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Chapter 1: Introduction to Negotiation Posted in Chapter 1: Introduction on March 5, 2010| Leave a Comment »

6 Characteristics of a Negotiation Situation 1. Two or more parties involved • It involves two or more individuals, groups or organizations 2. Conflict of needs & desires • What one party wants is may not be what the other wants 3. Voluntary process • Negotiators negotiate by choice • Believe that they can get a better deal by negotiating than accepting what is voluntarily exchanged 4. “Give & take “ process • Parties move away from their opening positions to middle position (compromise) to reach an agreement accepted by both 5. Preference for negotiation & search for agreement to fighting openly • Parties prefer to invent their own solution that resolves the conflict • No fixed rules on how to resolve the conflict 6. Management of tangibles & resolution of intangibles • Intangible factors (psychological motivations) that may directly or indirectly influence parties in negotiation • Examples : the need to “win”, “look good”, protect one’s reputation • Have enormous influence on negotiation processes & outcomes Interdependence – Parties need each other to achieve their desired objectives / outcomes. – Either they need to coordinate with each other to achieve their own objectives – Or choose to work together because joint efforts can produce better outcomes than individual effort Types of Interdependence affect Outcomes • Goals of both parties are interconnected such that only 1 party achieve his/her goal Zero-sum / distributive situation , -ve correlation between their goal attainments • Goals of both parties are linked such that when 1 party’s goal achievement helps the other party achieve his/her goal as well Non-zero-sum / integrative situation , +ve correlation between their goal attainments Alternatives Shape Interdependence • Desirability of alternatives to working together is used to evaluate interdependence

• Best Alternative To a Negotiated Agreement (BATNA) • Need to understand one’s & counterpart’s BATNA Mutual Adjustment – One of the key causes of changes occurring during negotiation – One assumption for successful mutual adjustment : the more information one has about the other party , the better – However, too much information may only confuse the parties involved Mutual Adjustment & Concession Making • When one party adjust his position to the another nearer to the counterpart’s position, it’s concession making • Parties involved will likely make similar concessions until a mutual agreement is reached. Two dilemmas in Mutual Adjustment Dilemma of honesty o How much to tell the other party? o Revealing too much info puts one in a vulnerable position, susceptible to being taken advantage of o Revealing too little info may not help in allowing both parties to look for an agreement Dilemma of trust o How much should one believe what the other party says? o Believing in all of the other party’s words may put one in disadvantage o Not believing in the other party’s words may make it difficult to find an agreement Value Claiming & Value Creation – Two types of negotiation: o Distributive o Intergrative – Distributive is associated with Value Claiming o Only 1 winner o Each party tries to claim as much as possible from the fixed resource – Integrative is associated with Value Creation o Win-win strategies applied to create win-win situations o Finding ways for all parties to meet their goals and objectives by either finding more resources or coordinating and sharing the resources – Most negotiations have a combination of value creation & claiming processes o Negotiators must be able to identify situations that require more of one approach than the other o Negotiators should be versatile and comfortable with the use of both approaches o Negotiators tend to see problems as more distributive/competitive than they really are

Key differences between Negotiators • Differences in interests o Items are seldom regarded equally in negotiations • Differences in judgments about the future o People hold differing views about the future value of something • Differences in risk tolerance o Different people have different risk appetite • Differences in time preference – Time has different impact on different parties Conflict – It is defined as “a disagreement in interests, views or positions.” Levels of Conflict 1. Intrapersonal or intrapsychic conflict a. Occurs within a person b. Can include conflicting ideas, emotions etc. 2. Interpersonal conflict a. Occurs between individuals b. Clash of interests, views between eg. Co-workers, classmates, friends 3. Intragroup conflict a. Occurs within groups or organizations b. Affects groups’ ability to function well 4. Intergroup conflict a. Occurs between different groups or organizations b. Most complex form of negotiation 5 major strategies for Conflict Management • Contending – Strong focus on own desired outcomes – Little concern for other’s outcomes • Yielding – Little concern for own desired outcomes – Highly concerned about other’s outcomes – “let the other win” mentality • Inaction – Little concern in either one’s own or other party’s outcomes – Associated with passivity • Problem-solving

– High concern for both one’s own and other’s party’s outcomes – Both parties try to make the most out of their collaborative efforts in the conflict • Compromising – Making moderate efforts to achieve one’s and other party’s outcomes

Chapter 2: Hardball Tactics March 5, 2010 by nego4biz

8 Typical Hardball Tactics 1. Good Cop / Bad Cop a. “Bad cop” plays the role of the bad guy who takes tough measures (threats, intimidation) against the targeted party b. “Bad cop” leaves the negotiation table for the “Good cop” to come and offer the targeted party “an easy way out” of the situation c. The “easy way out” option is meant for the targeted party to yield to the team’s demands Advantages • Often results in negotiated agreements Disadvantages • Easily seen through by targeted party • Can be countered easily by clearly exposing the negotiators’ plot • Distracts the negotiators from the negotiation goals Dealing with Good Cop / Bad Cop • Openly exposing the negotiators’ plot 2. Lowball / Highball a. Starts the negotiation with a unreasonable low(high) opening offer Advantages • Aims to get the other party to re-evaluate his opening offer & move closer to his resistance point Disadvantages • Other party may not want to negotiate at all • Requires a skilled negotiator to explain his extreme opening offer if the other party continues to negotiate Dealing with Lowball / Highball • Best tactic : ask for a more reasonable opening offer instead of a counter offer • Insisting on a reasonable opening offer before negotiating further • Show that you are familiar with the bargaining mix and therefore you will not be fooled • Show your displeasure of such tactic used against you by threatening to leave the negotiating

table • Come up with an extreme counter offer 3. Bogey a. Negotiator pretends that an unimportant issue is quite important to him b. Use this tactic to trade and make concessions for issues that are really important Advantages • Difficult to defend against Disadvantages • Difficult to enact • May backfire if the other party takes you seriously and therefore giving you what you want to bogey away Dealing with Bogey • Question why the negotiator wants a particular outcome or makes a sudden reversal in positions • Not conceding to what the negotiator wants after his sudden reversal in position 4. The Nibble a. Negotiator adds a small item(the nibble) to the agreement when the both parties had spent significant time & effort in negotiation and the agreement is near Advantages • None Disadvantages • Although the nibble is small in size, it’s enough to upset the other party • The other party may be motivated to seek revenge in future negotiations Dealing with The Nibble • Ask the negotiator “What else do you want?” every time he asks for a nibble, until all issues are raised and identified • Come up with one’s own nibbles in exchange for the negotiator’s nibbles 5. Chicken a. The negotiator uses a big bluff with a threatened action, in order to force the other party to “chicken out” and yield to their demands Advantages • Non Disadvantages • Turns the negotiation into a high-stakes gamble for both sides • Makes it hard to distinguish whether either party will follow through on his/her stated course of action Dealing with Chicken

• Preparation before negotiation helps to understand both parties’ situations • Using external sources to verify what’s exchanged in the negotiation 6. Intimidation a. Many tactics take the form of intimidation b. Common point of these tactics: the use of emotional ploys to force the other party to yield c. Other forms of intimidation : increasing the appearance of legitimacy & guilt d. All these tactics make intimidator feel more powerful e. Leads the targeted party to give in due to emotional rather than objective reasons Dealing with Intimidation • Discuss the negotiation process with the intimidator, stating that you expect a fair negotiation process • Ignore the intimidation • Using a team to negotiate with the intimidator o Not everyone in the team is intimidated by the same things o Team members provide mutual support to one another through the process 7. Aggressive Behavior a. Similar to intimidation tactics b. Being aggressive in establishing your position and attacking the other party’s position eg. i. Asking for best offer early in the negotiation ii. Getting the other party to explain his position by justifying item by item c. Getting the other party to make many concessions Dealing with Aggressive Behavior • Stop the negotiation to discuss the process itself • Using a team of negotiators to negotiate with the aggressive party 8. Snow Job a. To overwhelm the other party with large amount of information, such that the other party have a problem determining which information are real or important b. To use technical or expert language such that a non-expert party cannot understand and would simply acknowledge it just to avoid embarrassment Dealing with Snow Job • Not to be afraid to ask questions until a clearly understood answer is obtained • Use of technical experts to discuss and verify technical issues • Looking out for inconsistency in the negotiator’s answer or response & ask if in doubt

Chapter 2: Distributive Negotiation • •

The Distributive Bargaining Situation Goals of one party are in fundamental, direct conflict to another party

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Resources are fixed and limited Maximizing one’s own share of resources is the goal

The Distributive Bargaining Situation Preparation—set a • Target point, aspiration point • Walkaway, resistance point • Asking price, initial offer • The Distributive Bargaining Situation

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The Role of Alternatives to a Negotiated Agreement Alternatives give the negotiator power to walk away from the negotiation – If alternatives are attractive, negotiators can: • Set their goals higher • Make fewer concessions – If there are no attractive alternatives: • Negotiators have much less bargaining power The Distributive Bargaining Situation

Fundamental Strategies Push for settlement near opponent’s resistance point Get the other party to change their resistance point If settlement range is negative, either: – Get the other side to change their resistance point – Modify your own resistance point • Convince the other party that the settlement is the best possible • Keys to the Strategies The keys to implementing any of the four strategies are: • Discovering the other party’s resistance point • Influencing the other party’s resistance point • Tactical Tasks of Negotiators • Assess outcome values and the costs of termination for the other party • Manage the other party’s impressions • Modify the other party’s perceptions • Manipulate the actual costs of delay or termination • Assess Outcome Values and the Costs of Termination for the Other Party • Indirectly – Determine information opponent used to set: • Target • Resistance points • Directly – Opponent reveals the information • Manage the Other Party’s Impressions • Screen your behavior: – Say and do as little as possible – Direct action to alter impressions – Present facts that enhance one’s position • Modify the Other Party’s Perceptions • Make outcomes appear less attractive • Make the cost of obtaining goals appear higher • Make demands and positions appear more or less attractive to the other party –whichever suits your needs • Manipulate the Actual Costs of Delay or Termination • Plan disruptive action – Raise the costs of delay to the other party • Form an alliance with outsiders – Involve (or threaten to involve) other parties who can influence the outcome in your favor • • • •

Schedule manipulations – One party is usually more vulnerable to delaying than the other • Positions Taken During Negotiations • Opening offer – Where will you start? • Opening stance – What is your attitude? • Competitive? Moderate? • Initial concessions – Should any be made? If so, how large? • Positions Taken During Negotiations • The role of concessions – Without them, there is either capitulation or deadlock • Patterns of concession making – The pattern contains valuable information • Final offer (making a commitment) – “This is all I can do” • Commitments: Tactical Considerations • Establishing a commitment – Three properties: • Finality • Specificity • Consequences • Preventing the other party from committing prematurely – Their commitment reduces your flexibility – Commitments: Tactical Considerations • Ways to abandon a committed position – Plan a way out – Let it die silently – Restate the commitment in more general terms – Minimize the damage to the relationship if the other backs off – Closing the Deal • Provide alternatives (2 or 3 packages) • Assume the close • Split the difference • Exploding offers • Deal sweeteners • Dealing with Typical Hardball Tactics • Four main options: – Ignore them – Discuss them – Respond in kind – Co-opt the other party (befriend them) • Typical Hardball Tactics • Good Cop/Bad Cop • Lowball/Highball • Bogey (playing up an issue of little importance) • The Nibble (asking for a number of small concessions to) • Typical Hardball Tactics • Chicken • Intimidation • Aggressive Behavior • Snow Job (overwhelm the other party with information) – Summary Negotiators need to: • Set a clear target and resistance points • Understand and work to improve their BATNA • Start with good opening offer •

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Make appropriate concessions Manage the commitment process

Chapter 3: Integrative Negotiation Posted in Chapter 3: Intregrative negotiation on March 5, 2010| Leave a Comment »

7 Key Factors in Achieving Successful Integrative Negotiation 1. Common Objective or Goal • It is important for individuals to focus on the commonalities within a group to achieve successful integrative outcome. Parties have to believe that collaborative efforts will be beneficial to all of them. Therefore, it is important for them to establish common, shared or joint goals among them. Common goal • A goal that is being shared equally among one another. • One that would not be accomplished without each other’s collaboration. Shared goal • A goal that both parties hopes to achieve but are beneficial to each other in a different way. Joint goal • A goal that comprises of a collective effort to combine differing individual goals together. 2. Faith in One’s Problem-Solving Ability • Parties must have a collaborative attitude when working together. • The absence of such mentality will result in a lower devotion to collaborative relationship 3. A Belief in the Validity of One’s Own Position and the Other’s Perspectives • Parties should respect and accepts the view, interest and desires of other parties and incorporate them into the negotiation problem instead of challenging their viewpoint. • Hence, search for mutually beneficial alternatives that lead to satisfying negotiation outcomes. 4. Motivation and Commitment to Work Together • Parties must be highly motivated to collaborate rather than to compete • They should be committed to achieve a mutually beneficial objective or goal • One should present interpersonal style that are more: 1) Friendly than Competitive 2) Flexible(but firm) than Obstinate (but yielding) 3) Accepting and Trusting than Defensive and Evasive • Parties should state their needs clearly, be willing to focus on the similarities and accepts differences among each other • Be comfortable with inconsistencies and uncertainties 5. Trust • Parties must be able to elicit a certain level of trust towards the other party, vice versa. • The eliciting of trust will facilitate the sharing of information and greater accuracy in communicating individuals’ needs, wants, positions and desires in the given situation.

6. Clear and Accurate Communication • Parties must be willing to share relevant information and state what they want clearly to prevent any misunderstanding as a result of generalities or vagueness • Parties must be willing to speak up and clarify any ambiguities • Parties must make sure that the messages that were communicated through numerous communication channels are consistent. • Parties should always give everyone a chance to speak, no one should dominate the negotiation process 7. An understanding of the Dynamics of Integrative Negotiation • To achieve a successful outcome in Integrative Negotiation, one should truly understand the dynamics, key elements, structure and principles that make up integrative negotiation. • It is only through thorough understanding and training that one will be able to successfully pursue the process. 6 Key Strategies for Reaching Integrative Negotiation 1. Expand the Pie • Effective for negotiations that experience shortages in resources that fails to meet both parties objectives or interest • Assumes that the enlargement of resources will solve the problem Solution: • Add resources (expand the pie) so that both parties can achieve their objectives How? • Ask diagnostic questions, such as, “Is there a resource shortage, How can resources be expanded to meet both parties needs/interest?” • Make package deals • Unbundle issues Advantages: • Requires no information from the other parties except of their interest • Simple and easy method to solve problems relating to resource shortages Disadvantages: • Not applicable to problems that are outside the scope of shortages in resources 2. Logrolling • Effective for negotiation that have more than one conflicting issues that are of different priorities Solution • Involves the trading off of issues between parties so that both achieve their preferred outcome How? • Done by trial and error, experimenting with numerous package deals that satisfies everyone’s

interest • Ask diagnostic questions,”Can I unbundle issues, make one issue into smaller ones that can then be logrolled?” • Unbundling issues and unlinking them • Making package deals Advantages: • Result in a win-win options • Simple and easy way to solve negotiations with multiple conflicting issues • Enable the establishment of long-term working relationships Disadvantages: • Time-consuming • Only applicable to negotiation that have more than one conflicting issue at stake • Not suitable for successive negotiations-where parties takes turn to get what they want • Not suitable for parties that do not wish to establish long-term working relationships 3. Non Specific Compensation • Involves the paying off of a non specific compensation to the party that accommodates to the other party’s interest and objectives • The payoff is unrelated to substantive negotiation but adequate for the party in agreeing to the other party’s preferences. How? • Parties should know how much compensation is sufficient in making the accommodative party satisfied • Need to experiment with different types of compensation offers to identify the one that satisfies the other party the most • Ask diagnostic questions, “What are the things that will be inexpensive to me but valuable to the other party?” Advantages: Disadvantages: • Time-consuming • Fear of turning into distributive situation when , the other party may request for high demands as in return for accommodating while the other tries to play down the compensation that he/she will pay. 4. Cut the Cost for Compliance • Involves the achieving of one’s objective by minimizing the cost incurred by the agreeing party How? • Parties are required to have personal knowledge of the agreeing party’s needs, wants, desire and

preferences. Advantages: • More sophisticated as compared to logrolling and nonspecific compensation as it requires a more detailed personal knowledge of the agreeing party Disadvantages: • Time-consuming 5. Bridging • Involves the inventing of a new options that meet the needs of both parties How? • Through the revealing of sufficient information which discloses interests and needs that facilitate the invention of new options Advantages: • Highly satisfying when negotiators commit themselves to win-win negotiations Disadvantages: • Do not always remedy all concerns • Not applicable when parties commit themselves to win-lose negotiations 6. Post Settlement –Settlement • Involves the using of current settlement as a benchmark or (BATNA) to explore other possible/satisfying options and agreement How? • Find a more satisfying option or agreement over the present negotiated outcome Advantages: • Enable both parties another chance to reach an even more satisfying outcome Disadvantages:

Chapter 5: Perception, Cognition and Emotion March 5, 2010 by nego4biz

Perception is the process by which individuals connect to their environment. In layman’s terms, it is a sense-making process where people interpret their environment so to respond appropriately. As perception depends on the perceiver’s current state of mind, role and comprehension, here could always be errors in the interpretation and subsequent communication. Some forms of such distortions are as follows; I. Types of Perceptual Distortions –

Stereotyping

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Assign attributes to one solely on the basis of the membership to a particular large group or category (social, racial, religious or sexual orientations ) Eg: He is an Italian so he must know so much about Rome. Very common, highly resistant to change once formed

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Halo effect

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Generalize many attributes based on the knowledge of one attribute of the individuals without any consistent relationship between them  Positive effect à good attribute, negative effect à bad attribute  Reasons for occurrence o Very little experience with the other party o When the person is well known o When the qualities have strong moral implications o Eg: He is smiling so he must be telling the truth! –

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selective perception Singles out certain information that supports a prior belief and filters out information that does confirm the belief.

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Projection Assign to others the characteristics or feelings that they possess themselves. Eg: I feel upset to postpone things, so he also will probably get frustrated if I tell him to delay our meeting.

Framing Frame is the subjective mechanism through which people evaluate and make sense out of situations based on their own experiences, leading them to pursue or avoid subsequent actions. Type of Frames Used in Disputes Substantive

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Disposition about key issue and concern in the conflict Neglects how parties will resolve the dispute Outcome

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Predisposition to achieving a specific result or outcome from the negotiation Primarily used by distributive negotiators Aspiration

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Predisposition to a broader set of interests, needs and concern other than a specific outcome. Primarily used by integrative negotiators Process

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Procedure on how parties will resolve their dispute. Does not care much about specific key issues and concern in the conflict Identity

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Definition of oneself, based on membership of a number of different social groups such as gender, religion, ethnic origin, etc

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Used to differentiate themselves from others and tend to be positive Characterization

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One’s definition of the other parties, shaped by prior or early experience and knowledge about others. Tend to be negative in conflicts Loss/ Gain

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Definition of risk and reward associated with different outcomes Can frame the outcome as loss or reward based on risk preference of other parties For instance, a car buyer can view the transaction as a monetary cost of the purchase (loss) or the value (gain) of the item.

How frames work in Negotiation Negotiators can use more than one frame Mismatches in frames between parties are sources of conflict Different types of frames or content from the two parties can cause misunderstanding and conflict escalation  Can reframe the conflict into the frame that is more compatible for both parties3. Particular types of frames may lead to particular types of agreements 1. Aspiration frames lead to integrative agreement 2. Outcome or negative frames can lead to distributive agreement  Specific frames may be likely to be used with certain types of issues 1. People discussing salary may be likely to use outcome frame. 2. People discussing relationship may be likely to use characterization frame  Parties are likely to assume a particular frame because of various factors 1. Differences in personality 2. Value differences 3. Power differences 4. Differences in background 5. Social context

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Different approach on how frames work in negotiation 1. Interests 1. Frame the conflicts based on interest, not on their positions and demands 2. Rights 1. Use some standards and rules to decide who has legitimacy, who is correct and fair in resolving the problem 3. Power 1. Create win-lose situation 2. Resolve the conflict based on power – ability to coerce the other by imposing other types of forces – economic pressures, expertise, legitimate authority, etc II. Cognitive Biases in Negotiation Irrational Escalation of Commitment – stick with a failing course of action o Eg: a country continues to pour resources into an unwinnable war because the conflict has already happened.  Mythical Fixed-Pie Beliefs – assume that all negotiations are win-lose  Anchoring and Adjustment – effect of standard against which subsequent adjustments are made during negotiation  Issue Framing and Risk – more risk averse when a decision problem is framed as gain, and risk seeking when framed as a loss  Availability of Information- depends on how easily information can be recalled and used  The Winner’s curse – tendency to settle quickly and subsequently feel discomfort about a win that comes easily o Eg: the other party gives in too easily, so there might be something wrong with the outcome or I could have done better.  Overconfidence – tendency to believe their ability to be correct or accurate is greater than for real.

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The Law of Small Numbers- tendency to draw conclusions from small sizes Eg: assuming all negotiations as distributive based on a number of past negotiations or prior experiences Self-Serving Biases- explain behaviors by making attributions to the person or situation o Eg: If I mess up, it’s bad luck. If you mess up, it’s your fault! Endowment Effect – tendency to overvalue something you posess Eg: One is likely to pay $3 for a mug if he is to buy from others, but values $7 on the same mug he owns. Ignoring Others’ Cognitions – ignoring the other party’s perceptions and thoughts hence working with incomplete information Reactive Devaluation- devaluing the other party’s concessions simply because the other party made them

o     

Managing Misperceptions and Cognitive Biases in Negotiation Be aware that misperceptions and cognitive biases can occur as negotiators gather and process information and discuss them in a structured manner within their team and with their counterparts  Careful discussion of the issues and preference can reduce the effects of perceptual biases

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III. Mood, Emotion and Negotiation Mood and emotion are different in specificity (emotion is directed at more specific targets), intensity (mood is less intense) and duration(mood is more enduring)  Negotiations create both positive (happiness)and negative (dejection-related, agitationrelated) emotions  Positive emotions generally have positive consequences for negotiations (lead parties to integrative process)  Negative emotions generally have negative consequences for negotiations (lead parties to competitive or distributive process or escalate conflicts)  Emotions can be used strategically as negotiation gambits  The effect of positive and negative emotion in negotiation

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1)

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More susceptible to a competitive opponent’s deceptive tactics Less focus on arguments of other party, leading to less-than-optimal outcomes Create strong positive expectations, experiencing the defeat more strongly and treating other more harshly if an satisfying integrative agreement is not found 2)

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Positive feelings may have negative consequences

Negative feelings may create positive outcomes Negative emotion has information value Motivate people to either leave the situation or resolve the problem Alerting other party of a problem in relationship, leading both to work on fixing the problem

Chapter 6: Communication During Negotiation March 5, 2010 by nego4biz

Offers, Counteroffers, and Motives -The communicative framework for negotiation 1). the communication of offers is a dynamic process 2). the offer process is interactive 3). various internal and external factors drive the interaction and “motivate” a bargainer to change his or her offer.

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Information about Alternatives

Negotiators with an attractive BATNA should tell the other party about it if they expect to receive its full benefits. -The style and tone used to convey information about an attractive BATNA 1).Politely making the other party aware of one’s good alternative can provide leverage without alienating the other party. 2).Waving a good BATNA in the other party’s face in an imposing or condescending manner may be construed as aggressive and threatening. Ÿ

Information about Outcomes

Negotiators should be cautious about sharing their outcomes or even their positive reactions to outcomes with the other party, especially if they are going to negotiate with that party again in the future. Ÿ

Social Accounts

Three explanation types: 1).Explanations of mitigating circumstances 2).Explanations of exonerating circumstances 3).Reframing explanation Ÿ

Communication about Process

How well it is going or what procedures might be adopted to improve the situation. Consider: Is More Information Always Better? “Information-is-weakness Effect”: Negotiators who know the complete preferences of both parties may have more difficulty determining fair outcomes that negotiators who do not have this information. l How People Communicate in Negotiation Ÿ

Use of Language

-Two levels of language operation: Logical level & Pragmatic level: The meaning conveyed by a statement or proposition is combined with a logical surface message and several pragmatic levels.

Parties whose statements communicated interests in both the substance of the negotiation and the relationship with the other party achieved better, more integrative solutions. Ÿ

Use of Nonverbal Communication

1).Make Eye Contact –When listening: show others you are paying attention and listening that you consider them important –When delivering: emphasize the importance of the message that is being sent 2).Adjust Body Position One’s body position indicates whether one is paying attention to the other party. –To show you are attentive: hold your body erect, lean slightly forward, and face the other person directly –To show strong rejection or disapproval: crossing arms, bowing the head, furrowing the brow, and squeezing eyebrows together. 3).Nonverbally Encourage or Discourage What the Other Says Indicate encouragement: brief eye contact, a smile, or a nod of the head. Indicate discouragement: a frown, a scowl, a shake of the head, or a grab of one’s chest in mock pain Ÿ

Selection of a Communication Channel

–Face-to-face negotiators are more easily to develop personal rapport, more inclined to disclose information truthfully, increasing their ability to attain mutual gain. –What e-mail negotiations lack is schmoozing—off-task or relationship-focused conversations. l How to Improve Communication in Negotiation Ÿ

The Use of Questions

Questions in Negotiation: 1).Manageable: cause attention or prepare the other person’s thinking for further questions, get information, generate thoughts 2).Unmanageable: cause difficulty, give information, bring the discussion to a false conclusion

–collect and diagnose information, assist the other party in addressing and expressing needs and interests –pry or lever a negotiation out of a breakdown or an apparent dead end Ÿ

Listening

1). Passive listening Receive the message while providing no feedback to the sender about the accuracy or completeness of reception. (Can be used as the best strategy when the counterpart is talkative) 2).Acknowledgment: Receivers occasionally nod their heads, maintain eye contact, or interject responses like “I see,” “mm-hmm.” “interesting,” “really,” and the like. 3).Active listening Restate or paraphrase the sender’s message in their own language Ÿ

Role Reversal

Gain an understanding of the other party’s perspective or frame of reference: allow negotiators to understand more completely the other party’s position by actively arguing these positions until the other party is convinced that he or she is understood. l Special Communication Considerations at the Close of Negotiations Ÿ

Avoiding Fatal Mistakes

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Achieving Closure

–avoid surrendering important information needlessly, and to refrain from making “dumb remarks” that push a wavering counterpart away from the agreement –recognize the other party’s faux pas and dumb remarks for what they are and refuse to respond or be distracted by them

Chapter 7: Sources of Power and Dealing With Others Who Have More Power Posted in Chapter 7: Power on March 5, 2010| Leave a Comment »

Power – capabilities negotiators can assemble to give themselves an advantage or increase the probability of achieving their objectives Sources of Power – How People Acquire Power

Traditional Sources of Power –

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Expert power from having unique, in-depth information about a subject

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Reward power from ability to reward other for doing what needs to be done

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Coercive power from ability to punish other for not doing what needs to be done

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Legitimate power from hierarchical status within organization

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Referent power from respect or admiration one commands due to attributes like personality, integrity, interpersonal style and the like

Major Source of Power in Negotiation –

informational sources of power

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personal sources of power

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power based on position in an organization

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relationship-based sources of power

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contextual sources of power

1) Informational Sources of Power –

most common source of power – derived from ability to assemble and organize facts and

data to support one’s position, arguments or desired outcomes –

challenge other’s position or desired outcomes

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undermine the effectiveness of the other’s negotiating argument

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power based on expertise is a special form of information power – only for those who have

achievement some level of command and mastery of a body of information –

experts’ arguments are more credible than nonexperts’ ones

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to use expert power, demonstrate that this expertise actually exists and is relevant to the

issues under discussion

2) Personal Sources of Power –

have different psychological orientations to social situations

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cognitive orientation individual differences in ideological frames of reference shape one’s expectations, the way individual process social information about power and people’s willingness to share power  3 types of ideological frames o The unitary

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o Beliefs that society is an integrated whole and that the interests of individuals and society are one, such that power can be largely ignored or, when needed, be used by benevolent authorities to benefit the good of all. (communal) o The radical  Beliefs that society is in a continual clash of social, political, and class interests, and that power is inherently and structurally imbalanced (Marxist) o The pluralist  Beliefs that power is distributed relatively equally across various groups, which compete and bargain for a share of the continually evolving balance of power (liberal democracies)

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motivational orientation differences rooted more in need and energizing elements of the personality rather than in ideology power motive – a need to influence and control others and to seek positions of power and authority

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dispositions and skills Competitive dispositions and skill emphasize on “power over” approach along with skills such as sustaining energy and stamina, maintaining focus and having high expertise, strong selfconfidence and high tolerance for conflict. Cooperative dispositions and skill emphasize on “power with” approach along with skills such as sensitivity to others, flexibility and ability to consider and incorporate other’s views into an agreement

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moral orientation different moral view about power and its use

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3) Power Based on Position in an organization –

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legitimate power

exist at the foundation of our social structure from occupying a particular job, office or position in an organizational hierarchy make people feel proper (legitimate) to receive directions from others and proper (obligatory) to follow it  ways of acquiring legitimate power o by birthright o by election (from peers) o by appointment (from superior) o by cultural value (the young respects the old)  legitimate power cannot function without obedience or the consent of the governed  types of social legitimate powers o legitimate power of reciprocity  if a person something positive for other, the gesture or favor is expected to be returned o legitimate power of equity

someone has a right to request compensation from other if he/she goes out of his way or endures suffering for the other o legitimate power of responsibility or dependence  we have an obligation to help others who cannot help themselves and are dependent on us



–

  

resource control resource can be anything valued by participants in the negotiation ability to create or control and dispense resources is a major power source in organizations develop and maintain control over some desirable reward that other party wants or control over some punishment the other wants to avoid

4) Relationship-Based Sources of Power –

 

good interdependence has strong impact on how likely parties will be to constructively use power shape “power with” orientation between parties, inducing higher expectations of assistance, more persuasion and less coercion and more trusting and friendly attitude

–



referent power Derived from the respect or admiration one commands due to attributes such as personality, interpersonal style, integrity and the like. Based on an appeal to commonalities Has negative forms to create distance between themselves and others or to label others

 

5) Contextual Sources of Power –

 

Alternative deal that a negotiator might pursue in case of negotiation failure Offers negotiator significant power –

 

–



Culture Often contains many implicit rules about use of power and more or less processes Company culture shapes what kind of power are seen as legitimate and illegitimate or how people use influence and react to influence National cultures also differ in the degree to which these “power over” or “power with” orientations are supported or encouraged





BATNAs

Agents, constituencies and external audiences Negotiation process is more complex when acting as agents, or other parties such as public media, critics, etc are present to observe. These other parties might or might not share your interests, putting pressure on either party.

Dealing with Others Who Have More Power 1. Never do an all-or-nothing deal – deal with several other partners to lower risks 2. Make the other party smaller- diversify into multiple negotiations by establishing relationships with several departments or individuals in an organization 3. Make yourself bigger- build coalitions 4. Build momentum through doing deals in sequence 5. Use the power of competition to leverage power-create competition among partners by using BATNA 6. Constrain yourself- limit the ways you can do business 7. Good information is always a source of power – seek information that is most compelling and persuasive to the counterpart

8. Do what you can to manage the process – steer the deal in an advantageous direction. Do not let the high-power party control the process (agenda, cadence, timing, location)

Chapter8: Ethics in Negotiation Posted in Chapter 8: Ethics, tagged Articles on March 4, 2010| Leave a Comment »

What are ethics? Ethics are broadly applied social standards for what is right or wrong in a particular situation, or a process for setting those standards. Ethics grow out of particular philosophies, which purport to: 1. Define the nature of the world in which we live in 2. Prescribe rules for living together Four standards for evaluating strategies and tactics in business negotiation: 1. End result ethics – Choose a course of action on the basis of results I expect to achieve 2. Duty ethics – Choose a course of action on the basis of my duty to uphold appropriate rules and principles 3. Social contract – Choose a course of action on the basis of the norms, values, and strategy of my organization or community 4. Personalistic ethics – Choose a course of action on the basis of my personal convictions Ethically ambiguous negotiation tactics: 1. 2. 3. 4. 5. 6.

Traditional competitive bargaining Emotional manipulation Misrepresentation Misrepresentation to opponent’s networks Inappropriate information gathering Bluffing

Tactics 1 and 2 are generally viewed as appropriate and are likely to be used. However, the other four categories are generally seen as inappropriate and unethical in negotiation. Deception by Omission versus Commision A negotiator using this tactic deceives the other party about what she wants on the common-value issue and then (grudgingly) agrees to accept the other party’s preferences, which in reality matches her own. Researchers discovered that negotiators used 2 forms of deception in misrepresenting the common-value issue: 1. Misrepresentation by omission – failing to disclose information that would benefit the other 2. Misrepresentation by commission – actually lying about the common-value issue Why Use Deceptive Tactics? 1. The Power Motive

  

To increase the negotiator’s power in the bargaining environment Because negotiation is often primarily an exchange of facts, arguments, and logic between two wholly rational information-processing entities, whoever has better information, or uses it more persuasively, stands to “win” the negotiation Individuals are more willing to use deceptive tactics when the other party is perceived to be uninformed or unknowledgeable about the situation under negotiation, particularly when the stakes are high. 2. Other Motives

    

Individualistic vs Cooperative orientations Individualistic – those looking to maximize their own outcome, regardless of the consequences for the other – more likely to use misrepresentation as a strategy. Cultural Differences à Motivational differences Individuals in a more individualistic culture (like the U.S.) are more likely to use deception for personal gain than those in a more collectivist culture (Israel). Personal motivational orientation – Cooperative vs Competitive Consequences of Unethical Conduct Based on 3 aspects of the situation: 1. Effectiveness



If using the tactic allows a negotiator to attain rewarding outcomes that would be unavailable if he had behaved ethically, and if the unethical conduct is not punished by others, the frequency of unethical conduct is likely to increase because the negotiator believes he can get away with it 2. Reaction of others

  

Arises from judgments and evaluations by the person who was the “target” of the tactic Depending on whether these parties recognize the tactic and whether they evaluate it as proper or improper to use, the negotiator may receive a great deal of feedback. People who discover that they have been deceived or exploited are typically angry and unlikely to trust the unethical negotiator again, may seek revenge from the negotiator in future dealings, and may also generalize this experience to negotiations with others. 3. Reactions of self

   



Under some conditions – such as when the other party has truly suffered – a negotiator may feel some discomfort, stress, guilt or remorse On one hand, while the use of these tactics may have strong consequences for the negotiator’s reputation and trustworthiness, parties seldom appear to take these outcomes into consideration in the short term On the other hand, particularly if the tactic had worked, the negotiator may be able to rationalize and justify the use of the tactic Some explanations and justifications are as follows: 1. The tactic was unavoidable 2. The tactic was harmless 3. The tactic will help to avoid negative consequences 4. The tactic will produce good consequences, or the tactic is altruistically motivated 5. “They had it coming” or “They deserve it” or “I’m just getting my due” 6. “They were going to do it anyway, so I will do it first” 7. “He started it” 8. The tactic is fair or appropriate to the situation These explanations and justifications help people to rationalize the behavior to themselves as well as allow the negotiator to convince others that the conduct that would ordinarily be wrong in a given situation is acceptable So, How Can Negotiators Deal With The Other Party’s Use of Deception?

1. Ask Probing Questions

 

Research shows that most buyers fail to ask questions, and that asking questions can reveal a great deal of information, some of which the negotiator intentionally leave undisclosed While asking questions can help a negotiator determine whether another negotiator is being deceptive, such cross-examination may actually increase the seller’s tendency to be deceptive in areas where questions are not being asked 2. Force the Other Party to Lie or Back Off

 

Pose a question that forces him or her to tell a direct lie or else abandon or qualify the assertion This kind of question may make the other party nervous about liability for fraudulent negotiator behavior 3. “Call” the Tactic

 

Indicate to the other side that you know he is bluffing or lying Do so tactfully but firmly, and indicate your displeasure 4. Discuss What You See and Offer to Help the Other Party Change to More Honest Behaviors



Tries to assure the other party that telling the truth is, in the long term, more likely to get him what he wants, than any form of bluffing or deception will 5. Respond in Kind

 

If the other party bluffs, you bluff more. If she misrepresents, you misrepresent. Not recommended, but if she recognizes that you are lying too, she may also realize that the tactic is unlikely to work 6. Ignore the Tactic All in all, ethics in negotiator is a blurred topic. There is a fine line between good ethical behavior and unethical behavior. Although some behaviors are clearly unethical, others depend on the culture, personal motivation and reaction of the negotiators.

Chapter 9: Relationships in Negotiation March 5, 2010 by nego4biz

Negotiation within Relationships When negotiating in the context of an important relationship, relationship issues could dramatically change the approach to negotiation strategy and tactics 1. Negotiation within relationships takes place over time. 2. Negotiation is often not a way to discuss an issue, but a way to learn more about the other party and increase interdependence. 3. Resolution of simple distributive issues has implications for the future. 4. Distributive issues within relationship negotiations can be emotionally hot. 5. Negotiating within relationships may never end. –Parties may defer negotiations over tough issues in order to start on the right foot.

–Attempting to anticipate the future and negotiate everything up front is often impossible. –Issues on which parties truly disagree may never go away. 1. In many negotiations, the other person’s behavior is the focal problem. 2. In some negotiations, relationship preservation is the overarching negotiation goal, and parties may make concessions on substantive issues to preserve or enhance the relationship.

l Key Elements in Managing Negotiations within Relationships Ÿ

Reputation

–Reputations are perceptual and highly subjective in nature. –An individual can have a number of different, even conflicting, reputations. –Reputation is influenced by an individual’s personal characteristics and accomplishments. –Reputations develop over time; once developed, they are hard to change. –Negative reputation is difficult to “repair”. Ÿ

Trust

–Many people show remarkably high levels of trust when approaching a new relationship. –Trust tends to cue cooperative behavior. –Individual motives shape both trust and expectations of the other’s behavior. –Trustors, and those trusted, may focus on different things as trust is being guilt. –The nature of the negotiation task can shape how parties judge the trust. –Greater expectations of trust between negotiators lead to greater information sharing, therefore tend to enhance effectiveness in achieving a good outcome. –Distributive processes may tend to reduce trust while integrative processes tend to increase trust.

–Trust increases the likelihood that negotiation will proceed on a favorable course over the life of a negotiation. –Face-to-face negotiation encourages greater trust development. –Negotiators who are representing others’ interest tend to behave in a less trusting way. Trust Repair ž

The more severe the breach of trust, the more difficult it is to repair trust and reconcile the

relationship. ž

If the parties had a good past relationship, it was easier to repair trust.

ž

The party who breach the trust must apologize as soon as better.

ž

The apology must be sincere enough.

ž

The one who makes the apology must take personal responsibility for having created the

breach. ž

Apologies were more effective when the trust breach appeared to be an isolated event rather

than habitual and repetitive for the other party. Ÿ

Justice

Forms of justice: 1)

Distributive Justice: about the distribution of outcomes

2)

Procedural Justice: about the process of determining outcomes

3)

Interactional Justice: about how parties treat each other in one-to-one relationship

4)

Systemic Justice: about how organizations appear to treat groups of individuals and the

norms that develop for how they should be treated. Relationships among Reputation, Trust, and Justice They are all central to relationship negotiations and feed each other. l Relationship Repair Find out: Ÿ

What might be causing any present misunderstanding, and what can I do to understand it

better?

Ÿ

What might be causing a lack of trust, and what can I do to begin to repair trust that might

have been broken? Ÿ

What might be causing one or both of us to feel coerced, and what can I do to put the focus on

persuasion rather than coercion? Ÿ

What might be causing one or both of us to feel disrespected, and what can I do to

demonstrate acceptance and respect? Ÿ

What might be causing one or both of us to get upset, and what can I do to balance emotion

and reason?

Chapter 11: International and Cross-Cultural Negotiation March 5, 2010 by nego4biz

What defines culture? Culture is the set of shared values and beliefs of a group of people. What Makes International Negotiation Different? Two overall contexts have an influence on international negotiations: the environmental context and the immediate context. Environmental Context: Includes environmental factors that neither negotiator controls that influence the negotiation. Seven factors: 1. Political and Legal Pluralism

 

Firms conducting business in different countries are working with different legal and political systems Political considerations may enhance or detract from business negotiations in various countries at different times 2. International Economics

  

Exchange value of international currencies naturally fluctuates The less stable the currency, the greater risk for both parties Any change in the value of a currency can significantly affect the value of the agreement for both parties 3. Foreign Governments and Bureaucracies



Countries differ in the extent to which the government regulates industries and organisations 4. Instability

  

Instability may take many forms: lack of resources, shortages of other goods and services, and political instability Challenge for international negotiators to anticipate changes accurately and with enough lead time to adjust for their consequences Negotiators facing unstable circumstances should include clauses in their contracts that allow easy cancellation or neutral arbitration, and consider purchasing insurance policies to guarantee contract provisions 5. Ideology

 

Negotiators from other countries do not always share the same ideology Clashes in ideology may lead to parties disagreeing at the most fundamental level about what is being negotiated 6. Culture

 

People from different cultures appear to negotiate differently People from different cultures may also interpret the fundamental processes of negotiations differently 7. External Stakeholders



International negotiators can receive a great deal of promotion and guidance from their government via the trade section of their embassy, and from other business people via professional associations Immediate Context: Includes factors over which negotiators appear to have some control. 1. Relative Bargaining Power

 

Relative power has frequently been operationalized as the amount of equity that each side is willing to invest in the new venture The presumption is that the party who invests more equity has more power in the negotiation and therefore will have more influence on the negotiation process and outcome 2. Levels of Conflict

 

High conflict situations – those based on ethnicity, identity, or geography – are harder to resolve Also important is the extent to which negotiators frame the negotiation differently or conceptualize what the negotiation concerns 3. Relationship between Negotiators

 

Negotiations are part of a larger relationship between two parties The history of relations between the parties will influence the current negotiation, just as the current negotiation will become part of any future negotiations between the parties 4. Desired Outcomes

 

Tangible and intangible factors play a large role in determining the outcomes of international negotiations Countries often use international negotiations to achieve both domestic and international political goals 5. Immediate Stakeholders

 

Include the negotiators themselves as well as the people they directly represent Skills, abilities, and international experience of the negotiator clearly can have a large impact on the process and outcome of international negotiations Conceptualizing Culture and Negotiation Concept of culture: 1. Culture is a group-level phenomenon – a defined group of people shares beliefs, values, and behavioral expectations. 2. Cultural beliefs, values, and behavioral expectations are learned and passed on to new members of the group. Cultural attribution error – the tendency to overlook the importance of situational factors in favor of cultural explanations Culture as shared values



Cross cultural comparisons are made by finding the important norms and values that distinguish one culture from another and then understanding how these differences will influence international negotiation. Four Dimensions that Describe the Important Differences Among the Cultures: 1. Individualism/Collectivism

 

The extent to which the society is organized around individuals or the group Negotiators from collectivist cultures will strongly depend on cultivating and sustaining a long-term relationship, whereas negotiators from individualistic cultures may be more likely to swap negotiators, using whatever short-term criteria seem appropriate 2. Power Distance

 

Describes the “extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally” Greater power distance will be more likely to concentrate decision making at the top



Negotiators from comparatively high power distance cultures may need to seek approval from their supervisors more frequently, and for more issues, leading to a slower negotiation process 3. Career Success/Quality of Life



Cultures differed in the extent to which they held values that promoted career success or quality of life Increases competitiveness when negotiators from career success cultures meet



4. Uncertainty Avoidance



Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations 10 Different Ways Culture can Influence Negotiations 1. Definition of Negotiation 2. Negotiation Opportunity 3. Selection of Negotiators 4. Protocol 5. Communication 6. Time Sensitivity 7. Risk Propensity 8. Groups versus Individuals 9. Nature of Agreements 10. Emotionalism Culturally Responsive Negotiation Strategies According to Familiarity with the other party’s culture:

  

Low Familiarity Employ Agents or Advisors (Unilateral Strategy) Bring in a Mediator (Joint Strategy) Induce the Other Negotiator to Use Your Approach (Joint Strategy) Moderate Familiarity

 

Adapt to the Other Negotiator’s Approach (Unilateral Strategy) Coordinate Adjustment (Joint Strategy) High Familiarity

  

Embrace the Other Negotiator’s Approach (Unilateral Strategy) Improvise an Approach (Joint Strategy) Effect Symphony (Joint Strategy)

Multiple Choice Quiz (See related pages)

1

Most of the complexities in multiparty negotiations will increase linearly, if not exponentially, as more parties, constituencies, and audiences are added. A)

True

B)

2

Negotiators who have some way to control the number of parties at the table may begin to strategically manipulate this control to serve their objectives. A) B)

3

B)

B)

B)

False

True False

True False

Multiparty negotiations differ from two-party deliberations in which of the following ways? A) B) C) D) E)

7

True

Conflict is a natural part of group life that improves members' ability to complete tasks, work together, and sustain these relationships. A)

6

False

When a chairperson is also advocating a particular position or preferred outcome, it will be difficult for that individual to act or be seen as "neutral." A)

5

True

A single negotiator is simply one of the parties in a multiparty negotiation and wants to ensure that his or her own issues and interests are clearly incorporated into the final agreement A)

4

False

Multiparty negotiations have more negotiators at the table. More issues and more information are introduced than when two parties negotiate. The environment changes from a one-on-one dialogue to small group discussion. The process for multiparty negotiators is more complex than two-party ones. All of the above statements about multiparty negotiations are true.

In multiparty negotiations, research shows that parties who approached multiple issues simultaneously: A) B)

achieved lower quality agreements. increased the likelihood of achieving agreement. exchanged less information.

C) D)

have less insight into the preferences and priorities of the other parties at the table.

Research shows that parties who approached multiple issues simultaneously E) achieved all of the above.

8

There are five ways in which the complexity increases as three or more parties simultaneously engage in negotiation. Which one of the following statements is incorrect? A)

There are simply more parties involved in the negotiation.

More parties bring more issues and positions to the table, and thus more B) perspectives must be presented and discussed. When negotiations become socially more complex, the social norms emerge that affect member participation, which reduces the stronger pressures to conform and C) suppress disagreement. As the negotiations become procedurally more complex, the parties may have to negotiate a new process that allows them to coordinate their actions more D) effectively. As the negotiations become more strategically complex, the parties must monitor the moves and actions of several other parties in determining what each will do E) next.

9

What are the three key stages and phases that characterize multilateral negotiations? the prenegotiation stage, managing the actual negotiations, and managing the A) agreement stage. the coalition building stage, the relationship development stage, the networking B) stage. C)

the coalition building stage, the networking stage, and the actual negotiation stage.

the prenegotiation stage, the networking stage, and the managing the agreement D) stage. None of the above lists the three key stages and phases that characterize E) multilateral negotiations.

10

Which of the following questions should not be asked as part of the requirements for building a relationship in the connect model? A) B) C) D)

Can we agree to have a constructive conversation? Can our conversation be productive enough to make a difference? Can we restructure the agreement to include the original issue? Can we all commit to making improvements?

Can we understand and appreciate each other's perspective? E) Advertisements