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,
 ELEMENTS OF NEGOTIATION-
negotiating essentials carrel,heavrin
1. 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.
2. Interdependency
3. Common goals
4. Flexibility
5. Ability to make a decision.
 NATURE OF NEGOTIATION-lewicki,
saunders
A negotiation situation is one in which
1. Two or more parties must make a decision about
their interdependent goals and objectives.
2. The parties are committed to peaceful means for
resolving their dispute.
3. There is no clear or established method or
procedure for making the decision.
 FEAR OF NEGOTIATING-lewicki,
saunders
Very often parties shun negotiation. But the fact is
we all negotiate. The basis of most negotiations is
some form of conflict and people are afraid of
conflict.
The concerns are
Sharing a scarce resource.
If we truly fear conflict, we avoid taking any position
and not get what we want and we take an
unrealistic position and still not get what we want.
 CHARACTERISTICS OF NEGOTIATION-
the essence of negotiation hiltrop, udall
1. Negotiation is a voluntary activity: either party can
break away from or refuse to enter into
discussion at any time.
2. 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.
3. Timing is a critical factor in negotiation and
affects the ultimate outcome of the discussion.
4. The progress is strongly influenced by the
personal values, skills, perceptions and emotions
of the parties.
 TACTICS OF DISTRIBUTIVE
BARGAINING-negotiation-lewicki, saunders,
minton
1. Delay
2. Silence and Bracketing. Bracketing is directing the
concentration to a specific area of negotiation and then listen
aggressively.
3. Limited Authority
4. The Bottom Line- This is the point below which you will not go.
5. No
6. Nibbling- Ability to withdraw and then return and then keep the
pressure on.
7. Expectation and Control-This is where you say, this part is not
negotiable but that part is.
8. Auctions- eg. I can get it cheaper somewhere else.
9. Concessions
10. Rationale
11. Message Sending
12. Deadlines
TACTICS OF INTEGRATIVE BARGAINING-
p112, lewicki, saunders, minton

1. Ostrich Approach: To postpone making a decision for

as long as possible and hope the problem will go
away.
2. To take side with one or more of the parties (in case of
multiple parties).
3. Hands off, let the experts decide: To rely on legal or
expert advisers for decision making.
4. Traditional approach: Holding public hearings in which
interested parties can raise their concern. But this
often raises community expectations beyond what
public officials can deliver. It often leads to less than
satisfactory solutions, which are often not accepted by
the public.
TACTICS OF INTEGRATIVE BARGAINING-
p112, 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 essentials-
carrell, 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.
 NEGOTIATION STRATEGY-carrel,
heavrin
Following are the key elements to identify before
choosing a strategy.
1. Time (deadline). If you have a firm deadline, you
should chose one of the three strategies
a. Without revealing your deadline, work to reach a
settlement well in advance.
b. Declare an earlier deadline before your real
deadline.
c. Question negotiators on the other side about their
deadlines and if you find out their deadline is
before yours, work to meet it. If its a deadline for
both sides, then neither has an advantage.
 NEGOTIATION STRATEGY
2. Information: This is the heart of negotiations. It
shapes our appraisal of reality, our negotiation
strategy, our BATNA, our expectations of what
can be achieved and the outcome of a
negotiation. The most important information we
need is BATNA.
3. Power: In the words of Patrick J. Cleary, former
chairman of the National Mediation Board
More than anything else-yes even more than
money-the negotiation process is about power,
ego and saving face
 STRATEGIES-negotiating essentials-
carrell, heavrin
. There are 5 strategies recommended for various
negotiation situations. We can chose them on the
basis of time, information and power.-page 155
negotiating essentials-carrel, heavrin
1. 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.
2. Principled Negotiation- If integrative bargaining is
preferred, this strategy can be practiced. Roger
Fisher and William Ury in their book, Getting to
Yes introduced the strategy of principled
negotiation.
1. Principled negotiators openly discuss
the issues and interests that are
important. They separate positions
from interests
2. Separate the people from the
positions.
3. Develop mutual gain options.
4. Discuss on objective criteria such as
principles and facts
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.
2.Separate people from positions.
People conduct negotiations. They have
feelings, ego, anger and other human
emotions. Position is the specific
demand that a party has chosen.human
responses to the positions taken by other
parties can easily derail a bargaining
situation that might otherwise be
successful. This is practically true if the
parties can maintain a long term
relationship.
 Example- 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. The
issue is not where but how do they
want to spend the weekend and what
do they want.
 Focus on objective criteria
Parties present offers based on
objective criteria such as facts,
principles or standards.
 Develop mutual gain options- case
Page 150 west coast music inc
Page 161 explanation
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.
3 steps-
1. Identify and then prioritize issues in the
negotiation, determining their weights in relative
values to the parties.
2. 2. 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.
 Create three different offers, three
because research indicates that
parties can effectively compare three
offers, without feeling overwhelmed by
too many options
 STRATEGIES-CONT.
4. 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.
5. 3-D Negotiation- Negotiators David A.Lax and James
K Sebenius developed this unconventional tactics.
The first dimension consists of the tactics used at the
bargaining table. The second dimension is the deal
design i.e. specifics of a proposal. The third
dimension is the set up of the negotiation- the parties
involved, the issues, the sequence of issues to be
decided, outside influences and the timing of
negotiation. They suggest that the negotiators will be
more successful, if they involve all three dimensions
in bargaining
 NEGOTIATION STRATEGY-
P23,essence of negotiation,hiltrop,udall
Key points in developing strategy:
1. What points should we ask in the first session?
2. What questions are the other party, likely to ask?
3. How will we answer these questions?
4. What is our opening position?
5. Do we have enough factual data and information
to support this position?
6. If not, what extra information could be available?
 NEGOTIATION STRATEGY
When negotiating as a team, following points
should also be considered.
1. Who will lead the discussion?
2. Who will verify facts?
3. Who will ask what questions? Who answers the
other sides questions?
4. Who will work to reduce tension? (optional,
according to the situation)
 NEGOTIATION STRATEGY
In addition to determine the strategy, 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.
2. Compromising: This approach assumes that win-
win solution is not possible. The objective is to
find mutually acceptable solution which partially
satisfies both the parties.
 NEGOTIATION STRATEGY
3. Accomodating: It refers to maintaining the
interpersonal relationship at all cost, with little or
no concern for goals of the parties involved:
4. Controlling: The focus is to take steps for goals of
the parties, whatever the cost to the relationship.A
power oriented approach.
5. Avoiding: the avoider views conflict as something
to be shun at all costs. The style might take the
form of diplomatically diverting an issue,
postponing or withdrawing from a threatening
situation.
 STRATEGIES-CONT.
The MESO technique involves three basic steps:
1. Identify and then prioritize three or more issues in
the negotiation, determining their weights and
relative values to the parties.
2. Identify the different outcomes or options,
available for each issue, establishing one as the
standard and then consider the relative value by
comparing with the standard value.
3. Create three different offers, three because
research indicates that parties can effectively
compare three offers, without feeling
overwhelmed by too many options.
 PLANNING FOR NEGOTIATION-the
neg handbook Patrich j. 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 dealers actual
cost. These are the empirical facts. Facts include a
persons background, history, drive and goals.
Know your principles Knowing your own principles is
important. It should be reaffirmed periodically.
Know your priorities You should divide your priorities
into two lists. 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).
 PLANNING-negotiating essentials-
carrell and heavrin
1. Clearly define the expected goals i,e, what exactly
do you expect to gain from the process.
2. Clearly decide upon your BATNA-Best Alternative
to a Negotiated Agreement.
3. Identify the issues-
a. The greater the number, the better.
b. Intangible issues should be listed as well as
tangibles like price and quantity. Intangibles could
include things like timing of payment, mode of
payment etc.
c. Add throwaways i.e. issues which have little or no
value to you but could be of value to the other
party.
 PLANNING
4. Set Priorities- This can be done by
a. Ranking all the issues from the highest priority to the
lowest priority.
b. Assigning percentage weights (relative importance )
to the items the total weight must be 100% and
throwaway items can be given a 0% weight.
c. Dividing the items into four broad categories-
Essential items that must be gained for a settlement.
Important items that you would like to gain but are willing
to trade to achieve essential or other important items.
Desirable items that have secondary value.
Throwaway items that may have value only to the other
party.
 PLANNING
5. Develop Support Arguments- 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.
UNIT 2
 PERCEPTION, COGNITION, AND
EMOTION IN NEGOTIATION
The basic building blocks of all social encounters are:
Perception
Cognition
Emotion
 PERCEPTION
Perception is:
The process by which individuals connect to their
environment.

A complex physical and psychological process

A sense-making process
THE ROLE OF PERCEPTION
 THE ROLE OF PERCEPTION
The process of ascribing meaning to messages
and events is strongly influenced by the perceivers
current state of mind, role, and comprehension of
earlier communications.
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
Negotiators approach each negotiation guided by
their perceptions...
Determine exactly what is being said and what is
meant.
Defined as the process of screening, selecting,
and interpreting stimuli so that they have meaning
to the individual.
 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 others membership in a
particular social or demographic group.
For example
Age
Gender
Race
Religion
 HALO EFFECTS
People generalize about a variety of attributes
based on the knowledge of one attribute of an
individual.
For example
Positive halo effect
Smiling person is honest.
Negative halo effect
Frowning person is dishonest.
 HALO EFFECTS CONTINUED...
Halo Effects Occur in Perception when...
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
 SELECTIVE PERCEPTION
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.
For example
Smiling
Frowning
 PROJECTION(PERCEPTUAL
DISTORTION)
Occurs when people ascribe to others the
characteristics or feelings that they possess
themselves.
For example
Frustration
Delays
 COGNITION
Cognition refers to mental processes that include
attention, remembering, producing and
understanding, solving problems, and making
decisions.
Cognitive psychology is the branch of psychology
that studies mental processes including how
people think, perceive, remember and learn.
As part of the larger field of cognitive science, this is
related to attention, memory, perception, problem
solving, decision making, judgement
COGNITIVE BIASES IN NEGOTIATION
Negotiators have a tendency to make systematic
errors when they process information. These
errors, collectively labeled cognitive biases, tend to
impede negotiator performance.
 COGNITIVE BIASES
Irrational escalation of commitment
Mythical fixed-pie beliefs
Anchoring and adjustment
Issue framing and risk
Availability of information
The winners 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
 COGNITIVE BIASES CONT.

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, thus be misleading
Issue framing and risk
Frames can lead people to seek, avoid, or be
neutral about risk in decision making and
negotiation
 COGNITIVE BIASES CONT.

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 winners curse
The tendency to settle quickly on an item and
then subsequently feel discomfort about a win
that comes too easily
 COGNITIVE BIASES CONT.
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, the greater the possibility
that past lessons will be erroneously used to infer
what will happen in the future
 COGNITIVE BIASES CONFIDENCE
OR OVERCONFIDENCE?
We came to Iceland to advance the cause of peace. .
.and though we put on the table the most far-
reaching arms control proposal in history, the
General Secretary rejected it.
President Ronald Reagan
to reporters,
following completion of presummit arms
control discussions
in Reykjavik, Iceland, on
October 12, 1986.
I proposed an urgent meeting here because we
had something to propose. . .The Americans came
to this meeting empty handed.
Secretary General Mikhail
Gorbachev,
Describing the same
meeting to reporters.
 COGNITIVE BIASES CONT.
Self-serving biases
People often explain another persons behavior
by making attributions, either to the person or to
the situation
The tendency, known as fundamental attribution
error, 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
 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
 Mood, Emotion, and Negotiation
The distinction between mood and emotion is
based on three characteristics:
Specificity
Intensity
Duration
 Emotion, 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 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
 EMOTION-neg counselling-
chandel,chhabra,puneet mohan
Emotions play an important role in the process of negotiation.
Affect effect: Disposition of mind or affectivity influences the
various stages of the negotiation process. We divide it into
two parts.
Positive Affect- It says that happy people are more likely to
exchange information and be creative in negotiations. Its
drawback is that it distorts perception of self performance,
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
 EMOTION
Negative Affect-It has detrimental effects on various
stages in the negotiation process. The most
researched negative emotion is, Anger. Anger
disrupts the process of negotiation and angry
negotiators cooperate less.
Negative Emotions-
They may lead parties to define the situation as
competitive or distributive
They may undermine a negotiators ability to analyze
the situation accurately, which adversely affects
individual outcomes
They may lead parties to escalate the conflict
They may lead parties to retaliate and may thwart
integrative outcomes
 CONDITIONS FOR INFLUENCE OF
EMOTION IN NEGOTIATION

There are two conditions for emotional effect-

1. Identification of the Affect
2. Determination that the affect is relevant and
important for the judgement
COMMUNICATION
 COMMUNICATION
Communication is the process of passing information and
understanding from one person to another. Communication
processes, both verbal and nonverbal, are critical to
achieving negotiation goals and to resolving conflicts.

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
 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, building on, or
rebutting the original message (processes
referred to as feedback)
 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
 How People Communicate
in Negotiation
Use of language
Logical level (proposals, offers)
Pragmatic level (semantics, syntax, style)
Use of nonverbal communication
Making eye contact
Adjusting body position
Nonverbally encouraging or discouraging what
the other says
 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, in writing
and increasingly through electronic channels or
virtual negotiations
Social presence distinguishes one
communication channel from another.
The ability of a channel to carry and convey
subtle social cues from sender to receiver
 Four Biases that Threaten
E-mail Negotiations
1. Temporal synchrony bias
Tendency for negotiators to behave as if they
are in a synchronous situation when they are
not
2. Burned bridge bias
Tendency to do risky things during e-mail that
would not be used in a face-to-face encounter
3. Squeaky wheel bias
Tendency to use a negative emotional style
4. Sinister attribution bias
Overlooking the role of situational factors
 How to Improve
Communication in Negotiation
Use of questions: two basic categories
Manageable
Cause attention or prepare the other persons
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
Didnt you know we couldnt afford this?
bring the discussion to a false conclusion
Dont you think we have talked about this
enough?
 How to Improve
Communication in Negotiation
Listening: three major forms
1. Passive listening: Receiving the message
while providing no feedback to the sender
2. Acknowledgment: Receivers nod their heads,
maintain eye contact, or interject responses
3. Active listening: Receivers restate or
paraphrase the senders message in their own
language
 How to Improve
Communication in Negotiation
Role reversal
Negotiators understand the other partys
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. Effective in producing cognitive changes and
attitude changes
2. When the positions are compatible, likely to
produce acceptable results; when the positions
are incompatible, may inhibit positive change
3. Not necessarily effective overall as a means of
inducing agreement between parties
Special Communication Considerations
at the Close of Negotiations
Avoiding fatal mistakes
Keeping track of what you expect to happen
Systematically guarding yourself against self-
serving 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
 TEN BEST PRACTICES FOR
NEGOTIATORS
1. Be prepared
Understand and articulate your goals and
interests
Set high but achievable aspirations for
negotiation
2. 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
 TEN BEST PRACTICES FOR
NEGOTIATORS
3. Identify and work the BATNA
Be vigilant about the BATNA
Be aware of the other negotiators 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
 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
 TEN BEST PRACTICES FOR
NEGOTIATORS
6. 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
8. Savor and protect your reputation
Start negotiation with a positive reputation
Shape your reputation by acting in a consistent
and
fair manner
9. 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
 TEN BEST PRACTICES FOR
NEGOTIATORS
10. 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
 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
ELEMENTS OF BATNA
1. Deadlines
2. Alternatives
3. Ones resources
4. Other partys resources
5. Information
6. Experience
7. Knowing the interests of negotiation
 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 ones BATNA
Cost
Feasibility
Impact
Consequences
 UNIT 3
INTERNATIONAL AND
CROSS CULTURAL
NEGOTIATION
 INTERNATIONAL AND CROSS-
CULTURAL NEGOTIATION
Factors of International Negotiation-
Environmental 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, and preferences
Individualistic societies may be more likely to
swap negotiators, using whatever short-term
criteria seem appropriate
Collectivistic societies focus on relationships and
will stay with the same negotiator for years
 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
 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, etc.
Hofstedes Cultures Ranking
in the Top 10
TABLE 16.1
 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
 THE INFLUENCE OF CULTURE ON
NEGOTIATION: RESEARCH
PERSPECTIVES
Negotiation process
Culture has been found to have significant effects
on the negotiation process, including:
How negotiators plan
The offers made during negotiation
The communication process
How information is shared during negotiation
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
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, disagreements are
resolved based on rules, whereas in
individualistic countries, conflicts tend to be
resolved through personal experience and
training
 CULTURALLY RESPONSIVE
NEGOTIATION STRATEGIES
When choosing a strategy, negotiators
should:
Be aware of their own and the other partys
culture in general
Understand the specific factors in the current
relationship
Predict or try to influence the other partys
approach
Strategies are arranged based on the
level of familiarity (low, moderate, high)
that a negotiator has with the other partys
culture
 LOW FAMILIARITY

Employ agents or advisers (unilateral strategy)

Useful for negotiators who have little awareness of
the other partys culture
Bring in a mediator (joint strategy)
Encourages one side or the other to adopt one
cultures 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 negotiators 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
 HIGH FAMILIARITY

Embrace the other negotiators 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, other party, 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