Introduction Flashcards
Quality of Alternative
Is a way to look at a negotiation to find the best possible outcome for your party
E.g. If a party has a good argument, they should content
If a party has a poor argument, the should concede
If all parties have good outcomes, they should look at finding more value in further negotiations - good both creative compromise
If all parties have poor outcomes, they should look at alternatives which keeps both parties at the bargaining table sine all parties will lose - clear-cut compromise
How do personalities affect negotiation
Personalities influence the way we think in negotiation and often turn the negotiation into a win or lose ‘competition’
Personalities can get other negotiators annoyed, lose their tempers and make unreasonable ultimatums
We cannot excuse our personality and behave as we wish and we cannot rely on on our personality as a substitute for becoming more competent
Our personality may not have a determining impact on negotiations but how we approach a negotiation certainly does
This can lead to an understanding of negotiation as a game or contest in which there are winners and losers
Meaning we tend to view negotiations as having completely competitive sctipr
How does one deal with differences
Take your time
Clearly state your perspective and expectations, that is, the issues and concerns which have to be addressed if there is to be an agreement
Present your position in the broader context so that it does not look like you are presenting a “take it or leave it” proposition.
Invite the other party to state and restate their positions and interests; allow them to do so without interruption.
Do your best to outline, albeit a bit at a time, the key drivers behind your position; encourage reciprocity through information drip feed;
Invite the other party to provide background information; reciprocate when they do
Give attention to building a good working relationship with the other negotiator
Ask ‘why’ from time to time (but don’t assume you are going to get the full answer to the first time you ask that question)
Encourage reciprocity by giving full answers
Summarise regularly
Accept that underlying interests might evolve as the parties sort out their priorities
Take a process perspective: if it seems to be getting positional, view this as differentiation, not closure
Put any suggested solutions on hold, but try to discern what motivated the suggestion.
Ignore any threats or closing statements from the other party, responding instead with a restatement of your own preferred position and why.
How to be strategic with time pressure
All negotiations have timeframe in which an agreement is required before the deadline.
This leads to more creativities ideas to get the ball moving again if there is a standstill in the negotiation and the deadline is fast approaching
Negotiators who are under more time pressure do less well as they concede more to achieve an agreement
If negotiators who are genuinely under a deadline tell the other party, tis puts the other party under the same deadline and subjects them to the same time pressure
If both parties are under the same time pressure they are more likely to make mutual concessions resulting in a better outcome for the party that initially experienced the greater time pressure
Effect of time pressure on strategy choice
low time pressure = content
high time pressure = concede
high time pressure = clear-cut compromise
low(ish) = creative compromise
Ways mediators can help in negotiations
If the Negotiation process has been poorly managed then efforts should be made to get the negotiations back in phase, perhaps with the involvement of a mediator
• A mediator can rebuild the process and get the parties to reconsider their positions on the issues in dispute
• mediators have to be as strategic as the negotiators
• The role of the mediator is not to fix the dispute but to help the parties fix their dispute themselves (and so be more committed to implementing the agreement)
• The mediator brings a skills set and experience which the parties might lack and so assists them through the remainder of their negotiation
SEE IMAGE ON SLIDE 2 2017
Rules of good negotiation
- Be friendly and make cooperative opening move
- Be firm and match the others behaviours
- Be forgiving
- Be facilitative
- Be friendly and make a cooperative opening move
Make a ‘yes-able’ proposition, rather than an excessive one which will indicate a degree of reasonableness and so show that you won’t expect the other party to make every single move to reach an agreement
Be firm and match the others behaviour
Be clear from the outset on any genuine non-negotiables; state and restate underlying interests; match the other party’s statements of interest/position with your own; make concessions to match the other party
Be forgiving
Do not try to recoup any ‘losses’ from a previous negotiation; do not focus on retrieving setbacks in the current negotiation – look at the overall package being negotiated.
Be facilitating
Hold positions on the issue and don’t press for change from the other party
Ways to arrive at creative compromises
• to propose or consider new options that will add value
• Adding value to the proposal can change direction of the negotiations as it provides new ground to which the other party can compromise to
• A creative compromise aims to produce options that will accommodate the interests of all parties
• The parties’ differences can be used to create
compromise
• Proposals should be weighed against a primary value for the party
• Discuss ways to improve the proposal
The effect of importance of issue to self and concern for other on strategy choice
Importance of issue strategy choice = high content THUS concern for other strategy choice = low contend
Importance of issue strategy choice = low content THUS concern for other strategy choice = high contend
Importance of issue strategy choice = low(ish) clear-cut compromise THUS concern for other strategy choice = high clear-cut compromise
Importance of issue strategy choice = high creative compromise THUS concern for other strategy choice = high creative compromise
SEE SLIDE 4
Behaviours associated with cooperative negotiations
Reciprocation
Develop Trust
Four Fs
Ethical behaviours
Reciprocation
If one party is cooperative, it is likely that the other will develop a similar approach.
Matching Behaviour – For each positive behaviour, it is likely the other party will match/equal the behaviour.
Information Exchange – Enables each party to better understand their position. Equal exchange of
information strengthens a party’s position through trust.
Develop Trust
Maintain integrity and predictability
Open discussion about how negotiations are unfolding – talk process
Build the other party’s confidence through reciprocation and information exchange.
Four Fs
Friendly – Through language and demeanour, show willingness to reach a solution.
Firm – Reciprocate, do not feel obligated to reduce your position to overcome impasse.
Forgiving – If a friendly attitude is not reciprocated, remain
firm, but do not seek to punish the other party.
Facilitating – Openly discuss the issues and process and ways to proceed.
Ethical Behaviour
Can be viewed as a scale of behaviours with some more acceptable and others leaning toward unacceptable.
Concealing a party’s lowest acceptable outcome, or tactical/competitive bargaining is viewed as acceptable.
Examples of unethical behaviour are manipulation, misrepresentation, bluffing and providing false information
Dimensions of cultural difference
Individualism or Collectivism
Power distance
Temporal perspective
Individualism or Collectivism
Degree of self reliance rater than reliance upon others
Power distance
Egalitarianism or Hierarchal - Level of acceptance of inequality as legitimate. This flows through into how relationships are organised, decisions are made and power in exercised
Temporal perspective
Attitude towards time (short or long term perspective) This flows through into evaluations of situations and issues, and influences how tasks might be approached
Mediating and managing negotiator’s behaviour - mediators obligation
Mediators must employ the same behavioural techniques as negotiators to manage the behaviour of each party.
Mediator’s reciprocity
The manner in which the mediation is conducted will create a sense of balance between negotiators
Mediator’s trust
A mediator will seek to build the parties’ trust as the first step to developing trust between negotiating parties.
Mediator’s power
The mediator should ensure the parties’ understand the balance of power. They will seek to control and negate attempts of the negotiators to exercise personal power.
Mediator’s information exchange
The mediator will endeavour to ensure that each party knows what the other wants and why
Mediator’s ethics
The mediator’s own competency, conduct and ground rules will set the standard for the parties.
Mediator’s ourcome
The mediator will ensure the parties are fully aware of what they are agreeing to and the implications
Role of ethics in negotiation and exercise of power
It is typically unethical to exercise power over an involved party to gain the upper hand in negotiations or an unfair outcome.
Unethical practices via power intimidation lead to distrust and therefore countering the intention – a loss of
power in negotiations.
What is an example of unethical exercise of power?
An example of this is a FUD strategy (fear, uncertainty, doubt).
• Fear – Intentionally cause a party to believe that their outcome may be highly detrimental or catastrophic.
• Uncertainty – Intentionally cause a party to worry about the future of their business operations.
• Doubt – Place doubt in the mind of a party about their position in negotiations.
Why/where do differences arise
- As negotiation is two sided the hoped for results of any tactic are not guaranteed as you can not predict the actions of the other party
- Emotional tactics establish social relationships and shape how issues are
- Expressing anger to draw out a succession is known to work— however is situation dependent— less likely under time pressure, if the other party is more focused on understanding the situation or if they feel they are more powerful.
- Showing emotion can be effective where the statements are about the issue and not the person— don’t transfer frustration to the other negotiation “you know I can’t accept that offer!”
- Negotiators use emotional outbursts as a tactic because they are passionate about an issue, a trigger is pushed or simply because it works for them, males are more reactive to emotion then female as they see it as getting in the way of fixing the dispute, whereas females see it as part of the relationship
Process of Emotion in negotiation
→ Treat people with respect→ Treat yourself with respect→ Reflect on what others are saying→Seek to manage the process
How can gender differences affect negotiation
- Gender and professional background (e.g. lawyer) can effect how the negotiators approach their task, particularly in shaping one’s expectations (e.g. expect to earn less so don’t bother negotiating) and goals
- Women prefer a relationship rather than a substantive outcome taking a more cooperative approach, and will be wary of negotiating assertively because of the anticipated backlash
- The role expectations of the organisation provide a context that shapes how individuals approach the task of resolving differences
- Male negotiators should look at the broader perspective and include other people’s concerns, while backing off from using threats or sarcastic humour
Levels of conflict
Micro, Meso, Macro
Micro conflict
intra (within ourselves e.g. I shouldn’t eat that Easter egg) and interpersonal (conflict between people)
Meso conflict
Inter group (conflict between groups)
Macro conflict
inter state and nation (e.g. between power, language, government or territory groups)
Sources of conflict
→Resources →Preferences →Communication →Power differences →Identity and Values
Destructive aspects of conflict
→Competitive processes
→Misperception and bias
→ Emotionality
→Decreased communication Blurred issues of what actually needs to be discussed
→Rigid commitments
→ Magnified differences between parties, minimised similarities and failure to see points of commonality
→Escalation of the conflict— increase costs, time, public shaming incurred by the other side to pressure them to concede to demands
Creative and productive aspects of conflict
→Uncovers underlying problems— latent conflict that has always been there, is given a voice
→Agent of change and adaptation— change the situation
→Can promote understanding of one another’s sides
→ Personal and psychological development
→An opportunity to go beyond status quo— greater number of needs met and interests recognised
Conflict mapping
thinks about who are the immediate parties to a conflict and who are the effected audience (stakeholders and their degree of involvement)•
Conflict diagnosis
what is the source of conflict and why has it occurred.
Conflict prognosis
what is going to happen if it continues to manifest itself in this wa
Conflict Therapy
what can be done to improve the conflict/situation
William Ury: The walk from “no” to “yes”
- Step back from the situation and look at it with fresh eyes— find a new solution that creates value
- The secret to peace: the community surrounding conflict need to play an active role.
- Third side to conflict: the surrounding community— the third side needs to remind the two parties what is at stake
Conflict management approaches
• Moves from lower degrees of coercive power to greater degrees of coercive power
in resolving conflict
Forms of 3rd Party Intervention
- Mediation: facilitating and structuring negotiations
* Arbitration: binding decision by a third part
Advantages and disadvantages of 3rd party interventions
- Negotiation: control over process and outcome
- Mediation: lose control over process but retain control over outcomes
- Arbitration: retain some control over process but lose control over outcomes
Interest based bargaining
Realistically the parties know what they would like their interests to be coming to negotiations, only to find during the process that they must revise their thoughts on what is really important as they learn more. (e.g. reordering priorities as they learn they will not get everything they want)
Interest based negotiations should be opened by the parties presenting their key concerns and interests
Uncovering interests takes time
Interests eventually have to form into proposals which can begin to look positional
The negotiations have become very positional as of 6.2— a good negotiator would try and maintain an even handled dialogue and encourage the exchange of more information— as a result new insights into the underlying interests of the parties might emerge
New interests from the indigenous
“no access for this one particular company because of what they are doing to the land”— underlying interest in getting everyone to respect the land
• Mining representatives= sense of frustration at delays in the exploration permit process, not the only area for development [see table 6.3 for the new issues]
The issues facing the parties can be reframed in interest based bargaining
instead of whether to allow mineral exploration in the park which was azero sum issue, the PROBLEM is now how to set up a decision making process on access that was (a) relatively quicksand (b) governed the conduct of companies operating in the park
Be clear on the strategic intent
- Initiating company is at an advantage as the target company is in a reactive position
- Negotiators must be clear on the strategic intent that underpins the negotiation— the underlying rationale for the proposal drive the exploration for ways around the problems and again during periods of exchange where issues are trying to be closed of.
- Think in terms of the bigger picture
- The proposal has to be put into negotiable terms— from this subsidiary objectives arise such as specific legal or financial aspects critical to defining a successful outcome “Unless we obtain the company for less than X we will not proceed”. Process issues also arise such as the actual cost of negotiation, or time spent in negotiation.
High Context Communication
- The physical context and the person who is communicating is equally important to what is actually being said
- Communication requires individuals to have similar ‘reference points’
- You require understanding of the whole context before reaching any conclusions
- Statements will be reserved - communication will be in a way that maintains harmony within their own group
- Information will be sought through inference and through indirect means - eg. through reactions to offers made
- Silence conveys meaning
Low Context Communication
The meaning and intent will be conveyed primarily through the spoken word
Statements will be precise and relevant
Statements will reflect opinions, feelings and reactions
Information will be sought through questioning
Silence will be filled with words
Mediation Diamond
The mediation diamond represents 8 steps to a process which opens an issue, explores options in the negotiation and narrows down the options before an agreement and closure.
8 Steps of the mediation diamond
- Meet each party separately and take them through the situation
- Make an opening statement about their role and the purpose of the mediation
- Let each party outline their issues and desirable outcomes
- Summaries each parties statement and makes clear all parties were understood and sets the agenda to be followed
- Mediates each parties issue one by one before letting each party discuss the issue together
- Discuss possible settlements, question their key issues and desirable outcomes. Reiterate BATNA to mediation and encourage resolving the issues
- Explore possible options between parties
- Negotiation of options
- Completion of negotiation and assistant to each party so they are clear about what they are committing to.
Challenges of negotiating over the phone
The phone is not a leveller; one party can still dominate.
We tend to over do our strategy and to be repetitive because we are not picking up any visual clues as to how much the other person is receiving what we are saying.
We get fewer response cues, especially regarding the genuineness of agreement.
Negotiators with a strong case do better over the phone.
We tend to sound more competitive
Preparation for Negotiation
Constantly review the situation to take account of changes in the context
that might lead to a revision strategy.
Consider what might be done to the context to make a preferred course of action more likely.
Make considered analysis before deciding
upon a course of action.
Be constantly aware of options.
Have clear, considered goals.
Rules of negotiation
Rule 1 - Be Friendly and Make a Cooperative Opening Move
Rule 2 - Be Firm and Match the other’s Behaviour
Rule 3 - Be Forgiving
Rule 4 - Be Facilitating
Distributive Bargaining Strategies and Behaviours that are aimed at shaping the other party’s expectations;
Limited information exchange – that is, only information that helps one’s own case.
Adopting firm positions and making commitments.
Distributive Bargaining Strategies and Behaviours that are aimed at getting the other party to agree
Threatened alternatives and power plays undermining the other’s position or party.
Tense, controlled interaction.
What is a high context communicator able to do?
Some negotiators are high context communicators, able to read a situation not only from what is being said but also from info about the inferred meaning from context
What do low context negotiators like and what do they have difficulty with?
Low context negotiator who like the facts and a straight yes or now answers often have more difficulty discerning the other party’s underlying motivations, priorities and limits
What are Negotiators who are more individualistic in their orientation less likely to be willing to do?
Negotiators who are more individualistic in their orientation are less likely to be willing to offer info about their own priorities and so have to rely more on the offer-packaging approach to gain an understanding of the other parties’ priorities
What is the impact of emotion on negotiation and how do you deal with it?
Emotion may increase tension and conflict reducing the success of the negotiation
Stating an opening position can lead to the negotiations becoming a positional context
Negotiator use emotional outbursts as a tactic because they feel deeply about the issue and get carried away
What are the tactics of dealing with emotion?
Treat people with respect
Do listen - show you are trying to understand
Do allow for exaggeration
Do not use put-downs yourself
Do not challenge people’s statement
Treat yourself with respect
Do not get angry or frustrated
Do retain your belief that you can find a good solution
Restate what you want to achieve (but do not press others to agree)
State your own feelings too, but briefly
Reflect on what others are saying
Recognise the emotional component
Build on their statements about the substantive issues
Seek to manage the process
Talk about where the present dynamic is leading
Suggest alternative ways of interaction
What outcome do negotiators often emphasise?
win-win outcomes
Contending - Issue dimension - What are we doing about the issue? (Dealing with differences)
To stand firm and maintain one’s position in the expectation that, in time, the other party will accept your position
Differentiation - Process dimension - what are we trying to achieve at this point in the negotiation (Dealing with differences)
To find the full extent of the differences between the parties, particularly their underlying interests.
To decide whether to continue netogiating
Action dimensions - now are you going to do it? (Dealing with differences)
Information exchange
Clear statements, reiterating both “what” and “why”
Information “drip feed”
Checking understanding
DO NOT: challenge positions and present solutions
Bais thinking
Can be developed from the lack of critical thinking, biasses and prejudice and these biases can lead to negotiation difficulties. It is useful to reflect one’s negotiation process to encourage the awareness of biases
BATNA
Best Alternative To a Negotiated Agreement
• In a negotiation situation – what will happen if an agreement is not reached? What is ‘our’ – i.e. the company’s, negotiating party’s, etc. – backup strategy?
• Negotiations generally do not go accordingly to plan. As such, it is good practice to have a backup plan!
Quality of alternative
- Have a formulated and thought-through BATNA / alternate – it is easier to be railroaded in a negotiation if a negotiator does not have a strong conviction in their alternatives.
- Improve alternatives before a negotiation!
- If you do not have a strong backup and are relying on the negotiation, you will become desperate.
Managing competitveness
- Negotiations can become quite competitive.
- Tactics used by competitive negotiators may trigger a desired response; focus on secondary information / other topics; etc.
- Strategies for dealing with competitiveness:
- Remain firm on the issue / topic
- Focus on the process
- Repeat main concerns and/or summarise
Reciprocity and non-reciprocity in information exchange
Reciprocity works on the idea that if you walk into a conversation with an cooperative or bias attitude the other half will respond in kind. Leaving us all in possible a worst position.
• The ways around this issue it to cooperate and allow each other to give and take. (Check out the diagrams on page 16 & 17)
It is the tendancy of one person to match what the other is doing, if one negotiator is causing conflict it is likely to other will reciprocate. The reverse is true; if one person is cooperative it is most likely going to be matched.
Now to maintain reciprocity
One method recommended is to follow the stages below
1: be Friendly
2: be Firm
3: be Forgiving
4: be Facilitating
How to deal with threats
“If the threat would indeed get you to change your mind and it cost nothing to the other party to implement their threat, they would not be talking to you but would have already done what they are threatening to do”
Listening effectively - information exchange skills
- In the end Negotiations take time and repetition, it is important to understand that the other speaker has reason and evidence that supports their discussion, so while your mind might be filled with points you want to make. Try to listen to what they are saying
- So using a tic for tac approach be friendly don’t interrupt and listen to them
- Additionally if you have to disagree with them… then make the reason why more important in your talk than the rejection.
- Check out page 68 in some methods through different media
Strategies of negotiation - what are the 4-5 overarching options?
- You content - your aim is they will concede
- You concede - your aim is they will contend
- You clear-cut compromise - your aim is the 50/50 but at least its something
- You creatively compromise - your aim is the mysterious win win
and the non-negotiation option: You walk away - your aim is business is better elsewhere
What factors these options is time, relations, opinion and significance of the negotiations.
Helpful behaviours in exploration
▸ You are effectively prepared
▸ Explore options and maintain communication
▸ Differentiate between parties and options
▸ Remain flexible
▸ Framework agreement
Unhelpful behaviours in exploration
▸ Yours into the solution oriented phase
▸ Become competitive
▸ Limit yourself to a single solution
▸ Reject suggestions and apply pressure
Ways to arrive at creative compromises
▸ Realise the importance of the outcome AND the relationship
▸ Maintaining clear consider goals, remaining aware of options, considered analysis before deciding, adaptability
▸ Raise other party’s level of concern in both dimensions - dual concern approach
Dual Concern Approach
▸ High importance of issue to self ▸ High concern for other’s outcome ▸ Expectation of other’s strategy to be to compromise ▸ Low time pressure ▸ Good quality of alternatives
Biases in negotiation - how bias can affect the negotiation
▸ Being hostile, intolerant, inappropriate towards another
▸ Personal beliefs
▸ Relationships with other parties
▸ Professional opinion
How can biases be resolved?
▸ Keeping communication open
▸ Differentiate between internal bias and what needs to be achieved
▸ Find key areas of common ground
Concern for other’s outcome
▸ Be engaged with other parties
▸ Recognise different work styles and needs
▸ Be respectful and attentive
▸ Remain open minded to exploring alternative options
▸ Have a desire to compromise and resolve the issue to both parties advantage
Competitiveness & cooperation - distributive vs integrative bargaining
Distributive arrangement winds up in a win-lose circumstance where a few gatherings remain at leverage and the others miss out. Then again, integrative transaction makes a win-win circumstance for every one of the gatherings.
Distributive arrangement is aggressive in nature and requires that each gathering sees each other gathering as a contender, while integrative transaction is synergistic in nature and every one of the gatherings consult on agreeable terms, going about as partners to each other.
Integrative transaction fills in as a peace making apparatus, while distributive arrangement increases the contentions further.
In distributive transaction each moderator concentrates on meeting his own advantages, paying little mind to the misfortune the others may need to confront. Conversely, integrative transaction concentrates on shared interests of the considerable number of gatherings and hence, thinks of useful arrangements that will be useful for all.
Cultural differences
Negotiators from various cultures may tend to see the reason for a transaction in an unexpected way. For bargain producers from a few societies, the objective of a business transaction, as a matter of first importance, is a marked contract between
the gatherings.
