UNIVERSITY OF FINANCE - MARKETING

FACULTY OF COMMERCE
----------------------------

GROUP ASSIGNMENT

International Business Negotiation

Lecturer: Ta Hoang Thuy Trang, MBA

PRINCIPLED NEGOTIATION

Ho Chi Minh City, October 2022

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 UNIVERSITY OF FINANCE - MARKETING
FACULTY OF COMMERCE
----------------------------

GROUP ASSIGNMENT

TOPIC: PRINCIPLED NEGOTIATION

No. Student’s full name Student ID

1 Lương Thị Yến Nhi 2021008938

2 Vũ Minh Quang 2021009123

3 Trần Thành Đạt 2021008851

4 Nguyễn Thị Thảo Ngân 2021007891

5 Nguyễn Thanh Khang 2021008699

Estimated Presentation Time: 45 minutes

Ho Chi Minh City, October 2022

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 Principled Negotiation
1. Introduction ..................................................................................................................................... 4
2. Definition ........................................................................................................................................ 4
3. Problems ............................................................................................................................................ 4
4. Methods........................................................................................................................................... 7
a. Separate the people from the Problem ..................................................................................... 7
b. Focus on interests, not positions .............................................................................................. 8
c. Invent Options for Mutual Gain ............................................................................................... 9
d. Insist On Using Objective Criteria ......................................................................................... 12
5. BATNA ......................................................................................................................................... 15
e. What is BATNA? ................................................................................................................... 15
f. Benefits of BATNA ................................................................................................................... 15
g. How to determine your BATNA? .......................................................................................... 16
h. How to use BATNA ............................................................................................................... 16
6. Conclusion .................................................................................................................................... 16
7. References ..................................................................................................................................... 17

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 1. Introduction
“During negotiation, it would be wise not to take anything personally. If you leave personalities out
of it, you will be able to see oppoturnities more objectively” Brian Koslow. Negotiation, like
everything else in business, requires careful planning. A successful negotiation is one in which both
parties achieve some of what they want.

This topic will present the widely used negotiation style in the world - principled negotiation. The
Harvard Negotiation Project developed a method of principled negotiation that involves deciding
issues on their merits rather than haggling over what each side says it will and will not do. Principled
negotiation is an approach that was developed by the authors of a best-selling book called Getting To
Yes, which originally came out in 1981. It describes problems that arise in using the standard
strategies of positional bargaining and assists you in understanding the elements of principled
negotiation. Besides, you can recognize the value of BATNA in order to reach an optimal deal.

2. Definition
Principled negotiation is an interest-based approach to negotiation that focuses primarily on conflict
management and conflict resolution. Interests can include concerns, desires, fears, and needs that are
important to a side. Principled negotiation operates under the assumption that the two parties are
interested in maintaining a business relationship after the deal is done. Principled negotiation is also
known as win-win negotiation or integrative negotiation.

3. Problems
Negotiations commonly follow a process of “positional bargaining.” Positional bargaining represents
a win-lose, versus a win-win paradigm. In positional bargaining each party opens with their position
on an issue then bargains from the party’s separate opening positions to eventually agree on one
position. Haggling over a price is a typical example of positional bargaining, with both parties having
a bottom line figure in mind.

• Don’t bargain over positions

Any method of negotiation may be fairly judged by three criteria: It should produce a wise agreement
if agreement is possible. It should be efficient. And it should improve or at least not damage the
relationship between the parties.

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 • Positional bargaining produces unwise agreements

Negotiators who bargain over positions are typically reluctant to back down. Parties become so
interested in “saving face” that they lose sight of what else they might gain.

• Positional bargaining is ineffective

In positional bargaining, negotiators often try to best their counterparts by opening with an extreme
position and then focus only on how to counteroffer without budging. Extreme offers and small
concessions can drag out the negotiation process much longer than it needs to be.

• Positional bargaining harms the relationship

Positional bargaining often becomes a “contest of wills,” with each side trying to pressure the other to
back down. “Anger and resentment often result” if one party thinks they have sacrificed too much,
according to Fisher, Ury, and Patton. Positional bargaining thus strains and sometimes shatters the
relationship between the parties. Commercial enterprises that have been doing business together for
years may part company. Bitter feelings generated by one such encounter may last a lifetime.

When there are many parties, positional bargaining is even worse

In fact, almost every negotiation involves more than two persons. Several different parties may sit at
the table, or each side may have constituents, higher-ups, boards of directors, or committees with
whom they must deal. The more people involved in a negotiation, the more serious the drawbacks to
positional bargaining.

• Being nice is no answer

Positional bargaining occurs when people negotiate according to their positions or statements of what
they want to get out of the situation. Positional bargaining is a form of distributive bargaining where
both parties view the conflict as a win-lose situation. Positional bargaining can take one of two forms:
(1) soft, and (2) hard.

Soft positional bargaining emphasizes the importance of building relationships, which may mean that
the parties take a soft line toward the negotiation. This may create a win-lose outcome as they lose by
giving up too much in an effort to maintain a friendly environment and good relationship. Hard
positional bargaining emphasizes the importance of getting what you want by playing hard-ball and
being tough on the other person during a negotiation.

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PROBLEM

Positional Bargaining: Which Game Should You Play?

SOFT. HARD.
Participants are friends. Participants are adversaries.
The goal is agreement. The goal is victory.
Make concessions to cultivate the relationship. Demand concessions as a condition of the
relationship.
Be soft on the people and the problem. Be hard on the problem and the people.
Trust others. Distrust others.
Change your position easily. Dig in to your position.
Make threats. Make offers.
Disclose your bottom line. Mislead as to your bottom line.
Accept one-sided losses to reach agreement. Demand one-sided gains as the price of
agreement.
Search for the single answer: the one they will Search for the single answer: the one you will
accept. accept.
Insist on agreement. Insist on your position.
Try to avoid a contest of will. Try to win a contest of will.
Yield to pressure Apply pressure.

More seriously, pursuing a soft and friendly form of positional bargaining makes you vulnerable to
someone who plays a hard game of positional bargaining. In positional bargaining, a hard game
dominates a soft one.

• There is an alternative

“If you do not like the choice between hard and soft positional bargaining, you can change the game.
The answer to the question of whether to use soft positional bargaining or hard is "neither." Change
the game. At the Harvard Negotiation Project we have been developing an alternative to positional
bargaining: a method of negotiation explicitly designed to produce wise outcomes efficiently and

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amicably. This method, called principled negotiation or negotiation on the merits, can be boiled down
to four basic points.”

People: separate the people from the problem

Interests: focus on interests, not positions

Opinions: generate a variety of possibilities before deciding what to do

Criteria: insist that the result be based on some objective standard

To summarize, unlike positional bargaining, the principled negotiation method of focusing on

fundamental interests, mutually satisfying options, and fair standards typically results in a wise
agreement. The method permits you to reach a gradual consensus on a joint decision efficiently without
all the transactional costs of digging in to positions only to have to dig yourself out of them.

4. Methods
a. Separate the people from the Problem
Positional Bargaining Principled Negotiation
Soft Hard
Make concessions to Demand concessions as Participants are problem
preserve relationship condition of relationship solvers
Soft on people and Hard on people and Soft on people, hard on
problem problem problem
Trust other Distrust others Proceed independent of trust

There is a saying in medicine that prevention is better than cure, which means that we must prevent
disease first, not let disease happen and then seek a cure. In negotiation, too, the best way to solve a
problem is to prevent it from happening.

In negotiation, there are basically three problems:

- The first is the cognitive difference.

Most conflicts are caused by two parties' divergent thinking about an event, or maybe one party is
interpreting an idea but the other is interpreting it in a different way.

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 - The second problem is emotion.

In negotiation, it should be remembered that the human problem does not come from only one but
from two sides. Personal attitudes and feelings can get in the way of reaching a final agreement.

- Finally, it's Communication

Without information, there is no negotiation. Negotiation is a process of exchanging information back

and forth to reach a common conclusion. In many cases due to incomplete information, the parties do
not understand each other, even hostile and suspicious of each other. There are three major obstacles
to information:

+ Negotiators are not in a position to talk to each other, or at least speak so that the other person
understands.

+ Even if we speak frankly and clearly about your opinion, the other side won't listen to you.

+ The third obstacle to information is misunderstanding. Whatever one side says, the other side can
also misunderstand the party and vice versa.

b. Focus on interests, not positions

Positional Bargaining Principled Negotiation
Soft Hard
Change your position Dig in to your Don’t have a position
easily position
Make offers Make threats Explore interests
Disclose your bottom Hide your bottom line Avoid having a bottom line
line

To get a wise solution, harmonize interests and not positions because everything is directed towards
the end goal of benefit. Since they are often thought to be in conflict and the goal is to reach consensus
on a position, the natural tendency is to think about and discuss positions and this process often
culminates in stalemate. congestion. But in fact, in a negotiation, the basic problem is not a conflict of
positions, but a conflict between the wishes, aspirations, concerns and worries of the parties. So if you

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know how to focus on benefits, then the problem will be solved. But harmonization of interests over
position is possible, for two reasons:

First, for each interest rate there are usually several positions that can be satisfied.

Second, harmonization of interests, not a position that can be done, but behind opposing positions are
many different but complementary interests, all of which are building blocks of an agreement. insight.

To be able to focus on benefits, you need to do the following:

Identify interests: To identify the interests of our partners, ask "why" questions for each position they
take.

Next, proceed to list the benefits in order of their importance.We must always show our partners that
we understand and value their interests.

c. Invent Options for Mutual Gain

Positional Bargaining Principled Negotiation
Soft Hard
Accept one sided Demand one sided gains Resist one sided solutions
losses to reach as price of agreement
agreement
Search for single Search for single answer: Develop multiple options to
answer: one they will one you will accept choose from: decide later
accept

Expand the pie before dividing it. Invent solutions advantageous to both sides. Skill at inventing
options is one of the most useful assets a negotiator can have.

Obstacles that inhibit the inventing of an abundance of options:

- Searching for a single answer

+ Most people don’t agree that inventing options is part of the negotiating process. People see their
job as narrowing the gap between parties, not broadening options available. By looking for the single
best answer, we are likely to short-circuit a wiser decision-making process in which to select from a
larger number of possible answers.

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 - Thinking that “solving their problem is their problem”

Another obstacle to inventing realistic options lies in each side's concern with only its own immediate
interests. For a negotiator to reach an agreement that meets his own self-interest he needs to develop
a solution which also appeals to the self-interest of the other. Therefore, shortsighted self- concern
leads a negotiator to develop only partisan positions, partisan arguments, and one-sided solutions

To invent creative options, then you will need to:

- Separate inventing from deciding:

+ To get started with brainstorming: Establish your purpose: what do you want to leave the meeting
with? Choose a small group of participants (five to eight). Choose a time and place conducive to
creativity. Choose a facilitator to keep things on track.
+ During brainstorming: Sit facing a whiteboard. Ban criticism and clarify other ground rules.
Brainstorm — come up with a long list of ideas, approaching the topic from every angle. List the
ideas on the whiteboard.
+ After brainstorming: Identify the most promising ideas. Relax the no-criticism rule. Think of
ways to improve on the best ideas and implement them. Set up a time to finalize the list, deciding
which ideas to put on the table for negotiation.

- Broaden our option

+ Developing room within which to negotiate

+ Crafting a solution

+ A vintner making a fine wine chooses grapes from a number of varieties

+ Multiply Options by shuttling between the specific and the general: The Circle Chart include 4 types
of thinking and suggests them as steps to be taken in sequence.

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 1. Particular problem

2. Descriptive analysis

3. What ought to be done

4. Specific, feasible, practical suggestions for action

- Look for mutual gain

Three points about shared interests are worth remembering. First, shared interests lie latent in every
negotiation. They may not be immediately obvious. Ask yourself: Do we have a shared interest in
preserving our relationship? What opportunities lie ahead for cooperation and mutual benefit?
Second, shared interests are opportunities, not godsends. To be of use, you need to make something
out of them. It helps to make a shared interest explicit and to formulate it as a shared goal.
Third, stressing your shared interests can make the negotiation smoother and more amicable.
Passengers in a lifeboat afloat in the middle of the ocean with limited rations will subordinate their
differences over food in pursuit of their shared interest in getting to shore.
+ Dovetailing different interests :

• Differences between two parties sometimes create problems, but differences can also lead to a
solution.

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• Many creative agreements reflect this principle of reaching agreement through differences.
Differences in interests make it possible for an item to be high benefit to you, yet low cost to
the other side.
• Ask for their preferences as a way of dovetailing interests. Invent several options all equally
acceptable to you and ask the other side which one they prefer.
• You then take the option that is most preferable, work with it some more, and again present two
or more variants, asking which one they prefer. In this way, without anyone making a decision,
you can improve a plan until there are no more joint gains.
• In summary, dovetailing is the process of looking for items that are low cost to you and high
benefit to them, and vice versa.
- Make their decision easy

+ Pay attention to way of advancing you case by taking care of the interests on the other side.

+ Whose Shoes? - Put yourself in their shoes. and Pick one person: See how the problem looks
from their point of view.

+ Performance

• If it is performance you want, do not add something for “negotiating room”

• Make offer attractive:

• Reduce approval

• Easy to implement

+ Making threats is not enough

• Offers are usually more effective than threats and warnings of consequences

• Write out options in a “yesable proposition”

d. Insist On Using Objective Criteria

Positional Bargaining Principled Negotiation

Soft Hard
Insist on agreement Insist on your position Insist on objective solutions

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 Tray to avoid contest Try to win contest of Try to reach result based on
of will will standards, not will
Yield to pressure Apply pressure Yield to principle, not pressure

- Deciding On The Basis of Will is Costly

If trying to settle differences of interest on the basis of will has such high costs, the solution is to
negotiate on some basis independent of the will of either side – that is, on the basis of objective criteria.

- The case for using objective criteria.

You want the rent to be lower, the landlord wants it to be higher. You shoud insist that a negotiated
price, for example, be based on some standard such as market value, replacement cost, depreciated
book value, or competitive prices instead of whatever the seller demands.

- Principled negotiation produces wise agreements amicably and efficiently.

People using objective criteria tend to use time more efficiently talking about possible standards and
solutions versus defending their position. Using objective criteria is more likely to lead to creative
solutions than trying to force the other party to back down.

No matter how we understand the other party's interests, no matter how skillfully we create ways to
harmonize interests, no matter how much we value an existing relationship, we will always have
opposing interests. In fact, sellers always want to sell at a high price, and buyers also want to buy at a
low price. We can only solve this problem using objective criteria which are standards independent of
the will of each party and must be scientific and practical.

- Fair standards.

In order to use objective criteria, you need to have objective criteria! Like most things, it is beneficial
to prepare in advance. Develop some alternative standards before the negotiation begins and think
through their application to your case. An agreement may be based upon:

• Market Value

• Precedent

• Scientific Judgment

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 • Professional Standards

• Efficiency

• Costs

• What a court would decide

• Moral standards

• Equal treatment

• Tradition

• Reciprocity

- Fair procedures

To resolve a conflict, you can either use fair standards or fair procedures. For example, when two
children split a piece of cake, one cuts and the other chooses. As you consider procedural solutions,
look at other basic means of settling differences: taking turns, drawing lots, letting someone else
decide, and so on.

- Nigotiating with objective criteria

There are three basic points to remember:

+ Frame each issue as a joint search for objective criteria:

Ask “What’s your Theory?” If you are interested in purchasing a house and the seller names their
price, ask them, “How did you arrive at that figure?”

Agree first on principles. Each standard the other side proposes becomes a lever you can use to then
persuade them. Your case will have more impact if it is presented in terms of their criteria.

+ Reason and be open to reason as to which standards are most appropriate and how they should be
applied: Throwing around the phrase, “It’s a matter of principle” when you disagree with your
negotiating partner, is not what is meant by principled negotiation. A principled negotiator is open to
reasoned persuasion on the merits; a positional bargainer is not.

+ Never yield to pressure, only to principle: Pressure can take on many forms: a bribe, a threat, a
manipulative appeal to trust, or a simple refusal to budge. In all these cases, the principled response is

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the same: invite them to state their reasoning, suggest objective criteria you think apply, and refuse to
budge except on this basis.

5. BATNA
e. What is BATNA?
BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes:
Negotiating Without Giving InBATNA stands for Best Alternative to a Negotiated Agreement. It is
defined as the most advantageous alternative that a negotiating party can take if negotiations fail.In
other words, we can understand that BATNA is a plan B if plan A doesn’t bring success for us.
f. Benefits of BATNA
You establish a baseline
BATNA not only helps negotiators avoid unnecessary exchanges but also helps them avoid
unfavorable agreements. In addition, BATNA is also evaluated as an objective basis to know when to
fall back. Without the BATNA, negotiators would be at risk in determining the walk-away point, and
that they issue a refusal. Then, negotiators will be able to reject offers that are better than expected or
accept an offer that is less favorable.
Protect yourself:
Your negotiation counterpart may try to use difficult tactics: strategies that are meant to” intimidate,
provoke strong emotion, or push you into snap decision making”. These tactics work best when
negotiators are not prepared or caught off-guard. Thus, knowing your BATNA protects you from
attempts at intimidation. It provides you with an objective view of your situation – as well as the
circumstances of the other side. If your partner is pretend and threatening to walk away, clearly explain
the concrete actions you will take to use your BATNA if the negotiation ends. Not only can this
minimize the impact of such rigid tactics, but you can also show your partner that you want to continue
negotiating with them even though you have something to walk away to.
You have confidence
Without an established BATNA, you walk into your negotiations with a lot of uncertainty. Uncertainty
pushes us to make uninformed, snap decisions based on our response to a stressful situation. Some
negotiators may walk away prematurely, they are scared to accept any deal because there might be
some alternative out there that is better. A clearly established and well-researched BATNA lets you
know exactly where you’ll go if you choose to walk away. Even a weak BATNA provides you with
an understanding of where you stand and where you can go.

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 g. How to determine your BATNA?
Fisher and Ury outline a simple process for determining your BATNA:
Step 1: develop a list of actions you might conceivably take if no agreement is reached;
Step 2: improve some of the more promising ideas and convert them into practical options
Step 3: select, tentatively, the one option that seems best.
h. How to use BATNA
Identify your BATNA – and then improve it
A strong BATNA drives stronger negotiated outcomes, so improving your BATNA can help improve
your negotiated agreements. You can identify by: creating a long list of possible alternatives, and
identifying two or three especially promising ones. Then, work to improve them. Concrete information
is powerful when using your BATNA, and the extra energy spent researching – and even negotiating
beforehand – will pay off at the negotiation table.
Use your BATNA as a shield and sword
If the other side talks much about better offers, you can present your BATNA as well to show that you
are also comfortable walking away from the negotiation. However, you can confirm again that despite
your strong BATNA, you are at the negotiation table because you think the two of you can do better
together. Likewise, you can present your BATNA if the other side is downplaying your ability to get
a better deal. Telling the other side about a real offer, rather than threatening to walk and find
something better, allows you to present your BATNA objectively (and powerfully) as a possibility.
Using timing to manage a weaker BATNA
Sometimes, even with careful research, your BATNA is not very strong. While this weakens one
source of power for you in the negotiation, you can try to buy yourself more time. Request a break to
think about the agreement on the table, and see if you can improve upon your BATNA or explore other
alternatives in the meantime.

6. Conclusion
In summary, there are four principles of the main points of principled negotiation, include:
• Separate the PEOPLE from the PROBLEM
• Focus on INTERESTS, Not Positions
• Invent OPTIONS for Mutual Gain
• Insist on Using Objective CRITERIA
If you know how to apply them effectively, you will make a deal with your party directly and
empathetically, thus making possible an amicable agreement.

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 7. References
[1] In 2011, Fisher and Ury published a 3rd Edition of Getting to Yes. The updated edition was edited
by Bruce Patton and incorporates Fisher and Ury's responses to criticisms of their original 1981 book.

[2] Roger Fisher and William Ury. Getting to Yes: Negotiating Agreement Without Giving In, 3rd ed.
(New York: Penguin Books, 2011).

[3] Roger Fisher and William Ury. Op.cit, 108

[4] William McCarthy, "The Role of Power and Principle in Getting to Yes," in Negotiation Theory
and Practice, Eds. J. William Breslin and Jeffery Z. Rubin.

[5] ThS Tạ Hoàng Thuỳ Trang, Giáo trình Đàm phán trong Kinh doanh quốc tế, Đại học Tài chính –
Marketing
Websites for references:
https://www.beyondintractability.org/essay/batna
https://www.mwi.org/what-is-batna-in-negotiation/
https://glints.com/vn/blog/batna-trong-dam-phan-la-gi/#.Y0RLYvcSklQ

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