Prof. John Barkai William S. Richardson School of Law University of Hawaii Negotiation& ADR...

Prof. John BarkaiProf. John BarkaiWilliam S. Richardson School of LawWilliam S. Richardson School of Law

University of HawaiiUniversity of Hawaii

NegotiationNegotiation & ADR& ADR

Inside the

Heads

of my

Negotiation

Students

By

John Barkai

Negotiation & ADRare

Professionaland

PersonalSkills

Handling of Problems

designed by Liu Young

Western - American Asian

www2.hawaii.edu/~barwww2.hawaii.edu/~barkaikai

Google: John Barkai

http://www2.hawaii.edu/~barkai

http://www2.hawaii.edu/~barkai

Dragon Naturally Speaking “Premium” edition - $145 AmazonAcademic pricing $100

Various microphone options

Not everyone can be a great chef

Not everyone can be a great chef

But, everyone can learn to cook

“Even a sheet of paper has two sides”

Japanese Proverb

“Every coinhas two sides”

Proverb

PerspectivePerspectiveViewView

I’ve got it again Larry. An eerie feeling like there is something on top of the bed.

"Then it's agreed. Watson, Smith, Teller, and Wilson go to Heaven; Jones, Paducci, and Horner go to Hell; and Fenton and Miller go to arbitration.

This course will ….

After taking this course

A recent student said …

My girl friend is like a changed woman


My girl friend is like a changed woman

(because she thinks I'm a changed man)


Common Forms Common Forms of Dispute Resolutionsof Dispute Resolutions• Negotiation:Negotiation:

– Discussion for the purpose of settling differences.Discussion for the purpose of settling differences.• Mediation - Conciliation:Mediation - Conciliation:

– A neutral third party assists the parties to reach a A neutral third party assists the parties to reach a negotiated settlement but has no power to decide negotiated settlement but has no power to decide the issues in dispute.the issues in dispute.

• Arbitration:Arbitration:– A neutral third party is given the power to decide A neutral third party is given the power to decide

the issues in conflict. The arbitrator decides after the issues in conflict. The arbitrator decides after hearing arguments and reviewing evidence.hearing arguments and reviewing evidence.

• Trial in Court:Trial in Court:– Evidence is presented to a judge or jury for a Evidence is presented to a judge or jury for a

decision under formal rules of law and proceduredecision under formal rules of law and procedure

ADRADR

AlternativeAlternativeDisputeDispute

ResolutionResolution

HOW DO YOU SAY “ADR”?HOW DO YOU SAY “ADR”?Country / Language Negotiation Mediation

Cambodia Ka cho cha Agna Kandal

Hong Kong Tam Pun Tin Teng

India Hindi Oriya

SamvadMuleiba

MadhyasthaMadhyasti

Indonesia Negosiasi Penengah

Japan Kosho Chotei

Korea Hyoepsang Joongjae

Malaysia Rundingan Perantaraan

Pohnpei Micronesia Paronogorong pene Kamwahu

Philippines Negosasyan- Tawad (bargain)

Pagbatiin

China Tan Pan Tiao Jie

Singapore English or Mandarin English or Mandarin

Sri Lanka Samuthiya Samatha Mandalaya

Taiwan Tam Pan Tawa Shay

Thailand Jeraja Klaiklea

Vietnam Dam Phan Hoa Giai

Compiles by Professor John Barkai and students from the University of Hawaii’s JEMBA Program (Japan Focused Executive MBA) and JAIMS’ (Japan American Institute forManagement Science) Intercultural Negotiations class.

How many lawsuits are filed in the U.S. each year?

Guess!

OverOver

106 Million Cases106 Million Cases

Filed in Filed in Federal and State CourtsFederal and State Courts

in 2010in 2010 Source: Examining the Work of State Courts, 2010Source: Examining the Work of State Courts, 2010

http://www.ncsconline.org/d_research/csp/CSP_Main_Page.htmlA 2% decrease over prior year

http://www.ncsconline.org/d_research/csp/CSP_Main_Page.html

104 Million State Court 104 Million State Court CasesCases

2 Million Federal Court 2 Million Federal Court Cases Cases

104 Million104 MillionU.S. State Court CasesU.S. State Court Cases

56 Traffic56 Traffic 20 Criminal 20 Criminal

19 Civil19 Civil 6 Domestic 6 Domestic

2 Juvenile 2 Juvenile Source: Examining the Work of State Courts, Source: Examining the Work of State Courts,

20102010

Hawaii Civil CasesHawaii Civil Cases

7,013 Filed7,013 Filed4,007 Terminated 4,007 Terminated

Circuit Court 2011-2012Circuit Court 2011-2012

How many jury trials?How many jury trials?

Guess!Guess!

15 Jury Trials15 Jury Trials

53 Non-Jury Trials 53 Non-Jury Trials

Circuit Court Civil Circuit Court Civil Cases Cases

in Hawaii 2011-2012in Hawaii 2011-2012

Jury TrialsJury Trials

1 Contract Trials 1 Contract Trials12 Tort Trials12 Tort Trials

3 Other” Trials3 Other” Trials

Circuit Court Civil Cases Circuit Court Civil Cases in Hawaii 2011-2012in Hawaii 2011-2012

Civil Jury TrialsCivil Jury Trials

1515 20122012 66 201120111414 201020101212 200920091717 200820081212 200720071010 200620061616 20052005

Hawaii Court Statistics

161 Jury Trials161 Jury Trials

58 Non-Jury Trials 58 Non-Jury Trials

Circuit Court Circuit Court CriminalCriminal Cases Cases

in Hawaii 2011-2012in Hawaii 2011-2012

5 5 %%

Criminal cases are Criminal cases are terminated in Hawaiiterminated in Hawaii

by jury trialby jury trial

0.4 0.4 %%

Circuit CourtCircuit Court

Civil CasesCivil Cases terminated in Hawaiiterminated in Hawaii

by jury trialby jury trial2011-20122011-2012

3% Jury Trials3% Jury Trials

in U.S.in U.S.

161 Jury Trials

58 Non-Jury Trials

Circuit Court Criminal Cases

in Hawaii 2011-2012Of 3575 cases terminated – 4.5% by Jury; 1.6% Non-jury

> 5 %Criminal cases are

terminated in Hawaiiby jury trial

Trial Rates:

0.8% District Court

13% Small Claims

2010-2011

3% Jury Trials3% Jury Trials

in U.S.in U.S.

Vanishing Trials – Federal Court – 1962-200212% to 2%

Vanishing Trials – Hawaii Circuit Court – 1964-2010

Total Trials

050

100150200250300350400450

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

All Civil

Contracts

Torts

Hawaii Circuit Court – 1978-2010

Percentage of Jury Trials 1964-2010

0.01.02.03.04.05.06.0

All Civil

Contracts

Torts

What is the appropriate amount What is the appropriate amount of Conflict?of Conflict?

Conflict

Conflict

Conflict

Conflict

In one of our concert grand pianos, 243 taut strings exert a pull of 40,000

pounds on an iron frame. It is proof that out of great tension may

come great harmony.

Theodore E. Steinway

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CONFLICT IS LIKE WATERCONFLICT IS LIKE WATER::

Too much causes damage Too much causes damage to people and propertyto people and property

Too little creates a dry, Too little creates a dry,

barren landscape devoid of life barren landscape devoid of life and color.and color.

- Designing Conflict Management Systems - Designing Conflict Management Systems

- Cathy Costantino & Christina Sickles - Cathy Costantino & Christina Sickles MerchantMerchant

All polishing is All polishing is achieved by frictionachieved by friction

- Mary Parker Follett- Mary Parker Follett

Who has the Power?

Information is

Power

The easiest way to improve your

negotiation skills is to

A__M___

Q________!

AskMore

Questions

Expand the pie

Two Key Ideas about Negotiation

& ADR

1) Focus on Interests

not positions

2) Improve theCommunication(information & temperature)

Positions

Interests

Positions

WHAT?

Proposed Solutions

Interests

WHY?

Are WHY you want

the positions

Mommy

Daddy

(oranges)

Juice

Rinds

Some Common Interests We Have

AcceptanceAcceptance

FulfilmentFulfilment

AccountabilityAccountability

IndependenceIndependence

AchievementAchievement

KnowledgeKnowledgeAcknowledgment Acknowledgment

LoveLove

AffectionAffection

NurturanceNurturance

AppreciationAppreciation

Opportunity for InputOpportunity for Input

AutonomyAutonomy

PrivacyPrivacy

BelongingBelonging

RecognitionRecognition

ClarityClarity

ResponsibilityResponsibility

CommitmentCommitment

RespectRespect

CompetencyCompetency

RelaxationRelaxation

ConsistencyConsistency

SatisfactionSatisfaction

Efficiency Efficiency

SafetySafety

FairnessFairness

SecuritySecurityFreedom from FearFreedom from Fear

TrustTrust

UnderstandingUnderstanding

ValidationValidation

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InterestsGoalsNeeds

DreamsDesires

Same bed, different dreams

Iceberg Theory“Below the line” issuesHuge & invisiblePurposely hiddenOut of awareness

Advantages and Disadvantages of Cooperation and Competition

“And notice, gentlemen, this year’s model has twenty per cent more trunk space.”

You can't always get what you want but if you try sometimes you might find you get what you need

The Rolling Stones

U.S. Declaration of Independence

53 CA32 TX29 NY

1AL DE MT

ND SD VT WYConstitution

The following matters are agreed between the parties:

- the full exercise of Egyptian sovereignty - the withdrawal of Israeli armed forces from the Sinai; - the use of airfields …for civilian purposes only, and

- stationing of Forces

No more than one division of Egyptian armed forces [permitted]

Only United Nations forces and civil police equipped with light weapons to perform normal police functions will be stationed within an area lying west of the international border and the Gulf of Aqaba, varying in width from 20 km. (12 miles) to 40 km. (24 miles).

[limited border armed forces]

The Camp David Accords September, 1978

Framework for the Conclusion of a Peace Treatybetween Egypt and Israel

For the Government of the Arab Republic of Egypt: Muhammed Anwar al-Sadat

For the Government of Israel: Menachem Begin

Witnessed by:Jimmy Carter, President of the United States of America

The Camp David Accords

GETTING TO YES

Separate People from Problem

Interests not Positions

Invent Options

Objective Criteria

BATNA http://mediationadvocacy.com/Getting%20to%20Yes.pdf

BATNA Best

AlternativeTo a

Negotiated Agreement

YOUR BATNA TELLS YOU

WHEN TO WALKWHEN TO WALK

NOT WHEN TO SIGN

Tolanski Curve Illusion

Conflicting Interests

Examples of Complementary Interests

One party might One party might care more about:care more about:

Other party might Other party might care more about:care more about:

Form, appearanceForm, appearance SubstanceSubstance





Economic Economic considerationsconsiderations

Political Political considerationsconsiderations







External External considerationsconsiderations

Internal Internal considerationsconsiderations









Immediate futureImmediate future More distant futureMore distant future










Tangible resultsTangible results The relationshipThe relationship










Tangible resultsTangible results The relationshipThe relationship

Progress, changeProgress, change Respect for traditionRespect for tradition


One party might care more about:

Other party might care more about:

Form, appearance Substance

Economic considerations

Political considerations

External considerations

Internal considerations

Immediate future More distant future

Tangible results The relationship

Progress, change Respect for tradition

Precedent This case

Cuban Missile Crisis 1962

OK Mr. President, let’s talk.

1962. The U.S. placed nuclear missiles in the U.K., Italy, and Turkey with the capability to strike Moscow.

The Soviet Union began to build missiles bases in Cuba for ballistic nuclear missiles with the ability to strike most of the continental United States.

The U.S. is considering the following options: pressure diplomatically the Soviet Union to remove the missiles, attack the missile bases by air, set up a naval blockade of Cuba, invade Cuba. Cuba and the Soviet Union, who supplied the missiles, claim that Cuba has a right to protect itself from a potential U.S. attack.

A. Positions B. Possible interests

Cuban Missile Crisis

Cuban Missile CrisisPositions

U.S.

No missiles in Cuba.

Soviet Union

YesMissiles can be

in Cuba.

Cuban Missile Crisis

Possible InterestsU.S.

- Security

- protect the U.S. from easy, “first strike” missile attack

- prevent the Soviet Union from placing nuclear weapons close to the U.S.

- -maintain image as a world superpower

Soviet Union

-prevent U.S. attack of Soviet Union

- prevent U.S. invasion of Cuba

- support other Communist nations,

- maintain image as a world power

Cuban Missiles Resolution

Publicly, the Soviets dismantled their offensive weapons in Cuba and return them to the Soviet Union, subject to UN verification, in exchange for a U.S. public declaration and agreement to never invade Cuba.

Secretly, the U.S. agreed that it would dismantle all U.S.-built Thor and Jupiter IRBMs deployed in Europe and Turkey.

Power Imbalances

Smart Bargaining: Doing Smart Bargaining: Doing Business with the Japanese Business with the Japanese

Graham & SanoGraham & Sano

Japan External Trade Organization's (JETRO)

Sengoku period battle15th century warring states period in Japan

Cuckoo Strategies

Nakanunara, koroshiteshimae, hototogisu (If the cuckoo does not sing, kill it.)

–by Nobunaga Oda – (ruthless)

Nakanunara, nakashitemiseyou, hototogisu (If the cuckoo does not sing, coax it.)

–by Hideyoshi Toyotomi – (creative)

Nakanunara, nakumadematou, hototogisu (If the cuckoo does not sing, wait for it.)

–by Leyasu Tokugawa–(patient)

Cuckoo Strategies

36 Chinese Strategies

Applied to Negotiations

PREPARING PREPARING ANDAND

PLANNINGPLANNING

If I had six hours to chop down a tree, I'd spend the first hour sharpening

the ax.

Abraham Lincoln

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Planning on roaming the neighborhood with your buddies again?

Planning

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Sengoku period battle15th century warring states period in Japan

Cuckoo Strategies

Nakanunara, koroshiteshimae, hototogisu (If the cuckoo does not sing, kill it.)

–by Nobunaga Oda – (ruthless)

Nakanunara, nakashitemiseyou, hototogisu (If the cuckoo does not sing, coax it.)

–by Hideyoshi Toyotomi – (creative)

Nakanunara, nakumadematou, hototogisu (If the cuckoo does not sing, wait for it.)

–by Leyasu Tokugawa–(patient)

Cuckoo Strategies

They would never reveal every fact, because successful negotiation does not hinge on full disclosure.

1 minute audio clip

Distributive NegotiationDistributive Negotiation

• CompetitiveCompetitive• Win-LoseWin-Lose• Zero-SumZero-Sum

The PieThe Pie

• Buyers = as low as possibleBuyers = as low as possible• Sellers = as high as possibleSellers = as high as possible• Long term relationship not importantLong term relationship not important• Claiming as much value as possible in Claiming as much value as possible in

the negotiationthe negotiation

Integrative NegotiationIntegrative Negotiation

• CooperativeCooperative• Win-WinWin-Win• Expanding the possibilitiesExpanding the possibilities

The PieThe Pie

• Buyers and Sellers work together to get Buyers and Sellers work together to get moremore

• Long term relationship is importantLong term relationship is important The value of the relationshipThe value of the relationship

• Creating Value in negotiationCreating Value in negotiation

Positive Bargaining ZonePositive Bargaining Zone

Seller’s Bargaining Range

Buyer’s Bargaining Range

$5 $10 $15 $20

PositivePositive Bargaining Zone

BT, Buyer’s Target Point

SR, Seller’s Resistance Point

BR, Buyer’s Resistance Point

ST, Seller’s Target Point

Negative Bargaining ZoneNegative Bargaining Zone

Seller’s Bargaining Range

Buyer’s Bargaining Range

$5 $10 $15 $20

NegativeNegative Bargaining Zone

BT, Buyer’s Target Point

BR, Buyer’s Resistance Point

SR, Seller’s Resistance Point

ST, Seller’s Target Point

SallySwansong

101 Ways to get a 101 Ways to get a bigger piece of the Piebigger piece of the Pie

It is not (always, or even It is not (always, or even often) about the moneyoften) about the money

BEFORE THE NEGOTIATION BEFORE THE NEGOTIATION

Prepare. Prepare. Prepare. Prepare. Prepare. Prepare. Know your BATNAKnow your BATNA Focus on interests, not positionsFocus on interests, not positions Know your interestsKnow your interests Prioritize your interestsPrioritize your interests Improve your BATNA before the Improve your BATNA before the

negotiation startsnegotiation starts Improve your BATNA during the Improve your BATNA during the

negotiationnegotiation

BEFORE THE NEGOTIATION BEFORE THE NEGOTIATION

Set a high goal for yourselfSet a high goal for yourself Estimate their BATNAEstimate their BATNA Estimate their interestsEstimate their interests Estimate the ZOPA (zone of possible Estimate the ZOPA (zone of possible

agreement)agreement) Talk with others who have negotiated Talk with others who have negotiated

with themwith them

AT THE TABLE 1AT THE TABLE 1

Develop a relationship before talking moneyDevelop a relationship before talking money Recognize their negotiating styleRecognize their negotiating style Don't narrow your negotiations to one issueDon't narrow your negotiations to one issue Don't quickly accept the first offerDon't quickly accept the first offer even if you think it's fair. even if you think it's fair. If you agree in haste, you may repent at If you agree in haste, you may repent at

leisure leisure Ask lots and lots of questionsAsk lots and lots of questions Active listenActive listen Reframe negative statementsReframe negative statements


Pace themPace them Make the first offer to anchor (if you Make the first offer to anchor (if you

have enough info)have enough info) Start with an extreme, but not Start with an extreme, but not

outrageous offeroutrageous offer If they make the first offer, ignore If they make the first offer, ignore

any extreme offer and anchor your any extreme offer and anchor your offer in a favorable positionoffer in a favorable position

Justify all offers and concessionsJustify all offers and concessions

Take a seat to your advantage (not detriment)Take a seat to your advantage (not detriment) Wait for TOP to finish before responding Wait for TOP to finish before responding Hint at, or disclose your BATNA, to improve their offerHint at, or disclose your BATNA, to improve their offer Mislead them about your BATNAMislead them about your BATNA Determine their interestsDetermine their interests Ask. Estimate based upon available info. Ask. Estimate based upon available info.

Assume and ask Qs to confirmAssume and ask Qs to confirm Be willing to make the first concessionBe willing to make the first concession Don't make multiple, unilateral concessionsDon't make multiple, unilateral concessions Concede slowlyConcede slowly Concede in small stepsConcede in small steps Make you concessions 1/2 of what you would Make you concessions 1/2 of what you would

naturally donaturally do


"That sounds a little high (low)." - to induce "That sounds a little high (low)." - to induce concessionsconcessions

Don't be in a hurry to make the dealDon't be in a hurry to make the deal Ask for an "extra." NibbleAsk for an "extra." Nibble Don't take it personallyDon't take it personally Frame issues as "gains" for them, not Frame issues as "gains" for them, not

losseslosses Use silence Use silence Consider if they have a hidden agendaConsider if they have a hidden agenda Keep the emotional temperature lowKeep the emotional temperature low


Have limited authorityHave limited authority Think about the long termThink about the long term Is it worth serious negotiating on this one?Is it worth serious negotiating on this one? Don't appear desperate for the dealDon't appear desperate for the deal Invent options for mutual gainInvent options for mutual gain Seek objective criteriaSeek objective criteria Act confident and informed Act confident and informed "Split the difference" only when it is to "Split the difference" only when it is to

your advantageyour advantage Flinch Flinch


Offer contingent concessionsOffer contingent concessions Don't act like you "won" or you won't next Don't act like you "won" or you won't next

timetime Don't underestimate your offerDon't underestimate your offer Be willing to walk away (at least for a while)Be willing to walk away (at least for a while) Be willing to suggest mediationBe willing to suggest mediation Make a larger concession than you thought Make a larger concession than you thought

necessarynecessary Most psychological principles suggest your Most psychological principles suggest your

offer is too extremeoffer is too extreme Over optimistic, Selective perception, Over optimistic, Selective perception, Do not reject their offer based because of Do not reject their offer based because of

reactive devaluationreactive devaluation


TIPS FOR NEGOTIATING WITH A COMPETITIVE NEGOTIATOR

Flinch.

Take time out.

Remember your BATNA!

Get another opinion.

Ask "how" they will negotiate.

If they don't know what "win-win" means, they won't be negotiating that way.

Avoid multiple concessions if your concessions are

not matched by their concessions.

Recognize "dirty tricks" and comment on them immediately.

TO IMPROVE YOUR NEGOTIATIONS:

Think in terms of interests

Classify the type of negotiation:

Deal or Dispute

Distributional or Integrative

Expand the pie

Use a planning chart

Investigate the opposing negotiator

Consider both strategy and tactics

Set high goals for yourself

Practice before you negotiate

Determine your BATNA

TO IMPROVE YOUR NEGOTIATIONS:

Ask lots of questions

Separate the people from the problem

Generate alternatives by brainstorming

Frame your proposals as a gain to them

Flinch when you hear a high demand

Protect your facts when necessary

Be willing to make concessions, but only if they do too

TIPS FOR NEGOTIATING WITH A COMPETITIVE NEGOTIATOR

Flinch.

Take time out.

Remember your BATNA!

Get another opinion.

Ask "how" they will negotiate.

If they don't know what "win-win" means, they won't be negotiating that way.

Avoid multiple concessions if your concessions are

not matched by their concessions.

Recognize "dirty tricks" and comment on them immediately.

Prof. John Barkai William S. Richardson School of Law University of Hawaii Negotiation& ADR...

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