Negotiations Test 1
Intergroup Conflict
- Conflict can occur between organizations, warring nations, feuding families, or within splintered, fragmented communities - These negotiations are the most complex
Interpersonal conflict
- Conflict is between individuals • Conflict between bosses and subordinates, spouses, siblings, roommates, etc.
Intragroup Conflict
- Conflict is within a group • Among team and committee members, within families, classes etc.
Bidding
- Each party states their "opening offer" - Each party engages in "give and take"
Issue framing and risk
Frames can lead people to seek, avoid, or be neutral about risk in decision making and negotiation
Halo effects:
- Are similar to stereotypes - Occur when an individual generalizes about a variety of attributes based on the knowledge of one attribute of an individual
Projection:
- Arises out of a need to protect one's own self-concept - People assign to others the characteristics or feelings that they possess themselves
Information using
- Assemble your case
Closing the deal
- Build commitment
Dilemma of honesty
- Concern about how much of the truth to tell the other party
Dilemma of trust
- Concern about how much should negotiators believe what the other party tells them
Perceptual Distortion
• Four major perceptual errors: - Stereotyping - Halo effects - Selective perception - Projection
Compromising
- Actors show moderate concern in obtaining own outcomes, as well as moderate concern for the other party obtaining their outcomes
Summary on the Planning Process
"...planning is the most critically important activity in negotiation."
Conflict may be defined as a:
"sharp disagreement or opposition" and includes "the perceived divergence of interest, or a belief that the parties' current aspirations cannot be achieved simultaneously"
Contending
- Actors pursue own outcomes strongly, show little concern for other party obtaining their desired outcomes
Problem solving
- Actors show high concern in obtaining own outcomes, as well as high concern for the other party obtaining their outcomes
Inaction
- Actors show little interest in whether they attain own outcomes, and little concern about whether the other party obtains their outcomes
Yielding
- Actors show little interest in whether they attain own outcomes, but are quite interested in whether the other party attains their outcomes
Stereotyping:
- Is a very common distortion - Occurs when an individual assigns attributes to another solely on the basis of the other's membership in a particular social or demographic category
Information gathering
- Learn what you need to know about the issues
Aspects of the negotiation process can lead to negative emotions
- Negative emotions may result from a competitive mind-set - Negative emotions may result from an impasse - Negative emotions may result from the prospect of beginning a negotiation
• Mythicalfixed-piebeliefs
- Negotiators assume that all negotiations (not just some) involve a fixed pie
Ignoring others' cognitions
- Negotiators don't bother to ask about the other party's perceptions and thoughts - This leaves them to work with incomplete information, and thus produces faulty results
• Irrational escalation of commitment
- Negotiators maintain commitment to a course of action even when that commitment constitutes irrational behavior
Availability of information
- Operates when information that is presented in vivid or attention-getting ways becomes easy to recall. - Becomes central and critical in evaluating events and options
Self-serving biases
- People often explain another person's behavior by making attributions, either to the person or to the situation - The tendency, known as fundamental attribution error, is to: • Overestimate the role of personal or internal factors • Underestimate the role of situational or external factors
Selective perception:
- Perpetuates stereotypes or halo effects - The perceiver singles out information that supports a prior belief but filters out contrary information
Ways to abandon a committed position
- Plan a way out - Let it die silently - Restate the commitment in more general terms - Minimize the damage to the relationship if the other backs off
Effects of positive and negative emotion
- Positive emotions may generate negative outcomes - Negative feelings may elicit beneficial outcomes
Aspects of the negotiation process can lead to positive emotions
- Positive feelings result from fair procedures during negotiation - Positive feelings result from favorable social comparison
Framing
- Represent the subjective mechanism through which people evaluate and make sense out of situations - Lead people to pursue or avoid subsequent actions - Focus, shape and organize the world around us - Make sense of complex realities - Define a person, event or process - Impart meaning and significance
The distinction between mood and emotion is based on three characteristics:
- Specificity - Intensity - Duration
Anchoring and adjustment
- The effect of the standard (anchor) against which subsequent adjustments (gains or losses) are measured - The anchor might be based on faulty or incomplete information, thus be misleading
The law of small numbers
- The tendency of people to draw conclusions from small sample sizes - The smaller sample, the greater the possibility that past lessons will be erroneously used to infer what will happen in the future
Positive emotions generally have positive consequences for negotiations
- They are more likely to lead the parties toward more integrative processes - They also create a positive attitude toward the other side - They promote persistence
Negative emotions generally have negative consequences for negotiations
- They may lead parties to define the situation as competitive or distributive - They may undermine a negotiator's ability to analyze the situation accurately, which adversely affects individual outcomes - They may lead parties to escalate the conflict - They may lead parties to retaliate and may thwart integrative outcomes
Relationship building
- Understanding differences and similarities - Building commitment toward a mutually beneficial set of outcomes
Preparation
- What are the goals? - How will I work with the other party?
Dysfunctions of Conflict
1. Competitive, win-lose goals 2. Misperception and bias 3. Emotionality 4. Decreased communication 5. Blurred issues 6. Rigid commitments 7. Magnified differences, minimized similarities 8. Escalation of conflict
Styles of Conflict Management
1. Contending - Actors pursue own outcomes strongly, show little concern for other party obtaining their desired outcomes 2. Yielding - Actors show little interest in whether they attain own outcomes, but are quite interested in whether the other party attains their outcomes 3. Inaction - Actors show little interest in whether they attain own outcomes, and little concern about whether the other party obtains their outcomes 4.Problem solving - Actors show high concern in obtaining own outcomes, as well as high concern for the other party obtaining their outcomes 5. Compromising - Actors show moderate concern in obtaining own outcomes, as well as moderate concern for the other party obtaining their outcomes
Three Reasons Negotiators Should Be Familiar with Distributive Bargaining
1. Independent situations require knowing how this works in order to do well 2. Need to know how to counter the effects of the strategies 3. Every situation has the potential to require skills at the "claiming-value" stage
Functions of Conflict
1. Makes organizational members more aware and able to cope with problems through discussion. 2. Promises organizational change and adaptation. 3. Strengthens relationships and heightens morale. 4. Promotes awareness of self and others. 5. Enhances personal development. 6. Encourages psychological development—it helps people become more accurate and realistic in their self-appraisals. 7. Can be stimulating and fun.
Three Important Themes
1. The definition of negotiation and the basic characteristics of negotiation situations 2. Interdependence, the relationship between people and groups that most often leads them to negotiate 3. Understanding the dynamics of conflict and conflict management processes which serve as a backdrop for different ways that people approach and manage negotiations
Four Propositions That Suggest How the Keys Affect the Process
1. The higher the other party's estimate of your cost of delay or impasse, the stronger the other party's resistance point will be. 2. The higher the other party's estimate of his or her own cost of delay or impasse, the weaker the other party's resistance point will be. 3. The less the other party values an issue, the lower their resistance point will be. 4. The more the other party believes that you value an issue, the lower their resistance point may be.
The Social Context of Negotiation: "Field" Analysis
A-B are primary actors C- indirect actors E- Outside forces uncontrollable by the parties D- observers
The Dual Concerns Model
Avoidance: Don't negotiate Competition: I gain, ignore relationship Collaboration: I gain, you gain, enhance relationship Accommodation: I let you win, enhance relationship
Best available alternative:
BATNA (acronym for Best Alternative to a Negotiated Agreement)
Intrapersonal or intrapsychic conflict
Conflict that occurs within an individual • We want an ice cream cone badly, but we know that ice cream is very fattening
Interdependence
In negotiation, parties need each other to achieve their preferred outcomes or objectives • This mutual dependency is called interdependence • Interdependent goals are an important aspect of negotiation • Win-lose: I win, you lose • Win-win: Opportunities for both parties to gain • Interdependent parties are characterized by interlocking goals • Having interdependent goals does not mean that everyone wants or needs exactly the same thing • A mix of convergent and conflicting goals characterizes many interdependent relationships
Generate Alternative Solutions
Invent options by redefining the problem set: - Expand or modify the pie - Logroll - Use nonspecific compensation - Cut the costs for compliance - Find a bridge solution Generate options to the problem as a given: - Brainstorming - Surveys - Electronic brainstorming
The Distributive Bargaining Situation Preparation
Need to set a: • Target point, aspiration point • Walkaway, resistance point • Asking price, initial offer
Understanding the Flow of Negotiations: Stages and Phases
Negotiation proceeds through distinct phases or stages • Beginning phase(initiation) • Middle phase(problem solving) • Ending phase(resolution)
The process of ascribing meaning to messages and events is strongly influenced by the perceiver's current state of mind, role, and comprehension of earlier communications
People interpret their environment in order to respond appropriately The complexity of environments makes it impossible to process all of the information People develop shortcuts to process information and these shortcuts create perceptual errors
Emotion in Negotiation
The basic building blocks of all social encounters are: • Perception • Cognition - Framing - Cognitive biases • Emotion
Managing Misperceptions and Cognitive Biases in Negotiation
The best advice that negotiators can follow is: • Be aware of the negative aspects of these biases • Discuss them in a structured manner within the team and with counterparts
Keys to the Strategies of the Distributive Bargaining Situation
The keys to implementing any of the four strategies are: • Discovering the other party's resistance point • Influencing the other party's resistance point
Implementing the agreement
The negotiation isn't really complete until the agreement has been put into effect. If the process has been a good one, the negotiators are more likely to follow through on what has been agreed to. If the process has been a bad one, they'll have little personal commitment to making the deal a reality
Reactive devaluation
The process of devaluing the other party's concessions simply because the other party made them
Overconfidence
The tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true
Endowment effect
The tendency to overvalue something you own or believe you possess
The winner's curse
The tendency to settle quickly on an item and then subsequently feel discomfort about a win that comes too easily
WATNA:
Worst Alternative to a negotiated agreement
Negotiations create
both positive and negative emotions
Rights:
people may be concerned about who is "right" - that is, who has legitimacy, who is correct, and what is fair
Power:
people may wish to resolve a conflict on the basis of who is stronger
Interests:
people talk about their "positions" but often what is at stake is their underlying interests
Emotions can be used
strategically as negotiation gambits
The Dual Concern Model assumes
that parties' preferred method of handling conflict is based on two underlying dimensions: assertiveness and empathy. The assertiveness dimension focuses on the degree to which one is concerned with satisfying one's own needs and interests.
The Role of Alternatives to a Negotiated Agreement
• Alternatives give the negotiator power to walk away from the negotiation - If alternatives are attractive, negotiators can: • Set their goals higher • Make fewer concessions - If there are no attractive alternatives: • Negotiators have much less bargaining power
Getting Ready to Implement the Strategy: The Planning Process
• Analyze the other party - Why do they want what they want? - How can I present my case clearly and refute the other party's arguments? • Present the issues to the other party
Tactical Tasks of Negotiators
• Assess outcome values and the costs of termination for the other party • Manage the other party's impressions • Modify the other party's perceptions • Manipulate the actual costs of delay or termination
Most people think bargaining and negotiation mean the same thing; however, we will be distinctive about the way we use these two words:
• Bargaining: describes the competitive, win-lose situation • Negotiation: refers to win-win situations such as those that occur when parties try to find a mutually acceptable solution to a complex conflict
Active-Engagement Strategies
• Competition - distributive, win-lose bargaining • Collaboration - integrative, win-win negotiation • Accommodation - involves an imbalance of outcomes ("I lose, you win")
Overview of the Integrative Negotiation Process
• Create a free flow of information • Attempt to understand the other negotiator's real needs and objectives • Emphasize the commonalties between the parties and minimize the differences • Search for solutions that meet the goals and objectives of both sides
Getting Ready to Implement the Strategy: The Planning Process
• Define the issues • Assemble the issues and define the bargaining mix - The bargaining mix is the combined list of issues • Define your interests - Why you want what you want • Know your limits and alternatives • Set your objectives (targets) and opening bids (where to start) - Target is the outcome realistically expected - Opening is the best that can be achieved • Assess constituents and the social context of the negotiation
Getting Ready to Implement the Strategy: The Planning Process
• Define the protocol to be followed in the negotiation - Where and when will the negotiation occur? - Who will be there? - What is the agenda?
Goals - The Focus That Drives Negotiation Strategy
• Determining goals is the first step in the negotiation process • Negotiators should specify goals and objectives clearly • The goals set have direct and indirect effects on the negotiator's strategy
Two Dilemmas in Mutual Adjustment
• Dilemma of honesty - Concern about how much of the truth to tell the other party • Dilemma of trust - Concern about how much should negotiators believe what the other party tells them
Commitments: Tactical Considerations
• Establishing a commitment - Three properties: • Finality • Specificity • Consequences • Preventing the other party from committing prematurely - Their commitment reduces your flexibility
What Makes Integrative Negotiation Different?
• Focus on commonalties rather than differences • Address needs and interests, not positions • Commit to meeting the needs of all involved parties • Exchange information and ideas • Invent options for mutual gain • Use objective criteria to set standards
Dealing with Typical Hardball Tactics
• Four main options: - Ignore them - Discuss them - Respond in kind - Co-opt the other party (befriend them)
Some Advice about Problem Framing for Negotiators
• Frames shape what the parties define as the key issues and how they talk about them • Both parties have frames • Frames are controllable, at least to some degree • Conversations change and transform frames in ways negotiators may not be able to predict but may be able to control • Certain frames are more likely than others to lead to certain types of processes and outcomes
The Distributive Bargaining Situation
• Goals of one party are in fundamental,direct conflict to another party • Resources are fixed and limited • Maximizing one's own share of resources is the goal for both parties
Typical Hardball Tactics
• Good Cop/Bad Cop • Lowball/Highball • Bogey (playing up an issue of little importance) • Bogey II: Hard on Issue/Soft on People • The Nibble (asking for a number of small concessions) • Chicken • Intimidation • Aggressive Behavior • Snow Job (overwhelm the other party with information)
Key Steps in the Integrative Negotiation Process
• Identify and define the problem • Understand the problem fully - identify interests and needs on both sides • Generate alternative solutions • Evaluate and select among alternatives
Assess the Other Party's Target, Resistance Point, and Costs of Terminating Negotiations:
• Indirectly - Determine information opponent used to set: • Target • Resistance points • Directly - Opponent reveals the information
Parties in conflict use one of three frames:
• Interests: • Rights: • Power:
Understand the Problem Fully— Identify Interests and Needs
• Interests: the underlying concerns, needs, desires, or fears that motivate a negotiator - Substantive interests relate to key issues in the negotiation - Process interests are related to the way the dispute is settled - Relationship interests indicate that one or both parties value their relationship - Interests in principle: doing what is fair, right, acceptable, ethical may be shared by the parties
Levels of Conflict
• Intrapersonal or intrapsychic conflict - Conflict that occurs within an individual • We want an ice cream cone badly, but we know that ice cream is very fattening • Interpersonal conflict - Conflict is between individuals • Conflict between bosses and subordinates, spouses, siblings, roommates, etc. Intragroup Conflict - Conflict is within a group • Among team and committee members, within families, classes etc. • Intergroup Conflict - Conflict can occur between organizations, warring nations, feuding families, or within splintered, fragmented communities - These negotiations are the most complex
Types of Cognitive Biases in Negotiation
• Irrational escalation of commitment • Mythical fixed-pie beliefs • Anchoring and adjustment • Issue framing and risk • Availability of information • The winner's curse • Overconfidence • The law of small numbers • Self-servingbiases • Endowmenteffect • Ignoringothers' cognitions • Reactivedevaluation
Modify the Other Party's Perceptions
• Make outcomes appear less attractive • Make the cost of obtaining goals appear higher • Make demands and positions appear more or less attractive to the other party - whichever suits your needs
Evaluate and Select Alternatives
• Narrow the range of solution options • Evaluate solutions on: - Quality - Objective standards - Acceptability • Agree to evaluation criteria in advance • Be willing to justify personal preferences • Be alert to the influence of intangibles in selecting options • Use subgroups to evaluate complex options
How Frames Work in Negotiation
• Negotiators can use more than one frame • Mismatches in frames between parties are sources of conflict • Particular types of frames may lead to particular types of arguments • Specific frames may be likely to be used with certain types of issues • Parties are likely to assume a particular frame because of various factors
Cognitive Biases in Negotiation
• Negotiators have a tendency to make systematic errors when they process information. These errors, collectively labeled cognitive biases, tend to impede negotiator performance.
The Frame of an Issue Changes as the Negotiation Evolves
• Negotiators tend to argue for stock issues or concerns that are raised every time the parties negotiate • Each party attempts to make the best possible case for his or her preferred position or perspective • Frames may define major shifts and transitions in a complex overall negotiation • Multiple agenda items operate to shape issue development
Value Claiming and Value Creation
• Opportunities to "win" or share resources - Claiming value: result of zero-sum or distributive situations where the object is to gain largest piece of resource - Creating value: result of non-zero-sum or integrative situation where the object is to have both parties do well
Key Steps to an Ideal Negotiation Process
• PREPARATION - What are the goals? - How will I work with the other party? • RELATIONSHIP BUILDING - Understanding differences and similarities - Building commitment toward a mutually beneficial set of outcomes • INFORMATION GATHERING - Learn what you need to know about the issues • INFORMATION USING - Assemble your case • BIDDING - Each party states their "opening offer" - Each party engages in "give and take" • CLOSING THE DEAL - Build commitment • IMPLEMENTING THE AGREEMENT
Strategic Options
• Per the Dual Concerns Model, choice of strategy is reflected in the answers to two questions: - How much concern do I have in achieving my desired outcomes at stake in the negotiation? - How much concern do I have for the current and future quality of the relationship with the other party?
Manipulate the Actual Costs of Delay or Termination
• Plan disruptive action - Raise the costs of delay to the other party • Form an alliance with outsiders - Involve (or threaten to involve) other parties who can influence the outcome in your favor • Schedule manipulations - One party is usually more vulnerable to delaying than the other
Closing the Deal
• Provide alternatives (2 or 3 packages) • Assume the close • Split the difference • Exploding offers (Deadline) • Deal sweeteners
Ways to Create a Commitment
• Public pronouncement • Linking with an outside base • Increase the prominence of demands • Reinforce the threat or promise
Fundamental Strategies of The Distributive Bargaining Situation
• Push for settlement near opponent's resistance point • Get the other party to change their resistance point • If settlement range is negative, either: - Get the other side to change their resistance point - Modify your own resistance point • Convince the other party that the settlement is the best possible
Information Needed to Prepare Effectively for Engaging the Other Party
• Resources, issues, and bargaining mix • Interests and needs • Walkaway point and alternative(s) • Targets and opening bids • Constituents, social structure, and authority to make an agreement • Reputation and negotiation style • Likely strategy and tactics
Manage the Other Party's Impressions
• Screen your behavior: - Say and do as little as possible • Direct action to alter impressions - Present facts that enhance one's position
Negotiators need to:
• Set a clear target and resistance points • Understand and work to improve their BATNA • Start with good opening offer • Make appropriate concessions • Manage the commitment process
Factors That Facilitate Successful Integrative Negotiation
• Some common objective or goal • Faith in one's own problem-solving ability • A belief in the validity of one's own position and the other's perspective • The motivation and commitment to work together • Trust • Clear and accurate communication • An understanding of the dynamics of integrative negotiation
Strategy versus Tactics
• Strategy: The overall plan to achieve one's goals in a negotiation • Tactics: Short-term, adaptive moves designed to enact or pursue broad strategies - Tactics are subordinate to strategy - Tactics are driven by strategy • Planning: The "action" component of the strategy process; i.e. how will I implement the strategy?
Types of Frames
• Substantive • Outcome • Aspiration • Process • Identity • Characterization • Loss-Gain
Why Integrative Negotiation Is Difficult to Achieve
• The history of the relationship between the parties - If contentious in past, it is difficult not to look at negotiations as win-lose • The belief that an issue can only be resolved distributively - Negotiators are biased to avoid behaviors necessary for integrative negotiation
Perception is:
• The process by which individuals connect to their environment. • A complex physical and psychological process • A "sense-making" process
Positions Taken During Negotiations
• The role of concessions - Without them, there is either capitulation or deadlock • Patterns of concession making - The pattern contains valuable information • Final offers (making a commitment) - "This is all I can do"
Characteristics of a Negotiation Situation
• There are two or more parties • There is a conflict of needs and desires between two or more parties • Parties negotiate because they think they can get a better deal than by simply accepting what the other side offers them • Parties expect a "give-and-take" process Parties search for agreement rather than: - Fight openly - Capitulate - Break off contact permanently - Take their dispute to a third party • Successful negotiation involves: - Management of tangibles (e.g., the price or the terms of agreement) - Resolution of intangibles (the underlying psychological motivations) such as winning, losing, saving face
Observations on Interests
• There is almost always more than one interest • Parties can have different interests at stake • Often stem from deeply rooted human needs or values • Can change • Numerous ways to surface interests • Surfacing interests is not always easy or to one's best advantage
Negotiations occur for several reasons:
• To agree on how to share or divide a limited resource • To create something new that neither party could attain on his or her own • To resolve a problem or dispute between the parties
Other Tactics
• Trial Balloon • Precedent/Past Behavior • Limited Authority • Resource Limitations • Missing Person • Association • Blanketing ("everyone is doing it") • Flinch ("what, are you kidding") • Crunch ("you have to do better than that")
Factors That Facilitate Successful Integrative Negotiation
• Trust • Clear and accurate communication • An understanding of the dynamics of integrative negotiation
Approaches to Strategy
• Unilateral: One that is made without active involvement of the other party • Bilateral: One that considers the impact of the other's strategy on one's own
Mutual Adjustment and Concession Making
• When one party agrees to make a change in his/her position, a concession has been made • Concessions restrict the range of options • When a concession is made, the bargaining range is further constrained
