“Negotiation Analysis: an Introduction”

 Before any negotiation, there are some aspects that have to be considered.

Those are:

BATNAs

What will both parties do if they don’t come to an agreement?

            The BATNA concept might be simple, but its application is quite complicated. Indeed, it is necessary to think about all the alternatives possible to an agreement and the solution might involve other aspects than just money.

            It is also important to know that your BATNA is you preferred course of action and NOT your bottom line. And this precise bottom line must be flexible otherwise it can prevent you from thinking “outside the box” and finding creative solutions.

            Evaluation the BATNAs (yours and your opponent’s) is something difficult that requires experience.

            About the ZOPA : it is possible to test its true dimensions by making offers and counteroffers. It turns out that any figure within that range is a good agreement. However, it is hard to know the ZOPA… but some factors help to determine it : market conditions, the opponent’s behaviour, what he wants out of the deal and the pattern of offers and concessions.

PARTIES

Who are the real parties in the negotiation?

           

            You always should ask yourself this question. It’ll enable you to have a better understanding of the situation and maybe to not lose time by negotiating with a middle man who simply responds to orders. Indeed, sometimes, we are not dealing with the person that takes all the decisions (for example, when you buy a car, you negotiate with the salesman but the one who really decides at the end is his manager).  

INTERESTS

What the fundamental needs and priorities?

            First of all, you should define and rank those two elements. Indeed, evaluating the interests is crucial before, during and also after the negotiation, when agreements are being refined. Without that, it is complicate to come with an effective strategy and judge it’s chances of success.
            Also, negotiation is a process of discovery thanks to wise questions and answers that makes interests evolve and get more acute. That’s why, strategy should adapt to changing goals and circumstances.

VALUES

How can value be created and who is likely to get it?

            Sometimes the stakes of a negotiation go beyond the simple “price”. Those stakes might be tax savings, employee’s job security etc. The potential for value creation depends on how the other parties’ interests compare with your own.

            Value creation requires that both parties are willing to discuss and agree to reveal the right amount of information (not too little but also not too much). The information that is shared is necessary at the time to come with creative solution and enables to create value that can be shared between the two parts. The brainstorming for finding a solution should continue until a point is reached where one party’s well-being cannot be further improved without hurting the others”.  This point is called “Pareto optimal”.

            To sum up: value is created by capitalizing on differences, not necessarily by finding common ground. Creativity must be used to find opportunities of deal that can benefit to everyone.

BARRIERS

What obstacles might prevent agreement (or the maximization of value)?

How can they be overcome?

Obstacles:

-       Strategic behaviour: refusing a good offer to seek for something more. With such an attitude, both parties can lose a potentially desirable deal.

-       Psychological/interpersonal barrier: generated by a lack of trust and difficulties while communicating.  Also, all kind of emotions can make people lose sight of their principal objective.

-       Institutional barrier: Legal constraints may impeach a compromised found between the two negotiators. Overcoming those barriers may require crafting new policies.

POWER

How can the various parties influence the negotiation process and its outcome?

            According to some authors, bargaining power is related to the strength of the BATNA but a good BATNA simply insures you against having to accept too little.

            Also, power sometimes turns upside down in negotiation. You can weaken your opponent’s BATNA. It is possible by worsening the consequences of refusing the offer you’ve made.

            More clearly: the bargaining power is a result of situational factors and of perception as well. Having an attractive BATNA will give you little advantage at the bargaining table. Bargaining power is also a reflection of both knowledge and skill (negotiation skills includes multifarious talents from strategic vision and creativity to persuasiveness and self-confidence).  

ETHICS

What is the right thing to do?

            This is all about moral questions… How much is he/she honest? It the deal fair? Did he/she used moral pressure on me? What is the impact on bystanders or principal-agent conflicts?

            Moral issues are never clear given that it varies from one individual to another. Negotiation strategy and tactics must be based on carefully considered principles.