Summary Managing Negotiations all mandatory articles summarized
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Course
Management and Negotiations (E_MFDM_MNGY)
Institution
Vrije Universiteit Amsterdam (VU)
All the mandatory articles, including Hofstede's cultural dimensions, are summarized. This contains the articles used for the presentations which is also part of the exam. All the important focus points are mentioned.
Art 1. Sebenius, J.K. (2001). Six Habits of Merely Effective Negotiators.
In his article Sebenius outlines six common mistakes made by negotiators that limit their
effectiveness:
1. Letting price bulldoze other interests: Focusing on hard bargaining tactics over the
broader strategic context. This narrow focus can hinder their ability to achieve optimal
outcomes. It leaves potential joint gains unrealized. That’s because, while price is an
important factor, it’s rarely the only one (game theory). Successful negotiators,
acknowledging that economics aren’t everything, focus on four important nonprice
factors: the relationship, the social contract (people’s expectations), the process, the
interests of the full set of players (don’t lose sight of the interests or the capability of
internal players to affect the deal).
2. Neglecting the other party's problem: Effective negotiators understand that both
parties involved have their own set of problems and interests. Failing to understand
and address the concerns of the other party can lead to suboptimal agreements.
3. Letting positions drive out interests: interest-driven bargainers see the process
primarily as a reconciliation of underlying interests. Despite the clear advantages of
reconciling deeper interests, people have a built-in bias towards focusing on their own
positions instead. This hardwired assumption that our interests are incompatible
implies a zero-sum pie in which my gain is your loss. The pie must be expended and
divided.
4. Searching too hard for common ground: we’re advised to find win-win agreements
by searching for common ground. Even when an issue seems purely economic, finding
differences can break open deadlocked deals. Differences in forecasts can also fuel
joint gains. If we were all clones of one another, with the same interests, beliefs,
attitudes toward risk and time, assets etc, there would be little to negotiate.
5. Neglecting BATNAs: both parties doing better than their BATNAs is a necessary
condition for an agreement. The better your BATNA appears both to you and to the
other party, the more credible your threat to walk away becomes, and the more it can
serve as leverage to improve the deal. Think about your own BATNA and about the
other side’s. The potential deal and the BATNAs should work together.
6. Failing to correct for skewed vision: Self serving role bias: people tend
unconsciously to interpret information pertaining to their own side in a strongly self-
serving way. Partisan perceptions: an unconscious mechanism that enhances one’s
own side, portraying it as more talented, honest, and morally upright, while
simultaneously vilifying the opposition. It overestimates the actual substantive
conflict. (self-fulfilling prophesies)
Sebenius suggests that by recognizing and rectifying these habits, negotiators can enhance
their effectiveness and improve their outcomes in various negotiation scenarios.
Art 2. Haselhuhn, M. P. (2015). Support theory in negotiation: How unpacking aspirations
and alternatives can improve negotiation performance.
The article delves into the impact of two critical factors in negotiation:
Aspirations: Negotiators often focus on their target or aspiration level, which represents the
best possible outcome they hope to achieve. The article emphasizes that understanding and
,properly framing one's aspirations during negotiations can significantly impact decision-
making and ultimately influence negotiation outcomes.
Alternatives: Negotiators often have fallback options or alternatives if the current negotiation
fails. The article highlights that unpacking these alternatives and understanding their support
value can shape negotiation strategies and enhance overall negotiation performance.
Prescriptions for improving negotiation performance, including developing alternatives to
negotiated agreements or setting high aspirations, often fail to consider the inherent
uncertainty in such deliberations. This paper demonstrates that negotiators who address this
uncertainty by unpacking their positive alternatives and aspirations (e.g., the likelihood of
attaining an alternative job offer from Firm #1, Firm #2, or any other firm) judge these
outcomes to be more likely to occur and achieve better negotiation outcomes compared with
negotiators who consider these same outcomes as a single package (e.g., the likelihood of
attaining an alternative job offer from any firm). Unpacking is not uniformly beneficial:
unpacking potential negative outcomes (e.g., not receiving another job offer) leads negotiators
to demand less in the current negotiation and claim less value as a result.
Understanding how people respond to uncertainty in negotiations is important, both in
predicting negotiation outcomes and in constructing prescriptive advice for negotiators. In this
paper, support theory, which posits that the subjective probability of an outcome increases
when it is described in greater detail, may be a critical perspective to understanding
negotiators' responses to uncertainty. Elaborating on aspirations and alternatives, compared
with considering these potential outcomes more comprehensively, can have a powerful effect
at the bargaining table. Negotiators who focus on their aspirations negotiate more assertively,
for example, by making aggressive opening offers that anchor the negotiation in their favor
gives the result that negotiators are counseled to consider their goals and aspirations before
negotiating and to keep these aspirations in mind during the bargaining process.
The negotiation process is laden with uncertainty, arising from various sources like behavior
impact, issue valuation, counterpart intentions, and personal alternatives. Recognizing this
uncertainty is crucial as it influences negotiators’ judgments and goals significantly.
Unpacking an event increases the judged likelihood of occurrence by reminding individuals of
outcomes that they may have otherwise forgotten and by increasing the salience of
information that may be considered
Applying support theory to the negotiation domain suggests that whether negotiators consider
their aspirations and alternatives as a comprehensive package versus an elaborated set of
options may have important implications for how they perceive the parameters of the
negotiation and for the outcomes they ultimately achieve at the bargaining table. This suggests
that negotiators who unpack the positive things they could attain either in the current
negotiation (aspirations) or outside the current negotiation (alternatives) will believe that they
are more likely to achieve these outcomes compared with negotiators who do not unpack the
same potential event.
Negotiators who unpack possible positive negotiation outcomes will believe these outcomes
are more likely to occur, will set higher aspirations and more aggressive bottom lines, and
ultimately will claim more value in negotiation
, Four studies were conducted to test these predictions. Outcomes:
Study 1: negotiators who unpacked their aspirations set higher, more agressive goals and
attained superior outcomes compared with negotiators who considered a less detailed set of
the same possibilities. (negotiating over their cab fare)
Study 2: negotiators who considered an extended list of their possible positive alternatives set
more aggressive bottom lines and claimed more value at the bargaining table compared with
negotiators who considered the same set of possible alternatives more comprehensively.
(simulation in the laboratory)
Study 3: demonstrate how unpacking potential alternatives leads negotiators to adopt higher
reservation points. Importantly, participants received full information regarding the range of
possible outcomes in this study, mitigating concerns that previous effects were driven by
experimenter suggestion.
Study 4: negotiators who unpacked the positive potential of their alternative demanded more
from the current negotiation and claimed greater value at the bargaining table. Participants in
Study 4 generated their own lists of potential alternatives, thereby supporting the idea that it is
the act of unpacking positive outcomes, rather than specific information provided by the
experimenter, that drives these effects. Conversely, unpacking negative aspects of alternatives
led to poorer negotiation performance by reducing perceived strength in alternatives,
demanding less, and claiming less value at the table.
By effectively unpacking and understanding the support associated with aspirations and
alternatives, negotiators can improve their decision-making processes, navigate negotiations
more strategically, and potentially achieve more favorable outcomes. By incorporating
Support Theory into negotiation strategies, individuals can gain deeper insights into their
aspirations and alternatives, enabling them to make more informed and effective decisions
during negotiations.
Art 3. Malhotra, D. (2014). 15 Rules for Negotiating a Job Offer.
The complexity of the job market creates opportunities for people to negotiate the terms and
conditions of employment. Negotiation matters most when there is a broad range of potential
outcomes. People vying for similar positions often have different backgrounds, strengths, and
salary histories, making it hard for employers to set benchmarks or create standard packages.
There are 15 rules for negotiating a job offer.
1 - Don’t underestimate the importance of likability: Likability matters in negotiation;
avoid actions that reduce likability and manage tensions gracefully. Negotiators can typically
avoid these pitfalls by evaluating how others are likely to perceive their approach.
2 - Help them understand why you deserve what you’re requesting: Besides liking, they
also have to believe you’re worth the offer you want. Don’t just state your desire; explain
precisely why it’s justified. You should have a justification for a demand.
3 - Make it clear they can get you: If you intend to negotiate for a better package, make it
clear that you’re serious about working for this employer and that you have the right
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