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Ch1.

The Nature of Negotiation


Four key elements of the negotiation process 1. Managing interdependence Relation between parties Independent : meet their own needs without the help an assistance of others Dependent : rely on others for what they need Interdependent: interlocking the parties need each other in order to accomplish their objectives.
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Engaging in mutual adjustment introduces the ways parties begin to set goals for themselves in a negotiation and adjust to goals stated by the other party in order to emerge with an agreement that is satisfactory to both. Two dilemmas in mutual adjustment Dilemma of honesty : how much of the truth to tell the other party Dilemma of trust : how much should negotiators believe what the other party tells them. Two efforts in negotiation help to create trust and beliefs Perceptions of outcomes Perceptions of the process

3. Creating or claiming value processes by which parties handle negotiation opportunities to share or win a scarce resource or to enhance the resource so both sides can gain. While value is often created by exploiting common interests, differences can also serve as the basis for creating value. Two types of interdependent situations Competitive, zero-sum, distributive situation - Negative correlation between their goal attainments. - Only one winner. - Purpose of the negotiation : value claiming Mutual-gains, non-zero-sum, integrative situation - Positive correlation between the goal attainments of both parties - Many winners (many people can achieve their goals and objectives) - Purpose of the negotiation : value creation 4. Managing conflicts helps negotiators understand how conflict is functional and dysfunctional. It involves some basic strategies to maximize the benefits of conflict and limit its costs. Definition of conflict : sharp disagreement or opposition, as of interests, ideas, etc. Four levels of conflict Intrapersonal or intrapsychic : within an individual

Interpersonal : between individuals Intragroup : among team and work group members Intergroup : between organizations, ethnic groups, warring nations. Dual concerns model

Concern about others outcomes

Yielding (Compromisin g) Inaction

Problem Solving

Contendin g

Concern about own outcomes

Ch2. Strategy and Tactics of Distributive Bargaining


Basic elements of distributive bargaining situation - Competitive, win lose, bargaining - The goals of one party are usually in fundamental and direct conflict with the goals of the other party - Resources are fixes and limited, and both parties want to maximize their share - Distributive bargaining strategies and tactics are quite useful when a negotiator wants to maximize the value obtained in a single deal, when the relationship with the other party is not important, when they are at the claiming value stage of negotiations. Structure of Distributive bargaining situation Starting point : opening statements each party makes Target point : usually learned or inferred as negotiations get under way Resistance point : the point beyond which a person will not go and would rather break off negotiations Bargaining range (or settlement rage, zone of potential agreement) : the spread between the resistance points. Positive bargaining range : when buyers resistance point is above the sellers Negative bargaining range : when sellers resistance point is above the buyers Negotiations that begin with a negative bargaining range are likely to stalemate BATNA (Best Alternative To a Negotiated Agreement) : alternatives are important because they give negotiators the power to walk away from any negotiation when the emerging deal is not very good. Settlement point : The objective of both parties is to reach an agreement as close to the other partys resistance point as possible Bargaining mix : It is rare that a negotiation includes only one item, more typically, a set of items, referred to as a bargaining mix, is negotiated. The bargaining mix may provide opportunities for bundling issues together, trading off across issues or displaying mutually

concessionary behavior Fundamental Strategies


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Discovering the other partys resistance point Influencing the other partys resistance point

Tactical Tasks
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Assess the other partys target, resistance point and cost of terminating negotiations Indirect assessment : determining what information an individual likely used to set target and resistance points and how he or she interpreted this information Direct assessment Manage the other partys target, resistance point and cost of terminating negotiations Screening activity : control the information sent to the other party about your target and resistance point. Important at the beginning of negotiation. Say and do as little as possible Calculated incompetence : constituents do not five the negotiating agent all the necessary information, making it impossible for him or her to leak information Present a great many items for negotiation (ex. Snow job, kitchen sink tactic) Direct action to alter impressions Selective presentation : negotiators reveal only the facts necessary to support their case Explain or interpret known facts to present a logical argument that shows the costs or risks to oneself if the other partys proposal are implemented Displaying emotional reaction to facts, proposals and possible outcomes Modify the other partys perception of his or her own target, resistance point and cost of terminating negotiations Interpret for the other party : explain how an undesirable outcome would result if the other party really did get what he or she requested Conceal information : may carry with them the ethical hazards Manipulate the actual costs of delaying or terminating negotiations Disruptive action : increase the costs of not reaching a negotiated agreement Alliance with outsiders : involve other parties in the process who can somehow influence the outcome Schedule manipulation : using fatigue of travel, jet lag or delay into the last remaining minutes of a session in order to extract concessions from the other party

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Tactics for closing a deal Provide alternatives Assume the close Split the difference Exploding offers : The purpose of the exploding offer is to convince the other party to accept the settlement and to stop considering alternatives

Sweeteners : to save a special concession for the close Dealing with typical hardball tactics Ignore them Discuss them Respond in kind Co-opt the other party

Typical hardball tactics Good Cop / Bad Cop : relatively transparent, especially with repeated use Low ball / High ball : The extreme offer will cause the other party to reevaluate his or her own opening offer and move closer to or beyond their resistance point Bogey : pretend that an issue of little or no importance to them is quite important The Nibble : ask for a proportionally small concession on an item that hasnt been discussed previously in order to close the deal Chicken : Negotiators use this tactic combine a large bluff with a threatened action to force the other party to chicken out and give them what they want Intimidation : attempt to force the other party to agree by means of an emotional ploy, usually anger or fear Aggressive behavior : relentless push for further concessions, asking for the best offer early in negotiations, asking the other party to explain and justify his or her proposals item by item or line by line Snow job : overwhelm the other party with so much information that he or she has trouble determining which facts are real or important, and which are included merely as distractions

Ch3. Strategy and Tactics of Integrative Bargaining


Overview of the integrative negotiation process The parties must understand each others true needs and objectives 2. They must create a free flow of information and an open exchange of ideas 3. They must focus on their similarities, emphasizing their commonalities rather than their differences 4. They must engage in a search for solutions that meet the goals of both sides
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Four key steps in the integrative negotiation process 1. Identifying and defining the problem Define the problem in a way that is mutually acceptable to both sides State the problem with an eye toward practicality and comprehensiveness State the problem as a goal and identify the obstacles to attaining this goal Depersonalize the problem Separate the problem definition from the search for solutions 2. Identifying interests and needs

Types of interests Substantive interest : relate to the focal issues under negotiation economical and financial issues such as price or rate, or the substance of a negotiation such as the division of resources Process interest : related to the way a dispute is settled. Relationship interest : one or both parties value their relationship with each other and do not want to take actions that will damage it Interests in principle : certain principles concerning what is fair, what is right, what is acceptable, what is ethical or what has been done in the past and what should be done in the future may be deeply held by the parties and serve as the dominant guides to their action Some observations on interests There is almost always more than one type of interest underlying a negotiation Parties can have different types of interests at stake Interests often stem from deeply rooted human needs or values Interests can change There are numerous way to surface interests Surfacing interests is not always easy or to ones best advantage Focusing interests can be harmful 3. Generating alternative solutions By redefining the problem or problem set Expand the pie : add resources in such a way that both sides can achieve their objectives Logroll : Successful logrolling requires the parties to find more than one issue in conflict and to have different priorities for those issues. Logrolling is effective when the parties can combine two issues, but not when the parties take turns in successive negotiations. Use nonspecific compensation : to allow one person to obtain his objectives and pay off the other for accommodating his interests Cut the costs for compliance : Through cost cutting, one party achieves her objectives and the others costs are minimized if she agrees to go along Find a bridge solution : When the parties are able to invent new options that meet all their respective needs they have created a bridge solution By taking the problem as given and creating a long list of options from which the parties can choose Brainstorming Surveys Electronic brainstorming Summary 4. Evaluating and selecting alternatives Narrow the range of solution options Evaluate solutions on the basis of quality, standards and acceptability Agree to the criteria in advance of evaluating options

Be willing to justify personal preferences Be alert to the influences of intangibles in selecting options Use subgroups to evaluate complex options Take time out to cool off Explore different ways to logroll Keep decisions tentative and conditional until all aspects of the final proposal are complete Minimize formality and record keeping until final agreements are closed Factors that facilitate successful integrative negotiation 1. Common objective or goal This goal may be one that the parties both want to achieve, one they want to share or one they could not possibly attain unless they worked together 2. Faith in ones problem-solving ability 3. A belief in the validity of ones own position and the others perspective The parties must be willing to believe that the others needs are valid 4. The motivation and commitment to work together 5. Trust 6. Clear and accurate communication 7. Understanding of dynamics of integrative negotiation

Ch4. Negotiation : Strategy and Planning


The Planning Process
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Defining the issues Understand the key issues that must be resolved in the upcoming negotiation Assembling issues and defining the bargaining mix Assemble all the issues together and understand the complexity of the bargaining mix Defining the interests Understand and define the key interests at stake that underlie the issues Defining limits and alternatives Define limits- points where we will walk way and alternatives other deals we could do if this deal does not work out Defining ones own objectives (targets) and opening bids (where to start) Clarify the targets to be achieved and the opening points where we will begin the discussion Assessing constituents and the social context in which the negation will occur Understand my constituents and what they expect of me Analyzing the other party Understand the other party in the negotiation their goals, issues, strategies, interests, limits, alternatives, targets, openings and authority Planning the issue presentation and defense Plan the process by which I will present and sell my ideas to other party Defining protocol where and when the negotiation will occur, who will be there, what the agenda will be, etc.

Ch5. Perception, Cognition and Emotion


Perception : The process by which individuals connect to their environment (Attention Recognition Translation) Four types of perceptual distortion Stereotyping It occurs when one individual assigns attributes to another solely on the basis of the others membership in a particular social or demographic category 2. Halo effect It occurs when people generalize about a variety of attributes based on the knowledge of one attribute of and individual 3. Selective perception It occurs when the perceiver singles out certain information that supports or reinforces a prior belief and filters out information that does not confirm that belief 4. Projection It occurs when people assign to others the characteristics or feelings that they possess themselves
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Frame : subjective mechanism through which people evaluate and make sense out of situations, leading them to pursue or avoid subsequent actions Different types of frames Substantive : Parties taking substantive frame have a particular disposition about the key issue of concern in the conflict Outcome : a partys predisposition to achieving a specific result or outcome from the negotiation. Primarily engaged in distributive (win-lose) negotiation than in other types Aspiration : predisposition toward satisfying a broader set of interests or needs in negotiation. Primarily engaged in integrative (win-win) negotiation than in other types Process : how the parties will go about resolving their dispute Identity : how the parties define who they are Characterization : how the parties define the other parties Loss-gain : how the parties define the risk or reward associated with particular outcomes How frame work in negotiation situations - Negotiators can use more than one frame - Mismatches in frames between parties are sources of conflict - Particular types of frames may lead to particular types of agreements - Specific frames may be likely to be used with certain types of issues - Parties are likely to assume a particular frame because of various factors The interests/rights/power approach to negotiation framing Interests

People are often concerned about what they need, desire or want. People talk about their position, but often what is at stake is their underlying interests Rights People are also concerned about who is right, that is, who has legitimacy, who is correct or who is fair. Power People may wish to resolve a negotiation on the basis of power. How frames change as a negotiation encounter evolves Negotiators tend to argue for stock issues or concerns that are raised every time the parties negotiate - Each party attempts to make the best possible case for his or her preferred position or perspective - Frames may define major shift and transitions in a complex overall negotiation - Multiple agenda items operate to shape issue development Cognitive biases in negotiation Irrational escalation of commitment the tendency for an individual to make decision that stick with a failing course of action 2. Mythical fixed-pie beliefs the tendency to see negotiation in fixed-pie terms 3. Anchoring and adjustment related to the effect of the standard (or anchor) against which subsequent adjustments are made during negotiation. 4. Issue framing and risk The way a negotiation is framed can make negotiators more or less risk averse or risk seeking 5. Availability of information Negotiators must be concerned with the potential bias caused by the availability of information or how easy information is to retrieve that is, how easily it can be recalled and used to inform or evaluate a process or a decision 6. The winners curse the tendency, particularly in an action setting, to settle quickly on an item and then subsequently feel discomfort about a negotiation win that comes too easily. 7. Over confidence the tendency to believe that their ability to be correct or accurate is greater than is actually true 8. The law of small numbers the tendency of people to draw conclusions from small sample sizes. 9. Self-serving biases People often explain another persons behavior by making attributions, either to the person or to the situation. In explaining another persons behavior, the tendency is to overestimate the causal role of personal or internal factors and underestimate the causal role of situational or external factors. (ex. actor-observer effect) 10. Endowment effect the tendency to overvalue something you own or believe you possess 11. Ignoring others cognitions
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Failure to consider others cognition allows negotiators to simplify their thinking about otherwise complex processes 12. Reactive devaluation the process of devaluing the other partys concessions simply because the other party made them Mood, Emotion and negotiation Negotiations create both positive and negative emotions Positive emotions generally have positive consequences for negotiations Aspects of the negotiation process can lead to positive emotions Negative emotions generally have negative consequences for negotiations Emotions can be used strategically as negotiation gambits

Ch6. Communication
Five different categories of communication that take place during negotiations 1. 2. 3. 4. 5. Offer, Counteroffers and motives Information about Alternatives (BATNA) Information about outcomes Social accounts Communication about process

How people communicate in negotiation


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Use of language logical level : for proposals or offer pragmatic level : semantics, syntax and style Use of nonverbal communication Three important attending behaviors : eye contact, body position, encouraging Selection of a communication channel The use of network-mediated information technologies in negotiation is referred to virtual negotiations. The key variation that distinguishes one communication channel from another is social presence the ability of a channel to carry and convey subtle social cues from sender to receiver that go beyond the literal text of the message itself.

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How to improve communication in negotiation 1. The use of questions Questions are essential elements in negotiations for securing information Questions can be divided into two basic categories : manageable and unmanageable Negotiators can also use questions to manage difficult or stalled negotiations.

2. Listening Passive listening : receiving the message while providing no feedback to the sender about the accuracy or completeness of reception Acknowledgement : more active than passive listening. Receivers occasionally nod their heads, maintain eye contact or interject responses like I see, mm-hmm, interesting, really, sure, go on etc. Active listening : Receivers restate or paraphrase the senders message in their own language 3. Role reversal It allows negotiators to understand more completely the other partys positions by actively arguing these positions until the other party is convinced that he or she is understood. Special communication considerations at the close of negotiations Avoiding fatal mistakes Decision making process : framing gathering intelligence coming to conclusions learning from feedback 2. Achieving closure
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Ch7. Finding and using negotiation power


Two major ways to think about power Power over Power is fundamentally dominating and coercive in nature 2. Power with Power is jointly shared with the other party to collectively develop joint goals and objectives.
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Five major sources of power Informational sources of power (information and expertise) Personal sources of power (psychological orientation, cognitive orientation, motivational orientation, moral orientation and certain dispositions and skills) 3. Position-based sources of power (legitimate power and resource control) 4. Relationship-based power (goal interdependence, referent power, networks) 5. Contextual sources of power (availability of BATNAs, availability of agents and the organizational or national culture in which the negotiation occurs)
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Dealing with others who have more power Never do an all-or-nothing deal Make the other party smaller Make yourself bigger Build momentum through doing deals in sequence Use the power of competition to leverage power

Constrain yourself Good information is always a source of power Do what you can to manage the process

Ch8. Ethics in negotiation


Ethics : broadly applied social standards for what is right or wrong in a particular situation or a process for setting those standards. They differ from morals, which are individual and personal beliefs about what is right and wrong. Four approaches to ethical reasoning End-result ethics : Rightness of an action is determined by considering consequences. Duty ethics : Rightness of an action is determined by considering obligations to apply universal standards and principles 3. Social contract ethics : Rightness of an action is determined by the customs and norms of a community 4. Personalistic ethics : Rightness of an action is determined by ones conscience.
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Motives of deceptive tactics Power motive : To increase the negotiators power in the bargaining environment A persons motivational orientation : Individualistic negotiators are more likely to use misrepresentation as a strategy 3. Cultural differences : Individuals in highly individualistic culture are more likely to use deception for personal gain than those in a more collectivist culture.
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How can negotiators deal with the other partys use of deception? 1. Ask probing questions 2. Force the other party to lie or back off 3. Call the tactic 4. Discuss what you see and offer to help the other party change to more honest behaviors 5. Respond in kind 6. Ignore the tactic

Ch11. International and cross-cultural negotiation


Factors that make international negotiation different
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Environmental context (Salacuse) Political and legal pluralism International economies Foreign governments and bureaucracies Instability Ideology Culture External stakeholders (Phatak and Habib have added)

Immediate context 1 Relative bargaining power 2 Levels of conflict 3 Relationship between negotiators 4 Desired outcomes 5 Immediate stakeholders Conceptualizing culture and negotiation 1. Culture as shared value (Hofstede) 1 Individualism / Collectivism : the extent to which a society is organized around individuals or group 2 Power distance : the extent to which less powerful members of organization and institutions (like the family) accept and expect that power is distributed unequally 3 Career success / Quality of life : the extent to which cultures hold values that promoted career success or quality of life 4 Uncertainty avoidance : to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations 2. Culture as dialectic All cultures contain dimensions or tensions that are called dialectics. This approach can explain variances within cultures (i.e. not every person in the same culture shares the same values to the same extent) The influence of culture on negotiation Managerial (Practitioner) perspective Ten ways that culture can influence negotiation Negotiation factors Range of cultural responses Definition of negotiation Contract Relationship Negotiation opportunity Distributive Integrative Selection of negotiators Experts Trusted associates Protocol Informal Formal Communication Direct Indirect Time sensitivity High Low Risk propensity High Low Groups vs. individuals Collectivism Individualism Nature of agreements Specific General Emotionalism High Low Research perspective

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Negotiation outcomes Negotiation process Negotiator cognition Negotiator ethics and tactics

Eight different culturally responsive strategies (Stephen Weiss) Low familiarity Employ agents or advisers (Unilateral strategy) Bring in a mediator (Joint strategy) Induce the other negotiator to use your approach (Joint strategy) Moderate familiarity Adapt to the other negotiators approach (Unilateral strategy) Coordinate adjustment (Joint strategy)

High familiarity Embrace the other negotiators approach (Unilateral strategy) Improvise an approach (Joint strategy) Effect symphony (Joint strategy)