Cross Cultural

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Chapter 1

NEGOTIATION: THE MIND AND HEART

OVERVIEW

This chapter can either be assigned before students arrive on the first day of class or after the first class meeting. As a general teaching principle, I never assign reading in advance; instead, the reading always follows the exercise. The chapter lends itself well to small discussion groups. For example, during the first day or week of class, students can work in small groups for 10-15 minutes with the objectives of: (1) identifying the key challenges that managers face when they negotiate; and/or (2) identifying factors in the new economy that make negotiation more relevant. I usually like to give very current examples of how negotiation is a core management competency (e.g., examples of interdependence, competition, information age, and globalization). I suggest presenting the six “myths” of negotiation and the key reasons why people are ineffective. It can be very helpful to discuss the key learning objectives as they apply to the course or session. If students are keeping a journal as part of their class, they can be asked to develop their own learning objectives.

Lecture Outline

Negotiation: Definition and scope

1 Negotiation is an interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly. Thus, effective negotiation is not just about money—it is equally about relationships and trust.

2 Scope of negotiation ranges from two-party to highly complex multiparty and multinational deals

3 In the business world, people negotiate at multiple levels and contexts: within departmental or business units, between companies, and even across industries

negotiation as a core management competency

1 Five key reasons effective negotiation skills are increasingly important for executives, leaders, and managers in the business world

1 Dynamic nature of business

2 Interdependence

3 Competition

4 Information age

5 Globalization

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most people are ineffective negotiators

1 Research shows that people do not negotiate well

2 Less than 4% of managers reach win-win outcomes, 20% reach lose-lose outcomes

3 Even on issues for which people are in perfect agreement, they fail to realize it 50% of the time

negotiation sandtraps

1 Leaving money on the table (“lose-lose” negotiation)

2 Settling for too little (the “winner’s curse”)

3 Walking away from the negotiating table (negotiators reject terms offered by the counterparty that are demonstrably better than any other option available to them)

4 Settling for terms that are worse than your alternative (the “agreement bias”)

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why are people ineffective negotiators?

1 Egocentrism (the tendency for people to view their experiences in a way that is flattering for themselves)

2 Confirmation bias (tendency of people to see what they want to see when appraising their own performance)

3 Satisficing (the tendency to satisfice—to settle for something less than people otherwise could have)

4 Self-reinforcing incompetence

1 Single-loop vs. double-loop learning

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debunking negotiation myths

1 Myth 1: Negotiations are fixed-sum (whatever is good for one person must ipso facto be bad for the counterparty)

2 Myth 2: You need to be either tough or soft

3 Myth 3: Good negotiators are born

4 Myth 4: Experience is a great teacher

5 Myth 5: Good negotiators take risks

6 Myth 6: Good negotiators rely on intuition

1 Proactive and reactive strategies

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Learning objectives

1 Improve your ability to negotiate successfully

2 General strategy for successful negotiation

3 Enlightened model of negotiation (fraternal twin model)

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the mind and heart

1 Deliberate, rational, thoughtful strategies for negotiation...
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