Week 2

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READING

 For October the 9th, we had to read the text: Negotiation Analysis : An Introduction.

 Summary of the text:
A main point of the preparation before a negotiation is thinking about some strategic questions. Of course, each negotiation is different and requires a particular preparation, but there are 7 basic questions we should think about to analyse well the negotiation and be ready for it: 

* 1: BATNAs (Best Alternative To a Negotiated Agreements)
An agreement is possible when both parties consider that the deal is better than if they would have walked away of the negotiation process. Walkaway decision: "Agree or walk away". A BATNA is the action we would do if we can't reach an agreement, the preferred alternative.
The BATNA should't be mixed up with bottom line. We should put a value on our BATNA, while a bottom line is the limit we could reach. A bottom line can lead us to get a result close to our minimum, that's why it may be dangerous and why think about our BATNA's value during the negotiation is wiser.
The concept is simple to understand but the application can be difficult: we should be creative with the other possible solutions and not too optimistic.
ZOPA (Zone Of Possible Agreement): prices between the 2 bottom lines of each side. A negotiation supposes that both parties leave the bargaining table better than they would be if they can't reach to an agreement. But it's hard to determine the ZOPA, as we often don't know all the possibilities and ambitions of the other side. Therefore, research (with market data, company history and recent deals etc) is helpful. 

 * 2: Parties
During a negotiation, we aren't always talking with the real decision maker. Identifying the influencial members is essential.

 * 3: Interests
Forget to consider our important needs and priorities is a common mistake. But they are essential to lead our strategy before, during and also at the end of the negotiation (when the agreement s implemented). The strategy can evolve according to the changing interests and circumstances.

 * 4: Value
Value should be created by focusing on differences, not on common goods. The potential of value-creation depends on the other's party interests compared to ours. There are often more issues and dimensions than simply the price: the parties can negotiate on other parameters and thus create value:

 * 5: Barriers
Forecast the obstacles which will put a stop to the best agreement possible is a key element of a successful preparation. They can concern strategic behavior, psychology (communication issues), institutional parameters (ex: legal barriers)...

 * 6: Power
Bargaining power is the strength or the weakness of our BATNA. It is a matter of perception, but in many cases is also linked with the situation. To increase it, we can  for example create deadlines, or attack the other side's BATNA.

 * 7: Ethics
Negotiators need rules to indicate them how they should act with other people (and organizations). Negotiations should act responsibly in this situations and take in account this parameters: if they owe something to other parties, the equity of agreements that are reached, the potential use of force in negotiation, the impact of negotiation on bystanders, the case when one is negotiating on behalf of others.

IN-CLASS NEGOTIATION

 Concerning the simulation with the coffee shop chain and the hotel, unfortunately I wasn't in class this day, but my friends told me about the negotiation. I understood that the main difficulty was about getting to know the BATNA and reservation price of the other (and avoid lying on its own) to get the best price.

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