Negotiations: Bargaining Wednesday, June16,2021 3:52 PM 2. Key terms ‘Match the words and phrases on the left with the explanations on the right. 1. Position a. This is the figure for a particular variable that you would find satisfactory. 2. Interest b. This is something that doesn't really matter to you, but which you include in your opening position statement because you may be able to trade it for something from the other party. 3. Variable ©. This is your best alternative to a negotiated agreement. In other words, it is what you will stil have if the negotiation fails. “4. Opening point d. A situation where there is no solution, because neither side can move. 5. Target point @. This is your limit for a particular variable. You cannot go beyond this point. 6. Reservation point This is the figure you give for a particular variable when you first state your position. 7. BATNA g. This is what you really need out of the negotiation. 8. Deadlock h. To agree to a compromise half-way between person A's figure and person B's figure. 9. Split the difference 7. This is what you say you want out of the negotiation. 10. Giveaway | This is one of the things that can be negotiated, such as the unit price, guarantees or the delivery date.3. Reading Read the article. Write one of the words/phrases from exercise 2 in each space. Some words need to be in the plural form. Positions and interests They say that negotiating is like mind-reading but the most important mind to read is your own. If you don't fully understand your own needs and wants from the negotiation, there's no point in trying to read the other person's mind! The mistake most inexperienced negotiators make is that they focus too much on positions and not enough on interests. Almost by definition, (1) are incompatible: | want to pay £500 for your printer, but you want fo receive £1000; | want the printer tomorrow, but you want to deliver next month; | want you to install the printer, but you want me to do it. We can't both get what we want. Even if we (2) ‘on price and delivery date, neither of us will be happy. That's why it's so important to be aware of our interests, the reasons behind our positions. Let's look again at the three (3), in our example. | want the machine quickly so | can complete a big order for a client worth £10,000. You can't deliver quickly because you don't have that particular model in stock. | can't pay £1000 because I've got a cash flow crisis — that’s why the big order from my client is so important. You won't accept £500 because the printer will cost you £600 from your supplier. | want you to install the machine because | don't think | could do it property. You want me to do it because it costs you £50 to send out, an engineer. When we start thinking in terms of (4) , creative solutions become possible. Maybe there's a way for me to borrow a different machine to complete the big order, and to pay the full price, plus the £50 cost of installation, in two months, when the right machine's in stock and my cash flow crisis is over. In other words, instead of treating the negotiation like a game of poker, we can both benefit from being honest and open about what we really need and why we need it.Of course openness and honesty carry their own risks: a completely open and honest negotiator can easily be manipulated by a more cynical adversary. Revealing your interests can be a great way of breaking a (5) , but there's no need to reveal too much if there's no deadiock to break. At the end of the day, you've got a duty to get the best possible deal for yourself or your organisation. That's why, for each variable, i's essential to plan three points. Start by working out your (6), . If you're the seller, this might be the price you need simply to cover your costs. Below this price, you're better off walking away from the negotiation. You can then decide what you actually want from each variable - the figure that would make you feel satisfied. This is your (7). . Finally, plan your (8), some way beyond that target point. This means you can showsome flexibility in the negotiation and still come away with what you want — and you may even get more than you want! Once you've worked out these three points for every variable (and of course, how they relate to each other), there's still one vital piece of information you need: your BATNA, or best alternative to negotiated agreement. For example, if you're trying to sell your car to person A, it’s useful to know how much person B would be prepared to pay. If A can’t match B's price, walk away from the negotiation. Even if there's no person B, you can work out the probability of finding another buyer, and making a realistic calculation of how much you could expect that buyer to pay. Of course, real person A’s concrete offer of £1000 may be worth more to you than hypothetical person B's potential offer of £1200, but these are things you can calculate or at least estimate. And even if there’s no hope of finding a person B, you've stil got a (9), : YOu get to keep your car. Finally, professional negotiators always plan a few (10), : things that cost them nothing, but which they can exchange for something of value from the other side. For example, one variable might be delivery time. The supplier has actually got the goods in stock, and is desperate to get them out of the warehouse. But he still asks for a four-week delivery period. The customer needs the goods as soon as possible, and accepts a higher price in exchange for quicker delivery. Of course, this can be a risky strategy — deceiving the other person is in direct conflict with your aim of building long-term trust! But if used in moderation, this technique can be good for breaking deadlocks.