no alternative, we should create one ! No alternative put the negotiator in a very weak position (deal taker =/ maker).
We have to notice that business negotiations often involve many variables: not only the price but also not quantifiable parameters; we must be able to make trade-offs in developing our BATNA and sizing up the agreement.

Then, the next key concept is the reservation price. Also called the walk-away, the reservation price is the limit of what we could accept for the deal, it would be the worst agreement we would accept. We should never start a negotiation without a clear reservation price in mind!

The third concept of negotiation of this text is the ZOPA, the Zone Of Possible Agreement. That's the range in which a deal that satisfies both sides can be decided. The ZOPA is between both partie's reservation prices. If there is no ZOPA, we can try to break the impass by proposing something else - create value in another way (integrative negotiations).

The last part of the text deals with value creation through trades. The two parties can create value by proposing to each other something with little value to provide but getting something with a great value in exchange. We should think about ways and things that the other side value a lot but that as little value for us.

GIVE AN ACCOUNT OF MY IN-CLASS NEGOTIATIONS

A) 2 Dollars negotiation
I had to end up with $1.30.
It was hard to make Frederic change his mond. He as determined to pass his phone call even if I was proposing him other solutions and he was using strong emotional arguments with his parents and own mental health.
I used rational arguments at the beginning, and then, seeing that it was not working, I used emotional arguments too ("I'm poor", "my boyfriend beats me"... etc).



B) 2 Dollars negotiation n°2 - negotiation with instructions
I had to get the maximum of the $2 and got 70 cent and 2 dinners.
The main difficulty I encountered during this negotiation with Natasha was to stay "tough" and maintain a "high level of tension" as asked. Natasha used emotional arguments about a crisis in Mexico, and so did I about my empty bank account and my starving baby.
I learned at the end that Natasha had to be carefull with her words as she was a public figure.

The teacher said that enlarge the parameters (with the offered dinner) was relevent. Indeed we have to focus of the interest and be able to create value in other ways to avoid a blockage in negotiations.



To be continued at the next course!