Chapter 04
Negotiation: Strategy and Planning
Overview
In this chapter, we discuss what negotiators should do before
opening negotiations. Effective strategy and planning are the most critical
precursors for achieving negotiation objectives. With effective planning and
target setting, most negotiators can achieve their objectives; without them,
results occur more by chance than by negotiator effort.
Regrettably,
systematic planning is not something that most negotiators do willingly.
Although time constraints and work pressures make it difficult to find the time
to plan adequately, for many planning is simply boring and tedious, easily put
off in favor of getting into the action quickly. It is clear, however, that devoting insufficient time to planning is
one weakness that may cause negotiators to fail.
The discussion of strategy
and planning begins by exploring the broad process of strategy development,
starting with defining the negotiator’s goals and objectives then moves to
developing a strategy to address the issues and achieve one’s goals. Finally,
we address the typical stages and phases of an evolving negotiation and how
different issues and goals will affect the planning process.
Learning Objectives
1.
Goals – The focus that drives a negotiation strategy.
2.
Strategy – The overall plan to achieve one’s goals.
3.
Getting ready to implement the strategy – The planning
process.
I.
Goals – The
Focus That Drives a Negotiation Strategy
A. Direct effects of goals on choice of strategy.
1. There are four important aspects to understand about how goals affect
negotiations.
a) Wishes are not goals,
especially in negotiation.
b) Goals are often linked to the
other party’s goals.
c) There are boundaries or limits to what goals
can be.
d) Effective goals must be concrete, specific
and measurable. If they are not, then it
will be hard to:
(1) Communicate
to the other party what we want;
(2) Understand
what the other party wants;
(3) Determine
whether an offer on the table satisfies our goals.
2.
Goals can be intangible or procedural.
3. The
criteria used to determine goals depend on your specific objectives and your
priorities among multiple objectives.
B. Indirect
effects of goals on choice of strategy.
1. 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 a
concern for achieving a substantive outcome only.
2. Negotiation
goals that are complex or difficult to define may require a substantial change
in the other party’s attitude. In most
cases, progress will be made incrementally, and may depend on establishing a
relationship with the other party.
II.
Strategy
versus Tactics
A. Strategy
versus Tactics.
1. A
major difference between strategy and tactics is that of scale, perspective or
immediacy.
2. Tactics
are short-term, adaptive moves designed to enact or pursue broad strategies,
which in turn provide stability, continuity, and direction for tactical
behaviors.
3. Tactics
are subordinate to strategy: they are structured, directed, and driven by
strategic considerations.
4. Accommodation,
competition, and collaboration.
a) Accommodation is as much a win-lose strategy
as competition, although it has a decidedly different image it involves an
imbalance of outcomes, but in the opposite direction. (“I lose, you win” as opposed to “I win, you
lose.”).
b) Competition is distributive win-lose
bargaining.
c) Collaboration is integrative or win-win
negotiation.
d) There are drawbacks to these strategies if
applied blindly, thoughtlessly or inflexibly:
(1) Distributive
strategies tend to create “we-they” or “superiority-inferiority” patterns,
which may result in a distortion of the other side’s contributions, as well as
their values, needs and positions.
(2) 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.
(3) Accommodative
strategies may generate a pattern of constantly giving in to keep the other
happy or to avoid a fight.
III. Getting
Ready to Implement the Strategy: The Planning Process
Effective
planning requires hard work in considering the ten key steps for success.
A. Defining
the issues or negotiation goal.
1. Usually
begins with an analysis of what is to be discussed in the negotiation.
2. The
number of issues in a negotiation, along with the relationship between the
negotiator and the other party, are often the primary determinant of whether
one uses a distributive or integrative strategy.
3. In any negotiation,
a complete list of the issues at stake is best derived from the following sources:
a) An analysis of
all the possible issues that need to be decided.
b) Previous
experience in similar negotiations.
c) Research
conducted to gather information.
d) Consultation with
experts in that industry.
B.
Defining the major issue related to achieving the goal.
1. 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. Single-issue negotiations tend to dictate distributive negotiations
because the only real negotiation issue is the price or “distribution” of that
issue. In contrast, multiple-issue negotiations lend themselves more to
integrative negotiations because parties can use processes such as logrolling
to create issue “packages” that are mutually beneficial.
C. Assembling the issues and defining the
bargaining mix.
1.
The combination of lists from each side in a negotiation
determines the bargaining mix.
2.
There are two steps a negotiator can use to prioritize
the issues on an agenda:
a) Determine which
issues are most important and which are less important.
b) Determine whether
the issues are linked together or are separate.
D. Defining the interests.
1. Interests may be:
a) Substantive,
that is, directly related to the focal issues under negotiation.
b) Process-based,
that is, related to how the negotiators behave as they negotiate.
c) Relationship-based,
that is, tied to the current or desired future relationship between the
parties.
2. Interests may also be based on intangibles of
negotiation.
E. Knowing your alternatives (BATNAs).
1. 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 important in both
distributive and integrative processes because they define whether the current
outcome is better than another possibility (with a different negotiating partner).
F. Knowing your
limits, including a resistance point.
2. Good preparation requires that you establish
two clear points:
d) Resistance point
– the place where you decide that you should absolutely stop the negotiation
rather than continue.
e) Alternatives –
other agreements negotiators could achieve and still meet their needs. Alternatives define whether the current
outcome is better than another possibility.
G. Analyze and
understand the other party's goals, issues and resistance points.
1. Gathering information about the other party is also a critical step in
preparing for negotiation. Learning the other’s issues, preferences,
priorities, interests, alternatives and constraints is almost as important as
determining one’s own.
2. What
information does one party need about the other party in order to prepare
effectively? Several key pieces of background information will be of great
importance, including their:
a) Broad,
overall goals and objectives.
b) Issues and
the likely bargaining mix.
c) Interests and
needs.
d) Resistance
point and alternative(s).
3. The other party's goals.
Asking the other party to discuss
their goals (either at the table or before negotiations begin), or gathering
data about the other party prior to negotiations, are two common ways to gather
this data. Most importantly, we should attempt to understand whether the other
party has the same goals as we do.
4. The other party's issues and bargaining mix.
The more the
negotiator can get even a general sense of how much the other is capable of
addressing and meeting the party’s issues or needs, and of what issues they
will bring to the bargaining table, the better we can predict how the process
is likely to unfold.
5. The other party's interests and needs.
1. In addition to learning about
the party’s major issues and resources, we also need to get information about
his or her current interests and needs (see Chapter 3). This information may be
obtained through a variety of approaches:
a) Conducting a
preliminary interview, including a broad discussion of what the other party
would like to achieve in the upcoming negotiations (focus on broad interests,
not just issues).
b) Anticipating
the other party’s interests (as if you were “in their shoes”).
c) Asking others
who know or have negotiated with the other party.
d) Reading how
the other party portrays himself or herself in the media.
6. The other party's resistance point and
alternatives.
If the other party has a strong
and viable alternative, he or she will probably be confident in negotiation,
set high objectives, and be willing to push hard for those objectives. In
contrast, if the other party has a weak alternative, then she or he will be
more dependent on achieving a satisfactory agreement with you and be less
likely to push as hard.
H. Setting one's
own targets and opening bids.
After negotiators have defined the
issues, assembled a tentative agenda, and consulted others as appropriate and
necessary, the next step is to define two other key points: the specific target
point, where one realistically expects to achieve a settlement, and the opening
bid, representing the best deal one can hope to achieve.
1. Setting a target.
When setting a target – there are
several principles to keep in mind:
a) Targets
should be specific, difficult but achievable, and verifiable.
b) Target
setting requires proactive thinking about one’s own objectives.
c) Target
setting may require considering how to package several issues and objectives.
d) Target
setting requires an understanding of trade-offs and throwaways.
2. Setting an opening bid.
An opening bid may be the best
possible outcome, an ideal solution, something even better than was achieved
last time. It is easy to get overly confident, however, and to set an opening
that is so unrealistic that the other party immediately laughs, gets angry, or
walks away before responding. See Box 4.4 for helpful advice on the setting of
an opening bid.
I. Assessing
the social context of a negotiation.
1. When people negotiate in a professional
context, there may be more than two parties.
a) There may be more than two negotiators at the
table. Multiple parties often lead to
the formation of coalitions.
b) Negotiators also have constituents who will
evaluate and critique them.
c) Negotiation occurs in a context of rules – a
social system of laws, customs, common business practices, cultural norms, and
political cross-pressures.
2. “Field analysis” can be used to assess all
the key parties in a negotiation.
a) Who is, or should
be, on the team on my side of the field?
b) Who is on the
other side of the field?
c) Who is on the
sidelines and can affect the play of the game? Who are the negotiation equivalents of
owners, managers and strategists?
d) Who is in the
stands? Who is watching the game, is interested in it, but can only indirectly affect
what happens?
e) What is going on
in the broader environment in which the negotiation takes place? A number of context issues can affect
negotiation:
(1) What is the history of the relationship with
the other party, and how does it affect the overall expectations they bring to
this negotiation.
(2) What kind of a relationship with the other
party is expected or desired for the future, and how do these expectations
affect the current negotiation.
(3) How often do we expect to negotiate in the
future?
(4) What are the deadlines or time limits?
(5) What are the “rules of the game” by which this
agreement will be managed?
(6) What is common and acceptable practice in the
ethical system in which the deal is being done?
J. Presenting
issues to the other party.
1. Presenting and framing the issues.
Because of the breadth and
diversity of issues that can be included in negotiations, it is not possible to
specify all the procedures that can be used to assemble information. There are,
however, some good general guides that can be used. A negotiator can ask these
questions:
a) What facts support my point of view?
b) Whom may I consult or talk with to help me
elaborate or clarify the facts?
c) Have these issues been negotiated before by
others under similar circumstances?
d) What is the other party’s point of view
likely to be?
e) How can I develop and present the facts so
they are most convincing?
2. When planning the process and structuring the
context a negotiator should consider a number of elements of protocol and
process.
1. The agenda to follow. Pendergast (1990) suggests five major
concerns to be considered in developing a negotiation agenda:
a) Scope: What issue should be
considered?
b) Sequence: In what order
should those issues be addressed?
c) Framing: How should the
issues be presented?
d) Packaging: Should the issues
be taken one at a time, or in various groupings/packages?
e) Formula: Should we strive to
first get an agreement on general principles, or should we immediately begin to
discuss each of the issues?
2. The location of negotiation.
3. The time period of negotiation.
4. What might be done if negotiation fails?
5. How will we keep track of what is agreed to?
6. How can we modify the deal if necessary?
Summary
Planning is a critically
important activity in negotiation. As we noted at the outset, however,
negotiators frequently fail to plan for a variety of reasons. Effective
planning allows negotiators to design a road map that will guide them to
agreement. While this map may frequently need to be modified and updated as
discussions with the other side proceed, and as the world around the
negotiation changes, working from the map is far more effective than attempting
to work without it.
We began this chapter with
a basic understanding of the concepts of strategy. We then discussed the importance of setting
clear goals, based on the key issues at stake.
When negotiators are able
to consider and evaluate each of ten factors of protocol, they will know what
they want and will have a clear sense of direction on how to proceed. This
sense of direction, and the confidence derived from it, is a very important
factor in affecting negotiating outcomes.
