Sally’s Negotiation Dynamics
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• What were each side’s alternatives?
– Opera’s?
– Sally’s?
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Negotiation Dynamics?
$15K $20K $25K
$30K $35K $40K $45K
Zone of Agreement
Sally wants about $25K minimum
Lyric will pay up to about $35K max
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Lesson one
• A bad alternative does not necessarily equal a bad
outcome…
– Why would the Opera not push Sally as far as it could?
– Why wouldn’t Sally squeeze the Opera, if she could?
• Other forces often drive deals
– Relationship
– Interests
– Principles
• But if one side has strong leverage and doesn’t
care…it will be decisive
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The impact of relationships
• Others may consider them primary, especially in other
cultures
• Likely to make fairness more important
• How to establish/enhance?
– Stress similarities, connections
– Use gifts as a signal
– ID a mutual friend or other stake in being trustworthy
• Distinguish working from personal relationships
5
Objective Standards for
Compensation?
$0K $5K $10K $15K $20K $25K $30K $35K
What Lyric is willing to pay to get Sally to sing 35K
$40K
$45k
What Original Soprano would have been paid $30K
What neophyte soprano might be paid
< $28K
$25K What title role was paid last year
$24K What Sally thinks title role paid last year
$22K
What Sally received 4 years ago for title role
What Sally has sung secondary roles for
$10K to $18K •------------•
$12.5K
What Lyric paid Sally last year
$25K What Sally would be willing to take
6
Impact of principles
Principles are important
– They influence both us and opponents
– We want to be, and appear, consistent
Principles are useful
– Legitimize your position
– Minimize emotional reactions
– Substitute for relying on alternative
– Give basis for asking for information
– Allow moving w/o slippery slope
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Selecting an effective principle
• Should not be under your influence
• Consider industry customs, model clauses, cases,
well-known organizations, tradition
• OK to use a standard that benefits you, if a
neutral person might accept it
• Best to use standard that other side has already
accepted: this creates “normative leverage”
• If you can ID a principle to justify a concession,
easier for them to move
Integrative (“Win-Win”) Bargaining
• Good negotiators change style to fit the
situation, but integrative bargaining is
preferable.
• Key: What does a party want other than or in
addition to money? The answer is its interests.
• Faced with a position, ask why do they want
that?
• Easier to divide a large pie than a small one
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What matters, other than money?
• Personal interests: Being treated with respect,
valued as a person
• Process interests: Telling my story, using fair,
predictable rules
• Economic interests: Getting the best possible
value from the deal
• External interests: Issues from a context
outside the negotiation
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How To Prepare?
• ID your own interests clearly, and rank your
preferences
• Ask yourself what their interests may be: use role
reversal
• Ask whose interests? Those of bargainer and client
may differ
• ID contrary interests: Why might they say no?
• Ask: how can I satisfy their goals at a low cost?
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How to bargain with interests?
• Competitively: Haggle, often one issue at a time
• Cooperatively:
–
–
–
–
–
–
–
ID range of issues
Exchange info re: relative importance to each side
Propose packages
Offer adjustments + trade pairs or groups of issues
Continue to seek out more information
Work to be creative; don’t rush just to be friendly
Faced with a position, ask why do you need that?
Copyright 2006 Dwight Golann
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Compare
$30K in cash to Sally
$0 in special advertising
$30K total cost to Lyric
to
$25K in cash to Sally
$5K in special advertising
$30K total cost to Lyric
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What Solutions in Sally Soprano?
Opera:
Pay -- How much? When? Risks?
Sally:
Advertising -- How much? Form helpful to both?
Other PR: Master classes
Star Status: Limos, roses, dressing room, tribute
Future Performances
Other ideas?
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Why Is It Hard?
• We instinctively view world from our own lens:
we assume they want what we want, and would
reject what we oppose. Not true!
• Bargaining fosters competitiveness: We want to
“win” and be tough
• Openness can hurt you when dividing the gains
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