Negotiation

Getting to YES

RD 300

14 & 19 November 2001

Negotiation

A process of communicating back and forth for the purpose of reaching a joint decision when you and the other side have some interests that are shared and others that are opposed.

Hard versus soft negotiation styles.

Positional Bargaining

Most common negotiation style adopted:each side takes a position, argues for it and makes

concessions to reach a compromise.

Problems:Locks people into their positions.Ego becomes attached to your position.Focus on positions means less attention is paid to

the underlying concerns/issues of the parties.

Positional Bargaining Problems (cont.):

Start with extreme positions; try to hold onto them; make only minor concessions to keep negotiation alive.

This requires a lot of time and effort.

Becomes a contest of wills.

Can strain and even shatter relationships.

The more parties the more difficult.

Soft Participants are friends. Goal is agreement Make concessions to maintain

relationship. Be soft on the people and the

problem. Trust others. Change your position easily. Make offers. Disclose your bottom line. Accept one-sided losses to

reach agreement. The single answer: the one

they will accept. Insist on agreement. Try to avoid a contest of wills. Yield to pressure.

Hard Participant as adversaries. The goal is victory. Demand concessions as a

condition of relationship. Be hard on the problem

and the people. Distrust others. Dig in to your position. Make threats. Mislead as to your bottom

line. Demand one-sided gains

as the price of agreement. The single answer: the

one you will accept. Insist on your position. Try to win a contest of

wills. Apply pressure.

Principled NegotiationCharacteristics:

decide issues on their merits.look for mutual gains.where interests conflict, use fair standards to

obtain a result.can be used whether there is one issue or

several.two parties or many.useful in prescribed or impromptu

negotiations

Principled Negotiation4 Key Points

1. Separate the people from the problem.

2. Focus on interests, not positions.

3. Generate a variety of possibilities before deciding what to do. Invent options for mutual gain.

4. Insist that the result be based on some objective standard or criteria.

Principled Negotiation

Three stages:Analysis stage: diagnose the situation.

Planning stage: generate ideas and decide strategy.

Discussion stage: communication back and forth.

Deal with People ProblemsA negotiator wants to reach an agreement

that:satisfies his/her substantive interests; andpreserves/fosters valued relationships.

Most negotiations take place in the context of an ongoing relationship.

In some cases the ongoing relationship may be more important than the outcome of any particular negotiation (e.g. family).

We tend to treat the people and the problem as one in the same.

Egos become involved in substantive positions.

People often draw unfounded inferences from comments on substance.

Deal with people problems directly; don’t try to solve them with substantive concessions.

Base the relationship on:accurate perceptions,clear communicationappropriate emotionsa forward-looking outlook.

Types of People Problems(1) Perception -

both parties may agree as to the facts but disagree on the preferred outcome.

we need to be able to see the situation as the other side sees it.

understanding their point of view is not the same as agreeing with it. You may however modify your own views as a result.

Don’tEven if blaming is justified, it is usually

counterproductive.

Don’t deduce their intentions from your fears. Tendency to put the worst interpretation on what the other side says or does.

Don’t treat as unimportant those concerns of the other side that you perceive as not standing in the way of an agreement.

Do

Discuss each other’s perceptions.

Look for opportunities to act inconsistently with their preconceptions.

Involve the other side in the process of reaching an outcome. Agreement is much easier if both sides feel ownership of the ideas/solutions.

Involve the other side(s) early.

Allow all parties to save-face. A potentially acceptable solution may be rejected if a party is forced to lose face in the process.

Face-saving reflects a person’s need to reconcile the stand he or she takes in a negotiation or an agreement with their principles and their past words and deeds.

(2) Emotion -Emotions often run high from the start.Emotions can create an impasse.Recognize your emotions and those of the other

side.

Don’tDon’t treat negotiators who represent

organizations as mouthpieces without emotions.

Don’t react to emotional outbursts.

Don’t stop people from expressing their emotions or dismiss their emotions.

DoMake emotions explicit and acknowledge

them as legitimate. Recognize theirs and yours.

Continue listening when the other side is letting off steam.

Interact with the other side away from the bargaining table (e.g. dinner).

Make an apology if it is warranted.

(3) Communication

Potential problems:Negotiators may not be talking to one

another but to other parties. Playing to the gallery.

Negotiators are not really listening to the other side. Thinking about their next argument.

The other side misinterprets the communication (e.g. language - the word “average”).

DoEngage in active listening. Demonstrate

that you have been listening - positive paraphrasing. Understanding is not agreeing.

Think before you speak.

Don’t

Blame the other side for the problem; name-call; or raise your voice.

Allow poor body language.

Communication Issues

Confidentiality (the press, third parties, constituents).

Size of group meetings.

Communication away from the table.

Ability of negotiator to make decisions on behalf of their constituents.

RelationshipsNegotiations are about relationships.

A working relationship can be very beneficial - less chance for miscommunication; more openness; more trust.

Hard to separate the relationship from the substantive problem.

Side-by-side joint problem solving.

Focussing on Interests

Many impasses are due to our tendency to think about our positions not our interests.

Interests - each side’s needs, desires, concerns and fears.

Our interests underpin our positions.

Interests

In a negotiation the interests of the respective parties may be:the same (i.e. shared);different but compatible (e.g. Ugli

oranges); or irreconcilable.

We often conclude too quickly that our interests are irreconcilable.

Examining each side’s interests instead of their positions can make solutions easier to find.

For every interest there usually exist several possible options that could satisfy it.

Shared and compatible interests may lie behind opposing positions.

Differing but complimentary interests can also form the basis for a mutually acceptable agreement.

The interests underlying a person’s position are often not clear. They may be unexpressed or inconsistent with their clearly stated position.

Try to discover the underlying interests of the other side.

In most negotiations, each side will have multiple interests, not just one.

Every negotiator has a constituency to whose interests he/she is sensitive. It may be a constituency of one (e.g. themselves) or of many (e.g. an organization or coalition).

Within a constituency there may exist a variety of interests.

The most powerful interests are basic human needs:securityeconomic well-beinga sense of belongingrecognitioncontrol over one’s life

Make your interests clear. Don’t let them get lost in the rhetoric. Be specific.

“if you want the other side to appreciate your interests, begin by demonstrating that you appreciate theirs.”

Paraphrase their interests. Active listening. Legitimizing.

Encourage them to listen to you by: Stating your interests and reasoning first and your conclusions/proposals later.

Shared interests:may not be immediately obvious;are opportunities to build upon; andcan make negotiations smoother and more

amicable (“in it together”).

Differences (e.g. interests, beliefs, valued items) can lead to agreements.

Dovetailing - looking for items of low cost to you but high benefit for them, and vice versa.

Focus on where you are going, rather than arguing about the past.

Try to bring to the negotiation several options that could meet your interests.

While pressing your substantive issues, keep an open mind to modifying your list of options.

Successful negotiators invent options for mutual gain.

Obstacles that Inhibit the Inventing of Multiple Options:

premature judgment;

searching for the single answer;

the assumption of a fixed pie; and

thinking that “solving their problem is their problem”.

Inventing options does not come naturally. Not inventing is the normal state of affairs.

Sometimes we fear that by inventing options we will disclose some piece of information that will jeopardize our bargaining position.

Negotiations often appear to be “fixed-sum” games (e.g. buying a car: $100 more for you, means $100 less for me).

Ask yourself whether your proposed solution meets the self-interest of all parties.

We are too often unwilling to help the other party(ies) find solutions that meet their needs (e.g. history of bad blood).

To invent creative options:

Separate the act of inventing options from the act of judging them.

Broaden the options on the table rather than look for a single answer.

Search for mutual gains.

Invent ways of making their decision easy.

Try to think laterally to generate more options that might lead to a solution(s):

Small group activities (build on each others ideas).

Use a third party to help you overcome the tendency for “groupthink”.

Generate variations on your original set of options.

Don’t throw away “flawed” options too quickly. They might provide the seed for a good idea/option.

Create an environment conducive to this task.

The above could be done by each party (among themselves) or between the negotiating parties.

Examine your problem from the perspective of different professions and disciplines.

If you cannot agree on substance, you may be able to agree on procedure.

At a minimum agree on where you disagree.

A perfect “win-win” solution may not be possible at the time of the negotiation.

Negotiations sometimes result in provisional or contingent agreements or partial solutions.

Remember: the context of most negotiations is dynamic and will continue to be so after the negotiation.

Can the subject matter be enlarged so as to “sweeten the pot”?

Successful partial solutions can form the basis for more comprehensive solutions later.

Make it easy for the other side to accept your solution.

Are there useful precedents to draw upon?

Insist on Using Objective Criteria

Sometimes, despite your best efforts, interests will conflict.

The temptation is to resort to positional bargaining in such cases.

The alternative is to make a decision on the basis of objective criteria.

The more you bring standards of fairness, efficiency, or scientific merit to bear on your problem, the more likely is a final outcome that is wise, fair and stable.

Example, the Law of the Sea conference: MIT model for the economics of deep-seabed mining.

Allowed all parties to save face.

How do you develop objective criteria?

Plan in advance.

Typically more than one objective criterion is available. Example: car insurance claim. What is the car’s value?

Are the criteria legitimate and practical?

Examples of Types of Objective Criteria

Market valuePrecedentScientific judgmentProfessional standardsEfficiencyWhat a court would decideMoral standardsTradition

To produce an outcome independent of will, you can use either fair standards for the substantive question or fair

procedures for resolving the conflict.

Negotiating with objective criteria:

Frame each issue as a joint search for objective criteria.

Reason and be open to reason as to which standards are most appropriate and how they should be applied.

Never yield to pressure, only to principle.

“It’s a matter of principle”.

“It’s company policy”.

A principled negotiator is open to reasoned persuasion on the merits.

What is your BATNA?

What are the costs and benefits associated with having a

“bottom line”?

Best Alternative to a Negotiated Agreement

What is the difference between a “bottom line’ and your BATNA? Example: selling your home.

Why should we know our BATNA?

Your BATNA is the standard against which any proposed

agreement should be measured.

Negotiating without determining your BATNA is negotiating with your eyes closed.

Too optimistic or too desperate.

Trip wires – provides you with some margin in reserve.

The better your BATNA, the greater your power.

How attractive to each party is the option of not reaching agreement?

Power balance.

Develop Your BATNA

Invent a list of actions you might take if no agreement is reached;

Improve some of the more promising ideas and convert them into practical alternatives; and

Select, tentatively, the one alternative that seems best.

Knowing your BATNA gives you additional confidence in the negotiating process.

It is easier to break off negotiations if you know where you are going should the negotiation fail.

Should you reveal your BATNA to the other side?

Consider the other side’s BATNA

If both sides have attractive BATNAs, the best outcome of

the negotiation, for both parties, may well be not to reach

agreement.