CHAPTER ONE The Nature of Negotiation 4-2 Introduction Negotiation is something that everyone does, almost daily 4-3 Negotiations 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 4-4 Approach to the Subject 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 hose that occur when parties try to find a mutually acceptable solution to a complex conflict 4-5 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 4-6 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 4-7 Characteristics of a Negotiation Situation • 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 4-8 Interdependence In negotiation, parties need each other to achieve heir 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 4-9 Interdependence • 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 4-10 Types of Interdependence Affect Outcomes • Interdependence and the structure of the situation hape processes and outcomes – Zero-sum or distributive – one winner – Non-zero-sum or integrative – a mutual gains situation 4-11 Alternatives Shape Interdependence • Evaluating interdependence depends heavily on the alternatives to working together • The desirability to work together is better for outcomes • Best available alternative: BATNA (acronym for Best Alternative to a Negotiated Agreement) 4-12 Mutual Adjustment • Continues throughout the negotiation as both parties act to influence the other • One of the key causes of the changes that occur during a negotiation • The effective negotiator needs to understand how eople will adjust and readjust and how the negotiations might twist and turn, based on one’s own moves and the other’s responses 4-13 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 4-14 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 4-15
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 4-16 Value Claiming and Value Creation • Most actual negotiations are a combination of claiming and creating value processes – Negotiators must be able to recognize situations that require more of one approach than the other – Negotiators must be versatile in their comfort and use of both major strategic approaches Negotiator perceptions of situations tend to be biased toward seeing problems as more distributive/competitive than they really are 4-17 Value Claiming and Value Creation Value differences that exist between negotiators include: • • • • Differences in interest Differences in judgments about the future Differences in risk tolerance Differences in time preferences 4-18 Conflict 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” 4-19 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. 4-20 Levels of Conflict • 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 -21 Dysfunctions of Conflict 1. 2. 3. 4. 5. 6. 7. 8. Competitive, win-lose goals Misperception and bias Emotionality Decreased communication Blurred issues Rigid commitments Magnified differences, minimized similarities Escalation of conflict 4-22 Functions and Benefits 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 eople become more accurate and realistic in their self-appraisals. 7. Can be stimulating and fun. 4-23 The Dual Concerns Model 4-24 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 4-25 Styles of Conflict Management . 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 CHAPTER TWO Strategy and Tactics of Distributive Bargaining 4-27 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 kills at the “claiming-value” stage 4-28 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 4-29 The Distributive Bargaining Situation Situation includes: • Starting points (initial offers) • Target points • Resistance points (walkaway) • Alternative outcomes 4-30 The Distributive Bargaining Situation Party A – Seller Walkaway Point Initial Offer Party B – Buyer Target Point Target Point Asking Price Walkaway Point 4-31 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 4-32 The Distributive Bargaining Situation Party A – Seller Walkaway Point Target Point Alternative Initial Offer Party B – Buyer Asking Price Alternative Target Point Walkaway Point 4-33 Fundamental Strategies • 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 4-34 Keys to the Strategies The keys to implementing any of the four strategies are: • Discovering the other party’s resistance point • Influencing the other party’s resistance point 4-35 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 4-36
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 4-37 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 4-38 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 uits your needs 4-39 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 4-40 Positions Taken During Negotiations • Opening offers – Where will you start? • Opening stance – What is your attitude? • Competitive? Moderate? • Initial concessions – Should any be made? If so, how large? 4-41 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” 4-42 Commitments: Tactical Considerations • Establishing a commitment – Three properties: • Finality • Specificity • Consequences • Preventing the other party from committing prematurely – Their commitment reduces your flexibility 4-43 Ways to Create a Commitment • • • • Public pronouncement Linking with an outside base Increase the prominence of demands Reinforce the threat or promise 4-44 Commitments:
Tactical Considerations • 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 4-45 Closing the Deal • • • • • Provide alternatives (2 or 3 packages) Assume the close Split the difference Exploding offers Deal sweeteners 4-46 Dealing with Typical Hardball Tactics • Four main options: – Ignore them – Discuss them – Respond in kind – Co-opt the other party (befriend them) 4-47 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) 4-48 Typical Hardball Tactics • • • • Chicken Intimidation Aggressive Behavior Snow Job (overwhelm the other party with information) 4-49 Summary 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 CHAPTER THREE Strategy and Tactics of Integrative Negotiation 4-51 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 4-52 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 4-53 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 4-54 Claiming and Creating Value 4-55 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 4-56 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 4-57 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 4-58
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 Non specific compensation Subordination • Generate options to the problem as a given: – Brainstorming – Surveys – Electronic brainstorming 4-59 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 4-60 Evaluate and Select Alternatives • Take time to “cool off” • Explore different ways to logroll • Exploit differences in expectations and risk/time preferences • Keep decisions tentative and conditional until a final proposal is complete • Minimize formality, record keeping until final agreements are closed 4-61 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 -62 Factors That Facilitate Successful Integrative Negotiation • Trust • Clear and accurate communication • An understanding of the dynamics of integrative negotiation CHAPTER FOUR Negotiation: Strategy and Planning 4-64 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 4-65 The Direct and Indirect Effects of Goals on Strategy • Direct effects – – – – Wishes are not goals Goals are often linked to the other party’s goals
There are limits to what goals can be Effective goals must be concrete/specific • Indirect effects – Forging an ongoing relationship 4-66 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? 4-67 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 4-68 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 4-69 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? 4-70 The Nonengagement Strategy:
Avoidance • If one is able to meet one’s needs without negotiating at all, it may make sense to use an avoidance strategy • It simply may not be worth the time and effort to negotiate • The decision to negotiate is closely related to the desirability of available alternatives 4-71 Active-Engagement Strategies • Competition – distributive, win-lose bargaining • Collaboration – integrative, win-win negotiation • Accommodation – involves an imbalance of outcomes (“I lose, you win”) 4-72 Key Steps to an Ideal Negotiation Process 4-73 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 4-74 Key Steps to an Ideal Negotiation Process • 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 4-75 Getting Ready to Implement the Strategy: The Planning Process • Define the issues • Assemble the issues and define the bargaining ix – The bargaining mix is the combined list of issues • Define your interests – Why you want what you want 4-76 Getting Ready to Implement the Strategy: The Planning Process • 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 4-77 The Social Context of Negotiation: “Field” Analysis 4-78 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 4-79 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 4-80 Getting Ready to Implement the Strategy: The Planning Process • 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? 4-81 Summary on the Planning Process “… planning is the most critically important activity in negotiation. ” CHAPTER FIVE Perception, Cognition, and Emotion 4-83 Perception, Cognition, and Emotion in Negotiation The basic building blocks of all social encounters are: • Perception • Cognition – Framing – Cognitive biases • Emotion 4-84 Perception Perception is: • The process by which individuals connect to their environment. A “sense-making” process 4-85 The Process of Perception 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 4-86 Perceptual Distortion • Four major perceptual errors: – Stereotyping – Halo effects – Selective perception – Projection 4-87
Stereotyping and Halo Effects • 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 4-88 Selective Perception and Projection • 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 4-89 Framing • Frames: – 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 4-90 Types of Frames • • • • • • • Substantive Outcome Aspiration Process Identity Characterization Loss-Gain 4-91 How Frames Work in Negotiation Negotiators can use more than one frame • Mismatches in frames between parties are sources of conflict • Parties negotiate differently depending on the frame • Specific frames may be likely to be used with certain types of issues • Particular types of frames may lead to particular types of agreements • Parties are likely to assume a particular frame because of various factors 4-92 Interests, Rights, and Power Parties in conflict use one of three frames: • Interests: people talk about their “positions” but often what is at stake is their underlying interests • 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 4-93 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 4-94 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 4-95 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. 4-96 Cognitive Biases • • • • •
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-serving biases • Endowment effect • Ignoring others’ cognitions • Reactive devaluation 4-97 Irrational Escalation of Commitment and Mythical Fixed-Pie Beliefs • 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 4-98
Anchoring and Adjustment and Issue Framing and Risk • 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 4-99 Availability of Information and the Winner’s Curse • 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 ptions • The winner’s curse – The tendency to settle quickly on an item and then subsequently feel discomfort about a win that comes too easily 4-100 Overconfidence and the Law of Small Numbers • 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 4-101 Self-Serving Biases and Endowment Effect • 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 4-102 Ignoring Others’ Cognitions and Reactive Devaluation • 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 4-103 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 4-104 Mood, Emotion, and Negotiation • The distinction between mood and emotion is based on three characteristics: – Specificity – Intensity – Duration 4-105 Mood, Emotion, and Negotiation • Negotiations create both positive and negative emotions • Positive emotions generally have positive onsequences for negotiations – They are more likely to lead the parties toward more integrative processes – They create a positive attitude toward the other side – They promote persistence 4-106 Mood, Emotion, and Negotiation • 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 4-107 Mood, Emotion, and Negotiation • 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 – Not all negative emotion has the same effect 4-108 Mood, Emotion, and Negotiation • 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 • Effects of positive and negative emotion Positive feelings may generate negative outcomes – Negative feelings may elicit beneficial outcomes • Emotions can be used strategically as negotiation gambits CHAPTER SIX Communication 4-110 Communication in Negotiation Communication processes, both verbal and nonverbal, are critical to achieving negotiation goals and to resolving conflicts. 4-111 What is Communicated during Negotiation? • • • • Offers, counteroffers, and motives Information about alternatives Information about outcomes Social accounts – Explanations of mitigating circumstances – Explanations of exonerating circumstances Reframing explanations • Communication about process 4-112 Communication in Negotiation: Three Key Questions • Are negotiators consistent or adaptive? – Many negotiators prefer sticking with the familiar rather than venturing into improvisation • 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 • Is more information always better? – There is evidence that having more information does not automatically translate into better outcomes 4-113 How People Communicate n 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 4-114 How People Communicate in Negotiation • 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 4-115 How to Improve Communication in Negotiation Three main techniques: 1. The use of questions 2. Listening 3. Role reversal 4-116 How to Improve Communication in Negotiation • Use of questions: two basic categories – 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? ” 4-117 How to Improve Communication in Negotiation • Use of questions: two basic categories – 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? ” 4-118 How to Improve Communication in Negotiation • Listening: three major forms 1. Passive listening: Receiving the message while providing no feedback to the sender 2. Acknowledgment: Receivers nod their heads, maintain eye ontact, or interject responses 3. Active listening: Receivers restate or paraphrase the sender’s message in their own language 4-119 How to Improve Communication in Negotiation • Role reversal – – 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 4-120 Special Communication Considerations at the Close of Negotiations Avoiding fatal mistakes – Keeping track of what you expect to happen – Systematically guarding yourself against self-serving expectations – Reviewing the lessons from feedback for similar decisions in the future • Achieving closure – Avoid surrendering important information needlessly – Refrain from making “dumb remarks” CHAPTER SEVEN Finding and Using Negotiation Power 4-122 Why Is Power Important to Negotiators? Seeking power in negotiation arises from one of two perceptions: 1. The negotiator believes he or she currently has less power than the other party. 2. The negotiator believes he or she needs more power than the other party. -123 A Definition of Power • “an actor…has power in a given situation (situational power) to the degree that he can satisfy the purposes (goals, desires, or wants) that he is attempting to fulfill in that situation” • Two perspectives on power: – Power used to dominate and control the other– “power over” – Power used to work together with the other–“power with” 4-124 Major Sources of Power – How People Acquire Power • • • • • Informational sources of power Personal sources of power Power based on position in an organization Relationship-based sources of power Contextual sources of power 4-125 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 4-126 Power Based on Personality and Individual Differences • Personal orientation • Cognitive orientation – Ideologies about power • Motivational orientation – Specific motives to use power • Disposition and skills – Orientation to cooperation/competition • Moral orientation – Philosophical orientation to power use -127 Power Based on Position in an Organization Two major sources of power in an organization: • Legitimate power which is grounded in the title, duties, and responsibilities of a job description and “level” within an organization hierarchy • Power based on the control of resources associated with that position 4-128 Power Based on Position in an Organization Two major sources of power in an organization: • Legitimate power is derived from occupying a particular job, office, or position in an organizational hierarchy – Power resides in the title and responsibilities of the job itself and the “legitimacy” of the office holder Legitimate power is the foundation of our social structure and may be acquired by birth, election or appointment or promotion 4-129 Power Based on Resource Control • People who control resources have the capacity to give them to someone who will do what they want, and withhold them (or take them away) from someone who doesn’t do what they want. 4-130 Power Based on Resource Control • Some of the most important resources: – – – – – – – Money Supplies Human capital Time Equipment Critical services Interpersonal support 4-131 Power Based on Relationships • Goal interdependence – How parties view their goals • 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 in the structure (usually information and resources) 4-132 An Organization Hierarchy 4-133 An Organizational Network Isolated Dyad Star Gatekeeper Liaison External Environment Linking Pin Isolate 4-134 Power Based on Relationships • Key aspects of networks: – Tie strength • An indication of the strength or quality of relationships with others – Tie content • The resource that passes along the tie with the other person – Network structure The overall set of relationships within a social system 4-135 Power Based on Relationships Aspects of network structure that determine power include: • • • • • Centrality Criticality and relevance Flexibility Visibility Membership in a coalition 4-136 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 4-137 Dealing with Others Who Have More Power • • • • • • • • • Never do an all-or-nothing deal Make the other party smaller Make yourself bigger Build momentum through doing deals in sequence Use the power of competition to leverage power Constrain yourself Good information is always a source of power Ask many questions to gain more information Do what you can to manage the process CHAPTER EIGHT Ethics in Negotiation 4-139 What Do We Mean by Ethics and Why Do They Matter in Negotiation? Ethics: • Are broadly applied social standards for what is right r 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 4-140 Resolving Moral Problems 4-141 Questions of Ethical Conduct that Arise in Negotiation • Using ethically ambiguous tactics: It’s (mostly) all about the truth • Identifying ethically ambiguous tactics and attitudes toward their use – What ethically ambiguous tactics are there? – Is it all right to use ethically ambiguous tactics? 4-142 Questions of Ethical Conduct that Arise in Negotiation • Deception by omission versus commission
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