Decision Analytic Approach For Handling Negotiations Essay

Decision Analytic Approach For Handling Negotiations Essay

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When a group of people have differing preferences they need to negotiate to reach a decision. When negotiating decisions, it is important to know that the input of each negotiator will have an impact on the final outcome. Chapter 10 of Bazerman and Moore’s Book (2013), Judgement in Managerial Decision Making, explains that you can improve decision making in negotiations by understanding the interests of all the parties involved, and using it to reach a settlement that will benefit all the parties (p. 176).
One approach to handling negotiations is the decision-analytic approach (Bazerman and Moore, p. 176). With this method three different factors are considered. First, each party needs to figure out their best alternative to a negotiated agreement (BATNA). By determining your bottom line best alternative to your decision, you know where you stand if negotiations stray from your first choice. This approach is often experienced when you sell or purchase a home. Often times, the seller lists the house for more than they are willing to accept, and the buyer will start the bidding lower than they are actually willing to pay. Both parties have a BATNA in mind. This form of preparation will help you to make more sound decisions that are not swayed by emotions. Second, is to identify the interests of all the parties. By identifying these objectives you begin to recognize what each party is striving for. Thirdly, by focusing on what the most important issues are for each party, a decision would be more likely to maximize benefits for everyone involved.
Once these factors are identified you are ready to begin negotiating by creating and claim value. During a negotiation, if the parties have BATNA’s that overlap, it creates a positive...

... middle of paper ...

...ring that could be beneficial to all the parties in a negotiation.
After a negotiation, post-settlement settlements can be discussed. It is essentially one last look at a contract for alternatives that would benefit both parties. If an alternative is not agreed upon, you still have the original contract to fall back on. This reconsideration of the contract may seem unnecessary, but it can sometimes present an opportunity that was not maximized during the initial negotiation.
When negotiating decisions, the strategies discussed present a rational approach to this type of bargaining that can benefit all of the parties involved. Not all of these strategies will work in every situation, but if you consider each of them and attempt as many as you can, and you understand the intentions of the other party, you are in a better position to have an effective negotiation.

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