Negotiations Book 1 Test

There are at least two reasons that an exaggerated opening offer is advantageous

First, it gives the negotiator room for movement and therefore allows him or her time to learn about the other party's priorities. Second, an ex-aggerated opening offer acts as a meta-message and may create, in the other party's mind, the impression that (1) there is a long way to go before a reasonable settlement will be achieved, (2) more concessions than originally intended may have to be made to bridge the difference between the two opening positions, and (3) the other may have incorrectly estimated his or her own resistance point.

Dealing with Typical Hardball Tactics

Four main options: -Ignore them -Discuss them -Respond in kind -Co-opt the other party (befriend them)

integrative strategy

If a negotiator pursues an integrative strategy without regard to the other's strategy, then the other may manipulate and exploit the collaborator and take advantage of the good faith and goodwill being demonstrated. Blind pursuit of an integrative process can also lead negotiators to cease being accountable to their constituencies in favor of pursuit of the negotiation process for its own sake. F

Diagnosis

In most negotiations there are four major obstacles that inhibit the inventing of an abundance of options: 1. Premature Judgement 2. Searching for the single answer 3. The assumption of a fixed pie 4. Thinking that - solving their problem is their problem

-Accommodation, Competition, and Collaboration

In other words, the negotiator wants to let the other win, keep the other happy, or not endanger the relationship by pushing hard to achieve some goal on the substantive issues. This strategy is often used when the primary goal of the exchange is to build or strengthen the relationship (or the other party) and the negotiator is willing to sacrifice the outcome just to benefit the other party.

3. Generate Alternative Solutions

Inventing Options: Generating Alternative Solutions by Redefining the Problem or Problem Set -Logroll -Expand the Pie -Modify the Resource Pie -Find a Bridge Solution -Nonspecific Compensation -Cut the Costs for Compliance -Superordination -Compromise

Negotiation

Is a form of decision making in which two or more parties talk with one another in an effort to resolve their opposing interests Win-win situations and mutually acceptable solution to a complex conflict.

Expand the Pie

Many negotiations begin with a shortage of resources, and it is not possible for both sides to satisfy their interests or obtain their objectives under the current conditions. A simple solution is to add resources—expand the pie—in such a way that both sides can achieve their objectives.

Conflict

May be defined as a sharp diagreement or opposition, as of interests, ideas, etc. and includes the perceived divergence of interstate's, or a belief that the parties' current aspiration cannot be achieved simultaneously.

Accommodative strategies

May generate a pattern of repeatedly giving in to keep the other happy or to avoid a fight. This pattern establishes a precedent that is hard to break. It could also lead the other to a false sense of well-being due to the satisfac-tion that comes with the "harmony" of a good relationship, which may completely ignore the accumulating giveaways on substantive issues. Over time, this imbalance is unlikely to perpetuate, but efforts to stop the giving or restore the balance may be met with surprise and resentment from the other.

Logroll

Requires the parties to find more than one issue in conflict and to have different priorities for those issues.

Superordination

Superordination solutions occur when "the differences in interest that gave rise to the conflict are superseded or replaced by other interests.

Strategy versus Tactics

Tactics are short-term, adaptive moves designed to enact or pursue broad (or higher-level) strategies, which in turn provide stability, continuity, and direction for tactical behaviors. -Accommodation, Competition, and Collaboration (See below)

Distributive strategies

Tend to create "we-they" or "superiority-inferiority" patterns and may lead to distortions in judgment regarding the other side's contributions and efforts, as well as to distortions in perceptions of the other side's motives, needs, and positions

Bargaining

The competitive win-lost situations such as haggling over the price of that item that happens at a yard sale, or used car lot.

Dilemmas that all negotiators face

The dilemma of honesty- concerns how much of the truth to tell the other party. The Dilemma of trust -

Intergroup Conflict

The final level of conflict. This occurs between organizations, ethnic group, warring nations, or funding families, or within splintered communities. Large number of people, most complex.

Goals

The first step in developing and executing a negotiation strategy is to determine one's goals.

Every negotiator has two kinds of interests: in the substance and in the relationship

The relationship tend to become entangled with the problem. Positional Bargaining puts relationship and substance in conflict.

Tactical Taksk

(1) assess the other party's target, resistance point, and cost of terminating negotiations (2) manage the other party's impression of the negotiator's target, resistance point, and cost of terminating negotiations (3) modify the other party's perception of his or her own target, resistance point, and cost of terminating negotiations 4) manipulate the actual costs of delaying or terminating negotiations. Each of these tasks is now discussed in more detail.

One study of successful negotiators by Rackham suggested that in the planning process, skilled negotiators

(1) explored a wider range of options for action; (2) worked harder to find common ground with the other party; (3) spent more time considering the long-term implications of the issues; and (4) were significantly more likely to set upper and lower limits, or the boundaries of a "range" of acceptable settlements.

Two disadvantages of an exaggerated opening offer are

(1) it may be summarily rejected by the other party and halt negotiations prematurely (2) it communicates an attitude of toughness that may be harmful to long-term relationships.

Factors That Facilitate Successful Integrative Negotiation

(1) the presence of a common goal (2) faith in one's own problem-solving ability (3) a belief in the validity of the other party's position (4) the motivation and commitment to work together (5) trust (6) clear and accurate communication (7) an understanding of the dynamics of integrative negotiation -Some Common Objective or Goal (See Below) -Faith in One's 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 ( See Below) -Trust -Clear and Accurate Communication -An Understanding of the Dynamics of Integrative Negotiation

sub-stantive goals

(e.g., money or a specific outcome)

procedural goals

(e.g., shaping the agenda or simply having a voice at the table).

intangible goals

(e.g., winning, beating the other party, or getting a settlement at any cost)

Invent Options For Mutual Growth

- Diagnosis -Prescription

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 display emotional reaction to facts, proposals, and outcomes).

How do you identify interests

-Ask why? Or, ask why not? To put yourself in their shoes. Think about their choice -Realize that each side has multiple interests -The most powerful interests are basic human needs. Basic human needs include Security Economic well-being A sense of belonging Recognition Control over one's life -Make a list

3. Generating Alternative Solutions to the Problem as Given

-Brainstorming 1. Avoid judging or evaluating solutions 2. Separate the people from the problem 3. Be exhaustive in the brainstorming process. 4. Ask outsiders Surveys Electronic brainstorming

Prevention works best

-Build a working relationship -Face the problem. not the people.

1. Identify and Define the Problem

-Define the problem in a way that is mutually acceptable to both sides -State the problem with an eye toward practicality and comprehensiveness -State the problem as a goal and identify the obstacles in attaining this goal -Depersonalize the problem -Separate the problem definition from the search for solutions

Emotion

-First recognize and understand emotions, theirs and yours. -Pay attention to "core concerns" -Consider the role of identity -Make emotions explicit and acknowledge them as legitimate -Allow the other side to let off steam -Don't react to emotional outbursts -Use symbolic gestures

Focus on interests, not positions

-For a wise solution reconcile interests, not positions -How do you identify interests? -Talking about interests

Typical Hardball Tactics

-Good Cop/Bad Cop -Lowball/Highball -Bogey (playing up an issue of little importance) -The Nibble (asking for a number of small concessions to) -Chicken—becomes winner take all -Intimidation -Aggressive Behavior -Snow Job (overwhelm the other party with information)

For a wise solution reconcile interests, not positions

-Interests define the problem: The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side's needs, desires, concerns, and fears. -Behind opposed positions lie shared and compatible interests, as well as conflicting ones.

Communication

-Listen actively and acknowledge what is being said. -Speak to be understood, talk to the other side. It is not a debate or a trial. -Speak about yourself, not about them -Speak for a purpose

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

Talking about interesets

-Make your interests come alive -Acknowledge their interests as part of the problem -Put the problem before your answer -Look forward, not back -The question "Why?" has two quite different meanings. -Be concrete but flexible -Be hard on the problem, soft on the people.

4. Evaluate and Select Alternatices

-Narrow the range of solution options -Evaluate Solutions on the Basis of Quality, Standards, and Acceptability -Agree to the Criteria in Advance of Evaluating Options -Be Willing to Justify Personal Preferences -Be Alert to the Influence of Intangibles in Selecting Options -Use Subgroups to Evaluate Complex Options -Take Time Out to Cool Off -Explore Different Ways to Logroll -Keep Decisions Tentative and Conditional until All Aspects of the Final Proposal Are Complete -Minimize Formality and Record Keeping until Final Agreements Are Closed 1. Explore Differences in Risk Preference 2. Explore Differences in Expectations 3. Explore Differences in Time Preferences

Separate the people from the problem

-Negotiators are people first -Every negotiator has two kinds of interests: in the substance and in the relationship -Disentangle the relationship from the substance; deal directly with the people problem. -Perception -Emotion -Communication -Prevention works best

Insights into negotiation

-Personal experience -Source is the media -Wealth of social science research

Closing the deal

-Provide alternatives (2 or three alternative packages) -Assume the close (Should I get the paperwork started) -Split the difference (50/50) -Exploding offers (Ends in 24 Hours) -Sweeteners (If you say yes I will give you X).

Perception

-Put yourself in their shoes -Don't deduct their intentions from your fears -Don't blame them from your problem -Discuss each other's perceptions -Look for opportunities to act inconsistently with their perceptions. -Give them a stake in the outcome by making sure they participate in the process. -Face-saving: Make your proposals consistent with their values

the negotiator should plan to collect as much of this information as possible during the opening stages of the actual deliberations.

-The Other Party's Goals -The Other Party's Issues and Bargaining Mix -The Other Party's Interests and Needs -The Other Party's Resistance Point and Alternatives

When you shouldn't negotiate

-When you could lose everything -When you are running at capacity and sold out -When demands are unethical -When you don't care -When you don't have time. -When they act in bad faith -When waiting would improve your position -When you are not prepared.

3. Assembling the Issues, Ranking Their Importance, and Defining the Bargaining Mix

. Large bargaining mixes allow many possible components and arrangements for settlement, thus increas-ing the likelihood that a particular "package" of components will meet both parties' needs and therefore lead to a successful settlement. Prioritization includes two steps

Indirect Effects of Goals on Choice of Strategy

. This short-term thinking affects our choice of strategy; in developing and framing our goals, we may ignore the present or future relationship with the other party in favor of a simplistic concern for achieving only the substantive outcome. Buying car from grandma then realizes it was crap.

In any negotiation, a complete list of the issues at stake is best derived from the following sources:

1. An analysis of all the possible issues that need to be decided. 2. Previous experience in similar negotiations (e.g., buying your fifth house versus buy-ing your first). 3. Research conducted to gather information (e.g., study the neighborhood, have the house inspected, or read up on how to buy a house). 4. Consultation with experts in that industry (real estate agents, mortgage lenders, attorneys, home repair experts, or friends who have bought a house recently).

Compromise

A compromise solution that would not further the interests of either Samantha or Emma would be to stay in their current location and to maintain the status quo.

6. Knowing Your Limits, Including a Resistance Point

A resistance point is the place where you decide that you should absolutely stop the ne-gotiation rather than continue because any settlement beyond this point is not minimally acceptable

Interpersonal Conflict

A second major level of conflict is between individuals. This occurs between co-workers, spouses, siblings, roommates, or neighbors.

intragroup conflict

A third major level of conflict is within a group. This occurs between teams, work group members, within families, classes, living units, and tribes. (Affects the ability of the group to make decisions, work productivity, and continue to achieve its goals effectively)

4. Defining the Interest

After defining the issues, the negotiator must proceed to define the underlying interests and needs. Although defining interests is more important to integrative negotiation than to distributive bargaining, even distributive discussions can benefit from one or both parties identifying the key interests. Like goals, interests may be • Substantive, that is, directly related to the focal issues under negotiation. • Process-based, that is, related to how the negotiators behave as they negotiate. • Relationship-based, that is, tied to the current or desired future relationship between the parties. Interests may also be based on the intangibles of negotiation—including principles or standards to which the parties wish to adhere, the informal norms by which they will negotiate, and the benchmarks they will use to guide them toward a settlement—to achieve a fair or reasonable deal or to get the negotiation concluded quickly.

5. Knowing Your Alternatives (BATNAs

Alternatives (i.e., best alternatives to this negotiated agreement, or BATNAs) are other agreements negotiators could achieve and still meet their needs. Alternatives are very im-portant in both distributive and integrative processes because they define whether the cur-rent outcome is better than another possibility (with a different negotiating partner).

Nonspecific Compensation

Another way to generate alternatives is to allow one person to obtain his objectives and compensate the other person for accommodating his interests.

-Some Common Objective or Goal

Common Goal-is one that all parties share equally, each one benefiting in a way that would not be possible if they did not work together. Share Goal- one that both parties work toward but that benefits each party differently. Joint Goal- one that involves individuals with different personal goals agreeing to combine them in a collective effort.

Intrapersonal or intrapsychic conflict

Conflict that occurs within an individual. Sources of conflict can include ideas, thoughts, emotions, values, predispositions, or drives that are in conflict with each other. We want an ice cream cone badly, but we know that ice cream is very fattening

Disentangle the relationship from the substance; deal directly with the people problem.

Deal with people problems by changing how you treat people; don't try to solve them with substantive concessions.

7. Analyzing and Understanding the Other Party's Goals, Issues, and Resistance Points

Earlier in this section, we discussed the importance of assigning priorities to one's own goals and objectives. Gathering information about the other party is also a critical step in preparing for negotiation. Learning the other's issues, preferences, priorities, inter-ests, alternatives and constraints is almost as important as determining one's own. What information does one party need about the other party in order to prepare effec-tively? Several key pieces of background information will be of great importance, including their • Broad, overall goals and objectives. • Issues and the likely bargaining mix. • Interests and needs. • Resistance point and alternative(s).

2. Defining the Major Issue Related to Achieving the Goal

This step itself usually begins with an analysis of what are the key issues to be discussed in the negotiation. The number of issues in a negotiation, together with the relationship between the negotiator and the other party, are often the primary determinant of whether one uses a distributive or integrative strategy. Any point along the A-C-B line represents a possible solution to the single-issue negotiation. However, multiple issues may allow the parties to "create value" by find-ing solutions that improve the outcomes for both parties. Single-issue negotiations and the absence of a long-term relationship with the other party are the strongest drivers of claiming-value (distributive) strategies; multiple-issue negotia-tions and the importance of a long-term relationship with the other party are the strongest drivers of creating-value (integrative) strategies

Cut the Costs for Compliance

Through cost cutting, one party achieves her objectives and the other's costs are minimized if she agrees to go along.

Negotiations occur for several reasons:

To agree on how to share or divide a limited resource such as land, or money, or time. To create something new that neither party could attain on his or her own To resolve a problem or dispute between the parties

1. Separate inventing from deciding

To help invent a brainstorming session can help. Before Brainstorming During Brainstorming After Brainstorming Consider Brainstorming with the other side.

-Prescription

To invent creative options, then, you will need to: 1. Separate the act of inventing options from the act of judging them 2. Broaden the options on the table rather than look for a single answer. 3. Look for mutual gain 4. Invent ways of making their decisions easy

2. Surface Interests and Needs

Types of Interests -Substantive Interests (focal issues that are under negotiation, price or rate) -Process Interests (How the negotiation unfolds. Distributive vs integrative) -Relationship Interests Some Observations on Interests (The potential ongoing relationship) 1. There is almost always more than one type of interest underlying a negotiation. 2. Parties can have different types of interests at stake. 3. Interests often stem from deeply rooted human needs or values. 4. Interests can change 5. Surfacing interests (Numerous ways to surface) 6. Surfacing interests is not always easy or to one's best advantage.

Defining the Negotiating Goal

We pointed out that goals can be substantive (tangible), psychological (intangible), or procedural (how we get to agreement). Goals can have both direct and indirect effects on the choice of strategy. Knowing one's goal is absolutely the first and most important step in developing a strategy and executing a negotiation.

Concession

When one party agrees to make a change in his or her position. Concessions restrict the range of options within which a solution or agreement is reached; when someone makes a concession, the bargaining range is further concentrated.

Distributive Situation

When the goals of two or more people are zero-sum so that one can gain only at the other's expense. There is a negative correlation between their goal attainments.

Find a Bridge Solution

When the parties are able to invent new options that meet all their respective needs they have created a bridge solution.

Interdependence

When the parties depend on each other to achieve their own preferred outcome.

Mutual-gains Non-zero sum, or Integrative situation

Where there is a positive correlation between the goal attainments of both parties.

Modify the Resource Pie

While expanding the resource pie may be attractive, it does not always work because the environment may not be plentiful enough.

Negotiators are people first

You are dealing with human beings that have emotions, deeply held values, and different backgrounds and viewpoints, and can be unpredictable. It is important to deal with others sensitively as human beings prone to human reactions can be disastrous for a negotiation.

Independent Parties

are able to meet their own needs without the help and assistance of others

Levels of Conflict

intrapersonal interpersonal intragroup Intergroup

Direct Assessment

obtain information directly from the other party about their target and resistance point

Indirect Assessment

obtain information indirectly about the background factors behind an issue

Schedule Manipulation

the negotiation scheduling process can often put one party at a considerable disadvantage, and the negotiation schedule can be used to increase time pressure on negotiators

Dependent Parties

they must rely on others for what they need because they need help

Disruptive Action

to increase the costs of not reaching a negotiation

Alliance with Outsiders

to involve other parties who can somehow influence the outcome in the process

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

Negotiation is a combination of claiming and creating value processes.

1. Negotiators must be able to recognize situations that require more of one approach than the other. 2.Negotiators must be versatile in their comfort and use of both major strategic approaches. 3. Negotiator perceptions of situation tend to be biased toward seeing problems as more distributive/competitive than they really are.

Manipulate the actual costs of delay or termination

1. Plan distributive action 2. For an alliance with outsiders 3. Manipulate the scheduling of negotiations.

Functions and 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 the conflict

Five major strategies for conflict management have been commonly identified in the dual concerns model.

1. Contending 2. Yielding 3. Inaction 4. Problem Solving 5. Compromising

Negotiation Planning Guide

1. Define the negotiating goal. 2. List the major issues in the negotiation related to achieving the goal. 3. Define their relative importance of each issue, and define the bargaining mix. 4. Define the interests. 5. Define the alternatives (BATNAs). 6. Define your limits, including a resistance point. 7. Describe your understanding of the other party's goals, issues, and resistance points. 8. Set your targets and opening bid. 9. Assess the social context of the negotiation. 10. Outline how you will present the issues to the other party: what to say and how to say i

Getting Ready to Implement the Strategy: The Planning Process

1. Define the negotiating goal. 2. Defining the major issues related to achieving the goal. 3. Assembling the issues, ranking their importance, and defining the bargaining mix. 4. Defining the interests. 5. Knowing your alternatives (BATNAs). 6. Knowing your limits, including a resistance point. 7. Analyzing and understanding the other party's goals, issues, and resistance points. 8. Setting one's own targets and opening bids. 9. Assessing the social context of negotiation (for example, who is at the table, who is not at the table but has a strong interest in the negotiation outcomes, and who is observing and critiquing the negotiation). 10. Presenting the issues to the other party: substance and process.

Priori-tization includes two steps:

1. Determine which issues are most important and which are less important. 2. Determine whether the issues are linked together or separate.

Value may be created in numerous ways

1. Differences in interests 2. Differences in judgments about the future. 3. Differences in risk tolerance 4. Differences in time preference

-The Motivation and Commitment to Work Together

1. Negotiators can recognize that they share a common fate and discuss that there is more to be gained by working together than by working separately. The parties can emphasize that they may have to work together after the negotiations are over and will continue to benefit from the relationship they have created. 2. Negotiators can engage in commitments to each other before the negotiations begin; such commitments have been called pre-settlement settlements and are distinguished by three major characteristics 3. Negotiators could create an umbrella agreement that provides a framework for future discussions. Stefanos Mouzas suggests that umbrella agreements manage three nego-tiation challenges

3 Resons why every negotiator should understand distributive bargaining

1. Negotiators face some independent situations that are distributive, and to do well in them they need to understand how they work. 2. Many people use distributive bargaining strategies and tactics almost exclusively they need to understand how to counter their effects. 3. Every negotiation situation has the potential to require distributive bargaining skills when at the claiming-value stage.

three tactics to elicit information from the other negotiator when he or she mistrusts you:

1. Share information and encourage reciprocity. 2. Negotiate multiple issues simultaneously. Negotiating several offers simultaneously allows negotiators to identify relative priorities of the other negotiator, as well as obtain some information about his interests. 3. Make multiple offers at the same time. A third approach to obtaining information when the other party is distrusting is to make two or three offers at the same time. These offers should be the same value to you.

Factors can affect the process of distributive bargaining, four propositions

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.

Several characteristics common to all negotiation situations

1. There are two or more parties. 2. There is a conflict of needs and desires between two or more parties. What one wants is not necessarily what the other one wants. 3. The parties negotiate by choice, they think they can get a better deal by negotiating rather than accepting what the other side will give them or let them have. 4. We expect a give and take process. 5. The parties prefer to negotiate and search for agreement rather than to fight openly, have one side dominate, break off contact, or take their dispute to a higher authority. 6. Successful negotiation involves the management of tangibles (the price or terms of agreement) and also the resolution of intangibles (the need to win, the need to look tough of competent, the need to defend).

Be sensitive to two factors when creating offers

1. Value Characteristics how much the issues and options of different issues are worth to a negotiator 2. Content characteristics, which involve the way the negotiation is constructed (number of issues, possible options, etc.).

Direct Effects of Goals on Choice of Strategy

1. Wishes are not goals, especially in negotiation. Wishes may be related to interests or needs that motivate goals (see Chapter 3), but they are not goals themselves. A wish is a fantasy, a hope that something might happen; a goal is a specific, focused target that one can realistically develop a plan to achieve. 2. One's goals may be, but are not necessarily, linked to the other party's goals. Linkage between two parties' goals defines an issue to be settled (see the discussion of issues later in this chapter) and is often the source of conflict. At the beginning, my goal is to get a car cheaply, and the seller's goal is to sell it at the highest possible price (and profit); thus, the "issue" is the price I will pay for the car. If I could achieve my goal by myself, without the other party, I probably wouldn't need to negotiate. 3. There are boundaries or limits to what "realistic" goals can be (see the discussion of walkaways and alternatives later in this chapter). If what we want exceeds these lim-its (i.e., what the other party is capable of or willing to give), we must either change our goals or end the negotiation. Goals must be attainable. If my goal—"to buy this car at a cheap price"—isn't possible because the seller won't sell the car "cheaply" (notice that "cheaply" is an ambiguous goal at this point), I'm going to either have to change my goal or find another car to buy, (and perhaps from a different dealer). 4. Effective goals must be concrete, specific, and measurable. The less concrete, spe-cific and measurable our goals are, the harder it is to (a) communicate to the other party what we want, (b) understand what the other party wants, and (c) determine whether any given offer satisfies our goals.

Key Steps in the Integrative Negotiation Process

1. identify/define the problem 2. understand the problem fully (identify interests/needs on both sides) 3. generate alternative solutions 4. evaluate and select among alternatives