The Negotiations Process

Verbal and Non-Verbal Communications

During Negotiation
True or False Questions:
1. (T/F) ____ It is important in negotiations to avoid actions or questions
which provoke anxiety.
2. (T/F) ____ You should use humor to diffuse tension when a conflict gets
heated.
3. (T/F) ____ You should always keep your emotions under control when
trying to deal with tense situations.
4. (T/F) ____ It is important to take notes when people talk to you.
5. (T/F) ____ It is not appropriate to leave a conflict in a huff and slam the
door behind you.

To

Negotiate

Whether at a bargaining table with labor and management; a law office with
plaintiffs and respondents; Camp David with international combatants; a
hostage situation; or a mediation between an employee and supervisor, the
definition is the same.

To Negotiate is to arrange or settle by conferring or

discussing; or to use information and/or power to affect
human behavior in an environment filled with multiple
issues and tensions.

Another definition of

Negotiation...

A strategic endeavor directed toward the specific ends

of reaching agreements and satisfying negotiators
needs.
Strategies are the pre-formulated game plans, objectives, and
approaches that guide negotiators in reaching their goals;
Tactics are the specific ways bargainers implement these
strategies.
From Strategy of Conflict by Schelling

Characteristics of

Negotiations

*From

Essentials of Negotiations by Lewicki, Saunders

Two or more parties are involved.

There exists a perceived conflict of interest between those parties.
Parties chose to negotiate because they believe they can influence each
other to get a better deal than what they would otherwise get if action was
unilateral.
For time being, parties prefer to work together for resolution rather than fight
or seek other non-negotiated remedies.
Parties expect to experience give and take during their negotiations as
each side compromises positions.
Parties expect that negotiations will allow them to manage both the
tangibles and the intangibles contained in their issues.

Motivations for
Instrumental:
PRACTICAL value
Negotiation to achieve
tangible or
quantitative outcomes
(i.e., Wages; profits;
productivity; benefits; etc.)

Easy to measure

Negotiation
Expressive:
ATTENTION value
Negotiation to achieve
intangible or
qualitative outcomes
(i.e., More respect; easier
work; recognition; more
input; etc.)

More difficult to
measure

Conflicts in Negotiations
*From Essentials of Negotiations

Intrapersonal or Intrapsyhic conflict

Conflict within the individual

Interpersonal conflict
Conflict among and between individuals

Intragroup conflict
Conflict within a group

Intergroup conflict
Conflict among and between groups

Barriers to Successful Negotiations

Parties may not be open about their desired outcomes.
Parties may not be clear in their own minds about what
they actually want to accomplish with their proposals.
Parties may not reveal all of the truth regarding their
positions to each other.
Parties may not be willing to believe all that they hear
from each other.
Parties may not have the right negotiators.
Parties may not be ready to settle.

Traditional Negotiation Relationship

Assumptions
For me to win, you must lose: therefore, we must
compete
To help you is a sign of my weakness and it will
hurt me: therefore, little real communication
My power comes from opposing, criticizing and
beating you: therefore, parties are more rigid

Traditional Negotiation Relationship

Outcomes
One-sided victories (Win-Lose)
Split-the-difference compromise
Escalation into conflict
Costs high to both parties
Neither party fully achieves goals
May lead to decay and decline of both parties

What is the Aim of

Negotiations?

Aim of Negotiation
To reach a desired and durable result by
including the interests of both parties
To reach agreement efficiently and fairly using
talents of all participants to solve problems
To develop a shared sense of satisfaction from
working together successfully

A Good Negotiating Outcome

1.

Better Than Alternatives Away From The Table.

2.

Satisfies Interests
Me: Well Satisfied

Both: Your problem is my problem

You: Acceptable

3.

The Best Among Many Options

4.

I Do Not Feel Taken A Legitimate Outcome.

5.

Efficient Process Requires Good Communication

6.

Realistic Commitments - Likely to Comply, Easy to Implement

7.

Leaves Us With A Good Working Relationship

Dont leave joint gains on the table.

Negotiation Methods:
Power, Rights, and InterestBased

Negotiating Methods
The outcome of any agreement will reflect the
extent and manner in which the parties deal
with the basic methods of negotiation.
Power
Rights
Interests

Negotiating Method - Power

Power

Negotiation Method - Power

The ability to direct the outcome of negotiations.
Difficult to determine who is more powerful without
a destructive power contest
Perception of other partys power often incorrect
Other party may respond irrationally

Negotiating Methods - Rights

Rights

Negotiation Method - Rights

The entitlement to a negotiating outcome.
Rarely clear answer
Two rights sometimes contradictory
Advocating rights is frequently costly and time
consuming
Rights assertion frequently requires
intervention by a third party

Negotiating Methods Interests

Interests

Negotiation Method - Interests

What is needed for a acceptable negotiating
outcome.
Interests usually underlie positions
Concern needs, desires, concerns, fears, values, or
matters that a party really cares about
Seeks to preserve relationships

Negotiating Methods

Power

Rights

Interests

Conflict Resolution Methods

Power/Rights/Interests/Transaction Costs

Power

Rights

Interests

Resources
Required:

always high:
time, money,
stress

generally
costly: time,
money, stress

time, talent

Satisfaction
with Outcome:

one-sided: the
winner

mixed: not
satisfied, to
highly satisfied

both interests
must be
satisfied or no
agreement

Compliance:

as long as
power is
applied

until a better
opportunity
presents itself

very durable
because
interests are
met

Quality of
Relationship:

always runs
risk of

one
upmanship

mutual respect,
valued partner,

Positional and InterestBased

Negotiations
Understanding these negotiating
concepts and recognizing when to
use them.

Positional Negotiations
Positional negotiations is a process
that starts with the solution. Parties
propose solutions to each other and
tender offers and counter-offers with
the objective of reaching a solution
acceptable to all parties.

Positional Negotiations
Attitudes

Resolution options are limited

We are adversaries
There is only one right solution Mine
Be aggressive to win
Any concession is a sign of weakness
Negotiate to win all you can
A win for you is a lose for me

Positional Negotiations
Goals
NEGOTIATE TO WIN!
WIN ALL YOU CAN!
FOCUS ON THE PRESENT!

Positional Negotiations
Works Best
One Time Problem
Parties have Equal Skills
Comfortable with Tactics
Desire the Right Decision

Shortcomings in Positional
Negotiating
It tends to lock negotiators into positions they have taken
Ego becomes involved the more a party is compelled to
defend a position
It diminishes the importance and value of personal
relationships
It encourages reliance on power to force acceptance of a
position
It discourages communication of interests, values, and
needs that are essential to the search for creative
solutions

Interest-Based Negotiations
Interest-based negotiations starts
with a needs analysis. Parties
develop an understanding of their
individual needs and seek to educate
the other party about these needs
and learn the needs of the other
party with the objective of engaging
in joint problem solving to meet all

parties needs.

Interest Defined
Interests are specific needs,
conditions, or results that a
party must meet for successful
negotiations. Interests may be
procedural, psychological,
substantive, or external.

THE INTEREST ICEBERG

Remedy Requested
Relationships
Culture

Hurts/wounds

Behaviors
Pride
Practices

Bias

History

LSylvester

Interests

PSYCHOLOGICAL
Trust

PROCEDURAL
Fairness

SUBSTANTIVE
Outcome

EXTERNAL
Others

Interest-Based Negotiations
Attitudes

Resolution options are not limited

We are problem solvers
Relationships are important
Creative solutions are possible
There are probably several satisfactory solutions
We may have shared interests
Our goal is win/win

Interest-Based Negotiation
Goals
IDENTIFY YOUR INTERESTS!
ADVOCATE FOR YOUR NEEDS!
PRESERVE THE RELATIONSHIP!

Interest-Based Negotiations
Solve the Problem(s)
Focus on issues, not
personalities
Focus on interests,
not positions
Invent options that
meet both sides most
important concerns

Look to standards for

what should happen.
Keep in mind the
standard of mutual
caretaking; relationships
that always go one way
become very difficult
Talk about how to keep
communications open as
you go forward

Interest-Based Bargaining
Works Best
Relationship are Important
Communications are Good
Trust is Developed
Multiple Problems

Comparison
Interest-Based and Positional
Negotiations

Interest-Based

Identify Issues
Clarify Facts
Find Interests
Develop Options
Consider Standards
Rate Options/Standards
Reach Consensus

Positional

Identify Issues
Clarify Facts
Develop Positions
Advocate Positions
Reduce Your Demands
Consider Counteroffers
Reach Agreement

Positional vs Interest Based

Negotiating Elements
In Positional Negotiating

In Interest Based Negotiating

Open high or low

Use objective standards

Trade concessions toward

midpoint-compromise

Choose from many options

rather than splitting the
difference

Disguise true feelings wear a Speak openly and clearly,

mask
describing your interests
Discredit case and claims
made by the other party

Accept case made by the other

party as one possible solution

Use tactics to keep the other

party off balance

Make sure the other negotiator

feels comfortable,
unthreatened, secure and
respected

Creating a Stable Negotiating

Environment
Engage in discovery and mutual
education
Create advocacy
Listen, seek to understand
Enhance enforcement
Enhance implementation

Solve the Problem

Focus on issues, not
personalities
Focus on interests,
not positions
Invent options that
meet both sides most
important concerns

Look to standards for

what should happen.
Keep in mind the
standard of mutual
caretaking; relationships
that always go one way
become very difficult
Talk about how to keep
communications open as
you go forward

QUESTIONS FOR EXPLORING INTERESTS

What problem are we
trying to solve?
Are there other
problems?
What do you want to
have happen?
What concerns do you
have?
What is the best case
scenario for you?

What do you want to

accomplish?
What would have to
happen for you to feel
satisfied?
What will it take for
you to work together?
Is there anything else
important to you?

Management of Negotiations
Expectations
Reality
Standards
BATNA/WATNA

Alternative Outcomes to Reaching a

Negotiated Agreement
BATNA

WATNA

Best Alternative to a
Negotiated
Agreement

Worst Alternative to a
Negotiated Agreement

BATNA
The least damaging outcome
anticipated if no agreement is
reach.

BATNA Advantages
Forces negotiators to realistically evaluate
their negotiating strength
Prevents blind negotiations
Protects from accepting terms that are too
unfavorable

WATNA
The most damaging outcome to
anticipate if no agreement is
reached.

WATNA Advantages
Forces negotiators to realistically evaluate
their options
Prevents power negotiations
Protects from rejecting terms that are in
your interest to accept

Management of Negotiations
Closure
Reaching Agreement
Drafting the Agreement
Signing the Agreement

Structural Complexities
of

Multi-Party Negotiations

A Simple Two Party Negotiation

Party B
Party A
In any given negotiation session, many types of negotiation occur
between interdependent individual groups. For simplicitys sake,
let us illustrate this point by examining a two-sided dispute. At the
negotiating table are parties A & B.

Horizontal Bargaining

Party B
Party A

Horizontal Bargaining

Lead negotiator
Roles
Behavior
Techniques
Procedures
Interests
Closure

Vertical Bargaining
Constituency
Bargaining

Party B
Party A
Organizational
Bargaining

Vertical Bargaining
Constituency
Team member represents a special group
Constituency can assist in clarify interests
Need to keep informed

Organizational
Team is delegated negotiating authority
Understand interests of delegating authority
Need to keep informed

Unilateral Bargaining
Vested Interest

Party B
Party A
Unilateral vested-interest bargaining occurs when one or more members
of a team covertly approach members of another team.

Unilateral Bargaining
Conciliatory

Party B
Party A
Unilateral conciliatory bargaining occurs when one or more parties
informally, and possibly privately, explore alternatives for settlements
with members of another team. Those overtures are conducted with the
full knowledge of the team in the hope that the information shared will lead
to fruitful bargaining for all sides.

Unilateral Bargaining
Conciliatory Interest

Authorized by the team or lead negotiator

Used to clarify data or identify mutual needs
Requires accountability
Constructive

Vested Interest

Unauthorized covert meeting

Conducted for the benefit of the team member
Destroys team synergy
Destructive

Bilateral Bargaining

Party B

!
Party A
Bilateral bargaining occurs between the teams and is generally conducted
by a spokesperson or by authorized team members. In this type of
negotiation, the history of the dispute is reviewed, issues and interests
are identified, alternatives are generated and discussed and agreements
are reached.

External Factors

Press

Influential
Individual

Party B
Party A
Demonstrations

Environmental
Group

Collective Participation

Party B
Party A

Exercise Modifications
The company is Belgrade Baby Foods
The crime is potentially a felony
Each table should:
1) identify their own interests
2) Identify the other sides interests
3) Create options to satisfy both interests
4) Post all on a flip chart and be prepared to
report out to the other side

Influences on Negotiation

What are the cultural influences in

negotiations to be aware of when dealing
with representatives from:

France
Germany
Italy
UK

Goals (contract or relationship)

Attitudes towards negotiation process (win-win, win-lose)
Personal styles (formal vs. informal)
Styles of communication (direct/indirect)
Time sensitivity (high or low)
Emotionalism (high or low)
Agreement form (specific or general)
Agreement building process (bottom up or top down)
Negotiating team organization (unilateral or consensus)
Risk Taking (higher or lower)

France

Less team oriented negotiate individual

Debate is stimulating
Well prepared
Parties can make decisions
Strategies include logical proposals,
arguments and counter proposals
Preference for discussing philosophy
Important meetings treated very formally

Germany

Well prepared, serious, organized

Tough positional stances
Least affected by interpersonal issues/relations
Negotiations are formal and will follow agenda
Relationships should not intrude on tasks
Low risk takers
Conflict viewed as inadequate preparation
Emotional outbursts and frequent interruptions
not appreciated
Decision making takes time

British
Value bottom line and short term results
Open about opinion but indirect in its
expression, emphasizing courtesy and tact
and formality.
Dont show true emotions often reserved
and understated
Risk averse and cautious, favoring
security and status quo

Italy
Personal relationships important
Need to feel they can get along with
counterparts
Confident, shrewd and competent
Initial negotiations can include lots of casual
talks and positioning tactics
Takes a long time to get to point
Multiple conversations at once and interruptions
common
Presentation must be organized, clear and
polished with dramatic effect for audience

What is the Serbian

Approach to
Negotiation?

Goals (contract or relationship)

Attitudes towards negotiation process (win-win, win-lose)
Personal styles (formal vs. informal)
Styles of communication (direct/indirect)
Time sensitivity (high or low)
Emotionalism (high or low)
Agreement form (specific or general)
Agreement building process (bottom up or top down)
Negotiating team organization (unilateral or consensus)
Risk Taking (higher or lower)

Parameters of contract
Sales and marketing training for sales
force of brake manufacture
General sales training, not industry
specific
Focus on concepts, leave specific
knowledge to participants

Feedback on Training
Not specific to industry!!
Alienated females with inappropriate
language
Task Force Assignment had no females
Too lecture oriented

MANAGEMENT OF NEGOTIATIONS
Interest-Based Negotiations

Management of Negotiations
Seven Factors to Consider

Preparation
Planning
Administrative
Communications
Techniques
Expectations
Closure

Management of Negotiations
Preparation
Identify your interests
Anticipate other partys interest
Find objective standards
Generate possible options

Management of Negotiations
Planning
Set goals for initial contact
Collect and analyze facts
Design a strategy
Negotiating Team Representation

Management of Negotiations
Administrative

Time
Location
Participants
Room Arrangement
Refreshments
Support Roles
External elements

Management of Negotiations
Communications
Behavior
Verbal and non-verbal
Trust

Levels of Trust
Ability to Perform
Personal Conduct
Compliance with Agreements

Building Trust

Listen
Display a concern for interests
Demonstrate empathy
Keep confidences
Fulfill promises
Be respectful

How easy is it to build trust in

negotiations?

Destroying Trust in Negotiations

Act inattentive
Ignore interests
Breach a confidence
Break a promise
Embarrass the other party
Spring a surprise

How easy is it to destroy trust in

negotiations?

Rebuilding Trust
Accept responsibility for actions
Acknowledge your actions
Make restitution or repairs
Be transparent in future

Management of Negotiations
Problem-Solving Techniques
Brainstorming
Consensus-Building
Action Planning

Brainstorming
A technique used to generate as many
original ideas as possible for solving a
problem or an impasse without judging
them. It is based on the theory that the
more people working on the problem the
more ideas that will be generated.

Rules for Brainstorming

Define the problem

Do not criticize an idea
Be imaginative
Build on others ideas
Aim for quantity
Record all ideas

Procedures for Brainstorming

Create a relaxed comfortable environment
Set seating arrangement
Seek full participation
Record ideas in full view of all

Consensus-Building
A technique that reaches an agreement by
identifying the interests of concerned
parties and then builds a solution to
maximize meeting those interests. The
terms of the agreement do not have to be
the first choice of all parties, but rather a
solution that everyone can accept.

Why use Consensus-Building?

To benefit from each persons unique
knowledge, logic, and creativity.
To reach greater commitment and support
of the agreement and its implementation.

Procedures for Consensus-Building

Generate option
Discuss option
Explain consensus
Describe reasons for not acceptable
Consider means to make acceptable
Seek to build consensus

Action Planning

A technique that provides structure and a

framework for reaching a solution to a
problem.

Action Planning

Identify the real problem

Redefine the problem
Determine the causes of the problem
Discuss consequences of not resolving it
Brainstorm possible solutions
Use consensus to select a solution
Record the agreement

Management of Negotiations
Expectations
Reality Checking
Objective Standards
BATNA/WATNA

Reality Checking
What is my real interest in the outcome
Do I need to maintain this relationship
Are there external interests here
What are the consequences of not reaching an
agreement

Objective Standards
Tangible factors for comparing and
evaluating options. These may include
laws, court decisions, regulations, industry
guides, trade practice, past performance,
expert evaluations, or similar transactions.

Alternative Outcomes to Reaching a

Negotiated Agreement
BATNA

WATNA

Best Alternative to a
Negotiated
Agreement

Worst Alternative to a
Negotiated Agreement