NEGOTIATIONS

Foundational Principles

Day 3: The Negotiation Solution

OUTLINE
• Day 1: The Distributive Negotiation Problem
 Role play 1
 What is the distributive negotiation problem?
• Day 2: The Integrative Negotiation Problem
 Styles and Strategies
 Role play 2
 What is the integrative negotiation problem?
• Day 3: The Solution
 Role play 3
 Principled Negotiations: value creation
 How to create value in negotiations?
 Principled Negotiations: value distribution
 Role play 4
 How to distribute value in negotiations?
Negotiations Dr. Seraphim Voliotis

1
INTEGRATIVE BARGAINING
• Additional Characteristics
 focus on commonalities and exploit differences
 address needs & interests v. positions
 commit to meet needs of all parties involved
 exchange information & ideas  better results (dangers?)
 invent options for mutual gain (win-win)
 objective criteria
• Integrative process
 identify and define the problem
 bring interests to surface create value: integrative
 generate alternative solutions
 evaluate alternatives and select claim value: distributive

Negotiations Dr. Seraphim Voliotis

PRINCIPLED NEGOTIATION (2)

• Subject of Negotiation
 reconcile interests not positions
o (multiple) interests define the problem
o positions don’t necessarily reflect interests
• Tangibles v. intangibles (human negotiator)
o basic human needs  most powerful interests
o security, financials, sense of belonging, recognition, control, identity,
dignity, justice, freedom, autonomy…
o but also: ego, pride, reputation, revenge…
• Types: substantive, procedural, relational, principles

Negotiations Dr. Seraphim Voliotis

2
MATCHING INTERESTS
• Subject of Negotiation
 reconcile interests not positions
o (multiple) interests define the problem
o positions don’t necessarily reflect interests

• common:
 1: shared equally, depend on each other
 2: aligned, but each benefits differently
 3: collective effort, but different aspirations
• complementary: commerce
VALUE DISTRIBUTION
• conflicting: opposition
Negotiations Dr. Seraphim Voliotis

PRINCIPLED NEGOTIATION (3)

• Invent options for mutual gain
 problems
o premature judgment  hinders imagination
o searching for single answer  narrows thinking
o fixed pie  non-existence of mutual gain
o ‘their problem’  each concentrates on own interests
 solution
o first create - then decide: brainstorm (individually or jointly)
o broaden options: have many to choose from or combine
o mutual gain
o make it ‘easy’ for them: don’t overstate, threaten, surprise etc…
o make it ‘easy’ for yourself: don’t commit early, open mind etc…

Negotiations Dr. Seraphim Voliotis

3
MUTUAL GAIN
• focus on and develop shared interests
 relationship always one
• dovetail complementary interests: trade differences
 Synergies  combination/merger
 Needs (cash/invest) payment terms, exchanges
 Beliefs/forecasts  contingent agreements
 Risk aversion  ‘insurance’ agreements
 Valuations  exchanges
 Time  inter-temporal agreements
 Tax  transfer price / merger (legality?)

Negotiations Dr. Seraphim Voliotis

PRINCIPLED NEGOTIATION (1)

• Separate People from Problem (depersonalize)
 negotiators are people: emotional traps v. creativity
Listen!
 interests: content & relationship not in conflict (distributive?)
o minimum: working relationship to ensure deal Listen passively
 separate content and relationship
behavioural & people issues: ego, pride, ‘principles’
o

o not evaluative & judgmental Acknowledge

 perception
o empathy & cross-cultural issues Listen actively
o projection from own beliefs, emotions & blame
 emotion (own and others’)
o recognize, understand, make explicit, and legitimize
o letting off steam, but emotional outbursts
 communication & misunderstandings
o talk to be understood
o listening: passive, acknowledging, active
 soft on people – hard on problem

Negotiations Dr. Seraphim Voliotis

4
COMMUNICATION
• Verbal words
 common language?
 knowledge of language
• Body stances
 unconscious
 controlled?
• Diagrammatic shapes
 symbolic
• Phonetic sounds
 intonation, emphasis
 sighs, screams…
• Written letters
 record
 analysis
• Electronic
 ambiguity
 delay
• Multiple channels
 Incompatibility
 misunderstandings

Negotiations Dr. Seraphim Voliotis

QUALITY OF COMMUNICATION
• bluffs, lies, ambiguity
  no deal or
  bad deal (noise)
• examples
 I cannot go below….
 my red line is….
 take it or leave it…
• recording:
 major blow to creativity
 implicit blackmail
 illegal
 waste of time, credibility, economy

Negotiations Dr. Seraphim Voliotis

5
CREDIBILITY
• reach agreement
• implement agreement
 complete deals: no (complex) deal is ever
complete
 pick up the phone (even 10 years later…)
• credibility deficit  implementation…
 by installments…
• highest acrimony: hand to hand
 Cold War: spy exchange (Berlin)
Negotiations Dr. Seraphim Voliotis

EPISTEMIC CONDITIONS
• Both do not know pie
 objective criteria
• One knows pie
 push towards other’s RP
 other asks for justification
 …other’s RP – can you say it?
• Both know pie
 fair: 50-50 (default): symmetry
 distributive justice: asymmetry
Negotiations Dr. Seraphim Voliotis

6
PRINCIPLED NEGOTIATION (4)
• problem
 on will  escalation unable
to
 on ‘principle’ (unless genuine) reason
 on ‘company policy’ (unless genuine)
• use objective criteria: able to reason
 efficacy, efficiency, costs  simplicity
 scientific merit, authority  objectivity
 precedent, norm, tradition  consistency
 prof. standards, deontology  morality
 market…  common sense, equilibrium

Negotiations Dr. Seraphim Voliotis

DISTRIBUTIVE JUSTICE
• six basic principles have been developed
 equal share  the default distribution
o e.g. public education and health
 according to need
o e.g. unemployment benefits
 according to rights
o e.g. hereditary titles and property
 according to societal contribution
o e.g. public administration or security forces
 according to effort
o e.g. wages (minimum)
 according to merit
o e.g. promotions and bonus

Negotiations Dr. Seraphim Voliotis

7
FROM ROLE PLAYS
• Conflict in Prunes
 Who gets first (accident, cost)
 Who pays what
 Objective criteria?
 Distribution arguments?
• Conflict in House
 Price
 Objective criteria?
 Distribution arguments?
Negotiations Dr. Seraphim Voliotis

FAIR PROCEDURES
• an estate problem: allocate to grandchildren
 two sons – first has 2 children, second 4
 equality applied at what level?
• chance: inherently fair – equal opportunity
 e.g. flip a coin
 the law of the seas: 17th – 18th century
• alternating
 e.g. the sequence of concessions
• “one cuts the other chooses”
 e.g. Texas shoot out: buy out 50% partner in firm
 but information differential?
• using 3rd parties
 e.g. litigation (involves imposition)
 e.g. med, arb, med-arb, arb-med, last-best-arb, …

Negotiations Dr. Seraphim Voliotis

8
CONCLUSION
• Good negotiator (research amongst best practitioners)
 effective
 consistent
 sustainable deals
 regard from opposing party: reasonable and fair (not weak)
• Result
 meets your main interests
meets other side’s main interests

good


inspired
 is fair and enforceable
 is clear and sustainable

wise
 respects present relationships
 cultivates future relationships
 meets high ethical standards
 promotes higher ethical standards

Negotiations Dr. Seraphim Voliotis

Thank You!

Negotiations Dr. Seraphim Voliotis