1st Mid

Summarizing the major negotiations theories and techniques that have come
across in the readings presented in our class

Three Way to Resolving Disputes

Negotiation is a method by which people settle differences while avoiding disputes

and arguments. In any disagreement, individuals aim to achieve the best possible
outcome for their own. However, the keys to a successful negotiation are maintaining
a relationship and seeking mutual benefits for each other.

There are three ways to resolve a dispute: reconciling the interests of the parties,
determining who is right, and determining who is more powerful. The goal of
resolving disputes is to reconcile their interests. In a dispute, certain people have
interests at stake. Negotiations that primarily focus on interests are called
‘interest-based’.

Another way to resolve disputes is to rely on some independent standard with

fairness to determine who is right. In this case, the parties will hire someone from
jurisdictions to help them resolve their matter. A third way to resolve issues based on
power. In this way, the less dependent party will exercise their power to resolve their
issues. But the problem here is, it affects the relationship which will also affect the
outcomes of future disputes as well.

For example, ​due to recent pandemic issues all of the classes were being taken
through online platforms. The examinations were postponed for quite a long time and
after 1 year (approximately) the university authority decided to take examinations.
The university authority decided not to reopen the student dormitories to control the
spread of the virus and also they have announced a schedule for the final
examinations. But the students wanted the dormitories to be opened and also they
had to go through the hectic pressure of finishing their due mid exams in just only
one month so that they can sit for their finals.

In this example, the interests of the university authority are to clear up the session
clutter, so that the students in the final year can complete their graduation and to
apply for jobs. Another interest of them is to admit freshmen students into the
university. On the other hand, the interests of the students were to complete their
due exams but with all the provided accommodations and enough time for them to

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prepare for their exams. Interest and power both are involved in this example, but
the emphasis should be put on each side’s interest. Both of the parties were not
sitting together to resolve their issues which created a dispute and dissatisfaction.

There is an interrelationship among interest, Rights, and Power​. ​The interest takes
place within the context of power and rights. In the given example, if the students
focus on rights and if they cause strikes for their interest, this would have resulted
within the context of power. Here the focus is shifting from rights to power having the
innermost intention of achieving interest. Thus, the process of resolving a dispute
may shift from interest to rights to power.

The most effective way to resolve a dispute is to consider four criteria: transaction
cost, satisfaction with outcomes, the effect on the relationships, and recurrence of
disputes. Considering a low-cost approach is the best when resolving a dispute. In
the mentioned example, the “better” approach meant resolving the issues without
strikes, as this would cost both parties violence, destruction of properties, frustrating
hours, etc. Another way to evaluate different approaches is to dispute resolution by
parties for mutual satisfaction. For example, the university authority will extend the
time by a few days and the students will arrange accommodation on their own. This
would result in mutual satisfaction.

These four criteria are also interrelated. As dissatisfaction with outcomes affects the
relationship which continues to the recurrence of the dispute and increases
transaction costs. It is better to consider all the four criteria together to evaluate all
the approaches while resolving a dispute.

Selecting a Strategy

Another negotiation theory that has been presented, is selecting a strategy. It helps
to follow a structured approach. There are five basic strategies that can be used for
negotiations, most strategies involve a mixture of issues and each may be best
handled with a different strategy. The relationship with the other negotiator and the
outcome of the negotiations is dependent while selecting a strategy. Five distinctive
strategies are:

Avoiding (Lose-Lose): T​he Priorities for both relationship and the outcome
are low. The person who is using this strategy considers negotiations as a
waste of time. For Example, when you are negotiating with two buyers for two
different lands, and both meet your needs but one of the land’s prices is

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 higher than your budget. So you will select ​“avoiding strategy” to simply
select the alternative option.

Accommodating (Lose to Win): ​In this scenario, one party decides to ​“back
off” your concern for the outcome to preserve the relationship. For example,
Mr. White and Mrs. White want to go to different places on their vacation. As
they talk about their preferences, Mr. White decided to agree with Mrs. White.
Because she had a rough time in the previous month and now she wants to
relax. Here, Mr. White is considering the situation and preserved the
relationship by simply agreeing with his wife.
Competitive (Win-Lose): ​In this strategy, the concern for the relationship is
low. Both parties are more concerned about the outcome. ​For example, when
a buyer goes to Noor Jahan Market to buy clothing material. The buyer will
want to buy the clothing material at the lowest price and the seller will want to
sell the clothing material at the highest price.

Collaborative (Win-Win): ​This is considered to be a win-win situation for both

parties. It is more suitable when both of the parties are dependent on each
other for various reasons. To have a collaborative approach, both parties
have to be open to each other. For example, when Tesco Company was
expanding to the USA, they brought their supplier from the UK, so that there is
no shortage of supplies. Here both parties depend on each other, as Tesco
won’t be able to manage supplies on their own and the supplier company
won’t be able to supply to any other company in the USA. That is why both
parties' approaches should be a ​“collaborative strategy”​.

Compromising Strategy (Split the difference): This strategy is used when

the parties can have a good collaboration but are optimistic about some
outcomes or preserve the relationship.

Before choosing a strategy, it is necessary to evaluate some other factors such as

situation, preferences, experience, skills, and past experiences. All of these factors
also play a crucial role while resolving a dispute. Most importantly all of these
strategies are used in different settings, which means you can’t apply a collaborative
strategy in a competitive setting. That is why a negotiator should be able to identify
the situations and the setting for effective negotiation. It is always better to move
forward with a proper plan when you are negotiating for your claim to be more
specific and goal-oriented.

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 Where does Power Come From?

This is one of the most interesting theories that has been covered in our negotiation
class. As we are studying, different theories and methods of negotiations, the word
‘Power’ comes more often. Mary Parker Follet’s definition says “​Power is the ability
to make things happen”. ​Knowing where power comes from helps us to build our
strategy to increase our capacity to take action. Also, to be more effective, it is
necessary to develop sources of power and to use that power strategically and
tactically. Theories have emphasized the importance of personal attributes and
characteristics as the origin of Power.

Personal Attribute is a source of power. When we walk into an office, we see people
first, the way they are behaving, talking, moving around not the situations. People
have personalities, idiosyncrasies, and manners that engage our attention and hold
our interests. People’s behavior depends on situational factors. That is why we tend
to overemphasize power to personal attributes. Sometimes, the power derives from
personal attributes, and sometimes the situational factor pushes someone to act on
their power. External factors play a direct role in the success or failure of an
individual.

For example, ​Nairobi is a confident, persuasive, and organized girl, she works on
different projects with various people and she handles her duties effectively. Also,
she is trusted by all the other board members. Her personality made an impression
on all of them throughout the year, that’s why during the election of directorship, she
won. This is an example of personal attributes as a source of power.

There is another source of power which is structural sources. This derives from the
hierarchy of an organization. All of the employees and authority is tied to one single
organizational structure. The point about the situational factor is that a person
possesses power simply being in the authority or the position. ​For example, Nawab
Sirajuddaula was to succeed as the ​‘​Nawab’ of Bengal in April 1756 at the age of
23. He was appointed simply just being in the right place, the situational factor here
played a role to make him a ‘Nawab’.

An important message of this theory is that a person’s success depends on the fit
between the situational factor and personal traits. People always show outstanding
outcomes given their favorable situation as they can use their skills, capabilities at
their best. There are several examples of the necessity of matching personal
characteristics to the situation. ​For example, ​a freshers’ reception 2018 for the 3rd

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batch was arranged by OSL 2nd Batch. The 2nd Batch students had the skills and
capabilities to arrange a grand program. But due to a student strike, all the roads
were blocked. That’s why there was less of an audience on that day. If the situation
was in their favor, the program would’ve been a successful one.

Not only the knowledge and skills are critical for different settings, but also personal
attributes are more or less important depending on the setting.

Staying With ‘No’

People always expect a ​‘Yes’ as they propose something to another person. It is

really hard for the other person to say no to their face and this behavior is also
considered rude. Psychologically, we feel less pressured when we say yes. But there
are situations when we need to say no. But at that time, people try to change that
opinion from No to Yes. Not staying with ​‘No’ might cause much more damage.
There are many reasons behind other’s resistance to change the no to a yes and
recognizing those reasons helps to readjust emotions to their efforts.

The best way to stick to your no is to focus on the job, not on the personal
relationship. You need to ensure to the other party that you are doing your job, your
no for that proposal doesn’t mean disrespect for him/ her. You need to be very wary
about words that you are choosing to say ‘No’​. The other party will always try to yes
the no by trying out different tactics. But those tactics won’t work if you are strong
enough to identify those arguments. To limit frustration on both sides, give a reason
with good weight up from. Also, don’t give false hope to the counterpart because
then they will be encouraged to keep pushing.

It is better to practice ​‘No’ before you face any of those situations. Practice will help
you to stay with your message, you won’t change your no and you’ll be confident in
your answer as well.

In business, negotiation skills are important in both informal day-to-day interactions

and formal transactions such as negotiating conditions of sale, lease, service
delivery, and other legal contracts. If negotiations are unsuccessful, third-party
mediation can establish a constructive environment for negotiation that requires both
parties to discuss, propose, and resolve issues fairly and objectively.

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 2nd Mid

Refer to any of the exercises presented in your negotiation class. Give your
own opinion about the best way to resolve the issues in the exercise based on
your theoretical knowledge of negotiation strategies.

Exercise 16, is a stimulation based negotiation exercise. This is a fictitious exercise,

involving negotiation between parties who have never met in person and are
negotiating an important transaction using e-mails. This negotiation provides a
context about how negotiation skills, cultural differences, and ideology all play out in
an online environment.

Negotiation is a situation where two parties sit together aiming their claim. Both of
the parties have different interests at stake. It is more like a give and takes situation
where one party gains something from the other party by giving off something to the
other party. Negotiation is a part of our daily life whether it is a formal setting or an
informal setting.

Live 8 launched a project on 31st May 2005 by Bob Geldof intending to raise
awareness of issues in Africa. He organized eleven free concerts in London, Berlin,
Paris, Philadelphia, Rome, Barrie, Cornwall, Edinburgh, Johannesburg, Moscow,
and China. Tickets were released for these concerts via a text lottery in the UK and
the messages cost £1.50, over 2 million people messaged and £3 million was raised
from the messages alone.

This exercise is different from other exercises. This negotiation exercise can be done
using a media source such as an email or text message. I have thought of an
imaginary situation to resolve the dispute via text message. ​“Person A” is the role
of the Manager, who is trying to purchase a web domain to save the Live8 event
which is about to launch in the next two weeks. ​“Person B” is the owner of the web
domain and the background information of this owner is unknown.

Initially, the manager tried to gain as much information about the background
information of the owner but it was not possible. In the opening message, he
conveyed that this organization was a nonprofit organization and that it was trying to
raise money for the African nations and also asked the owner if he would be willing
to sell the web domain as it was under construction. The manager also mentioned
that“I hope you haven’t invested a lot in this site”. But the owner denied it and said
that he had invested a lot of money.

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The manager wanted to make a very low offer without insulting him. He had a set
budget and was trying to get the site at the lowest price. The buyer was trying to sell
it at the highest price and he was offering more than the usual price for his domain.
As this whole negotiation was being held by using e-mails, it was hard for the
manager to get immediate feedback or to understand the tone of his voice or facial
expressions for a sense of how the negotiation was going. Also, the owner was
being very brief and concise with his responses. The manager was trying his best to
understand his interest but he would reply with only a few words and give minimal
information.

The manager shot an initial offer to him of $200,000. The buyer replied that this
would not be a very good deal for him and $200,000 would not be enough. He
countered with an offer of $2.5 million. But this price is higher than usual. He decided
to send him a few more messages and tell him that his budget was set to $1 million
and going any higher than that would cost him his job and potentially hurt the event
as a whole. But, the owner kept his responses strictly about the price and very short.

The lowest offer he would give the manager was $1.5 million. The manager offered
the owner they would do some advertising for him on the site and for that, he might
lower the price. He seemed interested in this, but again his reply was very short.
Here, the manager was trying to yes the ‘no’ and pushing the owner again and
again. He replied saying he would drop the price to $1.3 million with advertising but
would walk away for anything less. The manager took the deal because without the
site the entire event could be lost. Also, he had to buy a domain from another
alternative option no matter what, but those would have cost him much more than
this price.

In this simulation exercise, the problem was using email as a negotiation platform.
Looking back at the negotiation, the manager could have proposed the idea of
renting the site and this could have saved him a lot of money, but still provided him
with what he exactly needed. But as he was not in a preferable setting for a regular
negotiation process and a shortage of time made him less confident. That is why he
couldn’t think of any other proposal. This exercise gave a lot of insight into
negotiations that are not ‘face to face’.

Another real-life example of online negotiation, where an undergrad student

communicates with a non-profit organization, the World Youth Alliance, about
opening a Chapter in her university. The WYA is a diversified organization, they have

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been working with the young generation since 1999. As the student was
communicating with the regional manager, she heard about their proposals about the
establishment of the chapter. They proposed to her to help her in every way but they
won’t be able to provide any financial support for her chapter. She liked their
proposals but there were some problems with the establishment of the chapter, such
as financial aid, a suitable moderator. The most important problem here was the
financial aid and the motivation for the other students who would like to work for the
chapter. She frankly talked about these problems with the regional directors, they
were very supportive too. But as it was an online negotiation, it always took time for
both of the parties to sit together and talk about these issues.

Online negotiations are not an easy task to do. The main problems of online
negotiations are, unable to understand the settings, unable to understand or read the
facial expressions of the other negotiator, unable to get the other negotiator to talk,
unable to understand the tricks of the other negotiator and the list goes on and on.
That is why people normally avoid online negotiations and they prefer face to face
negotiations.

For example, when you are shopping online, you can’t bargain as much as you
would do if you were in the market. Face to face negotiations makes it easier for you
to bid for your products and have a clear understanding of that seller. Also, online
sellers are more likely to charge extra for their products and they don’t negotiate that
much.

During this pandemic, a lot of organizations had to face these kinds of situations
daily as they were not being able to meet and talk face to face. But now it is high
time for every organization or any other individual to learn the skills of negotiating
through using online platforms.