This document discusses different types of negotiation and provides tips for each. There are two main types: distributive and integrative. Distributive negotiation is a win-lose situation where parties compete over a fixed amount. Integrative negotiation is a win-win where parties cooperate to create value and maximize benefits for both sides. The document provides examples of each and tips such as gathering information on the other side's interests for distributive negotiation and sharing information to find creative solutions for integrative negotiation. It also addresses that most negotiations have elements of both and the negotiator must decide whether to compete or collaborate at different points.

1. Negotiation skills
Patricia Maguet Levy
February – May 2014

2. What does negotiating mean?

“Negotiating is not listening to what they say, but
finding out what they want“. Reinhard Selten.
Economics Nobel Prize.

http://movieclips.com/B3FM-intolerable-crueltymovie-its-a-negotiation/
George Clooney no se prepara


3. Kinds of Negotiation
Distributive or
Confrontational
Zero sum
Win - lose
The parties compete
over the distribution of
a fixed sum of value.
Who will claim the most
value?
- Sale of a carpet, house,
car...
- Wage negotiations between
business owners and union
employees
Harvard Business Essentials

4. Kinds of Negotiation
Distributive
Winner takes it all
- Based on positions
- Based on differences
- Less flexible
- Relationship is not important
- Looks for short term gains risking long term losses

5. Negotiation example
 Distributive
 Acme
negotiation
Manufacturing: as low a price
as possible (1,75$ per item)
 The supplier Best Parts Company: as
high a price as possible (2$ per item)
 Final deal point: 1,75$

6. Tips and Tricks

Distributive negotiation
The less the other part knows about your
weaknesses and preferences the better – do
not reveal important information
 Learn as much as you can about the other
side

Why they want to make a deal
 Their interests and business constraints
 The point at which they would walk away from the
table
 Do they have other option?


7. Tips and Tricks

Distributive negotiation
Use the information to set your first offer or
demand
 Don’t overshoot: don’t be aggressive or greed


8. Kinds of Negotiation
Integrative or
Collaborative or
Interest based
Can we create value? Who
will claim the most value?
The parties cooperate to
achieve maximum benefits
by integrating their
interests into an
agreement.
Integrative
Win - Win
- The relationship is more
important than winning
-Before you claim for value
you try to create value

9. Kinds of Negotiation
Cooperative
We all can win
- Based on interests
- More flexibility in decision making
- More space for creativity
- Cares about the relationship
- Overcomes differences
- Agreements that really work
Harvard Business Essentials

10. Negotiation example
 Integrative
 Gomez
negotiation
Electronics needs 10.000
switches over a period of 6 months
 The supplier Kraft Components
Company (2$ per switch)
 They are long-term partners

11. Negotiation example
 Integrative
 Creating
 Gomez
negotiation
extra value
Electronics pays 2$ per switch
 Kraft Components gives Gomez sixty
days to pay
 They agree to collaborate in a new
project

12. Tips and Tricks

Integrative negotiation
Your goal is not to hurt your counterpart nor to
be coercive or exploitive.
 Your goal is to help them at little cost to you
and to have them help you at little cost to
them.
 You need to share your information


13. Tips and Tricks

Integrative negotiation
Provide significant information about you
 Explain why you want to make a deal
 Talk about real interests and business
constraints
 Reveal your preferences: issues and options
 Reveal any other capacities or resources

USE ALL THESE ISSUES TO FIND CREATIVE
OPTIONS

14. Tips and Tricks


How do we create value
Including not only prize but also:
Quality
 Delivery terms
 Payments
 A common objective: To accomplish a
particular task
 Improving a relationship
 Finding resources


15. Tips and Tricks

Is win – win for real?
It doesn’t mean that both parties get what
they want
 Sometimes the two side’s interests do not
compete at all
 Win – Win means that every party should get
what they value most while giving up other,
less critical factors


16. Tips and Tricks

The negotiator dilemma

Most negotiations are distributive and
integrative at a time
Should I
compete for
as a big
share of
this small
pie as
possible?
Should I
collaborate
in hopes of
doing well?
*

17. Negotiation Quotes
“If there is a range of possible
acceptable outcomes, then there
is always a set of outcomes that
will make both of us happier than
the minimum acceptable outcome
would”
Mark Gordon