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
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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
Don’t leave joint gains on the table.
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
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 party’s 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
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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
History
LSylvester
Bias
Interests
PSYCHOLOGICAL
• Trust
PROCEDURAL
• Fairness
SUBSTANTIVE
• Outcome
EXTERNAL
• Others
Interest-Based Negotiations
Attitudes
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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 side’s 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,
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 side’s 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 simplicity’s 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
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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
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Authorized by the team or lead negotiator
Used to clarify data or identify mutual needs
Requires accountability
Constructive
• Vested Interest
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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:
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France
Germany
Italy
UK
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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
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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
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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.
• Don’t 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?
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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
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Preparation
Planning
Administrative
Communications
Techniques
Expectations
Closure
Management of Negotiations
Preparation
• Identify your interests
• Anticipate other party’s 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
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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
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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
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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
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Define the problem
Do not criticize an idea
Be imaginative
Build on other’s 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 person’s unique
knowledge, logic, and creativity.
• To reach greater commitment and support
of the agreement and its implementation.
Procedures for Consensus-Building
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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
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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