An Introduction to Negotiation

Negotiation….Negotiation…. A means of resolving conflicts for centuriesA means of resolving conflicts for centuries An alternative to fighting, warAn alternative to fighting, war Agreements can be made permanent Agreements can be made permanent

through rules and lawsthrough rules and laws Today a common means of resolving Today a common means of resolving

family, work, and societal disputesfamily, work, and societal disputes

Yet, many people avoid, even fear Yet, many people avoid, even fear negotiation. Why?negotiation. Why?

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How Important a Skill Is How Important a Skill Is Negotiation?Negotiation?

““Negotiation is the pre-eminent form Negotiation is the pre-eminent form of decision making in personal and of decision making in personal and

professional life”professional life”

-William Ury-William UryGetting Past NoGetting Past No

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Five Negotiation SkillsFive Negotiation Skills Skill 1.1: Recognize the Skill 1.1: Recognize the five essential

elements in a negotiation in a negotiation Skill 1.2: Model Skill 1.2: Model bargaining behaviors

used by skilled negotiatorsused by skilled negotiators Skill 1.3: Recognize Skill 1.3: Recognize bargaining styles Skill 1.4: Set Skill 1.4: Set collaborative goals Skill 1.5:Skill 1.5: AvoidAvoid cognitive biases

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Three Basic Types of Three Basic Types of NegotiationNegotiation

1. 1. Deal making: : purchase of a new home purchase of a new home or caror car

2. 2. Decision making: : parties in a zoning parties in a zoning casecase

3. 3. Dispute resolution: : litigation over litigation over property rightsproperty rights

While the three have subtle differences, all While the three have subtle differences, all are forms of negotiationare forms of negotiation

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Chapter Case: Zoning Chapter Case: Zoning ChangeChange

Sophia is seeking a zoning changeSophia is seeking a zoning change Robert, an inexperienced attorney, is Robert, an inexperienced attorney, is

hired by Sophia to represent her hired by Sophia to represent her before the Zoning Commissionbefore the Zoning Commission

Neighborhood residents oppose Neighborhood residents oppose Sophia’s proposed new condo Sophia’s proposed new condo developmentdevelopment

The Zoning Commission staff suggest The Zoning Commission staff suggest a meeting of all parties to negotiate a meeting of all parties to negotiate their differencestheir differences

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The Five Elements Common The Five Elements Common to Negotiation Situationsto Negotiation Situations

1. 1. Two or more parties (or interests)Two or more parties (or interests)2. Interdependence2. Interdependence3. Common goals3. Common goals4. Flexibility4. Flexibility5. Decision-making ability5. Decision-making ability

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Parties and Their Parties and Their InterestsInterests

Parties can view a conflict situation differentlyParties can view a conflict situation differently That view, or frame, leads them to focus on That view, or frame, leads them to focus on

some characteristics of the conflict and ignore some characteristics of the conflict and ignore othersothers

Relationship/task frame: Parties focus on Relationship/task frame: Parties focus on either ongoing relationship or the subject either ongoing relationship or the subject matter of the disputematter of the dispute

Emotional/intellectual frame:Emotional/intellectual frame: PartiesParties pay pay attention to the emotional components of the attention to the emotional components of the dispute or behaviors of the partiesdispute or behaviors of the parties

Cooperate/win frame: Parties seeks to benefit Cooperate/win frame: Parties seeks to benefit both parties or to maximize personal gainboth parties or to maximize personal gain

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Developing Negotiating Developing Negotiating SkillsSkills

Negotiations are rarely pure win-lose Negotiations are rarely pure win-lose or win-win propositionsor win-win propositions

Negotiations take place under Negotiations take place under conditions of ambiguity and conditions of ambiguity and uncertaintyuncertainty

Most negotiations involve existing or Most negotiations involve existing or potential sources of conflict that potential sources of conflict that impede reaching agreementimpede reaching agreement

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Developing Negotiating Developing Negotiating SkillsSkills

Negotiating progress comes in stops Negotiating progress comes in stops and starts. Most complex negotiations and starts. Most complex negotiations take place between agents of groups take place between agents of groups and not the groups themselvesand not the groups themselves

Complex negotiations often involve a Complex negotiations often involve a team approachteam approach

Negotiating skills can be learnedNegotiating skills can be learned

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Developing Negotiating Developing Negotiating SkillsSkills

Negotiations are chaotic and seldom pass Negotiations are chaotic and seldom pass sequentially through distinct phases such sequentially through distinct phases such as pre-negotiation, deal structuring, as pre-negotiation, deal structuring, detailed bargaining, and agreementdetailed bargaining, and agreement

Negotiations involving multiple parties Negotiations involving multiple parties and complex issues challenge a and complex issues challenge a negotiatornegotiator

Most negotiations are linked to other Most negotiations are linked to other negotiationsnegotiations

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Bargaining Styles: Dual Bargaining Styles: Dual Concern Model Concern Model

(assertiveness/cooperation)(assertiveness/cooperation) Five bargaining Five bargaining

stylesstyles1. Avoiding 1. Avoiding 2. Accommodative2. Accommodative3. Collaborative3. Collaborative4. Competing4. Competing5. Compromising5. Compromising

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Dual-Concern Model of Bargaining Styles

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Big Five Personality Dimensions

DIMENSION ASSOCIATIONS OPPOSING

Neuroticism Anxious, depressed, worried, insecure

Emotionally healthy, calm, free from persistent negative feelings

Extraversion Sociable, assertive, talkative, active

Introversion, quiet, low-key, deliberate

Openness Imaginative, curious, original, open-minded

Conventional, narrow interests, straightforward, conservative

Agreeableness Courteous, flexible, trusting, cooperative, tolerant

Suspicious, unfriendly, uncooperative, critical, disciplined

Conscientiousness Careful, responsible, organized, persistent

Unreliable, lack of ambition, easily distracted

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Attributes of Bargaining Styles Conflict style Strong

predispositionAs a positive

attribute As a negative

attributeWeak

predispositionAs a strategy

Avoiding Defers confrontational negotiation

Displays tact and diplomacy

Causes stalemates

Prefers hard-nosed bargaining

When not interested in negotiating

Accommodating Derives satisfaction from solving problems

Good team builder

May make unwise concessions

Has little patience for other party’s needs

When hostilities need to be lessened

Competing Views negotiation as a game or sport to win

Excellent instincts for claiming value

Focus on issues that are easy to define win-loss

Believes in treating people fair and avoiding needless conflict

When substantive interests are important but not the relationship

Collaboration Enjoys participating in joint problem solving

Instinctively tries to discover and satisfy the real interests of the parties

May transform a simple problem into a complex one

No patience for the give and take that comes with collaborative thinking

Used when relationship and the substantive outcomes are important

Compromising Eager to conclude negotiation on fair standards

Best when stakes are small and time is short

Can rush the process and agree to unnecessary concessions

Refuses to compromise on principle

Used when stakes are small, time is short, or in a weak bargaining position

SKILLED NEGOTIATORS AVERAGE NEGOTIATORS

Considered a wide range of Considered a wide range of outcomes or optionsoutcomes or options

Considered a narrow range of Considered a narrow range of outcomes or optionsoutcomes or options

Gave over three times as much Gave over three times as much attention to common ground attention to common ground areasareas

Considered a third less common Considered a third less common ground areasground areas

Anticipated twice as many long-Anticipated twice as many long-term common areasterm common areas

Anticipated half as many long-Anticipated half as many long-term areasterm areas

Developed upper and lower limits Developed upper and lower limits for possible settlement pointsfor possible settlement points

Planned goals around fixed Planned goals around fixed settlement pointssettlement points

Flexible on the order of issues to Flexible on the order of issues to discuss discuss

Addressed issues in a Addressed issues in a predetermined orderpredetermined order

Used neutral phrases when Used neutral phrases when proposing offersproposing offers

Used judgmental phrases when Used judgmental phrases when proposing offersproposing offers

Tactics for Success: Find Common Tactics for Success: Find Common Interests by Asking the Right Interests by Asking the Right

Questions!Questions! Open-ended: Open-ended: “What were you hoping to “What were you hoping to

settle today?”settle today?” Leading: Leading: “Don’t you think this proposal “Don’t you think this proposal

meets one of your goals?”meets one of your goals?” Clarifying: Clarifying: “Can you postpone collecting that “Can you postpone collecting that

fee untilfee until next year?”next year?” Gauging:Gauging: “How important to you is the 24- “How important to you is the 24-

hour service guarantee?”hour service guarantee?” Seek agreement:Seek agreement: “If we agree to your “If we agree to your

delivery terms do we have a deal?”delivery terms do we have a deal?”

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Interdependency

Without interdependency no reason to negotiate, no motivation to reach agreement

Degrees of interdependency include: one-shot negotiation, repeat transactions, or long-term relationship

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Common GoalsCommon GoalsThe two most important types of goalsThe two most important types of goals

1. 1. ContentContent:: the substance or specifics the substance or specifics

2. 2. RelationshipRelationship: : how the parties want how the parties want to be viewed by each otherto be viewed by each other

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Other Types of GoalsOther Types of Goals

ProspectiveProspective:: initial objective initial objectiveTransactionalTransactional:: objectives that arise objectives that arise

during negotiationsduring negotiationsRetrospectiveRetrospective: : objectives that arise objectives that arise

after negotiations are completeafter negotiations are completeCollaborativeCollaborative: mutual objectives: mutual objectives

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FlexibilityFlexibility A power shift can quickly occur in a

negotiation situation. A negotiator must be able to respond in a strategic way.

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Decision-Making Ability

Negotiation involves at least two Negotiation involves at least two people making decisions that require people making decisions that require judgments and choices judgments and choices

JudgmentJudgment involves recognizing and involves recognizing and evaluating the content of the options evaluating the content of the options presentedpresented

ChoiceChoice involves actually selecting an involves actually selecting an optionoption

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Decision-Making Ability

Parties often differ in how they think Parties often differ in how they think or process informationor process information

People develop People develop schema schema as a way of as a way of organizing current knowledge and as organizing current knowledge and as a way to process future informationa way to process future information

Some schemas create biases Some schemas create biases

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Biases That May Affect a Biases That May Affect a NegotiatorNegotiator

Availability biasAvailability bias: An outcome probability is : An outcome probability is based on how easy it is to imaginebased on how easy it is to imagine

Representativeness biasRepresentativeness bias: : StereotypingStereotyping Self-serving biasSelf-serving bias: Belief that an option is : Belief that an option is

true because it benefits themtrue because it benefits them Self-enhancement biasSelf-enhancement bias:: Belief that one’s Belief that one’s

own behavior is more constructiveown behavior is more constructive Impact biasImpact bias: One overestimates the : One overestimates the

positive/negative satisfaction of an outcomepositive/negative satisfaction of an outcome

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Multiparty NegotiationsMultiparty Negotiations(three or more parties or interests)(three or more parties or interests)

Usually present significantly different Usually present significantly different challenges and negotiation techniques:challenges and negotiation techniques:

11. . CoalitionsCoalitions form to control the outcomeform to control the outcome22. . Trade-offsTrade-offs can occur with one or morecan occur with one or more33. . Majority ruleMajority rule may ignore interests of minority may ignore interests of minority

partiesparties44. . ConsensusConsensus does not mean all parties agree does not mean all parties agree

on all issues, but on the wholeon all issues, but on the whole55.. CommunicationCommunication is more difficult due to the is more difficult due to the

number of people and messages required number of people and messages required

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Negotiation Myths and Negotiation Myths and FactsFacts**

MythsMyths1. Good negotiators 1. Good negotiators

are bornare born2. Experience is a 2. Experience is a

great teachergreat teacher3. Good negotiators 3. Good negotiators

take riskstake risks4. Good negotiators 4. Good negotiators

rely on intuitionrely on intuition

**Leigh Thompson, Leigh Thompson, The Mind and The Mind and Heart of the NegotiatorHeart of the Negotiator

FactsFacts1. Good negotiators 1. Good negotiators make concessionsmake concessions2. Good negotiators 2. Good negotiators never lienever lie3. Good negotiators 3. Good negotiators look for common look for common interestsinterests4. Everyone is a 4. Everyone is a negotiatornegotiator

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