Week 3 - Strategy and tactics of integrative negotiation

Question 1

Overview of the integrative negotiation process

Answer 1

• Create a free flow of information
• Attempt to understand the other negotiator’s real needs and objectives
• Emphasize the commonalities between the parties and minimize the differences
• Search for solutions that meet the needs and objectives of both sides

Question 2

Recognize integrative situations

Answer 2

• The negotiation includes more than one issue
• It is possible to add more issues to the mix
• The negotiation is likely to recur over time
• The parties have varying preferences across the issues (negotiator’s must attempt to probe below the surface and discover underlying needs)

Question 3

Key steps in the integrative negotiation process - claiming value

Answer 3

When a negotiator carves out their share of finite resources that are being negotiated (distributive approach)

Question 4

Creating value

Answer 4

When parties with conflicting yet compatible interests trade low-priority issues

Question 5

Pareto efficiency

Answer 5

Find the point where there is “no agreement that would make any party better off without decreasing the outcomes to any other party

Pareto efficiency occurs when an economy is most efficiently allocating its goods. At this point, no further changes to the economy can be made without one party benefiting and one party becoming worse off.

Question 5

Negotiator’s dilemma

Answer 5

Tension between engaging in competitive and cooperative behaviour in a negotiation

“No matter how much creative problem solving enlarges the pie, it must still be divided; value that has been created must still be claimed”

People try to create, but ultimately needs to claim as well

Question 6

Interests

Answer 6

The underlying concerns, needs, desires, or fears that motivate a negotiator

Question 7

Substantive interests

Answer 7

Relate to key issues in the negotiation

monetary or the key issues of the deal (paying for a product etc.)

Question 8

Process interests

Answer 8

Related to the way a dispute is settled

Where do we meet, when will we spend time talking - how long will you talk, how long will I talk
Who is talking, who’s going to get voice

Question 9

Relationship interests

Answer 9

Indicate that one or both parties value their relationship

emotional interests/intangible/psychological
○ Who and how we get along
○ Do you appreciate me, are you understand me and apologize

Question 10

Interests in principle

Answer 10

Principle deeply held by the parties serving as the dominant guide to their actions (doing what is fair, right, acceptable, ethical, etc.)

Determining what’s fair and right

Question 11

More on interests

Answer 11

• There is almost always more than one type of interest underlying a negotiation
• Parties can have different types of interests at stake
• Interests can change over time
• There are numerous ways to surface interests
• Surfacing interests is not always easy or to your best advantage (can unravel things - because only focusing on interests are distracting from the purpose)
• Don’t spend too much time focusing on interests

Question 12

Key steps in the integrative negotiation process

Answer 12

• Generate alternative solutions
• Evaluate and select alternatives

Question 13

Alternative solutions

Answer 13

• Expand the pie: add resources for both sides to achieve their interests
• Log roll: find more than one issue in conflict and have different priorities for those issues - then agree to trade off among these issues
  ; If you don’t have many issues, unlink the issue - make one issue into multiple and then log roll

Non specific compensation: allow one person to obtain objectives and pay off the other person for accommodating interests

Cost-cutting: one party receives their objectives and the other’s costs are minimized if they agree

Bridge solution - invent new options and meet all their respective needs - disclosing sufficient information to discover their interests and then inventing options to satisfy them

Question 14

Evaluate and select alternatives

Answer 14

• Narrow the range of solution options
• Evaluate solutions on: quality, objective standards, acceptability
• Agree to evaluation criteria in advance (learn to agree with one another before negotiations)
• Be willing to justify personal preference (be open)
• Be alert to the influence of intangibles in selecting options (psychological needs and emotional tells)

Question 15

Evaluate and select alternatives (2)

Answer 15

• Use subgroups to evaluate complex options
• Take time to “cool off”
• Explore different ways to logroll (exploit differences in expectations and risk/time preferences)
• Keep decisions tentative and conditional until a final proposal is complete (so you don’t lose flexibility because you made deals earlier)
• Minimize formality/record keeping until final agreements are closed (allow free flow of information)

Question 16

Strategies that facilitate successful integrative negotiation

Answer 16

• Create a common objective or goal (parties share equally)
• Share this information: underlying interests, priorities and preferences, interpretation of key facts
• Build trust
• Make multiple equivalent simultaneous offers: come up with packaging that are equal in its value
• Find the motivation and commitment to work together - but don’t over do it (you should have a healthy act of self-interest, but find the commitment to work together)
• Try post-settlement settlements
• Use clear and accurate communication
• Understand the dynamics of integrative negotiation

Question 17

Common goals

Answer 17

Goals that parties share equally and both benefit from more than if not

Question 18

Shared goal

Answer 18

Goal that both parties work toward but benefits each party differently

Question 19

Joint goal

Answer 19

Involves individuals with different personal goals agreeing to combine them in a collective effort

Question 20

Constructing multiple equivalent simultaneous offers (MESOs)

Answer 20

1. Make a comprehensive list of all issues to be negotiated
2. Prioritize issues; assign a value to each option within each issue
3. Create 2-3 packages with varying terms that collectively are of equal value to you
4. When you present MESOs, let your counterpart know:
   a) you are going to make multiple offers
   b) each offer is of equal value to you
   c) you will give them time to consider the packages

Question 21

Pre-settlement settlement

Answer 21

Commitments made by parties before negotiations begin (we agree that whatever the outcome is, we will resolve it within 30 days, we agree that everything will be in writing etc.)

Question 22

Post-settlement settlement

Answer 22

Instead of agreeing to commitments upfront, negotiators reach a settlement and try to agree on improvement to the settlement afterward