The Negotiator Magazine

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When bargainers have gathered all of the relevant information, they have to ask themselves three critical questions. First, what happens to their side if no agreement is reached? Roger Fisher and William Ury, in their best-selling book Getting to Yes, call this your BATNA for your Best Alternative to a Negotiated Agreement. I simply call it my "bottom line," recognizing that I don't wish to enter into any agreement that would be worse than this point. Negotiators must always remember that bad deals are worse than no deals when their nonsettlement alternatives would be preferable to what they have agreed upon. Most negotiators ask this initial question to determine their bottom lines, but they fail to ask the second part of this question. What happens to the opposing party if he fails to reach an agreement with you? It is imperative for bargainers to place themself in the shoes of the other side and estimate what would probably happen to it if they did not achieve an agreement with this side. People who only know their own bottom lines generally behave as if their opponents have no pressure to settle, and they concede all of the bargaining power to their adversaries. If the opposing side's nonsettlement alternatives are worse than this party's, that side has more pressure to settle, and this side possesses more bargaining power.

Once a negotiator has determined her own and her opponent's bottom lines, she has to establish her own aspiration level. How well does she think she can do in this negotiation? There is a direct correlation between negotiator goals and bargaining outcomes. People who want better deals, get better deals. It is thus important for individuals preparing for bargaining encounters to establish firm, but realistic, goals they can use to guide them during their interactions with the other side. When multiple items are to be exchanged, it is imperative for people to create goals for each item. If they only have objectives for some, but not all, of the items to be exchanged, they will readily give up the items for which they have no firm aspirations. They should establish comparative values for the different items involved. Is Issue A valued three times as much as Issue B or only twice as much? How much of Issue A must this side obtain before it is basically satisfied with respect to that term? For example, a car seller may really need to obtain $12,500, but would like to get more. If they can get $14,000, they would not be willing to risk a no-sale over the possibility of obtaining an additional $500 or $1000.

When bargainers get into the interaction with the other side, they must remember to focus on their objectives, not their bottom lines. People who concentrate in their bottom lines tend to relax once those minimal objectives are achieved. Astute opponents will read their nonverbal signs of relief and not be too forthcoming after that point. Skilled negotiators always keep their eyes on their aspirations and do not relax until they approach those targets. This induces others to think they have to offer better deals to get them to accept the terms being proposed.

The final touchstone negotiators must establish is where plan to begin the interaction. Some people naively suggest that bargainers begin with reasonable opening offers to create a win-win bargaining atmosphere that will be reciprocated by their opponents. This is a lovely thought, but not empirically supportable. Because of a phenomenon known as "anchoring," when bargainers begin with generous opening offers, adversaries begin to think they will do much better than they initially anticipated, and they raise their expectation level to take advantage of the situation. On the other hand, when people receive less generous opening offers, they begin to think they will not do as well as they hoped, and they lower their expectations. Negotiators should thus try to establish the highest demand or lowest offer they can rationally defend. How much can they logically request or how little can they reasonably offer? By beginning further away from where they hope to end up, they begin to undermine the confidence of their opponents. On the other hand, if they began with offers more generous to the other side, they would embolden that party and cause it to expect more generous final results.

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