Manhattan Elite Prep Notice Mark Logo Negotiation Decision Chapter 1

Negotiation & Decision Making
Version 10.1
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Tactic Tip Sheets
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Assessment Chart
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Unilateral Strategy Formation
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Step by Step Planning
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Distributive Bargaining
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Integrative Negotiation
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Communication in Negotiation
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Power and Social Behavior
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Decision Making Framework
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Last updated on April 28, 2014

Negotiation and Decision Making i
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Negotiation and Decision Making ii
Chapter 1
Pre-Negotiation Preparation .......................................................................................1

1.1
Pre-Negotiation Assessment Chart.....................................................................................1

1.2
Pre-Negotiation Unilateral Strategy Formation.................................................................4

1.2.1
Design a Unilateral Strategy........................................................................................4

1.2.2
Four Major Types of Unilateral Strategy ....................................................................4

1.3
Pre-Negotiation Step-by-Step Planning .............................................................................6

Chapter 2
Distributive vs. Integrative vs. Hybrids......................................................................8

2.1
Definitions .........................................................................................................................8

2.1.1
Distributive Bargaining (A Fixed Total Pie)...............................................................8

2.1.2
Integrative Negotiation (Various Mutually Beneficial Results)..................................8

2.1.3
Hybrid Negotiation......................................................................................................8

2.2
Comparison Chart...............................................................................................................9

Chapter 3
Distributive Bargaining.............................................................................................10

3.1
Key Bargaining Points in Distributive Bargaining (Such as Buy & Sell)........................10

3.11
BATNA (Best Alternatives To a Negotiated Agreement) .........................................10

3.12
The Spread..................................................................................................................11

3.2
Key Goals .........................................................................................................................12

3.2.1
Negotiation Mix.........................................................................................................12

3.2.2
Negotiation Goals......................................................................................................12

3.3
Negotiation Scenarios.......................................................................................................13

3.4
Key Strategies...................................................................................................................14

3.4.1
Communicating and Assessing Information .............................................................14

3.4.2
Influencing Perceptions.............................................................................................16

3.4.3
Influencing the Resistance Point ...............................................................................18

3.4.4
Controlling Relative Positions...................................................................................20

3.4.5
Managing Concessions..............................................................................................21

3.4.6
Managing Commitments and Final Offer..................................................................23

3.5
Hardball Tactics................................................................................................................25

3.5.1
Identify Hardball Negotiators....................................................................................25

3.5.2
Hardball-Countering Tactics .....................................................................................27

Chapter 4
Integrative Negotiation .............................................................................................30

4.1
Outline Problems and Underlying Interests .....................................................................31

4.2
Create Possibilities for Resolution ...................................................................................32

4.3
Assess Possibilities and Choose the Best Resolutions .....................................................33

4.4
The End Result of Integrative Negotiation.......................................................................34

4.5
Common Myths................................................................................................................35

Chapter 5
General Tips..............................................................................................................36

5.1
Important Steps to a Good Deal .......................................................................................36

5.1.1
Understanding/Problem Solving ...............................................................................36

5.1.2
Planning.....................................................................................................................37

5.1.3
Building Communication ..........................................................................................37

5.1.4
Controlling the Negotiation.......................................................................................37

5.1.5
Solving Their Problem ..............................................................................................38

5.1.6
Let the Other Person Win..........................................................................................38

5.1.7
How to Derive Those Numbers.................................................................................38

5.1.8
Achieving Results......................................................................................................39

5.2
How to Say No without Saying No..................................................................................40

5.3
Common Negotiating Mistakes........................................................................................41

Negotiation and Decision Making iii
5.4
Getting Better at Negotiation............................................................................................42

5.5
Negotiate Over the Phone.................................................................................................44

5.6
Negotiate Via Email .........................................................................................................45

5.7
Build a Negotiation Team ................................................................................................46

5.8
Establish Strategic Partnerships .......................................................................................47

5.9
Negotiate with Customers ................................................................................................48

Chapter 6
Communication in Negotiation.................................................................................49

6.1
Three Main Stages............................................................................................................49

6.2
Active Listening ...............................................................................................................52

6.3
Nonverbal communication ...............................................................................................54

6.4
Planning Your Meeting ....................................................................................................55

Chapter 7
Authority in Negotiation...........................................................................................57

7.1
The Origins of Authority..................................................................................................58

7.2
Use Power for Influence..................................................................................................59

Chapter 8
Multi-Party Negotiations ..........................................................................................60

Chapter 9
Decision Making Advice ..........................................................................................62

9.1
Key Principles to Guide Your Decision-Making .............................................................62

9.1.1
Collect Key Information............................................................................................62

9.1.2
Meet with Others .......................................................................................................63

9.1.3
Evaluate Options and Be Creative.............................................................................63

9.1.4
Do Not Procrastinate .................................................................................................63

9.1.5
Don’t Rush if There is Still Time..............................................................................63

9.1.6
Avoid Self-Doubt ......................................................................................................63

9.1.7
Monitor the Outcome ................................................................................................64

9.2
Selecting a Leadership Method ........................................................................................65

9.3
Making Ethical Decisions.................................................................................................66

Chapter 10
Cultural Sensitivity & Etiquette...............................................................................67

10.1
Overview ........................................................................................................................67

10.2
Cross Cultural Communication ......................................................................................68

10.3
Tips for Cultural Sensitivity & Etiquette........................................................................72

Chapter 11
Simulation Exercises................................................................................................73

11.1
Job Offer.........................................................................................................................73

11.2
Office Lease....................................................................................................................81

11.3
Business Partnership.......................................................................................................89

11.4
Business Combination....................................................................................................97

Index............................................................................................................................................100

Negotiation and Decision Making 1
Chapter 1 Pre-Negotiation Preparation
1.1 Pre-Negotiation Assessment Chart
A successful negotiation requires careful planning, thorough research, skills and determination.
The main factors related to a negotiation are outlined below.
YOU OPPOSITION(S)
Motives for reaching an
agreement and achieving
goals
__Main Motive
__Secondary Motive
__Misc. Motives
__Individual Motives
__Group Motives
__Main Motive
__Secondary Motive
__Misc. Motives
__Individual Motives
__Group Motives
Deadline for reaching an
agreement
__Immediate
__Near-term (<1 month)
__Medium-term (1-3 months)
__Long-term (>3 months)
__Immediate
__Near-term (<1 month)
__Medium-term (1-3 months)
__Long-term (>3 months)
Alternatives to not
reaching an agreement
__None
__One
__A few
__Many
__BATNA (Best Alternative
To a Negotiated Agreement)
__None
__One
__A few
__Many
__BATNA (Best Alternative To a
Negotiated Agreement)
Risks involved without an
agreement (including
execution risks for a
different agreement with
another party)
__None
__Low
__Medium
__High
__None
__Low
__Medium
__High
Specifics related to this
particular negotiation
__Key decision-maker(s) in
each party
__No. of people involved in
each party
__No. of parties involved in
total
__Outcome (Distributive vs.
Integrative)
__Key decision-maker(s) in each
party
__No. of people involved in each
party
__No. of parties involved in total
__Outcome (Distributive vs.
Integrative)
Frequency of interactions
and extent of future
implications
Historical Relationship
__None
__Yes. Successful.
__Yes. Moderately successful.
Historical Relationship
__None
__Yes. Successful.
__Yes. Moderately successful.

__Yes. Unsuccessful.
__Long-term vs. short-term
Future Relationship
__Ongoing relationship with
multiple future negotiations
this one-time negotiation
__One-time relationship with
ongoing implications on
relationships with others in the
industry
__One-time relationship only
__Yes. Unsuccessful.
__Long-term vs. short-term
Future Relationship
multiple future negotiations
__Ongoing relationship with this
one-time negotiation
__One-time relationship with
ongoing implications on
relationships with others in the
industry
__One-time relationship only
Style, Culture &
Reputation
__Negotiation style (e.g.,
Accommodating vs. Hard-
balling)
__Group & Corp Culture (e.g.,
Flat vs. Hierarchical)
__Personality (e.g., Flexible
vs. Inflexible; Trustworthy or
Unreliable)
__Negotiation style (e.g.,
Accommodating vs. Hard-
balling)
__Group & Corp Culture (e.g.,
Flat vs. Hierarchical)
__Personality (e.g., Flexible vs.
Inflexible; Trustworthy or
Unreliable)
Track Record (related to
similar negotiations)
Outcome
__None
__Highly successful
__Moderately successful
__Not successful
Procedures
__Simple
__Complex
Outcome
__None
__Highly successful
__Moderately successful
__Not successful
Procedures
__Simple
__Complex
↓↓ ↓↓
Bargaining Zone __Target Outcome
__Acceptable Outcome
__Resistance Point
(Related to BATNA)
__Target Outcome
__Acceptable Outcome
__Resistance Point
(Related to BATNA)

A thorough understanding and a complete analysis of these factors contribute to more profitable
and successful negotiations. It is important that you prepare in advance so that you come to the
negotiating table primed and ready, something many negotiators fail to do.

1.2 Pre-Negotiation Unilateral Strategy Formation
Before actually negotiating, you must plan, strategize, and do some tactical analysis.
Consider the following attributes of your strategy as you develop it:
• Voluntary (created by you) or Involuntary (imposed by your organization)
• Firm or Flexible
• Based on excellent or limited knowledge of the other party
1.2.1 Design a Unilateral Strategy
A unilateral strategy is the most common form before the negotiation stage, in which it is
unlikely that the negotiator has the benefit of deeper knowledge of the needs and desires of the
other party. Thus, this strategic choice requires an analysis focused more on the individual
party’s goal, not the two combined.
Two major elements you need to consider in designing your own unilateral pre-negotiation
strategy:
1) How crucial is it to achieve a final agreement with a set target outcome?
2) How important is it to maintain the relationship with the other party?
The answers to these questions will guide the negotiator in one direction or the other.
1.2.2 Four Major Types of Unilateral Strategy
If BOTH your target outcome and relationship with the other party are highly important,
consider engaging in collaborative negotiation.
↓
If Only your target outcome is highly important,
consider engaging in competitive negotiation.
↓
If Only your relationship with the other party is highly important,
consider engaging in accommodating or compromising negotiation.
↓
If NEITHER your target outcome NOR relationship with the other party is highly important,
consider staying put and not engaging in any vigorous negotiation.

When & Which:
Competitive Strategy: The ultimate goal is to succeed or win.
Accommodating Strategy: It is most important to maintain the relationship. Whether you win or
lose on some items is of lower importance.
Compromising Strategy: Meet in the middle for the entire negotiation situation.
Collaborative Strategy: It is possible for all needs to be met to varying degrees.

1.3 Pre-Negotiation Step-by-Step Planning
Step 1: Prioritize Negotiation Items and Potential Areas of Conflict; Analyze Underlying
Factors
To achieve your goal, you need to:
§ Talk to fellow negotiators and others on your side to verify your own understanding of
what is most important and what is at stake, as well as to firm up your knowledge of the
other party;
§ Do thorough research, including inquiries into past relationships;
§ Develop a detailed understanding of the dilemma existing between your party and the
other; and
§ Discuss your strategies and goals with specialists.
Once you’ve compiled the major negotiation items, conflict areas and underlying factors,
§ Organize them in a list from the most important to the least important factors to you;
§ Make a special note of any underlying factors that are related. Make an effort to include
similar or related factors together on you list; and
§ There is no need to streamline the list. At this point, a longer list is better.
↓
Step 2: Define and Analyze your Main Objectives
Perform a detailed analysis of your own goals in which you clearly define the following:
§ Target Outcome
§ Acceptable Outcome
§ Resistance Point
You may want to categorize your various goals into subject groups and in each category pay
attention to feasibility and possibility.
↓
Step 3: Defining and Evaluate the Objectives of the Other Party
This will require some investigation into your past relationship with the other party as well as
that of other groups with the party. Consider and try to define their goals, their tendencies,
trends, compelling factors to them, and who ultimately is calling the shots for the other party.
↓

Step 4: Make Logistical Arrangements
Determine the location where negotiations will occur and possibly the method/procedure for
engaging each other. What kinds of additional staff or consultants will attend? Who else might
be permitted? What is the expected timeline to reach an agreement?
Answers to these questions will enable you to come in well prepared.
↓
Step 5: Define the Most Important Objectives for Both Parties
Re-evaluate your list.
If you have a greater sense of the issues that are most important to the other party, you should
include additional notes as to where greatest discord might occur.
↓
Step 6: Create Cases to Support your Requests and Arguments
This will require research, knowledge of facts to support your view, trusted sources or experts to
back up facts, knowledge of potential arguments that might be waged by the other party, and the
creation of counterarguments of your own.
↓
Step 7: Role Play to Be Better Prepared for Unanticipated Responses
Notes
All negotiations are different. For every negotiation, methods need to be slightly adjusted and
redefined. However, fundamental aspects remain highly similar. Thus the proceeding steps of
analysis, research, and strategy provide a helpful guide in preparation for negotiations.

Chapter 2 Distributive vs. Integrative vs. Hybrids
2.1 Definitions
There are two main types of negotiation that differ in terms of their approach to problem solving
and conflict resolution.
2.1.1 Distributive Bargaining (A Fixed Total Pie)
§ Any distributive bargaining scenario can be called a win-lose situation.
- Two parties are battling for the most access to certain limited resources.
An important aspect of this type of negotiation is the strategic distribution of information.
While this may be a more negative style of negotiation that many would prefer to shy away from,
it is important to be aware of the strategies and tactics that are proven successful in competing
with a “hard bargainer.”
2.1.2 Integrative Negotiation (Various Mutually Beneficial Results)
In an Integrative Negotiation, parties work to resolve conflict and create peaceful and satisfying
solutions to problems.
Achieving this goal, however, requires all of the negotiating parties to carefully examine each
potential problem themselves. It also requires openness, understanding and a degree of creativity.
2.1.3 Hybrid Negotiation
In a business world, complex negotiations often times are a combination of both distributive and
integrative negotiations. Some issues involve distribution of a fixed resource, others can be
resolved to maximize joint benefits.

2.2 Comparison Chart
Information
Flow
Mutual
Efforts
Discrepancy Time
Line
Resolution
Integrative
Negotiation
§ Direct
§ Shared
→ Effort made to
understand one
another
→ Focus on
agreement
→ Longer → Mutually
beneficial
Distributive
Negotiation
§ Standoffish
§ Guarded
→ Less attempt to
understand one
another
→ Highlight
differences
→ Shorter → One-sided

Chapter 3 Distributive Bargaining
In Distributive Bargaining, there are usually negative consequences. Many negotiators will use
techniques to maximize their gains. Most often in distributive situations, maximizing one’s gains
causes a decrease in another’s.
3.1 Key Bargaining Points in Distributive Bargaining (Such as Buy & Sell)
- Target Outcome: The goal of the negotiator
o This may be inferred throughout the negotiation process rather than stated
outright
- Resistance Point: The most the negotiator will pay or the lowest settlement the
negotiator will accept, etc.
o This price will be kept secret throughout the process
- The initial price set by the seller
- Initial Offer: The number that the buyer quotes,
o One’s initial offer must be below his target point. If the buyer must make
concessions, then he will still be approaching his target point rather than his
resistance point
o If it is too low, then the seller may break negotiations due to an “unreasonable”
offer
- Settlement Point: The final set of terms both parties agree upon
3.11 BATNA (Best Alternatives To a Negotiated Agreement)
- Sometimes, one party may have the option of completing a deal with a third party
- A BATNA can be same as the resistance point, but they can also differ, depending on the
party’s perception of the BATNA in comparison to the resistance point
- A new BATNA can create a new resistance point
- Realistic alternatives can be good for the negotiator because they produce options and
exit strategies
- The better the BATNA, the stronger the negotiating power

3.12 The Spread
- The spread is the area between the lowest and highest points in a bargaining scenario
o This can also be called the zone of potential agreement, bargaining or settlement
range
- Negative Bargaining Zone:
o When the seller’s resistance point is above the buyer’s
- Positive Bargaining Zone:
o When the buyer’s resistance point is above the seller’s
The characteristics of the spread are typically not known to either negotiator initially because the
resistance points are still undisclosed. If it is discovered that there is a positive bargaining range,
then the negotiation is likely to end in a mutually satisfactory way. If it is negative, then the
negotiation may be cut off, or both parties may be forced to re-position themselves.

3.2 Key Goals
3.2.1 Negotiation Mix
- The mix should include all the major items related to closing the deal. In a buy/sell
situation, relevant terms include the price, payment method, payment timing, exclusivity,
confidentiality, the closing date, final adjustments, unexpected situations, future liability
and future dispute resolution channels.
- Each of the elements in a negotiation mix can have its own mini bargaining zone with
separate target, resistance, and starting points.
- You should have a clear idea of the priority of the major elements in the mix to both you
and your opposition.
3.2.2 Negotiation Goals
Your Goals in a Distributive Negotiation
- Identify as much of the opposition’s bargaining zone as possible
- Influence the opposition’s bargaining zone
- Get the settlement as close to the opposition’s resistance point as possible
- Make the opposition feel that it is a fair exchange and the settlement point is
the best he/she can realistically obtain to ensure no bruised egos

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