Overview and Objectives

Managerial, executive, and entrepreneurial success requires the ability to negotiate.  Whether you are forging an agreement with suppliers, trying to ink a deal with potential customers, raising money from investors, managing a conflict inside the firm, or tackling a dispute that is headed towards litigation, your ability to negotiate will significantly impact your performance.  This course will enable you to become a more effective negotiator by teaching you how to:

• Make wiser decisions in negotiation;
• Avoid common biases and mistakes;
• Design and execute agreements that create maximum value on a sustainable basis;
• Capture an appropriate share of the value that is created;
• Achieve superior results in a vast array of competitive environments, including those that entail uncertainty, complex issues, high stakes, intense pressure from competitors, negotiating from a position of weakness, negotiating in multi-party environments, and negotiating under the threat of litigation;
• Resolve disputes and achieve desired outcomes even when others are becoming emotional or appear irrational;
• Think strategically in competitive contexts (e.g., bidding wars) by anticipating the strategy of others;
• Understand the vital role of ethics in negotiation;
• Work with people whose backgrounds, expectations, perspectives, and values differ from your own;
• As a leader, create environments that will lead to wiser negotiations.
• Introduce a negotiation framework that will help you analyze, prepare for, and execute negotiations more systematically—and hence, more effectively—in a wide variety of contexts. 
• Build a negotiation toolkit that consists of strategies and tactics for creating and capturing value in negotiation, and which can be put to use as soon as you walk out the door.
• Create an environment which helps diagnose your individual skills, and allows you to identify techniques for mitigating your weaknesses and leveraging your strengths.

At its core, the course is designed to help you audit and refine your negotiation skills, and to provide an opportunity for you to develop a negotiator’s lens for diagnosing and acting on threats and opportunities that involve the decisions of others. 

Approach

You will engage in a number of (increasingly complex) negotiation simulations, receive feedback on your strategies and performance, debate alternative approaches, and work with classmates to discover new insights. The course will allow you to test your analytic ability and your tactical skills, and to experiment with new ideas. This approach allows us to:

• Introduce a negotiation framework that will help you analyze, prepare for, and execute negotiations more systematically—and hence, more effectively—in a wide variety of contexts.
• Build a negotiation toolkit that consists of strategies and tactics for creating and capturing value in negotiation, and which can be put to use as soon as you walk out the door.
• Create an environment which helps diagnose your individual skills, and allows you to identify techniques for mitigating your weaknesses and leveraging your strengths.

Content

This section of negotiations uses a broad definition of negotiations: Decision making involving two or more parties who do not have the same preferences. If you are looking for a narrower class on haggling over price, this is probably not the section for you.

Some of the content we will cover includes:

   -Price negotiations

   -Job Negotiations

   -Ethics in negotiations

   -Negotiating over ethical issues

   -Noticing opportunities in negotiations

   -Thinking about the decision of others

   -The behavioral economics of negotiations

   -Systematic and predictable mistakes that even the best and the brightest make. 

   -Reservation prices and bargaining zones

   -Finding the Pareto efficient frontier in negotiation

   -Designing the structure of transacting

   -Multi-party negotiations

Instruction Regarding Simulations – READ THIS CAREFULLY

Missing a class in which we are conducting a simulation is a very bad idea, because you are essentially missing out on two classes (exercise and debrief). Do whatever you can to avoid this.

If you are unable to participate in a simulation for any reason, you must notify my faculty support specialist (Elizabeth Sweeny) before the scheduled exercise in writing, as soon as possible—early enough so that we can adjust the groupings. Otherwise, your group will be left stranded, and this will diminish their learning.

Conscientious preparation and conduct of simulations is essential. Under no circumstances is it acceptable to adopt the attitude, “I didn’t try because it was not a real negotiation.” Failing to take a simulation seriously (or pretending to have not taken it seriously after you perform poorly) is unfair to your counterpart, who is counting on you to provide a realistic experience.

For each simulation, you will receive “confidential role information” with which to prepare. This information is for your eyes only. You are not allowed to show or discuss your confidential role information with anyone else, at any time. During the negotiation, you are allowed to say whatever you want, but you CANNOT show your confidential role information to the other side. 

You are prohibited from searching the web or other sources to obtain information about the simulations used in the class.

Grading

1/3 based on Class Participation.  We are going to do this one differently than it is typically done.  Class involvement is critically important.  But, I want the best class discussion possible, rather than competition to make the most comments.  So, after each of the 14 class days, I will assess the 3-6 most useful comments.  I will not use the rest of the comments for grading.  Thus, only very high quality comments will be assessed.  Comments that simply provide description (“she said, he said”) may be useful for the conversation, but will not be among the most useful comments.  I will use frequency of comments as feedback to me on who I should call on more often, but not for grading.

2/3 based on Final Exam.  The final exam will have one essay question designed to assess your understanding of the core concepts in the course, and your ability to think about these concepts as a leader, where you want to influence negotiations beyond those negotiations where you are actually present.  The answer will be limited to 500 words.

Adjustments.  I reserve the right to adjust your grades up or down for unusual positive contributions to the learning environment or for failure to fully follow course policies.

Course Policies

Cell phones and other devices: Before each class session begins, please turn off ALL cell phones.  While we will all be on our computers, I ask that you only use your computer to connect to zoom – no online searches or email.  Violation of this policy will reduce class grade by one full level for each offense (1 to 2, 2 to 3).

Disability: I (Max) am committed to making the class accessible for all students. Any student needing accommodations because of a (short-term or long-term) disability should speak with Aldo Pena Moses, the Disability Coordinator for the MBA Program (amoses@hbs.edu), as soon as possible so that accommodations can be provided in a timely manner.

Academic integrity and professionalism: I expect full academic integrity from students in this course. All work handed in must be your own. Substantial paraphrasing or borrowing of ideas without appropriate citation can be construed as plagiarism, so be sure that you understand what constitutes a breach of academic integrity.

Attendance and participation: Class attendance is essential for understanding this material. Late arrivals are disrespectful to other class members.

A Note on Research

The results of the simulations and related polls provide rich material for class discussion, but may also be useful for research. Analysis of data from prior courses has contributed to the curriculum we use today. Only aggregate, statistical information, if any, would be used; complete anonymity would be guaranteed. If you are uncomfortable with this possibility, please contact my Faculty Support Specialist (esweeny@hbs.edu), and she will ensure that your data is always removed from any archived results that might subsequently be used for research.  She will not tell me the name of anyone who has made such a request.

Class Schedule

9/2       Negotiate and debrief Mt. Scopus Negotiation

            Overview of Course

9/8       Negotiate and debrief Hamilton Real Estate Negotiations

9/9       Fairstar case

            Influence Strategies

9/14     Negotiate and debrief El-Tek Negotiation 

9/15     Bounded Ethicality

            Biases and Behavioral Insights

            Noticing in Negotiations

9/21     Negotiate and debrief Viking Negotiation

9/22     Road Rage

            Commodity Purchase: In-Class Exercise and Debrief

9/28     Job Negotiations (asynchronous)

            Peer Feedback (Hamilton, El-Tek, and Viking)

9/29     Frasier Case

            Slice (Initial presentation)

9/30     Slice

            Airbnb

10/5     Auctions

            Malhotra video series (asynchronous)

10/6     Cuban Missile Crisis

            Negotiate Rio Curico

10/13   Debrief Rio Curico

            Endesa Case   

            Negotiating with Putin (asynchronous)

10/14   Negotiate and debrief California Family Negotiation

            Final Q&A, Discussion of Unanswered Issues in Negotiation, Exam Prep, and Wrap-Up