Exam #1
2. The Formal Negotiation Stage
-Appoint an appropriate "Chair" -Present & "Negotiate" the Agenda -Key process steps: -Collect thoughts and composure before speaking -Understand the other parties' position(s) -Think of ways all parties can win -Remember parties will likely work together in the future -Manage conflict before it "manages" the neg'n and you! -Strive for a "first agreement" -Manage problem team members •Be specific about problem behaviors •Describe problem as team problem (use "we" versus "you") •Focus on issue(s) and behavior(s) others can control 10-11
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 -Publicize/promote the actual costs of delay or termination
Role of BATNA's / Settlement range / target point / etc.
-BATNA = best alternative to a negotiated agreement -The course of action that you will take if the current negotiation(s) fail (an agreement cannot be reached) -BATNA almost always does NOT involve the other party (you're moving on) -NEVER accept a worse deal -Alternatives give the negotiator power to walk away from the negotiation •If "walk away" alternatives are attractive, negotiators can: Set their goals higher and make fewer concessions •If there are no attractive "walk away" alternatives: Negotiators have much less bargaining power
Ethics
-Broadly applied social standards for what is right or wrong in a particular situation, or a process for setting those standards -Grow out of particular philosophies which: •Define the nature of the world in which we live •Prescribe rules for living together
Integrative Negotiation Process
-Create a free flow of info. -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
The Planning Process: Details & Key Considerations
-Define the protocol to be followed in the negotiation •What is the agenda?, Who will be there?, Where will the negotiation occur?, What is the time period?, What might be done if the negotiation fails?, How will we keep track of what is agreed to?, How do we know whether we have a good agreement?
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
Value differences that exist between negotiators include
-Differences in... •interest(s), judgements about the future, risk tolerance, and time preferences
Direct Effects of Goals on Strategu
-Direct effects •Wishes are not goals, Goals are often linked to the other party's goals, There are limits as to what goals can be, There are limits as to what goals can accomplish, Effective goals must be concrete/specific
keys to the 4 strategies
-Discovering the other party's resistance point -Influencing the other party's resistance point
Difference between distributive and integrative negotiations
-Distributive (aka zero sum); one winner, taking a 'fixed pie' of possible negotiations outcomes, and 'carving them up' between the negotiating parties -Integrative (aka non zero sum); a mutual gains situation, finding creative solution(s) to growing the pie so that all parties enjoy more than they otherwise would have What makes inte. diff. -Focuses on commonalities rather than differences -Address needs and interests, not positions -Commit to meeting the needs of all involved parties -Exchanging information and ideas -Invent options for mutual gain• -Use objective criteria to set standards
Different types of justice in negotiations
-Distributive justice; The distribution of outcomes; "was it fair?" -Procedural justice; The process of determining outcomes; "was the process of determining the outcome(s) fair?" -Interactional justice ; How parties treat each other in one-to-one relationships; "did we interact with each other fairly in this negotiation?" -Systemic justice; How organizations appear to treat groups of individuals; "has this organization / body treated stakeholder groups equitably?"
Hofstede's Cultural Dimensions model and its impact on negotiations (not covered in class, but you've got to read Chapter 11 & watch the slides on your own). Literally only one question.
1.Individualism/collectivism -the extent to which the society is organized around the individual or the group -influences a broad range of negotiation processes, outcomes, and preferences -Individualistic societies may be more likely to swap negotiators, using whatever short-term criteria seem appropriate -Collectivistic societies focus on relationships and will stay with the same negotiator for years 2.Power distance -extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally -Cultures with stronger power distance will be more likely to have decision making concentrated at the top of an 3.Masculinity/femininity (Book calls it career success/work-life balance) -cultures differ in the extent to which they hold values that promote career success or quality of life -Cultures promoting CAREER SUCCESS are characterized by the acquisition of money and things, and not caring for others. -Cultures promoting QUALITY OF LIFE are characterized by concern for relationships and nurturing 4.Uncertainty avoidance -Indicates to what extent a culture programs its members to feel either uncomfortable in unstructured situations, or rather, accepting (even seeking) of such situations -Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations-want more certainty 5.Long-term vs Short-term orientation 6.(Indulgence vs Restraint)
Positions Take During Negotiations
-Opening offers (i.e., "Initial" Offer) •Where will you start? Why? -Opening stance •What is your attitude?(Competitive? Moderate?) -Initial concessions •Should any be made? If so, which ones, in which order? If so, how large? -The role of concessions •Without them, there is either capitulation or deadlock -Patterns of concession making •Your pattern contains valuable information -Final offers (making a commitment) •"This is all I can do"
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
Characteristics of negotiation situations part 3
-Parties (tend to) search for agreement rather than fight openly, capitulate, break off contact permanently, or take their dispute to a third party
Closing the Deal: Possibilites & Options
-Provide alternatives (2 or 3 packages) -"Assume the close" -"Split the difference" (careful here!) -"Exploding offers" -"Deal sweeteners"
Information needed to prepare effectively for engaging other party
-Resources, issues, and bargaining mix -Interests and needs -Walkaway point (BATNA) & 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, in a purely distributive situation, everything you see/do matters) -Direct action to alter impressions (Present facts that enhance one's position) -Make the other side's outcomes appear less attractive (than they think)
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/or the other's perspective -The motivation and commitment to work together
Negotiations
-Something that everyone does almost every daily
Distributive Bargaining Situation Characteristics
-Starting point (initial offers - usually 'low') -Target point (goal - usually 'realistic') -Resistance point (walkaway) -BATNA (the alternative you'll go to when you walkaway
Communication in Negotiation: Three Key Questions
1. Are negotiators consistent or adaptive? -Many negotiators prefer sticking with the familiar rather than venturing into improvisation 2. Does it matter what is said early in the process? -What negotiators do in the first half of the process has a significant impact on their ability to generate integrative solutions with high joint gains 3. Is more information always better?
Different types of listening
1.Passive listening: Receiving the message while providing no feedback to the sender 2.Acknowledgment: Receivers nod their heads, maintain eye contact, or interject responses 3.Active listening: Receivers restate or paraphrase the sender's message in their own language
Styles of conflict mangement
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 accommodating in whether or not the other part 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
2 Dilemmas in Mutual Adjustment
1. Dilemma of Honesty; concern about how much of the truth to tell the other party 2. Dilemma of Trust; concern about how much should negotiators believe what the other party tells them
Different sources of power
1. Informational sources of power 2. Personal sources of power 3. Power based on position in an organization 4. Relationship-based sources of power5. Contextual sources of power
Characteristics of negotiation situations part 1
1. Interdependence; the relationship between people and groups that most often leads them to negotiate 2. Understanding the dynamics of conflict and conflict management processes, which serve as a backdrop for different ways that people approach and manage negotiations
Three key stages that characterize multilateral negotiations.
1. The pre-negotiation stage-Characterized by many informal contacts among the parties (that's you internally; & the other parties) 2. The formal negotiation stage-One or more meetings, interactions, or neg's designed to achieve a result "endorsed" by all sides 3. The agreement phase-Parties select among the alternatives on the table
How to improve communication in negotiation
1. The use of questions 2. Listening 3. Role reversal
Why do negotiations occur?
1. To agree on how to share or divide a limited resource 2. To create something new that neither party could do on his or her own 3. To resolve a problem or dispute between the parties
Steps to an Ideal Negotiation Process
1. preparation •what are your goals •how will I work w/ the other party 2. relationship building •understanding differences and similarities •building commitment toward a mutually beneficial set of outcomes 3. information gathering •learn what you don't know •get all the issues on the table 4. information using •assemble your case •the bargaining mix is the combined list of issues 5. bidding •each party states their opening offer •each party engages in give and take 6. closing the deal •build commitment 7. implementing the agreement
4 fundamental strategies: distributive bargaining
1. push for settlement near opponent's resistance point 2. get the other party to change their resistance point 3. in settlement range is negative either; •Get the other side to change their resistance point •Modify your own resistance point 4. Convince the other party that some more neutral settlement is the best possible
4 perceptual erros
1. stereotyping 2. halo effect 3. selective perception 4. projection
How to Deal w/ Other Party's Use of Deception
Ask probing questions, Phrase questions in different ways, Force the other party to lie or back off, Test the other party, "Call" the tactic, Ignore the tactic, Discuss what you see and offer to help the other party change to more honest behaviors, Respond in kind
Bargaining
Describes the competitive, win-lose situation
What Is an Effective Group in a Multiparty Negotiation?
Effective Groups & Teams - what their Members "do" before & during a Neg'n: 1. Test assumptions and inferences 2. Share all relevant information 3. Focus on interests - not positions 4. Explain rationale(s) behind interests !!! 5. Talk in specific terms -- use examples if necessary 6. Agree on terminology / important words (meaning) 8. Discuss & work through "undiscussable" issues 9. Take needed "time outs" - breaks, more research, etc. 10. Avoid taking cheap shots or distracting the group 11.Exchange relevant information with non-group members 12. Make decisions by consensus and majority
Examples of hardball tactics, when to use them, and what to do when you encounter them
Examples -Good Cop/Bad Cop, Lowball/Highball, Bogey (playing up an issue of little importance), The Nibble (asking for a number of small concessions), Chicken ("we're both going to drive off this cliff together..."), Snow Job (overwhelm the other party with information) Dealing w/ them -ignore them, discuss them, respond in kind (you go hardball), co-opt the other party (befriend them)
Types of Conflict
Individual conflict -"INTRApersonal" or intrapsychic conflict; Conflict that occurs within an individual •I want an ice cream cone badly, but I know that ice cream is very fattening -"INTERpersonal" conflict; Conflict is between individuals •Conflict between bosses and subordinates, spouses, siblings, roommates, etc. Group conflict -Intragroup Conflict; Conflict is within a group •INTRAgroup Conflict -Conflict is within a group •Among team and committee members, within families, classes, firms, etc. -INTERgroup Conflict; Conflict can occur between organizations, warring nations, feuding families, management vs. unions, or within splintered, fragmented communities •These negotiations are the most complex
5. Contextual Sources of Power
Power is based in the context, situation or environment in which negotiations take place. •BATNAs -An alternative deal that a negotiator might pursue if she or he does not come to agreement with the current other party •Culture -Often contains implicit "rules" about use of power •Agents, constituencies and external audiences -All these parties can become actively involved in pressuring others
Negotiation
Refers to win-win situations such as those that occur when parties try to find a mutually acceptable solution to a complex conflict
Interests in principle
doing what is fair, right, acceptable, ethical may be shared by the parties
Relationship interests
indicate that one or both parties value their relationship
Substantive interests
relate to key issues in the negotiation
Process interests
related to the way the dispute is settled
Conflict
sharp disagreement or opposition and includes the perceived divergence of interest or a belief that the parties current aspirations cannot be achieved simultaneously
Dealing with Others Who Have More Power
•Diversify away from strong power parties •Make the other party smaller •Make yourself bigger •Build momentum through doing deals (or concessions "within" a deal in sequence) •Good information is always a source of "good" power •Ask many questions to gain more information
Situations that Involve Multiple Parties
•Dynamics change when groups, teams, and task forces have to present individual views and come to a collective agreement about a problem, plan, or future course of action
1. The Pre-Negotiation Stage
•Establish & confirm participants •Form coalitions •Define group member role(s) •Understand the costs and consequences of no agreement / impasse •Prioritize the issue(s) (i.e., the bargaining mix; primary vs. secondary interests, etc.) and construct an agenda / plan Agendas can be effective decision aids: •Establish the issues that will be discussed •Define how each issue is discussed •Set the order in which issues are discussed •Consider: Assigning time limits to various items
4. Power Based on Relationships
•Goal interdependence -How parties view their goals; are they interdependent?•Referent power -Based on an appeal to common experiences, common past, common fate, or membership in the same groups. •Networks -Power is derived from whatever flows through that particular location "within" the network the structure (usually information and resources) •Key aspects of networks: -Tie strength •An indication of the strength or quality of relationships with others -Tie content •Resource(s) that passes along the tie based on the "connection with the other person -Network structure •The overall set of relationships within a social system
1. Informational Sources of Power
•Information is the most common source of power -Derived from the negotiator's ability to assemble and organize data to support his or her position, arguments, or desired outcomes -A "tool" to challenge the other party's position or desired outcomes, or to undermine the effectiveness of the other's negotiating arguments or tactics
Differences between two-party and multiparty negotiations
•Number of parties •Informational & computational complexity •Social complexity •Procedural complexity •Strategic complexity
2. Power Based on Personality& Individual Differences
•Personal orientation •Cognitive orientation -"Thinking through" consequences and uses of power •Motivational orientation -Specific motives to use power •Disposition and skills -Orientation to cooperation vs. competition •Moral orientation -Philosophical orientation to power usage
Power Based on Resource Control
•Some of the most important resources: -Money, Ability / power to sign binding contracts, Supplies, Human capital, Time, Equipment, Critical services, Intraorganizational support
How People Communicate in Negotiation
•Use of language operates at two levels: -Logical level (proposals, offers) -Pragmatic level (semantics, syntax, style) •Use of nonverbal communication -Making eye contact -Adjusting body position -Nonverbally encouraging or discouraging what the other says •Selection of a communication channel -Communication is experienced differently when it occurs through different channels -People negotiate through a variety of communication media - by phone, in writing and increasingly through electronic channels or virtual negotiations -Social bandwidth distinguishes one communication channel from another. •the ability of a channel to carry and convey subtle social and relational cues from sender to receiver
Culturally Responsive Negotiation Strategies
•When choosing a strategy, negotiators should: -Be aware of their own and the other party's culture in general -Understand the specific factors in the current relationship, and negotiation setting / "deal" -Predict or try to influence the other party's approach •Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party's culture
Use of questions - Manageable questions
•cause attention or prepare the other person's thinking for further questions: -"May I ask you a question?" •getting information -"How much will this cost?" •generating thoughts -"Do you have any suggestions for improving this?"
Use of questions - Unmanageable questions
•cause difficulty -"Where did you get that dumb idea?" •give information -"Didn't you know we couldn't afford this?" •bring the discussion to a false conclusion -"Don't you think we have talked about this enough?
Mutual adjustment and concession making
-Effective negotiator needs to understand how people will ADJUST and READJUST and how the negotiation might twist and turn, based on one's own moves and the other's responses
Commitments: Tactical Considerations
-Establishing a commitment •Three properties: Finality, Specificity, Consequences -Preventing the other party from committing prematurely •Their commitment reduces your flexibility
3. The Agreement Phase
-Group chair or facilitator steps in moving toward a successful completion: -Move the group(s) toward selecting one or more of the options that have emerged -Shape and draft the tentative agreement -Discuss whatever implementation and follow-up needs to occur who will do "what", when, how, etc. •Also ... consequences / costs for missing implementation milestones, etc. -Thank the groups for their participation & hard work!-Organize and facilitate a "postmortem" / de-brief for "your side"
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
Interdependence part 1
-In negotiation (most of the time) parties need each other to achieve their preferred outcomes or objectives, this mutual dependency is interdependence -Interdependent goals are an important aspect of negotiation •Win-lose: I win, you lose •Win-win: Opportunities for both parties to gain
Types of Interdependence Effect outcomes
-Interdependence and the structure of the situation shape processes and out comes •Zero-sum or distributive •Non-zero-sum or integrative
Interdependence part 2
-Interdependent parties are often characterized by interlocking goals -Having interdependent goals DOES NOT mean that everyone wants of needs the same thing -A mix of convergent and conflicting goals characterizes many interdependent relationships and negotiations situations
Generate alternative solutions
-Invent options by "redefining" the problem set: •Compromise, "Logroll", Modify the pie-Expand the pie, Find a "bridge" solution, Cut the costs for compliance
Implementing the Strategy
-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 (realistically, possibly) achieved -Assess constituents and the social context of the negotiation
Successful negotiations involve
-Management of tangibles (ex. the price or the terms of agreement, dates, quantities, etc) -Resolution of intangibles (the underlying psychological motivations) such as winning, losing, or saving face
Cognitive Biases & Errors 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
Role reversal (..."put yourself in my shoes")
-Negotiators understand the other party's positions by actively arguing these positions until the other party is convinced that he or she is understood -Impact and success of the role-reversal technique •Research suggests that role reversal is a useful tool for improving communication and the accurate understanding and appreciation of the other party's position
What is communicated during a negotiation
-Offers, counteroffers, and motives -Information about alternatives -Information about outcomes -"Social" accounts •Explanations of mitigating circumstances •Explanations of exonerating circumstances •Reframing of explanations
Types of lies, and their potential (legal) consequences
-Omission; failing to disclose information that would benefit the other -Commission; actually saying something that is false about the common-value issue
Different biases (Halo, stereotyping, escalation of commitment, endowment effect, etc.)
-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 -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 -Selective perception: •Perpetuates stereotypes or halo effects •The perceiver singles out information that supports a prior belief but filters out contrary information -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 -Irrational escalation of commitment; Negotiators maintain commitment to a course of action even when that commitment constitutes irrational behavior -Mythical fixed-pie beliefs; Negotiators assume that all negotiations (not just some) involve a fixed pie -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 -Issue framing and risk; Frames can lead people to seek, avoid, or be neutral about risk in decision making and negotiation -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 -The winner's curse; The tendency to settle quickly on an item and then subsequently feel discomfort about a win that comes too easily -Overconfidence; The tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true -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 -Self-serving biases; People often explain another person's behavior by making attributions, either to the person or to the situation -There is a tendency to: •Overestimate the role of personal or internal factors •Underestimate the role of situational or external factors -Endowment effect; The tendency to overvalue something you own or believe you possess -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 -Reactive Devaluation; The process of devaluing the other party's concessions simply because the other party made them
Strategy vs. 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 this strategy?
Perception
-The process by which individuals connect to their environment. -A "sense-making" process
The perceptual process
-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" can create perceptual errors
Rationalizations for Unethical Conduct
-The tactic was unavoidable, harmless, or will help to avoid negative consequences -The tactic will produce good consequences, or the tactic is altruistically motivated ("its good for them too") -"They had it coming," or "They deserve it," or "I'm just getting my due" -"They were going to do it anyway, so I will do it first" -"He started it
Interests
-The underlying concerns, needs, desires, or fears that motivate a negotiator
Characteristics of negotiation situations part 2
-There are 2 or more parties (2 parties = dyadic/classic, 3+ parties = multi-parties -There are obvious and hidden NEEDS and DESIRES between the 2 or more parties -Parties negotiable 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"
Observations on interests
-There is almost always more than one -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
3. Power Based on Position in an Organization
-Two major sources of power in an organization: 1. Legitimate power which is grounded in the title, duties, and responsibilities of a job description and "level" within an organization hierarchy 2. Power based on the control of Resources associated with that position
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
Role of concession making and the information that can be gleaned from the pattern of concessions
-When one party agrees to make a change in his/her position, a Concession has been made -Concessions restrict the range of options (why?)
Dual concerns model
-Yielding, inaction, problem solving, contending, compromising -X axis concern about your outcome -Y axis concern about other's outcome
Difference between interests and positions
Interests motivate people; they are silent movers behind the hubbub of positions. Your position is something you have decided upon, while your interests are what caused you to decide.
