NEGOTIATION

CONCEPT OF NEGOTIATION
Negotiation: It is a process in which two or more individuals or groups having common or conflicting goals, state and discuss proposals for specific terms of a possible agreement.  Types of Negotiation:  Distributive: Often referred to as a fixed pie or fixed sum. Also known as competitive or hard bargaining negotiation. A win – lose situation. Example: Purchasing a car or a house. Interest of both the parties are self – serving.

CONCEPT OF NEGOTIATION
Integrative: Often described as the win-win situation. Parties form a long term relationship for mutual gains,

heavrin 1. 5. The parties and their interests: The parties to a negotiation can be friends trying to agree on what movie to see or world leaders trying to avoid war. Interdependency Common goals Flexibility Ability to make a decision. 4. 3.ELEMENTS OF NEGOTIATIONnegotiating essentials – carrel. . 2.

 2.  .  3. The parties are committed to peaceful means for resolving their dispute. saunders A negotiation situation is one in which  1. Two or more parties must make a decision about their interdependent goals and objectives. There is no clear or established method or procedure for making the decision.NATURE OF NEGOTIATION-lewicki.

we avoid taking any position and not get what we want and we take an unrealistic position and still not get what we want. The concerns are – Sharing a scarce resource. saunders     Very often parties shun negotiation.FEAR OF NEGOTIATING-lewicki. The basis of most negotiations is some form of conflict and people are afraid of conflict. . If we truly fear conflict. But the fact is we all negotiate.

3. perceptions and emotions of the parties. udall 1. Timing is a critical factor in negotiation and affects the ultimate outcome of the discussion. A negotiation usually starts because at least one of the parties wants to change the status quo and believes that a mutually satisfactory agreements is possible. 4. skills. Negotiation is a voluntary activity: either party can break away from or refuse to enter into discussion at any time.CHARACTERISTICS OF NEGOTIATIONthe essence of negotiation hiltrop. 2. . The progress is strongly influenced by the personal values.

saunders. 3. minton 1. 10. Bracketing is directing the concentration to a specific area of negotiation and then listen aggressively. 12. No Nibbling. 8.TACTICS OF DISTRIBUTIVE BARGAINING-negotiation-lewicki. 7. 6.Ability to withdraw and then return and then keep the pressure on. 4. Delay Silence and Bracketing. I can get it cheaper somewhere else. Concessions Rationale Message Sending Deadlines . Auctions. Expectation and Control-This is where you say. 9.This is the point below which you will not go. Limited Authority The Bottom Line. 5. 2. 11. this part is not negotiable but that part is.eg.

let the experts decide: To rely on legal or expert advisers for decision making. But this often raises community expectations beyond what public officials can deliver. Hands off. 1. saunders. 4. 2. which are often not accepted by the public. . It often leads to less than satisfactory solutions.TACTICS OF INTEGRATIVE BARGAININGp112. 3. minton Ostrich Approach: To postpone making a decision for as long as possible and hope the problem will go away. lewicki. To take side with one or more of the parties (in case of multiple parties). Traditional approach: Holding public hearings in which interested parties can raise their concern.

TACTICS OF INTEGRATIVE BARGAININGp112, lewicki, saunders, minton
5.

Collaboration: It is a process through which parties who see different aspects of a problem can explore their differences and search for solutions that go beyond their limited vision of what is possible. To assemble a representative sample of the stakeholders and let them work out on an agreement among themselves.(in the given example). This option has the advantage of dealing with interrelated issues. It allows for a solution that is acceptable to all.

NATURE OF COLLABORATIVE PROBLEMS
The problems for which Collaboration offers an advantage over other methods are: 1. The problems are ill defined or there is a disagreement about how they should be defined. 2. Several stakeholders have a vested interest in the problems and are interdependent. 3. These stakeholders are not necessarily organized. 4. There may be a disparity of power/resources among the stakeholders. 5. Technical complexity can be present. 6. Existing processes have been insufficient

STRATEGY-negotiating essentialscarrell, heavrin

Negotiation strategy can be defined as the overall approach chosen when confronted with a bargaining situation. It is very often confused with tactics which are the techniques used at the bargaining table. It does not include the efforts that occur away from the bargaining table, to set up the most promising situation.

you should chose one of the three strategies a. If it’s a deadline for both sides. If you have a firm deadline. work to reach a settlement well in advance. Question negotiators on the other side about their deadlines – and if you find out their deadline is before yours. heavrin Following are the key elements to identify before choosing a strategy. 1. b. Time (deadline). Declare an earlier deadline before your real deadline. c. work to meet it. then neither has an advantage.NEGOTIATION STRATEGY-carrel.  . Without revealing your deadline.

former chairman of the National Mediation Board – ―More than anything else-yes even more than money-the negotiation process is about power. Information: This is the heart of negotiations. ego and saving face . 3.NEGOTIATION STRATEGY 2. our BATNA. Cleary. It shapes our appraisal of reality. The most important information we need is BATNA. our negotiation strategy. our expectations of what can be achieved and the outcome of a negotiation. Power: In the words of Patrick J.

-page 155 negotiating essentials-carrel. 2. Increments of Concession( focus on the number)Example: one time purchase of a house or car-you make concession that enable you to achieve a price or cost according to your BATNA. We can chose them on the basis of time. . this strategy can be practiced. information and power. Principled Negotiation.If integrative bargaining is preferred. heavrin 1. Roger Fisher and William Ury in their book. There are 5 strategies recommended for various negotiation situations. ―Getting to Yes‖ introduced the strategy of principled negotiation.STRATEGIES-negotiating essentialscarrell. heavrin .

3. 4.1. Develop mutual gain options. Principled negotiators openly discuss the issues and interests that are important. They separate positions from interests Separate the people from the positions. Discuss on objective criteria such as principles and facts . 2.

1. Position versus interest  A position may be defined as a specific demand that the party has chosen.  Interests include the needs desires concerns and fears that caused the party to chose that position.

Position versus interest of neighbours smith and jones  Smith  Position-the dog must go.we will not move  Interest-we need peace and quiet place, our house is new and so we prefer to stay in it.

Jones Positions-the dogs must stay, we will not move.  Interests – we must let the dogs out in our enclosed yards, we love the neighbourhood and want to stay in the same street near our friends.

They have feelings. anger and other human emotions.  People conduct negotiations. . ego. Position is the specific demand that a party has chosen. This is practically true if the parties can maintain a long term relationship.Separate people from positions.human responses to the positions taken by other parties can easily derail a bargaining situation that might otherwise be successful.2.

a wife and a husband planning for a weekend. The husband wants to gout to play golf with friends and the wife to their farmhouse. . Example. The issue is not where but how do they want to spend the weekend and what do they want.

 . principles or standards.Focus on objective criteria  Parties present offers based on objective criteria such as facts.

case  Page 150 west coast music inc  Page 161 explanation  .Develop mutual gain options.

identify the different outcomes or options available for each issue establishing one as the standard and thus worth 100 points and then consider the ralative value of each other option by comparison to that standard. determining their weights in relative values to the parties. 2. . Identify and then prioritize issues in the negotiation. 2.Multiple Equivalent Simultaneous Offers(MESOs) It provides for a creation of a scoring system to compare qualitatively different issues so that the best option can be defined. 2. 3 steps1.

three because research indicates that parties can effectively compare three offers. without feeling overwhelmed by too many options . Create three different offers.

outside influences and the timing of negotiation. The Economic Matrix-It is applicable when a negotiation situation involves several issues of economic value and a fixed amount of resources available for the parties to negotiate. The third dimension is the set up of the negotiation. 4. 3-D Negotiation. if they involve all three dimensions in bargaining . 5. They suggest that the negotiators will be more successful.Lax and James K Sebenius developed this unconventional tactics. the issues. The second dimension is the deal design i.STRATEGIES-CONT.Negotiators David A.e. specifics of a proposal.the parties involved. The first dimension consists of the tactics used at the bargaining table. the sequence of issues to be decided.

How will we answer these questions? 4. Do we have enough factual data and information to support this position? 6. What points should we ask in the first session? 2. What questions are the other party.NEGOTIATION STRATEGYP23. likely to ask? 3. If not.hiltrop. what extra information could be available?  .essence of negotiation.udall Key points in developing strategy: 1. What is our opening position? 5.

Who will lead the discussion? 2. 1.NEGOTIATION STRATEGY When negotiating as a team. Who will ask what questions? Who answers the other side’s questions? 4. according to the situation)  . Who will work to reduce tension? (optional. following points should also be considered. Who will verify facts? 3.

The objective is to find mutually acceptable solution which partially satisfies both the parties.  . 2. the style to adopted should also be decided. According to Thomas and Kilmann the approaches can be grouped into five categories: 1. Collaborating: To manage by maintaining interpersonal relationships and ensuring that both parties to the conflict achieve their personal goals.NEGOTIATION STRATEGY In addition to determine the strategy. Compromising: This approach assumes that winwin solution is not possible.

5. with little or no concern for goals of the parties involved: Controlling: The focus is to take steps for goals of the parties. whatever the cost to the relationship. 4. .A power oriented approach. Avoiding: the avoider views conflict as something to be shun at all costs.NEGOTIATION STRATEGY 3. Accomodating: It refers to maintaining the interpersonal relationship at all cost. The style might take the form of diplomatically diverting an issue. postponing or withdrawing from a threatening situation.

3. without feeling overwhelmed by too many options. Create three different offers.STRATEGIES-CONT. Identify the different outcomes or options. determining their weights and relative values to the parties. establishing one as the standard and then consider the relative value by comparing with the standard value. available for each issue. Identify and then prioritize three or more issues in the negotiation. 2. three because research indicates that parties can effectively compare three offers.  . The MESO technique involves three basic steps: 1.

history. It should be reaffirmed periodically. drive and goals.  Know your principles – Knowing your own principles is important.  Know your priorities – You should divide your priorities into two lists. Facts include a person’s background.  . These are the empirical facts.PLANNING FOR NEGOTIATION-the neg handbook Patrich j. One should contain the items you would like to have from negotiation (what you want) and the other list should have items you must have as part of the final deal(what you have got). cleary Collect your facts – It is critical to accumulate as much information as you can. If you are buying a car you can get the information on price and on the dealer’s actual cost.

e. Intangible issues should be listed as well as tangibles like price and quantity. issues which have little or no value to you but could be of value to the other party. . what exactly do you expect to gain from the process. Intangibles could include things like timing of payment. Clearly decide upon your BATNA-Best Alternative to a Negotiated Agreement. the better. Clearly define the expected goals i. Add throwaways i. Identify the issuesThe greater the number. 3. mode of payment etc. b.e.PLANNING-negotiating essentialscarrell and heavrin 1. a. c. 2.

This can be done by a. Desirable items that have secondary value. Throwaway items that may have value only to the other party. . 4. c. b. Dividing the items into four broad categoriesEssential items that must be gained for a settlement.PLANNING Set Priorities. Ranking all the issues from the highest priority to the lowest priority. Assigning percentage weights (relative importance ) to the items –the total weight must be 100% and throwaway items can be given a 0% weight. Important items that you would like to gain but are willing to trade to achieve essential or other important items.

PLANNING 5.Why about each issue should be thought of supported with facts logic and argument which could be based on certain data or a similar deal. Develop Support Arguments. .

UNIT 2 .

AND EMOTION IN NEGOTIATION The basic building blocks of all social encounters are:  Perception  Cognition  Emotion . COGNITION.PERCEPTION.

 A complex physical and psychological process A ―sense-making‖ process  .PERCEPTION Perception is:  The process by which individuals connect to their environment.

THE ROLE OF PERCEPTION .

◦ People interpret their environment in order to respond appropriately ◦ The complexity of environments makes it impossible to process all of the information ◦ People develop shortcuts to process information and these shortcuts create perceptual errors .THE ROLE OF PERCEPTION  The process of ascribing meaning to messages and events is strongly influenced by the perceiver’s current state of mind. role. and comprehension of earlier communications.

selecting.THE ROLE OF PERCEPTION    Negotiators approach each negotiation guided by their perceptions. and interpreting stimuli so that they have meaning to the individual.‖ .. Determine exactly what is being said and what is meant.. Defined as ―the process of screening.

PERCEPTUAL DISTORTION  Four major perceptual errors: ◦ Stereotyping ◦ Halo effects ◦ Selective perception ◦ Projection .

STEREOTYPING  One individual assigns attributes to another solely on the basis of the other’s membership in a particular social or demographic group. ◦ For example  Age  Gender  Race  Religion .

 Negative halo effect  Frowning person is dishonest. . ◦ For example  Positive halo effect  Smiling person is honest.HALO EFFECTS  People generalize about a variety of attributes based on the knowledge of one attribute of an individual.

.HALO EFFECTS CONTINUED.... ◦ Very little experience with the party  Generalization occurs based on knowledge of the party in other contexts ◦ Party is well known ◦ Qualities have strong moral implications .  Halo Effects Occur in Perception when.

SELECTIVE PERCEPTION  Occurs when the perceiver singles out certain information that supports or reinforces a prior belief. ◦ For example  Smiling  Frowning . and filters out information that does not confirm that belief.

◦ For example  Frustration  Delays .PROJECTION(PERCEPTUAL DISTORTION)  Occurs when people ascribe to others the characteristics or feelings that they possess themselves.

As part of the larger field of cognitive science. and making decisions. decision making. producing and understanding.COGNITION Cognition refers to mental processes that include attention. remembering. remember and learn. perceive. memory. judgement . Cognitive psychology is the branch of psychology that studies mental processes including how people think. solving problems. perception. problem solving. this is related to attention.

tend to impede negotiator performance. collectively labeled cognitive biases. . These errors.COGNITIVE BIASES IN NEGOTIATION  Negotiators have a tendency to make systematic errors when they process information.

COGNITIVE BIASES             Irrational escalation of commitment Mythical fixed-pie beliefs Anchoring and adjustment Issue framing and risk Availability of information The winner’s curse Overconfidence The law of small numbers Self-serving biases Endowment effect Ignoring others’ cognitions Reactive devaluation .

COGNITIVE BIASES  Irrational escalation of commitment ◦ Negotiators maintain commitment to a course of action even when that commitment constitutes irrational behavior  Mythical fixed-pie beliefs ◦ Negotiators assume that all negotiations (not just some) involve a fixed pie .

or be neutral about risk in decision making and negotiation .COGNITIVE BIASES CONT. avoid. thus be misleading  Issue framing and risk ◦ Frames can lead people to seek.  Anchoring and adjustment ◦ The effect of the standard (anchor) against which subsequent adjustments (gains or losses) are measured ◦ The anchor might be based on faulty or incomplete information.

 Availability of information ◦ Operates when information that is presented in vivid or attention-getting ways becomes easy to recall. ◦ Becomes central and critical in evaluating events and options  The winner’s curse ◦ The tendency to settle quickly on an item and then subsequently feel discomfort about a win that comes too easily .COGNITIVE BIASES CONT.

COGNITIVE BIASES CONT. the greater the possibility that past lessons will be erroneously used to infer what will happen in the future .  Overconfidence ◦ The tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true  The law of small numbers ◦ The tendency of people to draw conclusions from small sample sizes ◦ The smaller sample.

. following completion of presummit arms control discussions in Reykjavik. President Ronald Reagan to reporters. Describing the same meeting to reporters. on October 12. Secretary General Mikhail Gorbachev.The Americans came to this meeting empty handed. . Iceland. 1986.and though we put on the table the most farreaching arms control proposal in history. the General Secretary rejected it. . . . I proposed an urgent meeting here because we had something to propose.COGNITIVE BIASES CONFIDENCE OR OVERCONFIDENCE? We came to Iceland to advance the cause of peace.

is to:  Overestimate the role of personal or internal factors  Underestimate the role of situational or external factors  Endowment effect ◦ The tendency to overvalue something you own or believe you possess . either to the person or to the situation ◦ The tendency.COGNITIVE BIASES CONT.  Self-serving biases ◦ People often explain another person’s behavior by making attributions. known as fundamental attribution error.

Managing Misperceptions and Cognitive Biases in Negotiation The best advice that negotiators can follow is:  Be aware of the negative aspects of these biases  Discuss them in a structured manner within the team and with counterparts .

Emotion. and Negotiation  The distinction between mood and emotion is based on three characteristics: ◦ Specificity ◦ Intensity ◦ Duration .Mood.

and Negotiation  Aspects of the negotiation process can lead to positive emotions ◦ Positive feelings result from fair procedures during negotiation ◦ Positive feelings result from favorable social comparison ◦ Emotions can be used strategically as negotiation gambits .Emotion.

Emotion and Negotiation  Aspects of the negotiation process can lead to negative emotions ◦ Negative emotions may result from a competitive mindset ◦ Negative emotions may result from an impasse .

Its drawback is that it distorts perception of self performance.chhabra. Affect effect: Disposition of mind or affectivity influences the various stages of the negotiation process. Positive Affect.It says that happy people are more likely to exchange information and be creative in negotiations. We divide it into two parts.EMOTION-neg counsellingchandel. such that performance is judged to be relatively better than it actually is. Positive emotions generally have positive consequences for negotiations ◦ They are more likely to lead the parties toward more integrative processes ◦ They also create a positive attitude toward the other side ◦ They promote persistence .puneet mohan     Emotions play an important role in the process of negotiation.

The most researched negative emotion is. which adversely affects individual outcomes ◦ They may lead parties to escalate the conflict ◦ They may lead parties to retaliate and may thwart integrative outcomes . Anger disrupts the process of negotiation and angry negotiators cooperate less. ―Anger‖. ◦ Negative Emotions◦ They may lead parties to define the situation as competitive or distributive ◦ They may undermine a negotiator’s ability to analyze the situation accurately.EMOTION ◦ Negative Affect-It has detrimental effects on various stages in the negotiation process.

CONDITIONS FOR INFLUENCE OF EMOTION IN NEGOTIATION There are two conditions for emotional effect1. Determination that the affect is relevant and important for the judgement  . Identification of the Affect 2.

COMMUNICATION .

counteroffers. both verbal and nonverbal. are critical to achieving negotiation goals and to resolving conflicts. Communication processes. and motives Information about alternatives Information about outcomes Social accounts ◦ Explanations of mitigating circumstances ◦ Explanations of exonerating circumstances ◦ Reframing explanations  Communication about process     .COMMUNICATION  Communication is the process of passing information and understanding from one person to another. What Is Communicated during Negotiation?  Offers.

Basic Models of Communication Communication is an activity that occurs between two people: a sender and a receiver  A sender has a meaning in mind and encodes this meaning into a message that is transmitted to a receiver  A receiver provides information about how the message was received and by becoming a sender and responding to. or rebutting the original message (processes referred to as ―feedback‖) . building on.

What Is Communicated during Negotiation?      Offers. counteroffers. and motives Information about alternatives Information about outcomes Social accounts ◦ Explanations of mitigating circumstances ◦ Explanations of exonerating circumstances ◦ Reframing explanations Communication about process .

style)  Use of nonverbal communication ◦ Making eye contact ◦ Adjusting body position ◦ Nonverbally encouraging or discouraging what the other says . offers) ◦ Pragmatic level (semantics.How People Communicate in Negotiation  Use of language ◦ Logical level (proposals. syntax.

The ability of a channel to carry and convey subtle social cues from sender to receiver . in writing and increasingly through electronic channels or virtual negotiations Social presence distinguishes one communication channel from another.How People Communicate in Negotiation  Selection of a communication channel • • • • Communication is experienced differently when it occurs through different channels People negotiate through a variety of communication media – by phone.

Four Biases that Threaten E-mail Negotiations 1. Burned bridge bias ◦ Tendency to do risky things during e-mail that would not be used in a face-to-face encounter 3. Sinister attribution bias ◦ Overlooking the role of situational factors ◦ . Squeaky wheel bias ◦ Tendency to use a negative emotional style 4. Temporal synchrony bias Tendency for negotiators to behave as if they are in a synchronous situation when they are not 2.

How to Improve Communication in Negotiation  Use of questions: two basic categories ◦ Manageable  Cause attention or prepare the other person’s thinking for further questions:  ―May I ask you a question?‖  getting information  ―How much will this cost?‖  generating thoughts  ―Do you have any suggestions for improving this?‖ .

How to Improve Communication in Negotiation  Use of questions: two basic categories ◦ Unmanageable questions  Cause difficulty  ―Where did you get that dumb idea?‖  give information  ―Didn’t you know we couldn’t afford this?‖  bring the discussion to a false conclusion  ―Don’t you think we have talked about this enough?‖ .

Passive listening: Receiving the message while providing no feedback to the sender 2. or interject responses 3.How to Improve Communication in Negotiation  Listening: three major forms 1. Acknowledgment: Receivers nod their heads. Active listening: Receivers restate or paraphrase the sender’s message in their own language . maintain eye contact.

likely to produce acceptable results. when the positions are incompatible.How to Improve Communication in Negotiation  ◦ Role reversal Negotiators understand the other party’s positions by actively arguing these positions until the other party is convinced that he or she is understood Impact and success of the role-reversal technique 1. may inhibit positive change 3. Not necessarily effective overall as a means of inducing agreement between parties ◦ . Effective in producing cognitive changes and attitude changes 2. When the positions are compatible.

Special Communication Considerations at the Close of Negotiations  Avoiding fatal mistakes ◦ Keeping track of what you expect to happen ◦ Systematically guarding yourself against selfserving expectations ◦ Reviewing the lessons from feedback for similar decisions in the future  Achieving closure ◦ Avoid surrendering important information needlessly ◦ Refrain from making ―dumb remarks‖ .

BEST PRACTICES IN NEGOTIATION AND BATNA .

Diagnose the fundamental structure of the negotiation — Make conscious decisions about the nature of the negotiation: is it a distributive or integrative negotiation or blend of the two — Choose strategies and tactics accordingly . Be prepared — Understand and articulate your goals and interests — Set high but achievable aspirations for negotiation 2.TEN BEST PRACTICES FOR NEGOTIATORS 1.

Identify and work the BATNA — Be vigilant about the BATNA — Be aware of the other negotiator’s BATNA 4. Be willing to walk away — Strong negotiators are willing to walk away when no agreement is better than a poor agreement — Have a clear walkaway point in mind where you will halt the negotiation .TEN BEST PRACTICES FOR NEGOTIATORS 3.

BEST PRACTICES 5. Master the key paradoxes of negotiation — Claiming value versus creating value — Sticking by your principles versus being resilient to the flow — Sticking with the strategy versus opportunistic pursuit of new options — Facing the dilemma of honesty: honest and open versus closed and opaque — Facing the dilemma of trust: trust versus distrust .

Remember the intangibles — ―See what is not there‖ — Ask questions — Take an observer or listener with you to the negotiation 7. Actively manage coalitions — Coalitions against you — Coalitions that support you — Undefined coalitions that may materialize for or against you .TEN BEST PRACTICES FOR NEGOTIATORS 6.

Savor and protect your reputation — Start negotiation with a positive reputation — Shape your reputation by acting in a consistent and fair manner 9.TEN BEST PRACTICES FOR NEGOTIATORS 8. Remember that rationality and fairness are relative — Question your perceptions of fairness and ground them in clear principles — Find external benchmarks of fair outcomes — Engage in dialogue to reach consensus on fairness .

Continue to learn from the experience — Practice the art and science of negotiation — Analyze each negotiation  Plan a personal reflection time after each negotiation  Periodically take a less from a trainer or a coach  Keep a personal diary on strengths and weaknesses and develop a plan to work on weaknesses .TEN BEST PRACTICES FOR NEGOTIATORS 10.

BATNA   BATNA=best alternative to negotiated agreement ◦ The alternative that negotiators can turn to if no agreement is reached in negotiation examples of BATNAs in ◦ Car Sale Negotiation ◦ Salary Negotiation ◦ Union-Management Negotiation .

BATNA  1. 6. ELEMENTS OF BATNA Deadlines Alternatives One’s resources Other party’s resources Information Experience Knowing the interests of negotiation . 3. 7. 2. 4. 5.

BATNA     DISCOVERING BATNA Prepare a list of all possible actions that you will take if no agreement is reached Focus on some of the bright options Select the one most suited .

BATNA Following points have to be kept in mind while determining one’s BATNA  Cost  Feasibility  Impact  Consequences  .

UNIT 3 INTERNATIONAL AND CROSS CULTURAL NEGOTIATION .

INTERNATIONAL AND CROSSCULTURAL NEGOTIATION   Factors of International NegotiationEnvironmental context ◦ Political and legal pluralism ◦ International economics ◦ Foreign governments and bureaucracies ◦ Instability ◦ Ideology ◦ Culture ◦ External Stakeholders .

FACTORS OF INTERNATIONAL NEGOTIATION  Immediate Context ◦ Relative bargaining power (not just investment) ◦ Levels of conflict ◦ Relationships between negotiators ◦ Desired Outcomes ◦ Immediate Stakeholders .

THE CONTEXTS OF INTERNATIONAL NEGOTIATIONS .

HOW DO WE EXPLAIN INTERNATIONAL NEGOTIATION OUTCOMES? International negotiations can be much more complicated Simple arguments cannot explain conflicting international negotiation outcomes  The challenge is to:  ◦ Understand the multiple influences of several factors on the negotiation process ◦ Update this understanding regularly as circumstances change .

Conceptualizing Culture and Negotiation  Culture as learned behavior ◦ A catalogue of behaviors the foreign negotiator should expect  Culture as shared values ◦ Understanding central values and norms  Individualism/collectivism  Power distance  Career success/quality of life  Uncertainty avoidance .

DIMENSIONS OF CULTURES  Hofstede studied 50 cultures and found four main dimensions to explain differences: ◦ Individualism/collectivism ◦ Power distance ◦ Career success/Quality of life ◦ Uncertainty avoidance .

INDIVIDUALISM/COLLECTIVISM Definition: the extent to which the society is organized around individuals or the group  Individualism/collectivism orientation influences a broad range of negotiation processes. outcomes. using whatever short-term criteria seem appropriate ◦ Collectivistic societies focus on relationships and will stay with the same negotiator for years . and preferences ◦ Individualistic societies may be more likely to swap negotiators.

POWER DISTANCE Definition: ―The extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally‖  Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture. .

CAREER SUCCESS/QUALITY OF LIFE .

etc. .UNCERTAINTY AVOIDANCE Definition: ―Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations‖  Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations--want more certainty on details.

1 .Hofstede’s Cultures Ranking in the Top 10  TABLE 16.

CONCEPTUALIZING CULTURE AND NEGOTIATION  Culture as dialectic ◦ All cultures contain dimensions or tensions that are called dialectics  Example: Judeo-Christian parables ―too many cooks spoil the broth‖ and ―two heads are better than one‖ offer conflicting guidance  This can explain variations within cultures  Culture in context ◦ No human behavior is determined by a single cause ◦ All behavior may be understood at many different levels simultaneously .

CULTURE AND NEGOTIATION Cultural attribution error: tendency to overlook situational factors in favor of cultural explanations.  .  Culture as shared values.

THE INFLUENCE OF CULTURE ON NEGOTIATION: MANAGERIAL PERSPECTIVES           Definitions of negotiation Negotiation opportunity Selection of negotiators Protocol Communication Time sensitivity Risk propensity Groups versus individuals emphasis Nature of agreements Emotionalism .

THE INFLUENCE OF CULTURE ON NEGOTIATION: RESEARCH PERSPECTIVES  Negotiation outcomes ◦ Research suggests that culture has an effect on negotiation outcomes. although it may not be direct and it likely has an influence through differences in the negotiation process in different cultures ◦ Some evidence suggests that cross-cultural negotiations yield poorer outcomes than intracultural negotiations .

including:  Effects of culture on negotiator cognition ◦ Accountability to a constituent influenced negotiators from individualistic and collectivistic cultures differently . THE INFLUENCE OF CULTURE ON NEGOTIATION: RESEARCH PERSPECTIVES Negotiation process     How negotiators plan The offers made during negotiation The communication process How information is shared during negotiation ◦ Culture has been found to have significant effects on the negotiation process.

whereas in individualistic countries. disagreements are resolved based on rules.THE INFLUENCE OF CULTURE ON NEGOTIATION: RESEARCH PERSPECTIVES   Effect of culture on negotiator ethics and tactics ◦ Differences exist in the tolerance of different negotiation tactics in different cultures ◦ Negotiators who trusted the other party were less likely to use questionable negotiation tactics Effects of culture on conflict resolution ◦ Within collectivistic countries. conflicts tend to be resolved through personal experience and training .

CULTURALLY RESPONSIVE NEGOTIATION STRATEGIES  ◦ ◦ When choosing a strategy. moderate. negotiators should: Be aware of their own and the other party’s culture in general Understand the specific factors in the current relationship Predict or try to influence the other party’s approach ◦  Strategies are arranged based on the level of familiarity (low. high) that a negotiator has with the other party’s culture .

LOW FAMILIARITY  Employ agents or advisers (unilateral strategy) ◦ Useful for negotiators who have little awareness of the other party’s culture  Bring in a mediator (joint strategy) ◦ Encourages one side or the other to adopt one culture’s approaches or mediator culture approach  Induce the other party to use your approach (joint strategy) ◦ The other party may become irritated or be insulted .

MODERATE FAMILIARITY   Adapt to the other negotiator’s approach (unilateral strategy) ◦ Involves making conscious changes to your approach so it is more appealing to the other party Coordinate adjustment (joint strategy) ◦ Involves both parties making mutual adjustments to find a common process for negotiation .

and circumstances  Effect symphony (joint strategy) ◦ The parties create a new approach that may include aspects of either home culture or adopt practices from a third culture . other party.HIGH FAMILIARITY  Embrace the other negotiator’s approach (unilateral strategy) ◦ Adopting completely the approach of the other negotiator (negotiator needs to completely bilingual and bicultural)  Improvise an approach (joint strategy) ◦ Crafts an approach that is specifically tailored to the negotiation situation.

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