TeachingEnglish | Lesson plans

Worksheets - Negotiations (2): Positions and interests

2. Key terms
Match the words and phrases on the left with the explanations on the right.

1. Position a. This is the figure for a particular

variable that you would find
satisfactory.
2. Interest b. This is something that doesn’t really
matter to you, but which you include
in your opening position statement
because you may be able to trade it
for something from the other party.
3. Variable c. This is your best alternative to a
negotiated agreement. In other
words, it is what you will still have if
the negotiation fails.
4. Opening point d. A situation where there is no
solution, because neither side can
move.
5. Target point e. This is your limit for a particular
variable. You cannot go beyond this
point.
6. Reservation point f. This is the figure you give for a
particular variable when you first
state your position.
7. BATNA g. This is what you really need out of
the negotiation.
8. Deadlock h. To agree to a compromise half-way
between person A’s figure and
person B’s figure.
9. Split the difference i. This is what you say you want out of
the negotiation.
10. Giveaway j. This is one of the things that can be
negotiated, such as the unit price,
guarantees or the delivery date.

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3. Reading
Read the article. Write one of the words/phrases from exercise 2 in each
space. Some words need to be in the plural form.

Positions and interests

They say that negotiating is like mind-reading but the most important mind to
read is your own. If you don’t fully understand your own needs and wants from
the negotiation, there’s no point in trying to read the other person’s mind!

The mistake most inexperienced negotiators make is that they focus too much on
positions and not enough on interests. Almost by definition, (1)________ are
incompatible: I want to pay £500 for your printer, but you want to receive £1000; I
want the printer tomorrow, but you want to deliver next month; I want you to
install the printer, but you want me to do it. We can’t both get what we want.
Even if we (2)________on price and delivery date, neither of us will be happy.

That’s why it’s so important to be aware of our interests, the reasons behind our
positions. Let’s look again at the three (3)________in our example. I want the
machine quickly so I can complete a big order for a client worth £10,000. You
can’t deliver quickly because you don’t have that particular model in stock. I can’t
pay £1000 because I’ve got a cash flow crisis – that’s why the big order from my
client is so important. You won’t accept £500 because the printer will cost you
£600 from your supplier. I want you to install the machine because I don’t think I
could do it properly. You want me to do it because it costs you £50 to send out
an engineer.

When we start thinking in terms of (4)________, creative solutions become

possible. Maybe there’s a way for me to borrow a different machine to complete
the big order, and to pay the full price, plus the £50 cost of installation, in two
months, when the right machine’s in stock and my cash flow crisis is over.

In other words, instead of treating the negotiation like a game of poker, we can
both benefit from being honest and open about what we really need and why we
need it.Of course openness and honesty carry their own risks: a completely open
and honest negotiator can easily be manipulated by a more cynical adversary.
Revealing your interests can be a great way of breaking a (5)________, but
there’s no need to reveal too much if there’s no deadlock to break. At the end of
the day, you’ve got a duty to get the best possible deal for yourself or your
organisation.

That’s why, for each variable, it’s essential to plan three points. Start by working
out your (6)________. If you’re the seller, this might be the price you need simply
to cover your costs. Below this price, you’re better off walking away from the
negotiation. You can then decide what you actually want from each variable – the
figure that would make you feel satisfied. This is your (7)________. Finally, plan
your (8)________some way beyond that target point. This means you can show

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some flexibility in the negotiation and still come away with what you want – and
you may even get more than you want!

Once you’ve worked out these three points for every variable (and of course, how
they relate to each other), there’s still one vital piece of information you need:
your BATNA, or best alternative to negotiated agreement. For example, if you’re
trying to sell your car to person A, it’s useful to know how much person B would
be prepared to pay. If A can’t match B’s price, walk away from the negotiation.
Even if there’s no person B, you can work out the probability of finding another
buyer, and making a realistic calculation of how much you could expect that
buyer to pay. Of course, real person A’s concrete offer of £1000 may be worth
more to you than hypothetical person B’s potential offer of £1200, but these are
things you can calculate or at least estimate. And even if there’s no hope of
finding a person B, you’ve still got a (9)________: you get to keep your car.

Finally, professional negotiators always plan a few (10)________: things that

cost them nothing, but which they can exchange for something of value from the
other side. For example, one variable might be delivery time. The supplier has
actually got the goods in stock, and is desperate to get them out of the
warehouse. But he still asks for a four-week delivery period. The customer needs
the goods as soon as possible, and accepts a higher price in exchange for
quicker delivery. Of course, this can be a risky strategy – deceiving the other
person is in direct conflict with your aim of building long-term trust! But if used in
moderation, this technique can be good for breaking deadlocks.

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4. Stating your position

Read this extract from a negotiation between trade union officials and the
new owners of a factory. Answer the questions.

Background:The new owners have hinted that they will try to reduce costs in the
factory by around 10%, and the workers see this as a threat to their jobs.
Their trade union is threatening to call a strike.

1. What exactly are the four variables?

2. Do you think the trade union’s demands are reasonable?
3. What can you guess about their underlying interests?
4. What is their BATNA?
5. What do you think their giveaways might be?

Trade Union representative:As we see it, there are four main issues that we
need to resolve: redundancies, outsourcing, unfair dismissals and wages.

First of all, on the issue of redundancies in the production department, we’re

aware that you’re trying to cut costs and our members are very worried
about the prospect of redundancies. What we need is a guarantee of no
compulsory redundancies for the next five years. We’re prepared to accept
a voluntary redundancy programme, but obviously the terms would have to
be very attractive to persuade people to take it.

Secondly, we understand you are planning to outsource some functions

from our factory, namely security, transport and catering. Our members
from these three departments are extremely nervous about this prospect,
and again, we’d have to expect a promise of no outsourcing.

Thirdly, four of our colleagues have been dismissed recently, for reasons
that we believe are totally unfair. We would have to insist that all four of
them are allowed to return to work, and that they receive a full apology from
management.

Finally, as you know, we have had a pay freeze for the past two years,
which means that pay levels in this factory have fallen in real terms relative
to similar factories in the area. We are aware that the company made a
record profit last year, and we expect some of that to be returned to the
workers. We believe a 5% pay rise for all workers would go some way
towards restoring the balance, with the promise of further pay discussions
next year.

If you are prepared to meet these conditions, we will be happy to call off
next week’s strike.

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5. Useful language
Complete this list of useful language using phrases from the extract.

Introducing your • As we (1)________ it, there are four main issues that
list of variables: we need to (2)________.
• We have identified three points for discussion, and
these mostly correspond with your own list.
Introducing a • On the (3)________ of …
variable: • With regard to the subject of …
• On your fourth point, …
Stating the • We’re (4)________ that …
background for a • We (5)________ …
variable: • As you (6)________, …
• We firmly believe that …
Insisting (= • What we (7)________ is a strong (8)________ of …
making stronger • We (9)________ have to (10)________ that …
demands): • I’m afraid this is not negotiable.
• I’m afraid this isn’t something we can discuss.
• This cannot be part of our negotiations today.
Urging (= making • … would have to be …
normal • We’d have to (11)________ a (12)________ of …
demands): • We (13)________ some of that to be …
• Our expectation is something in the region of …
• We would like to propose …
• … will have to depend on …
Justifying (= • Our members are very worried about …
providing • … would go some way (14)________ restoring the
reasons): (15)________.
• So we need to …. Otherwise, …
• We have conducted research which shows that …
• We have a global policy of …
• Our priority has got to be …
Showing • We’re prepared to (16)________ …
flexibility: • If you are (17)________ to … we will be (18)________
to …
• Of course, we will do all we can to help.
• That said, we do appreciate that …
• We accept we will need to pay more …
• We can discuss this separately.
• We would very much like to work with you to …

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6. Practice
The next extract is from the management’s statement of position. Complete
the extract with words from the table in exercise 5.

Management representative:We have (1)__________ three points for

discussion, and these mostly (2)__________ with your own list.

Firstly, redundancies. As you (3)__________, our main reason for buying

this factory is that we believe we can use it to produce goods more
efficiently than the previous owners. Another way of looking at it is that they
sold it because they were no longer able to produce goods here efficiently.
So we need to find cost savings. (4)__________, the factory will have to
close and none of us wants that. We have (5)__________ research which
(6)__________ that we need to reduce our headcount in production by 25%
over the next four years. We believe a significant part of that can be
covered by natural processes, like retirements, and we would like as many
of the redundancies as possible to be voluntary. But there will inevitably be
some compulsory redundancies. So our (7)__________ is something in the
(8)__________ of 10% redundancies this year, roughly half of which will be
compulsory.

Secondly, as you say, we are looking to outsource a number of non-core

functions. We have a global (9)__________ of not getting involved in
catering, security and transport – we (10)__________ believe that all three
functions can be performed more effectively and efficiently by external
suppliers. So I’m (11)__________ this is not (12)__________: we will
outsource those three functions, and will hopefully complete the process
over the next three months. Of course, we will (13)__________ all we
(14)__________ to help our employees from those three functions to get a
job with the new suppliers of those functions.

Thirdly, with (15)__________ to the subject of pay rises, I’m afraid again we
have to look to the long-term viability of the factory. The company did
indeed make record profits last year, but that was almost entirely due to our
financial trading arm, which is a separate business. This factory has to pay
for itself, and that means making efficiency improvements. That
(16)__________, we do (17)__________ that the two-year pay freeze has
been difficult, so we would like to (18)__________ a 1% pay rise for those
that remain after the redundancies. One of our longer-term aims is to make
more use of automation technology in the factory, so although this will mean
fewer people, it will also mean we need more specialised skills, for which
we (19)__________ we will need to pay more. So any pay rises will have to
(20)__________ on how much progress we make with our redundancies
and automation programme. So, those are our three positions.

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On your fourth (21)__________, the return to work of dismissed colleagues,

I’m afraid this (22)__________ something we can discuss. Of course, we
have an appeals procedure, which those employees can use if they feel
their dismissal was unfair, and of course we can discuss this
(23)__________, but this (24)__________ be part of our negotiations today.

We would very much like to (25)__________ with you to avoid a strike,

which would be terrible for all of us. But at the same time, our
(26)__________ has got to be to ensure the long-term viability of the
factory. Otherwise, none of us will have jobs two years from now.

7. Problem-solving
Work in two teams. Team A is the trade union representatives. Team B is
the management representatives. In your teams, plan a more reasonable
presentation of your interests, taking the other side’s proposals into
consideration.

8. Role-play
Work in pairs, with one manager and one trade union representative in each
pair. Take turns to present your new positions, using phrases from exercise
5.

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