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Chapter 4 Influencing: Power, Politics, Networking and Influencing: Power, Politics, Networking and Negotiation Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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2 Summary Of Lecture 8 Position vs personal power Differences among legitimate, reward, coercive, and referent power Relationship of power and politics Similar use of money and politics Steps in networking process Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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3 Learning Outcomes 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 Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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4 NEGOTIATION Two or more parties which are in conflict (disagreement) working to reach an agreement Common in: Job searches Labor relations Sales Business deals Mergers Contracts Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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5 Negotiation Process PlanPlan PostponementPostponement Agreement Close the deal Agreement No Agreement NegotiationsNegotiations Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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6 PLAN Research the other party(ies) Set objectives Lower limit Objective Opening Develop options & tradeoffs Be prepared to deal with questions & objections (especially unstated) Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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7 NEGOTIATIONS 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 Dont give in too quickly Never give something up for free Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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8 POSTPONEMENT May be advantageous or disadvantageous Most interested party usually tries to avoid postponements May try to create a sense of urgency Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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9 Agreement Both sides should feel good about the agreement Get it in writing Quit selling Start work on a personal relationship Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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10 Disagreement Accept that agreement isnt possible Learn from the failure Ask the other party what you did right & wrong Analyze and plan for the next time Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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11 Negotiation Adage If you cant afford to walk away, or at least convince the other side that you will walk away, youve already lost. Convincing others you will walk away when you cant is very tough. Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

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12 Six habits of Merely Effective Negotiator 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 - Role Bias - Partisan Bias by James K. Sebenius

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13 Negotiating the Spirit of the Deal 1THE SOCIAL CONTRACT The underlying social contract answers, What is our agreements 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 wayssmall versus large, entrepreneurial versus bureaucratic, By Ron S.Fortgang, David A. Lax, and James K. Sebenius

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14 Negotiating the Spirit of the Deal 2The ongoing social contract answer s How will we work together? How will we communicate? How will consult with each other? How to Resolve disputes? How to Handle surprises? By Ron S.Fortgang, David A. Lax, and James K. Sebenius

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15 Negotiating the Spirit of the Deal 3 RISK FACTORS Cultures clash (Example of NCR Japan) Third parties drive the deal Too few parties are involved in the deal 4 DOVETAILING THE CONTRACTS To make deal successful try to make economic and social aspects of the deal mutually exclusive By Ron S.Fortgang, David A. Lax, and James K. Sebenius

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16 Implementation of Negotiated Deal 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 deals objectives? What skills do your implementation teams need? Who has tried to block implementation, and how have you responded? by Danny Ertel

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17 Implementation of Negotiated Deal 2 Help the other party prepare 3 Treat alignment as a shared responsibility 4 Send one Message 5 Manage negotiation like a business process by Danny Ertel

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18 Implementation of Negotiated Deal Deal Minded vsImplementation Minded Surprise Information sharing Closing techniques Realistic commitments Decision making stakeholders Introduce new actors Raise new issues Withhold information Fail to correct misconceptions Artificial deadlines This day offer Limit participation Keep outsiders in dark Document commitments Rely on penalty clauses Propose agenda in advance Raise issues early Create fact finding committees Third party research analysis Identify interests need to consider Joint communication strategy Check capabilities to deliver Implementation shared concern Ask about stakeholders Whose approval is needed? Whose cooperation is needed? Whose might interfere or influence? by Danny Ertel

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Discussion Question 1: What is negotiation? Why it is important for leaders to master negotiation skills? Discussion Question 2: Why most of the deals fail? Discussion Question 3: What is difference between deal minded and implementation minded negotiator? In your opinion who is is better? Discussion Question 4: What is your understanding about social and economic aspects of the deal? Discussion Questions

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20 Summary 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