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M ULTI-PARTY N EGOTIATION
By Pablo M. Linzoain
INTRODUCTION AND DEFINITIONS There is a substantial difference between negotiation involving two parties and those, which involve more than two parties. Sebenius (1996) states that the most powerful advances in negotiation theory have been mainly inspired by the two-party case. On the other hand, multiparty negotiation is often seen as a question of coalition-formation ( Rubin and Brown, 1975, Zartman, 1988). The coalitional possibilities make the analysis of a complex negotiation more difficult and interesting. Part of the game for each party is to build a relationship with the group and to form alliances with some of the members within it. In these relationships they should be able to improve their communication, trust, exchange of information and understanding each other’s needs and wants. According to Bazerman, Mannix and Thompson (1988), group negotiation is a process in which three or more persons, with their interests, decide how to resolve their conflicting preferences among issues. However, the knowledge, theory and practice of two-party negotiation do not transfer to a group situation readily (Bazerman and Neale, 1992).
DIFFERENCES B ETWEEN TWO-PARTY AND M ULTI-PARTY NEGOTIATION A classic example of two-party negotiation is the standard strategic model Prisoner’s Dilemma Game, which has been called the negotiator’s dilemma by Lax and Sebenius (1986). Both
Pablo M. Linzoain
late.negotiators face a choice between contending (“claiming value”) and problem solving (“creating value”). or not at all. the dynamics of group negotiation are far Pablo M. throughout. creating while claiming value (Lax and Sebenius. there are four possible outcomes. Linzoain 2 . or be straight. as shown in figure. David Lax and James Sebenius (1986:39) “The Manager as Negotiator” The Free Press. 1986). N EGOTIATOR 2 CREATE CLAIM GOOD CREATE GR EA T GOOD N EGOTIATOR 1 TER R IB LE TER R IB LE M ED IOC R E M ED IOC R E CLAIM GR EA T Source: The negotiator’s dilemma. USA The negotiator’s dilemma characterises the whole of a negotiation. s/he can mislead by omission or commission. Each negotiator has specific interest and s/he can reveal information early. The essence of an effective negotiator is being able to manage this tension. The tension the negotiator’s dilemma reflects between cooperative impulses to create value and competitive impulses to claim it is the same regardless of the scale of the negotiation. Hence. However. The line between “creating” and “claiming” need not be clear-cut.
some parties were motivated to work together.more complex than those of the two-party negotiator’s dilemma.Madigan and T. In the complex negotiation of the Harborco case. there are five sets of individual interests. the network grows. 1 D. 1992). This web of interests and relationships becomes increasingly complex as the number of parties grows (Bazerman and Neale. In the Harborco1 case (in which the author of this assignment played the role of the Governor’s Negotiator). there are three sets of individual interests. to build productive relationships. it is much more difficult. Linzoain 3 .). Assistant Professor. two sets of interests and one interaction. David Lax and the Negotiation Roundtable. With three parties. It is relatively easy for two parties to find the motivation to work together: with more than two. When the negotiation is between more than two persons. it was difficult at the beginning to understand the interests and preferences of each party. In almost every case. with two parties there are four possible outcomes. which resulted in disarray. however. multiple potential three. Pablo M. Only when the group started to listen to one another and to divide into sub-groups did the situation become clearer.Weeks wrote this case study under the supervision of Professor Lawrence Susskind (M. in a multi-party negotiation it will take longer to differentiate interests and preferences of group members than it will between two parties. It was no surprise to discover that the group needed time and resources to be able to work in coordination and cooperation with one another and to find solutions that maximize the interests of the parties.I. Some parties. it makes coordination and cooperation much more important. and one five-person group. showed little enthusiasm for coordinating their actions with others’. ten possible two-player interactions. As has been seen.T. three possible interactions between any two players and one interaction of all three. In a five-party situation.and four-person subgroups.
STRATEGIC GUIDELINES RECOMMENDED NEGOTIATION TO PREPARE FOR PARTICIPATE IN A MULTI-PARTY Raiffa stated “Significant conceptual complexities arise when even a single new party is added to a two-party negotiation: coalitions of two parties can now form”(1982:257). at least to their coalition partners. trust. the negotiator should think hard about his/her real interest in the initiative. it is wasting other people’s time to arrive without a clear understanding of one’s own interest. information and exchange of ideas. communication. In preparing for the formal process of multi-party negotiation. Negotiators did not know if the other party was pushing hard or it was a real conflict of interest. In a negotiation with a group of people. definition of interests and needs. three or six people than it is with just one.It is more complicated to build trust with two. Pablo M. To overcome this. For example. Linzoain 4 . in the Harborco case. Negotiators should try to form coalitions in order to pool their resources and have greater influence on outcomes. Finally. Thus. as was said in the introduction. multi-party negotiation is often considered to be an exercise in coalition-building. parties have to make concessions. it can be seen that it is more difficult to create value and new alternatives in a multi-party than in a two-party negotiation. as each party expressed its preferences and it became apparent that parts of the interests were incompatible. Communication about what each party wants and making the effort to understand the others’ needs are more difficult when the parties face the problem of lack of trust. the parties grew more and more suspicious of one another. This is perhaps the biggest difference between two-party and multi-party negotiation. and indeed the common goal between parties is more complicated to see than in a two-party situation. In a multi-party negotiation.
The negotiator should then assess the other parties involved and their possible interests. it is important to be calm and to allow others adequate time to speak.” However. The negotiator representing Harborco Port took the initiative to talk with the different parties separately. it is essential to begin to make coalitions with parties whose agreement will have the strongest influence over the other parties. Working with opponents separately can be useful to find support and to recognize needs. Rubin and Brown (1975) tell us. As the negotiation progresses. It is essential to be a good listener because listening enables the negotiator to obtain information and to identify what makes people move from one stage to the next. information is power. so it is important not to miss any kind of signals that people send. in negotiation. “the social-psychological literature lends experimental support to the proposition that juggling multiple issues together can lead to settlements that are jointly preferred to those obtained by bargaining on an issue by issue basis. in the Malta case. A negotiator needs to be able to send signals or code that s/he is prepared to move. For example. This was a good way to build a coalition of support. Since a chaotic negotiation achieves very little. adding issues together for negotiation purposes while ignoring their interdependence has its dangers. It is important to identify potential coalition members and estimate which parties are going to have conflicts of interest. Dom Mintoff strengthened his position by involving the Soviets and the Libyans in the naval base negotiation with Great Britain. dealing one to one allowed Pablo M. Malta thus forced Britain into making better concessions. Bringing other parties to the table can increase support for the party who invited them. Linzoain 5 . It has already been said that. and also to read signals that the other person is prepared to move. The negotiator should reach agreement through packaging the separate issues on the table.
in what order. The dynamics of group negotiation are far more complex than those between two parties. Linzoain 6 . Pablo M. establishing communication. The principal difference between two-party and multi-party negotiation is probably the need to build coalitions. openly or secretly. adopt bargaining strategies and exchange information. 1996). to prepare for a multi-party negotiation the negotiator must assess his/her own interests and those of the others. The negotiator must consider “which parties are approached. there is in every negotiation tension between creating and claiming value. A more productive approach is to highlight the similarities and to work on the easier issues first. separately or together” (Sebenius. in order to calculate with which of the members around the table it would be most useful to make a coalition. identifying interests and goals become automatically more difficult when more than two parties are involved. attempt to persuade others.Harborco’s negotiator to understand better what was needed to secure the other parties’ agreement. Normally. returning later to the bigger issues involving most conflict. IN CONCLUSION Real-world negotiations are complex. Therefore. are crucial. what Lax and Sebenius (1986) call “strategic sequencing”. Sometimes parties choose to emphasize the differences between themselves and the others. as has been said above. building up trust. It is unusual that a group should be wholly “claiming value” or wholly “creating value”. to negotiate successfully and deal with this tension. members must reveal their preferences. The methods employed in coalition-building. According to Bazerman and Neale (1992).
Finally. Córdoba. either national or international. in the cities of Pittsburgh and Washington where he works as Managing Director of Consulting Global Business. Europe and Argentina. vehicle parts. insurance. film and advertising video productions. Argentina. the pivotal factor in multi-party negotiation is the “strategic sequencing”. Linzoain is an expert in Market Entry Strategies. South and North America. Harvard University. manufacture. capitalizing on his expertise in diverse industries such as fast moving consumer goods (FMCG). For the past ten years he has been working on the planning and execution of strategies and tactics for getting into new markets for important companies in various countries of Europe.Two other tactics for the negotiator to bear in mind for a multi-party negotiation are introducing additional parties to the proceedings and the packaging of the issues on the table. He obtained his double degree for the Master in Management Science of International Business and specialization in International Marketing. Manchester. Linzoain 7 . His academic background includes course of studies in USA. and for the MBA of the Institute of Management Sciences from the Manchester Metropolitan University and the catholic University of Córdoba. Boston. USA. He also obtained the certificate “Programme of Management Update” from Pablo M. About the author Pablo M. He now lives in USA. commodities trading. He graduated from the Negotiation Programme of Law School. and from the Business School of the Manchester Metropolitan University. England. Vice Marketing President for Fennell Consulting Group and Commercial Director for Tyerra.
USA. He graduated from the Business Faculty of the Catholic University of Córdoba. Pablo M. 1988. USA The Free Press. Advances in group process: theory and research. “Groups as mixed-motive negotiations”. In. vol. Jeffrey Z. "The Social Psychology of Bargaining and Negotiation". "The Art and Science of Negotiation". Zeckerhauser et al. 5 (Greenwich: JAI press) Lax and Sebenius 1986. Bert R. eds. He is author of several papers. Raiffa. and Negotiation. Linzoain 8 . Argentina. “Common Elements in the Analysis of the Negotiation Process”. Mannix and Thompson 1988.W. Inc. January-1988. I. Zartman. including “El estilo Argentino de Negociación” (Argentina Way of negotiating). Cambridge. USA Cambridge Negotiation Journal. and Neale. Chapter 18. USA.. Sebenius 1996. “Sequencing to Build Coalitions: With Whom Should I Talk First?” Wise Choices: Games. Max H. 1992. Howard 1982. Rubin. Edited by Richard J. 1975. MA: Harvard University Press. “The Manager as Negotiator”. and Brown. References Bazerman. with the degree of Licenciado (Bachelor of Science) in Business Administration. London: Academic Press. "Negotiating Rationally". Berkeley. USA: The Free Press. Lawler and Markovshy. Margaret A. He is also a permanent advisor for important publications on international negotiations.University of California. Harvard Business School Press. Bazerman.
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