🤝 Negotiation Strategies
Negotiation is a process of back-and-forth communication aimed at reaching an agreement when you and the other side have some interests that are shared and some that are opposed.
Key professors: Deepak Malhotra (HBS), Adam Grant (Wharton), Leigh Thompson (Kellogg) Key book: “Negotiation Genius” — Malhotra & Bazerman (HBS)
🔑 Two Types of Negotiation
Distributive (Win-Lose / Zero-Sum)
- Fixed “pie” — one party’s gain = other’s loss
- Focus: Claiming value (getting the most of the fixed resource)
- Tactics: Anchoring, extreme offers, concession management
- Example: Salary negotiation, car purchase price
Integrative (Win-Win / Value Creation)
- Expandable pie — create more value by understanding interests
- Focus: Creating value before claiming it
- Tactics: Revealing interests, log-rolling (trade on different priorities), contingent agreements
- Example: Business partnership, complex M&A deal
Key insight: Most negotiations have more integrative potential than they appear. Finding it requires skill.
🎯 BATNA — Best Alternative to a Negotiated Agreement
“Your BATNA is your walk-away power.” — Roger Fisher & William Ury, “Getting to Yes”
BATNA = what you do if the negotiation fails entirely.
- Strong BATNA → negotiate from power; you can afford to walk away
- Weak BATNA → you may accept bad deals; need to improve it first
- Always know both your BATNA and their BATNA
ZOPA (Zone of Possible Agreement):
Seller's Walk-Away ←────[ ZOPA ]────→ Buyer's Walk-Away
$80 $110
$85──────$105
Seller | Buyer
reserve reserve
No ZOPA = no deal is possible.
⚓ Anchoring
The first offer anchors the entire negotiation. Research shows:
- First offer has an outsized effect on final outcome
- Both sides anchor on the first number, even if arbitrary
- Strategy: Make the first offer if you’re well-prepared; let them go first if you’re uncertain of their range
Extreme anchoring: Open well outside your target to shift the reference point, then make strategic concessions.
📐 Harvard Negotiation Framework (Getting to Yes)
- Separate the people from the problem — attack the issue, not the person
- Focus on interests, not positions — “Why do you want that?” reveals room to trade
- Invent options for mutual gain — brainstorm before claiming
- Insist on objective criteria — market data, precedent, expert opinion
🧠 Key Tactics
| Tactic | How It Works |
|---|---|
| Anchoring | First offer shapes the range |
| Log-rolling | Trade: give on low-priority items, gain on high-priority |
| Contingent contract | ”If X happens, then Y” — resolve disagreement about the future |
| Deadline pressure | Creates urgency; use carefully |
| Good cop/bad cop | One negotiator takes hard stance; other offers relief |
| Silence | Powerful — resist filling silence with concessions |
| Nibbling | Small asks after main deal is closed |
🌐 Cross-Cultural Negotiations
Hofstede’s dimensions affect negotiation style:
| Dimension | High | Low |
|---|---|---|
| Power Distance | Hierarchy-based (Japan, China) | Egalitarian (Scandinavia) |
| Individualism | Self-interest focus (USA) | Group harmony (Japan, Korea) |
| Uncertainty Avoidance | Need detailed contracts (Germany) | Flexible agreements acceptable (India) |
| Long-term Orientation | Patient, relationship first (China) | Short-term, transactional (USA) |
🔗 Connected Concepts
- BATNA — Walk-away power
- Power and Influence — Sources of negotiating power
- Behavioral Economics Overview — Cognitive biases in negotiation
- Organizational Culture — How culture affects negotiating style
- Cross-Cultural Negotiations — International contexts
← 👥 Organizational Behavior MOC | Related: BATNA · Power and Influence · Behavioral Economics Overview