Post on 23-Dec-2015
transcript
The Negotiations Process
True or False Questions:
1. (T/F) ____ It is important in negotiations to avoid actions or questions
which provoke anxiety.
2. (T/F) ____ You should use humor to diffuse tension when a conflict gets
heated.
3. (T/F) ____ You should always keep your emotions under control when
trying to deal with tense situations.
4. (T/F) ____ It is important to take notes when people talk to you.
5. (T/F) ____ It is not appropriate to leave a conflict in a “huff” and slam the
door behind you.
Verbal and Non-Verbal CommunicationsDuring Negotiation
To “Negotiate”
Whether at a bargaining table with labor and management; a law office with plaintiffs and respondents; Camp David with international combatants; a hostage situation; or a mediation between an employee and supervisor, the definition is the same.
• To “Negotiate” is to arrange or settle by conferring or discussing; or to use information and/or power to affect human behavior in an environment filled with multiple issues and tensions.
Another definition of Negotiation...
• A strategic endeavor directed toward the specific ends of reaching agreements and satisfying negotiators’ needs.– Strategies are the pre-formulated game plans, objectives, and
approaches that guide negotiators in reaching their goals; – Tactics are the specific ways bargainers implement these
strategies.– From Strategy of Conflict by Schelling
Characteristics of Negotiations *From
Essentials of Negotiations by Lewicki, Saunders
• Two or more parties are involved.
• There exists a perceived conflict of interest between those parties.
• Parties chose to negotiate because they believe they can influence each other to get a better deal than what they would otherwise get if action was unilateral.
• For time being, parties prefer to work together for resolution rather than fight or seek other non-negotiated remedies.
• Parties expect to experience “give and take” during their negotiations as each side compromises positions.
• Parties expect that negotiations will allow them to manage both the “tangibles” and the “intangibles” contained in their issues.
Motivations for Negotiation
• Instrumental:– PRACTICAL value– Negotiation to achieve
tangible or quantitative outcomes (i.e., Wages; profits; productivity; benefits; etc.)
– Easy to measure
• Expressive:– ATTENTION value– Negotiation to achieve
intangible or qualitative outcomes (i.e., More respect; easier work; recognition; more input; etc.)
– More difficult to measure
Conflicts in Negotiations*From Essentials of Negotiations
• Intrapersonal or Intrapsyhic conflict– Conflict within the individual
• Interpersonal conflict– Conflict among and between individuals
• Intragroup conflict– Conflict within a group
• Intergroup conflict– Conflict among and between groups
Barriers to Successful Negotiations
• Parties may not be open about their desired outcomes.• Parties may not be clear in their own minds about what
they actually want to accomplish with their proposals.• Parties may not reveal all of the truth regarding their
positions to each other.• Parties may not be willing to believe all that they hear
from each other.• Parties may not have the right negotiators.• Parties may not be ready to settle.
Traditional Negotiation Relationship
• Assumptions– For me to win, you must lose: therefore, we must
compete– To help you is a sign of my weakness and it will
hurt me: therefore, little real communication– My power comes from opposing, criticizing and
beating you: therefore, parties are more rigid
Traditional Negotiation Relationship
• Outcomes– One-sided victories (Win-Lose)– Split-the-difference compromise– Escalation into conflict– Costs high to both parties– Neither party fully achieves goals – May lead to decay and decline of both parties
What is the Aim of Negotiations?
Aim of Negotiation
• To reach a desired and durable result by including the interests of both parties
• To reach agreement efficiently and fairly using talents of all participants to solve problems
• To develop a shared sense of satisfaction from working together successfully
1. Better Than Alternatives Away From The Table.
2. Satisfies Interests
3. The Best Among Many Options
4. I Do Not Feel Taken – A Legitimate Outcome.
5. Efficient Process – Requires Good Communication
6. Realistic Commitments - Likely to Comply, Easy to Implement
7. Leaves Us With A Good Working Relationship
Me: Well Satisfied
You: AcceptableBoth: Your problem is my problem
Don’t leave joint gains on the table.
A Good Negotiating Outcome
Negotiation Methods:Power, Rights, and Interest-
Based
Negotiating Methods
The outcome of any agreement will reflect the extent and manner in which the parties deal with the basic methods of negotiation.
• Power• Rights• Interests
Negotiating Method - Power
Power
Negotiation Method - Power
The ability to direct the outcome of negotiations.
• Difficult to determine who is more powerful without a destructive power contest
• Perception of other party’s power often incorrect• Other party may respond irrationally
Negotiating Methods - Rights
Rights
Negotiation Method - Rights
The entitlement to a negotiating outcome.
• Rarely clear answer• Two rights sometimes contradictory• Advocating rights is frequently costly and time
consuming• Rights assertion frequently requires
intervention by a third party
Negotiating Methods - Interests
Interests
Negotiation Method - Interests
What is needed for a acceptable negotiating outcome.
• Interests usually underlie positions• Concern needs, desires, concerns, fears, values,
or matters that a party really cares about• Seeks to preserve relationships
Negotiating Methods
Power
Rights Interests
Conflict Resolution MethodsPower/Rights/Interests/Transaction Costs
Power Rights Interests
Resources Required:
always high: time, money, stress
generally costly: time, money, stress
time, talent
Satisfaction with Outcome:
one-sided: the winner
mixed: not satisfied, to highly satisfied
both interests must be satisfied or no agreement
Compliance: as long as power is applied
until a better opportunity presents itself
very durable because interests are met
Quality of Relationship:
always runs risk of destruction
“one upmanship”
mutual respect, valued partner, joint problem solvers
Positional and Interest-Based
NegotiationsUnderstanding these negotiating concepts and recognizing when to use them.
Positional NegotiationsPositional negotiations is a process that starts with the solution. Parties propose solutions to each other and tender offers and counter-offers with the objective of reaching a solution acceptable to all parties.
Positional NegotiationsAttitudes
• Resolution options are limited
• We are adversaries
• There is only one right solution – Mine
• Be aggressive to win
• Any concession is a sign of weakness
• Negotiate to win all you can
• A win for you is a lose for me
Positional NegotiationsGoals
NEGOTIATE TO WIN!
WIN ALL YOU CAN!
FOCUS ON THE PRESENT!
Positional NegotiationsWorks Best
• One – Time Problem
• Parties have Equal Skills
• Comfortable with Tactics
• Desire the “Right” Decision
Shortcomings in Positional Negotiating
• It tends to lock negotiators into positions they have taken• Ego becomes involved the more a party is compelled to
defend a position• It diminishes the importance and value of personal
relationships• It encourages reliance on power to force acceptance of a
position• It discourages communication of interests, values, and
needs that are essential to the search for creative solutions
Interest-Based Negotiations
Interest-based negotiations starts with a needs analysis. Parties develop an understanding of their individual needs and seek to educate the other party about these needs and learn the needs of the other party with the objective of engaging
in joint problem solving to meet all parties needs.
Interest Defined
Interests are specific needs, conditions, or results that a party must meet for successful negotiations. Interests may be procedural, psychological, substantive, or external.
LSylvester
THE INTEREST ICEBERG
History
Behaviors
Relationships
Bias
Hurts/woundsCulture
Remedy Requested
Pride
Practices
Interests
SUBSTANTIVE• Outcome
PSYCHOLOGICAL• Trust
PROCEDURAL• Fairness
EXTERNAL• Others
Interest-Based NegotiationsAttitudes
• Resolution options are not limited• We are problem solvers• Relationships are important• Creative solutions are possible• There are probably several satisfactory solutions• We may have shared interests• Our goal is win/win
Interest-Based NegotiationGoals
IDENTIFY YOUR INTERESTS!
ADVOCATE FOR YOUR NEEDS!
PRESERVE THE RELATIONSHIP!
Interest-Based NegotiationsSolve the Problem(s)
• Focus on issues, not personalities
• Focus on interests, not positions
• Invent options that meet both side’s most important concerns
• Look to standards for what should happen. Keep in mind the standard of mutual caretaking; relationships that always go one way become very difficult
• Talk about how to keep communications open as you go forward
Interest-Based BargainingWorks Best
• Relationship are Important
• Communications are Good
• Trust is Developed
• Multiple Problems
ComparisonInterest-Based and Positional
NegotiationsInterest-Based
Identify IssuesClarify FactsFind InterestsDevelop OptionsConsider StandardsRate Options/StandardsReach Consensus
Positional
Identify IssuesClarify FactsDevelop PositionsAdvocate PositionsReduce Your DemandsConsider CounteroffersReach Agreement
Positional vs Interest Based Negotiating Elements
In Positional Negotiating In Interest Based Negotiating
Open high or low Use objective standards
Trade concessions toward midpoint-compromise
Choose from many options rather than splitting the difference
Disguise true feelings – wear a mask
Speak openly and clearly, describing your interests
Discredit case and claims made by the other party
Accept case made by the other party as one possible solution
Use tactics to keep the other party off balance
Make sure the other negotiator feels comfortable, unthreatened, secure and respected
Creating a Stable Negotiating Environment
• Engage in discovery and mutual education
• Create advocacy
• Listen, seek to understand
• Enhance enforcement
• Enhance implementation
Solve the Problem
• Focus on issues, not personalities
• Focus on interests, not positions
• Invent options that meet both side’s most important concerns
• Look to standards for what should happen. Keep in mind the standard of mutual caretaking; relationships that always go one way become very difficult
• Talk about how to keep communications open as you go forward
• What problem are we trying to solve?
• Are there other problems?
• What do you want to have happen?
• What concerns do you have?
• What is the best case scenario for you?
• What do you want to accomplish?
• What would have to happen for you to feel satisfied?
• What will it take for you to work together?
• Is there anything else important to you?
QUESTIONS FOR EXPLORING INTERESTS
Management of NegotiationsExpectations
• Reality
• Standards
• BATNA/WATNA
Alternative Outcomes to Reaching a Negotiated Agreement
BATNABest Alternative to a
Negotiated Agreement
WATNA
Worst Alternative to a
Negotiated Agreement
BATNA
The least damaging outcome anticipated if no agreement is
reach.
BATNA Advantages
• Forces negotiators to realistically evaluate their negotiating strength
• Prevents blind negotiations
• Protects from accepting terms that are too unfavorable
WATNA
The most damaging outcome to anticipate if no agreement is
reached.
WATNA Advantages
• Forces negotiators to realistically evaluate their options
• Prevents power negotiations
• Protects from rejecting terms that are in your interest to accept
Management of NegotiationsClosure
• Reaching Agreement
• Drafting the Agreement
• Signing the Agreement
Structural Complexitiesof
Multi-Party Negotiations
A Simple Two Party Negotiation
Party A
Party B
In any given negotiation session, many types of negotiation occurbetween interdependent individual groups. For simplicity’s sake, let us illustrate this point by examining a two-sided dispute. At the negotiating table are parties A & B.
Horizontal Bargaining
Party A
Party B
Horizontal Bargaining
• Lead negotiator
• Roles
• Behavior
• Techniques
• Procedures
• Interests
• Closure
Vertical Bargaining
Party A
Party B
OrganizationalBargaining
Constituency Bargaining
Vertical Bargaining
• Constituency– Team member represents a special group– Constituency can assist in clarify interests– Need to keep informed
• Organizational– Team is delegated negotiating authority– Understand interests of delegating authority– Need to keep informed
Unilateral Bargaining – Vested Interest
Party A
Party B
Unilateral vested-interest bargaining occurs when one or more membersof a team covertly approach members of another team.
Unilateral Bargaining – Conciliatory
Party A
Party B
Unilateral conciliatory bargaining occurs when one or more partiesinformally, and possibly privately, explore alternatives for settlementswith members of another team. Those overtures are conducted with thefull knowledge of the team in the hope that the information shared will leadto fruitful bargaining for all sides.
Unilateral Bargaining
• Conciliatory Interest– Authorized by the team or lead negotiator– Used to clarify data or identify mutual needs– Requires accountability– Constructive
• Vested Interest– Unauthorized covert meeting– Conducted for the benefit of the team member– Destroys team synergy– Destructive
Bilateral Bargaining
Party A
Party B ?!
Bilateral bargaining occurs between the teams and is generally conductedby a spokesperson or by authorized team members. In this type of negotiation, the history of the dispute is reviewed, issues and interestsare identified, alternatives are generated and discussed and agreementsare reached.
External Factors
Party A
Party B
Press InfluentialIndividual
EnvironmentalGroup
Demonstrations
Collective Participation
Party A
Party B
Exercise Modifications
• The company is Belgrade Baby Foods• The crime is potentially a felony
Each table should:• 1) identify their own interests• 2) Identify the other sides interests• 3) Create options to satisfy both interests• 4) Post all on a flip chart and be prepared to
report out to the other side
Influences on Negotiation
What are the cultural influences in negotiations to be aware of when dealing
with representatives from:
• France
• Germany
• Italy
• UK
• Goals (contract or relationship)• Attitudes towards negotiation process (win-win, win-lose)• Personal styles (formal vs. informal)• Styles of communication (direct/indirect)• Time sensitivity (high or low)• Emotionalism (high or low)• Agreement form (specific or general)• Agreement building process (bottom up or top down)• Negotiating team organization (unilateral or consensus)• Risk Taking (higher or lower)
France
• Less team oriented – negotiate individual• Debate is stimulating• Well prepared• Parties can make decisions• Strategies include logical proposals,
arguments and counter proposals• Preference for discussing philosophy• Important meetings treated very formally
Germany
• Well prepared, serious, organized• Tough positional stances• Least affected by interpersonal issues/relations• Negotiations are formal and will follow agenda• Relationships should not intrude on tasks• Low risk takers• Conflict viewed as inadequate preparation• Emotional outbursts and frequent interruptions
not appreciated• Decision making takes time
British
• Value bottom line and short term results
• Open about opinion but indirect in its expression, emphasizing courtesy and tact and formality.
• Don’t show true emotions – often reserved and understated
• Risk averse and cautious, favoring security and status quo
Italy
• Personal relationships important• Need to feel they can get along with
counterparts• Confident, shrewd and competent• Initial negotiations can include lots of casual
talks and positioning tactics• Takes a long time to get to point• Multiple conversations at once and interruptions
common• Presentation must be organized, clear and
polished with dramatic effect for audience
• Goals (contract or relationship)• Attitudes towards negotiation process (win-win, win-lose)• Personal styles (formal vs. informal)• Styles of communication (direct/indirect)• Time sensitivity (high or low)• Emotionalism (high or low)• Agreement form (specific or general)• Agreement building process (bottom up or top down)• Negotiating team organization (unilateral or consensus)• Risk Taking (higher or lower)
What is the Serbian Approach to Negotiation?
Parameters of contract
• Sales and marketing training for sales force of brake manufacture
• General sales training, not industry specific
• Focus on concepts, leave specific knowledge to participants
Feedback on Training
• Not specific to industry!!
• Alienated females with inappropriate language
• Task Force Assignment had no females
• Too lecture oriented
MANAGEMENT OF NEGOTIATIONS
Interest-Based Negotiations
Management of NegotiationsSeven Factors to Consider
• Preparation
• Planning
• Administrative
• Communications
• Techniques
• Expectations
• Closure
Management of NegotiationsPreparation
• Identify your interests
• Anticipate other party’s interest
• Find objective standards
• Generate possible options
Management of NegotiationsPlanning
• Set goals for initial contact
• Collect and analyze facts
• Design a strategy
• Negotiating Team Representation
Management of NegotiationsAdministrative
• Time
• Location
• Participants
• Room Arrangement
• Refreshments
• Support Roles
• External elements
Management of NegotiationsCommunications
• Behavior
• Verbal and non-verbal
• Trust
Levels of Trust
• Ability to Perform
• Personal Conduct
• Compliance with Agreements
Building Trust
• Listen
• Display a concern for interests
• Demonstrate empathy
• Keep confidences
• Fulfill promises
• Be respectful
How easy is it to build trust in negotiations?
Destroying Trust in Negotiations
• Act inattentive
• Ignore interests
• Breach a confidence
• Break a promise
• Embarrass the other party
• Spring a surprise
How easy is it to destroy trust in negotiations?
Rebuilding Trust
• Accept responsibility for actions
• Acknowledge your actions
• Make restitution or repairs
• Be transparent in future
Management of NegotiationsProblem-Solving Techniques
• Brainstorming
• Consensus-Building
• Action Planning
Brainstorming
A technique used to generate as many original ideas as possible for solving a problem or an impasse without judging them. It is based on the theory that the more people working on the problem the more ideas that will be generated.
Rules for Brainstorming
• Define the problem
• Do not criticize an idea
• Be imaginative
• Build on other’s ideas
• Aim for quantity
• Record all ideas
Procedures for Brainstorming
• Create a relaxed comfortable environment
• Set seating arrangement
• Seek full participation
• Record ideas in full view of all
Consensus-Building
A technique that reaches an agreement by identifying the interests of concerned parties and then builds a solution to maximize meeting those interests. The terms of the agreement do not have to be the first choice of all parties, but rather a solution that everyone can accept.
Why use Consensus-Building?
• To benefit from each person’s unique knowledge, logic, and creativity.
• To reach greater commitment and support of the agreement and its implementation.
Procedures for Consensus-Building• Generate option
• Discuss option
• Explain consensus
• Describe reasons for not acceptable
• Consider means to make acceptable
• Seek to build consensus
Action Planning
A technique that provides structure and a framework for reaching a solution to a problem.
Action Planning
• Identify the real problem• Redefine the problem• Determine the causes of the problem• Discuss consequences of not resolving it• Brainstorm possible solutions• Use consensus to select a solution• Record the agreement
Management of NegotiationsExpectations
• Reality Checking
• Objective Standards
• BATNA/WATNA
Reality Checking
• What is my real interest in the outcome
• Do I need to maintain this relationship
• Are there external interests here
• What are the consequences of not reaching an agreement
Objective Standards
Tangible factors for comparing and evaluating options. These may include laws, court decisions, regulations, industry guides, trade practice, past performance, expert evaluations, or similar transactions.
Alternative Outcomes to Reaching a Negotiated Agreement
BATNABest Alternative to a
Negotiated Agreement
WATNA
Worst Alternative to a
Negotiated Agreement