Module 12
Negotiation and Conflict Resolution
PowerPoint Presentation by Charlie Cook
Copyright © 2005 South-Western. All rights reserved.
Negotiation as a Form of
Conflict Management
• Conflict is ubiquitous and negotiation is only one
of many ways to deal with difference
• Ways of resolving conflict:
 Forcing behavior
 Smoothing
 Avoidance
 Negotiating
 Third-party assistance
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–2
Dealmaking:
Building Blocks of Negotiation
• Building blocks of dealmaking process are:
 Parties
 Issues
 Interests
• Dealmaking can resemble market transaction
where parties pursue individual gain or can be
one where parties pursue mutual gain
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–3
Dealmaking (cont’d)
• Negotiation takes place between and among
parties
• Parties can be people negotiating on their own
behalf or be agents acting on behalf of others
• Negotiations among parties affected by:
 Relationships between parties
 Number of parties
 Negotiator characteristics
 Organization context
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–4
Dealmaking (cont’d)
• Issues are the matters over which parties
disagree and seek to reach agreement on
• Most common distinction people make about
issues concerns number of them
• Issues can differ in terms of specificity and clarity
• Issues are not etched in stone; issues can
change during negotiation
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–5
Dealmaking (cont’d)
• Interests are what parties seek to advance in
negotiations
• Substantive interests relate directly to what’s
being negotiated
• Negotiators should be as specific as possible
about articulating interests
• Parties value interests and issues differently
• A major challenge in negotiating is talking about
interests
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–6
Dealmaking (cont’d)
• Bargaining power is the capacity to achieve
agreement on one’s own terms
• Sources of power:
 Ability to reward or coerce another party to make
particular concessions
 “Best alternative to a negotiated agreement” (BATNA)
• Bargaining power also derives from how
negotiators use the power and influence they
have
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–7
Dealmaking (cont’d)
• Dealmaking is the means by which parties work
out their differences over issues and pursue their
interests
• Two basic processes of negotiating:
 Distributive negotiations—parties view each other as
adversaries
 Integrative or mutual gains negotiations—parties focus
on interests, not positions, and search for options that
meet interests
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–8
Dealmaking (cont’d)
• Identifying mutual gains requires open sharing of
interests, then searching for agreements that
meet both parties’ needs
• Ways to meet mutual needs:
 Finding new resources
 Logrolling
 Nonspecific compensation
 Cost cutting
 Bridging
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–9
Dealmaking (cont’d)
• Negotiator’s dilemma:
 Pursuing distributive negotiation tactics makes it
unlikely we will move to a process of option creation
that leads to mutual gain
 Pursuing integrative negotiation tactics means we still
face the issue of how to distribute the new value
created
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–10
Dealmaking (cont’d)
• Shadow negotiations:
 Where parties position themselves and each other for
the negotiation
 Where negotiators work out the personal dynamic of
their exchange
 Where negotiators vie for control over who sets the
terms of the discussion or whose interests will be
heard
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–11
Assisted Negotiations
• Assisted negotiation is more akin to mediation
• Mediators assist negotiators by helping parties
manage dilemmas and difficulties
• Mediators can:
 Cool things down and keep parties focused on issues
 Explore for areas of flexibility without causing a party
to make a public commitment to a deal
 Create options that the two parties have not seen
 Help parties explore consequences of no agreement
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–12
Assisted Negotiations (cont’d)
• Challenges of assisted negotiation:
 Tendency to want to tell people what to do rather than
assist them to resolve their own differences
 The question of neutrality; absolute neutrality is
virtually impossible in organizations
 When parties reach an impasse in negotiations, it’s
often difficult to help them come to an agreement
Class Note: Negotiation and Conflict Resolution
Copyright © 2005 South-Western. All rights reserved.
12–13
Costs and Customers Relevant to
Lakeside-Tonicron Joint Venture
The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations
Copyright © 2005 South-Western. All rights reserved.
Table 12.1
12–14
Timing and Restraints on
Lakeside-Tonicron Sales
The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations
Copyright © 2005 South-Western. All rights reserved.
Table 12.2
12–15
Focusing on Differences as the
Material for Joint Gains
•
•
•
•
•
Cost/ revenue structure
Capability
Interest and priority
Agenda management
Forecast or belief about
the future
•
•
•
•
Attitudes toward risk
Attitudes toward time
Tax status
Accounting treatment and
reporting sensitivity
The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations
Copyright © 2005 South-Western. All rights reserved.
12–16
Breakthrough Bargaining Strategies
• Power moves
 Offer incentives
 Put a price on the status quo
 Enlist support
• Appreciative moves
 Help others save face
 Keep the dialogue going
 Solicit new perspectives
• Process moves
 Seed ideas early
 Reframe the process
 Build consensus
The Press: Breakthrough Bargaining
Copyright © 2005 South-Western. All rights reserved.
12–17