Matching Negotiation Approach to Spend Characteristics
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In this non-degree program, world-renowned negotiations expert Roy Lewicki will team with award-winning MBA professor John Gray to provide a course that tightly links insights from sourcing and procurement strategy to well-developed theory from negotiations.
Professor Gray will kick off the program with the latest thinking on linking the supplier/vendor selection and management strategy to key characteristics of the spend. Characteristics considered will include those from the buying firm (e.g., link to competitiveness; value of the spend), the spend itself (e.g., codifiability of specifications; importance of nonprice attributes), and the supplier market (e.g., competitiveness). Given the segmentation of the supply base resulting from the analysis, appropriate strategies for different groups of suppliers will be developed. A key part of the implementation strategy involves selection and negotiation.
Professor Lewicki will provide a basic introduction to the two most dominant approaches to negotiation – traditionally called transactional or win-lose negotiation, and relational or win-win negotiation. The assumptions, strategy and tactics of each approach will be reviewed, as skilled negotiators must be experienced in both approaches as well as several hybrid variations. The class will then explore how the characteristics defined in the morning session, as well as a number of other situational characteristics, suggest which negotiation strategy might be most appropriate for different procurement and sourcing situations. Other topics may include the critical importance of preparation for negotiation, the dynamics of working in a negotiation team, and dealing with ‘difficult’ opponents. One or two simulated negotiations during the afternoon will illustrate these key points.