Page 236 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes When you need it

Generally, I find that a BATNA needs be built and maintained to strengthen the negotiating position.
Say you are selling your house and a purchaser shows interest in buying, build yourself a
BATNA by showing your house to more people, and line up a second and third purchaser too.
BATNA gives you great negotiating power irrespective of the size, power, seniority, or ability of
the other party. Then decide where to open your negotiations, how far to move, and how long
to hang on for a settlement. I refuse to accept first offers because my experience shows that
working together on a deal can create extra value for both parties.

What it gives you

When I have a strong BATNA, I can say, “I am okay if the negotiation does not go forward!” I
understand I have the power to say “No!”, and to ask “what if” against every assumption that I can
find.

I love using “if” to trade off what we each want then we can hold the price while changing the
package. When there are things I have to concede, I do this slowly and always ask for extras to
balance each concession. I find that if I keep asking “How do you see this”, I can build bridges
(rather than attacking), discuss other person’s feelings and show mine, so we avoid deadlocks.

What’s in Your BATNA?

How do you determine your best alternatives to a negotiated agreement? First, you have to
dissect both your position and your interests. Then, look at the sum of these parts relative to all
the alternative options available. Pick the best option. Finally, do the reverse from your
counterparts perspective. A well prepared negotiator looks at the whole picture.
Some of the most crucial factors which should be considered include;
 The cost: Ask yourself how much it will cost to make the deal relative to the cost of your
best alternative. Cost estimation may entail both the short-term and the long-term. It
boils down to figuring out which of your options is the most affordable.
 Feasibility: Which option is the most feasible? Which one can you realistically apply over
all the rest of your available options?
 Impact: Which of your options will have the most immediate positive influence on your
current state of affairs?
 Consequences: What do you think or estimate will happen as you consider each option as
a possible solution?

Mine is not Necessarily Bigger than Yours!

Is that your ego showing? Put that thing away right now! After all the work you put into
estimating your BATNA, you might be feeling pretty smug. Studies have clearly shown that it
is an all ‘too human’ tendency to overestimate the strength of one’s own BATNA,
while underestimating the strength of your counterpart’s.
The underlying danger occurs at the point when one party reveals an overestimated BATNA too
early in the talks. Having put all their cards on the table too soon, they call the other side.
Suddenly, they find that their big hand really equates to a pair of deuces facing a full house. Kiss
that pot goodbye!

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