LECTURE 9
Chapter 4
Influencing: Power, Politics, Networking and Negotiation
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning
Learning Outcomes
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What is negotiation?
Steps in negotiation process
Relationship among: negotiation, conflict, influencing tactics, power, politics
Six habits of merely effective negotiator
Negotiating the Spirit of the deal
Deal Minded vs Implementation Minded Negotiator
NEGOTIATION
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Two or more parties which are in conflict (disagreement) working to reach an agreement
Common in:
o Job searches
o Labor relations
o Sales
o Business deals
o Mergers
Contracts
Negotiation Process
PLAN:
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Research the other party(ies)
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Set objectives
o Lower limit
o Objective
o Opening
Develop options & tradeoffs
Be prepared to deal with questions & objections (especially unstated)
NEGOTIATIONS
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Develop rapport
Keep it professional, never personal
Try to get the other person to make the first offer
“He who mentions a dollar amount first, loses”, Job Hunting adage
Ask questions
Listen
Don’t give in too quickly
Never give something up for free
POSTPONEMENT
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May be advantageous or disadvantageous
Most interested party usually tries to avoid postponements
o May try to create a sense of urgency
Agreement
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Both sides should feel good about the agreement
Get it in writing
Quit selling
Start work on a personal relationship
Disagreement
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Accept that agreement isn’t possible
Learn from the failure
Ask the other party what you did right & wrong
Analyze and plan for the next time
Negotiation Adage
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“If you can’t afford to walk away, or at least convince the other side that you will walk away,
you’ve already lost.”
o Convincing others you will walk
o away when you can’t is very tough.
Source: Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning
Six habits of Merely Effective Negotiator by James K. Sebenius
1. Neglecting the other side's Problem
2. Letting price bulldoze other interests
3. Letting position drive out interests
4. Searching too hard for common grounds
5. Neglecting BATNA
6. Failing to correct for skewed vision
Negotiating the Spirit of the Deal By Ron S.Fortgang, David A. Lax, and James K. Sebenius
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4.
THE SOCIAL CONTRACT
The underlying social contract answers,
What is our agreement’s nature and purpose?
Is this a short- or long-term deal?
A discrete transaction or partnership?
How much autonomy will each party have?
What decisions will each participate in?
Parties differing in basic ways—small versus
large, entrepreneurial versus bureaucratic,
The ongoing social contract answers
How will we work together?
How will we communicate?
How will consult with each other?
How to Resolve disputes?
How to Handle surprises?
RISK FACTORS
Cultures clash (Example of NCR Japan)
Third parties drive the deal
Too few parties are involved in the deal
DOVETAILING THE CONTRACTS
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To make deal successful try to make economic and social aspects of the deal mutually exclusive
Implementation of Negotiated Deal by Danny Ertel
1. Start with the end in mind
Is the deal working? What metrics are you using to measure its success?
• What has gone wrong so far? What have you done to put things back on course?
What signals suggest trouble ahead?
• What capabilities are needed to accomplish the deal’s objectives? What skills do your
implementation teams need? Who has tried to block implementation, and how have you
responded?
2. Help the other party prepare
3. Treat alignment as a shared responsibility
4. Send one Message
5. Manage negotiation like a business process
Implementation of Negotiated Deal