Negotiation Strategies

Strategy versus Tactics

 Strategy: The overall plan to achieve one’s goals in a
negotiation
 Tactics: Short-term, adaptive moves designed to enact
or pursue broad strategies
 Tactics are subordinate to strategy
 Tactics are driven by strategy
 Planning: The “action” component of the strategy
process; i.e. how will I implement the strategy?
Approaches to Strategy
 Unilateral: One that is made without active involvement of the
other party
 Bilateral: One that considers the impact of the other’s strategy on
one’s own
Strategic Options
 Dual Concern Model (Thomas, 1976)
Choice of strategy is reflected in the answers to two questions:
 How much concern do I have in achieving my desired outcomes at
stake in the negotiation?
 How much concern do I have for the current and future quality of
the relationship with the other party?
The Dual Concerns Model

Avoidance: Don’t negotiate

Competition: I gain, ignore relationship
Collaboration: I gain, you gain, enhance relationship
Accommodation: I let you win, enhance relationship
 The Non engagement Strategy
Avoidance

 If one is able to meet one’s needs without negotiating at all, it

may make sense to use an avoidance strategy
 It simply may not be worth the time and effort to negotiate
 The decision to negotiate is closely related to the desirability of
available alternatives.
Active-Engagement Strategies
 Competition – distributive, win-lose bargaining
 Collaboration – integrative, win-win negotiation
 Accommodation – involves an imbalance of outcomes (“I lose,
you win”)
Competitive Vs. Co-operative Strategies
Deal Relationship
Competitive/Distributive
Negotiation Strategy
Competitive Negotiation Strategy
 Also known as positional bargaining
 win-lose/zero sum/Distributive
 “Claiming value”
 Both parties grapple competitively (haggle) through
successive positions on all issues including price, they end up
with the ultimate compromise… something they both can
live with, usually neither party is really satisfied.
 You end up feeling…compromised.
 It’s…give and take
Competitive Negotiation Strategy
 Arguing over positions produces unwise agreements
 Arguing over positions is inefficient
 Arguing over positions endangers an ongoing relationship
(becomes a contest of wills)
 Anger and resentment is often a result
Positional Negotiation…
 Starts with the solution.
 Parties propose solutions to one another and
 Make offers and counter-offers until they find a solution that is
acceptable to both (it falls within their ZOPA).
Positional negotiation—typical attitudes
 The “pie” is limited—my goal is to get the biggest piece.
 A win for me = a loss for the other
 Negotiators are opponents or enemies
 There is one right solution—mine!
 I should stay on the offensive
 Concessions are a sign of weakness.
 Avoid compromise if at all possible, if not, give in as little as
possible.
Positional negotiation
Typical strategy:
 Extreme opening position
 Argue for its “fairness” or why it is “right”
 Intend to give in a little, but try to give in as little as possible.

Typical tactics of positional negotiation:

 Bluffing
 Wearing down the other side
 Devaluing other sides’ offers
 Threatening
 Softening them up, then squeezing them
Cooperative/Integrative
Negotiation Strategy
Cooperative Bargaining
 Also known as principled negotiation, developed by the
Harvard Negotiation Project (Fisher & Ury, 2nd Ed. 1991)

 Both parties decide issues on their merits not through a

haggling process and looks for mutual gains whenever
possible – its hard on the merits and soft on the people; don’t
harm relationships
 Uses no tricks and no posturing
 It’s… Win/Win (Integrative)
 “Creating value”
Cooperative Bargaining
 Concentrates on the underlying concerns of both parties
 Participants are problem solvers
 Focuses on interests, not positions
 Invent options for mutual gain (creativity)
 Develop multiple options to choose from
 Insist on using objective criteria
 Focuses on basic interests, mutually satisfying options, and fair
standards – typically results in a wise agreement.
 Permits a gradual consensus on a joint decision efficiently resulting
in an amicable agreement.
 Integrative negotiation
 The parties involved seek to integrate their interests and therefore
produce negotiated outcomes that exceed those normally achieved
through distributive bargaining.
 Integrative negotiation, according to negotiation researcher Leigh
Thompson of Northwestern University, can be described as both
a process and an outcome of negotiation.
 Thompson’s pyramid model of integrative agreements
Integrative negotiation
 Level 1 agreements are those in which both parties achieve an
outcome that is better than their reservation point, and thus is
within the ZOPA.
 Level 2 agreements produce an outcome that is even better for
both parties than Level 1 agreements, possibly by introducing a
new issue for which both parties have a similar objective.
 Finally, Level 3 agreements are those for which it is impossible to
improve the outcome from the perspective of both parties, one in
which any change that would benefit one party would harm the
other party.
 Parties ideally seek to reach Level 3 agreements, and therefore
“leave nothing on the table.” Integrative negotiators do not stop at
Level 1; they seek to gain the benefits of higher, mutually
beneficial levels 2 and 3.
 The “Principles” of Principled Negotiation
 Separate the People from the Problem
 Focus on Interests, Not Positions
 Invent Options for Mutual Gain
 Insist on Using Objective Criteria
 The “Principles” of Principled Negotiation
1. Separate the People from the Problem
 Focus first on the relationship and identity issues, then on the
topic issue
 Separate the relationship from the substance; deal directly with the
people problem
The “Principles” of Principled Negotiation

2. Attend to the communication issues

 First recognize and understand emotions, theirs & yours.
 Acknowledge emotions as legitimate
 Allow the other side to let off steam
 Don’t react to emotional outbursts
 Avoid the blame game
 Listen
 The “Principles” of Principled Negotiation

3. Focus on Interests, not Positions

 Define the problem
 Focus on compatible interests, not conflicting ones
 Realize both parties have multiple interests
 The “Principles” of Principled Negotiation
4. Generate many options & look for Options for Mutual Gain
 Brainstorm options by listing all possibilities first,
 Evaluating options second.
 Look for ways to meet everyone's interests at the same time.

 Four major obstacles to inventing many options:

–Premature judgment
–Searching for the single answer
–Each side sees the situation as either/or – either I win/or you do
–Concern with only your own immediate interests
The “Principles” of Principled Negotiation
5. Find Legitimate Criteria to Guide Decisions
 What's been done before?
 What's “fair”
 Insist on Objective criteria like Market Value, Precedent, Scientific
Judgment, Professional Standards, Efficiency, Costs, Previous Court
Cases, Moral Standards, Equal Treatment, Tradition, Reciprocity
etc.
 Negotiating with objective criteria
 Jointly apply objective criteria to each issue
 Reason, and be open to reason
 Never yield to pressure
The “Principles” of Principled Negotiation
6. Analyze the Best Alternative to a Negotiated Agreement
(BATNA)
The “Principles” of Principled Negotiation
7. Work with Fair and Realistic Commitments

Is the agreement
 Reasonable?
 Doable?
 Face-saving?
 Practical?
Hard, Soft, Principled Negotiation
Problem Solution
Positional Bargaining: Change the Game-
which Game Should You Play? Negotiate on the Merits

Soft Hard Principled

Participants are friends Participants are Participants are
adversaries problem-solvers
The goal is agreement The goal is victory The goal is a wise
outcome reached
efficiently and amicably
Make concessions to Demand concessions Separate the people
cultivate the as a condition of the from the problem
relationship relationship
Be soft on the people Be hard on the people Be soft on the people,
and the problem and the problem hard on the problem
Hard, Soft, Principled Negotiation
Soft Hard Principled
Trust others Distrust others Proceed independent
of others
Change your position Dig into your position Focus on interests, not
easily positions
Make offers Make threats Explore interests
Disclose your bottom Mislead as your bottom Avoid having a bottom
line line line
Accept one-sided Demand one-sided Invest options for
losses to reach gains as the price of mutual gain
agreement agreement
Search for the single Search for the single Develop multiple
answer: the one they answer: the one you options to choose from;
will accept will accept decide later
Insist on agreement Insist on your position Insist on using
objective criteria
Hard, Soft, Principled Negotiation

Soft Hard Principled

Try to avoid a contest Try to win a contest of Try to reach a result
of will will based on standards of
independent will
Yield to pressure Apply pressure Reason and be open to
reasons; yield to
principle, not pressure

Source: Getting to Yes