Chapter 01
The Nature of Negotiation
Overview
This chapter is the foundation for the nature of
negotiations. Friends, children,
businesses, police, nations, everyone negotiates almost daily. Negotiations occur for two reasons: (1) to
create something new that neither party could do on his or her own, or (2) to
resolve a problem or dispute between the parties. Perspectives used to understand different
aspects of negotiations include theory, research from economics, psychology,
political science, communication, labor relations, law, sociology, and
anthropology.
Learning Objectives
- Authors’
style and approach.
- Characteristics
of a negotiation situation.
- Interdependence
in negotiation.
4. Mutual
adjustment throughout negotiations and making and interpreting concessions.
- Value
claiming and value creation.
- Definition
and levels of conflict.
- Major
strategies for conflict management.
I.
Authors’
Style and Approach
A.
Use of terminology.
1. Bargaining: describes the competitive win-lose
situations (haggling).
2. Negotiation: refers to win-win situations (to find
mutually acceptable solutions).
B.
“Heart of Negotiation” ̶ give-and-take approach.
1. Give-and-take is extremely important, but
negotiation is a very complex social process, where many of the most important
factors that shape the negotiation occur before
the negotiation, or shape the context around
the negotiation.
C.
Insights drawn from three sources.
1. Personal experience.
2. Media – television,
radio, newspaper, magazine, and Internet.
3. Social science research.
II.
Joe and Sue
Carter
An illustrative
tale of negotiation.
III. Characteristics
of a negotiation situation
A. Characteristics
common to all negotiation situations.
1. There
are two or more parties, individuals, groups or organizations.
2. There
is a conflict of needs and desires between two or more parties, and the parties
must search for a way to resolve the conflict.
3. Parties
negotiate because they think they can get a better deal by negotiating than by
simply accepting what the other side will voluntarily give them or let them
have.
4. When
negotiating, a give-and-take is expected.
To reach an agreement, both sides will modify their opening statement to
find a middle ground; they compromise.
5. The
parties prefer to negotiate and search for agreement rather than to fight
openly, have one side dominate and the other capitulate, permanently break off
contact, or take their dispute to a higher authority to resolve it.
6. Successful
negotiation involves the management of tangibles and also the resolution
of intangibles.
a) Tangible factors: the price or the terms of
agreement.
b) Intangible factors: The underlying
psychological motivations that may directly or indirectly influence the parties
during a negotiation. They have an enormous influence on negotiation processes
and outcomes, so it is crucial for negotiators to understand how they affect
decision making and tangible outcomes. Examples of intangible factors include:
(1) The need to
“win” or avoid losing.
(2) The need to
look “good” to those you’re representing.
(3) The need to
defend an important principle or precedent in a negotiation.
(4) The need to
appear “fair” or “honorable” or to protect one’s reputation; and
(5) The need to
maintain a good relationship.
IV. Interdependence
A. Working
interdependently allows parties to achieve a possible outcome that is better
than they could achieve by working on their own.
B. Most
relationships between parties may be characterized in one of three ways:
independent, dependent, or
interdependent.
1. Independent
parties are able to meet their own needs
without the help and assistance of others.
2. Dependent
parties must rely on others for what they need; the dependent party must
accept and accommodate to that provider’s whims and idiosyncrasies.
3. When
the parties depend on each other to
achieve their own preferred outcome they are
interdependent; they are
characterized by interlocking goals.
C. Types of interdependence affect outcomes.
1. The
interdependence of people’s goals, and the structure of the situation in
which they are going to negotiate, strongly shapes negotiation processes and
outcomes.
a) Zero-sum
distributive: Competitive situation where there is only one winner.
b) Non-zero-sum
integrative: Goals are linked to achieve a mutual gain.
D. Alternatives shape interdependence.
1. BATNA:
Best Alternative to a Negotiated Agreement.
a) Whether you should or should not agree on
something in a negotiation depends upon the attractiveness of your best
available alternatives.
b) Negotiators need to understand their BATNA,
as well as the other parties’.
V.
Mutual Adjustment
A. Interdependent
parties have an influence on the others’ outcomes and decisions. As parties act to influence each other in a
negotiation, they engage in a mutual adjustment.
1. It
is important to recognize that negotiation
is a process that transforms over time, and mutual adjustment is one of the key causes of the changes that occur
during a negotiation.
2. An
example would be to look at Sue Carter’s job situation. She would like to leave her present employer
and take an available job at a large multinational bank. The job description announced the salary as
“competitive.” Her prospective manager,
Max, perceives her as a desirable candidate and is ready to offer her the job. She did not state her minimally acceptable
salary. She has decided the bank will
pay no more than necessary and that her minimum would be accepted quickly.
a) A
closer look reveals that she is making her decision on how she anticipates Max
will react to her actions.
b) Sue
is assessing the indirect impact of behavior on herself.
c) Sue
is choosing among behavioral options with a thought: not only how they will
affect Max, but also how they will then lead Max to act toward Sue.
d) Sue
knows that Max believes she will act in this way and makes her decision on the
basis of this belief.
3. The
effective negotiator needs to understand how people will adjust and readjust, and how the negotiations might twist and
turn, based on one’s own moves and
the others’ responses.
4. The
best strategy for successful mutual adjustment to the other is grounded in the assumption that the
more information one has about the other person, the better.
5. Mutual adjustment and concession making.
a) When
one party alters his/her position based on the other party’s suggestion to do
so, a concession has been made.
b) Concessions
constrain the bargaining range.
6. Two
dilemmas that all negotiators face in mutual adjustment:
a) Dilemma
of honesty – how much of the truth to tell the other party?
b) Dilemma
of trust – how much should negotiators believe what the other party tells them?
7. Two
efforts that help a negotiation create trust and beliefs:
a) Outcome
perception.
b) Process
perception.
8. The
pattern of give-and-take is also essential to joint problem solving in most
interdependent relationships. Satisfaction with negotiation is as much
determined by the process through which an agreement is reached as with the
actual outcome obtained.
VI. Value Claiming and Value Creation
A. Distributive
bargaining.
1. The
purpose this type of negotiation is to claim value—to do whatever is
necessary to claim the reward or gain the largest piece possible.
B. Integrative
bargaining.
1. The
purpose of this approach to negotiation is to create value, or find a way for all parties to meet their goals and
share the reward.
C. Most
negotiations are a combination of claiming and creating value. There are significant implications to this:
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 strategic approaches;
3. Negotiator
perceptions of situations tend to be biased toward seeing problems as more
distributive / competitive than they really are.
D. Successful
coordination of interdependence has the potential to lead to synergy,
which is the notion that “the whole is greater than the sum of
its parts.”
E. Lax
and Sebenius in their book “The Manager as Negotiator,” describe key
differences among negotiators:
1. Differences
in interests;
2. Differences in judgments about the future;
3. Differences in risk tolerance/aversion; and
4. Differences time preference.
F. Negotiators
need to be aware of the potential differences between them can serve as
barriers to reaching an agreement.
Exploring common and different interests to create value can set the
foundation for a lasting agreement.
VII.
Conflict
A. Definitions
of conflict may be a sharp disagreement or opposition, as of interests, ideas,
etc. and includes the perceived divergence of interest or a belief that the
parties’ current aspirations cannot be achieved simultaneously (both from
Pruitt and Rubin, 1986).
B. Levels
of conflict:
1. Intrapersonal
or intrapsychic conflict occurs within an individual. Sources of conflict can include ideas,
thoughts, emotions, values, predispositions, or drives that are in conflict
with each other.
2. Interpersonal
conflict that occurs between bosses and subordinates, spouses, siblings, or
roommates.
3. Intragroup
conflict is within a small group – among team and committee members and within
families, classes, fraternities and sororities and work groups.
4. Intergroup
conflict between unions and management, warring nations, feuding families, or
community action groups and government authorities.
C. 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
difference, minimized similarities.
8. Escalation
of the conflict.
D. Functions
and benefits of conflict:
1. Discussing
conflict makes organizational members more aware and able to cope with problems.
2. Conflict
promises organizational change and adaptation.
3. Conflict
strengthens relationships and heightens morale.
4. Conflict
promotes awareness of self and others.
5. Conflict
enhances personal development.
6. Conflict
encourages psychological development—it helps people become more accurate and
realistic in their self-appraisals.
7. Conflict
can be stimulating and fun.
E. Factors that make conflict easy or difficult
to manage.
VIII.
Effective
Conflict Management
A. The
two-dimensional framework is represented as the dual concerns model. The model
postulates that individuals in conflict have two independent levels of concern:
1. Concern
about their own outcomes.
2. Concern
about the other’s outcomes.
B. Five
major strategies for conflict management have been identified in the dual concerns
model:
1. Contending
(also called competing or dominating).
2. Yielding
(also called accommodating or obliging).
3. Inaction
(also called avoiding).
4. Problem
solving (also called collaborating or integrating).
5. Compromising
is the strategy located in the middle.
Summary
People negotiate almost daily, sometimes for major things
like a new job, other times for relatively minor things, such as who will take
out the trash. Negotiations occur to
create something new or to resolve a problem or dispute between parties.
Characteristics common to all negotiation situations include
two or more individuals, groups, or organizations, interpersonal, intragroup,
or intergroup process. There is a
conflict of interest between two or more parties. The parties negotiate because they think they
can use some form of influence to get a better deal. The parties prefer to search for agreement
rather than fight openly, have one side capitulate, permanently break off
contact, or take their dispute to a higher authority to resolve it. When you negotiate, expect to give and
take. Successful negotiation involves
the management of intangibles and well as the resolving of intangibles.
Interdependent relationships are characterized by
interlocking goals; the parties need each other in order to accomplish their
goals. A necessary step in all
negotiation is to clarify and share information about what both parties really
want as outcomes. When one party accepts
a change a concession has been made.
When a party makes a concession, the bargaining range is confined closer
to one or both sides’ limits or resistance point. Two dilemmas all negotiators face are honesty
and trust. Negotiators must understand the
nature of the interdependence of the parties.
Negotiators are seldom identical and may include differences in
interest, opinions, risk aversion, and time preferences. The other potential consequence of
interdependent relationships is conflict, which has several levels including
intrapersonal or intrapsychic, interpersonal, intragroup and intergroup. One of the most popular areas of conflict
management research and practice has been to define the different ways that the
parties themselves can manage conflict.
Each conflict management strategy has its advantages and disadvantages,
and is more or less appropriate given the type of conflict and situation in
which the dispute occurs.
