Exam material of Negotiation Strategies (880460-M-6), with a summary of Lewicki et al. (2023) and selected articles of the year 2024/2025.
N.B. This summary does not include lecture notes.
Negotiation is a process by which two or more parties attempt to resolve their opposing interests.
Negotiation situations have fundamentally the same characteristics, regardless which kind (e.g.
peace, business).
Characteristics:
1. 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.
2. The parties negotiate by choice, because they think they can get a better deal by negotiating
than by simply accepting what the other side will let them have.
a. Our experience is that most individuals in Western culture do not negotiate enough.
3. When we negotiate, we expect a ‘give-and-take’ process that is fundamental to our
understanding of the word negotiation.
4. Successful negotiation involves the management of tangibles (e.g. the price or terms of
agreements) and of intangibles (i.e. underlying psychological motivations that may influence
the parties). Examples of intangibles:
a. The need to win;
b. The need to look good, competent or tough;
c. The need to defend an important principle;
d. The need to appear fair or honorable;
e. The need to maintain a good relationship with the other party after the negotiation
is over.
A potential consequence of interdependent relationships is conflict. Conflict may be defined as “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”.
Elements that contribute to conflict’s destructive image:
1. Competitive, win-lose goals.
2. Misperception and bias, perceptions may become distorted (e.g. people view things
consistent with their own perspective of the conflict).
3. Emotionality, emotions overwhelm clear thinking, and parties can become more irrational.
4. Decreased communication, parties communicate less with those who disagree with them
and more with those who agree.
5. Blurred issues, the central issue becomes blurred and less well defined.
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Figure 1.2 shows dimensions for analyzing any dispute and determining how easy or difficult it will
be to resolve.
Dual concerns model (Figure 1.3) postulates that people have two independent types of concern: 1)
concern about their own outcomes, 2) concern about the other’s outcomes.
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Chapter 2: Strategy and tactics of distributive bargaining
Distributive bargaining, also known as win-lose or zero-sum bargaining, occurs when the parties'
goals are in direct conflict, and resources are fixed, leading to competition over limited resources.
The primary objective is to maximize one’s own gain, typically at the other party’s expense. Examples
include price negotiations where each party has a set minimum (seller) or maximum (buyer) they are
willing to accept or pay.
Key Concepts in Distributive Bargaining
● Starting point: Initial offer made by a negotiator.
● Target point: The optimal outcome one hopes to achieve.
● Resistance point: The limit beyond which a negotiator will not proceed, such as the
minimum acceptable price for a seller or maximum payment for a buyer.
● Bargaining range: Defined by the spread between the parties’ resistance points. A positive
bargaining range (buyer’s maximum exceeds seller’s minimum) facilitates agreement, while a
negative range may indicate an impasse.
Strategic Impact of Concessions
● Opening offers and anchoring: An initial offer acts as an anchor, significantly influencing the
direction of negotiations. Opening with a high (or low) offer can establish a benchmark
around which negotiations revolve.
● Concession patterns: Concessions should be deliberate, as their frequency and magnitude
can signal flexibility or firmness. Negotiators are encouraged to make smaller concessions as
they near their target, creating an impression that their flexibility is limited, urging the other
party to conclude the deal.
Commitment and Hardball Tactics
● Commitment tactics: A commitment locks a negotiator into a position, often by making a
public statement or acting firmly on an offer, compelling the other party to respond to that
stance. Premature commitment can reduce flexibility, so negotiators should manage
commitments carefully and avoid becoming “too committed” to a losing position.
● Hardball tactics: These aggressive tactics aim to intimidate or coerce the other party.
Common tactics include:
○ Extreme demands: Setting unreasonable expectations to manipulate the other party
into conceding more.
○ Bluffing and false promises: Misleading the other party about one’s limits or
intentions to gain an advantage.
○ Bogey: Pretending that an issue is important to extract concessions on other
matters.
○ Countering hardball tactics: Recognize and either ignore, counter, or reframe such
tactics to avoid being manipulated.
Alternatives to Negotiated Agreement (BATNA/WATNA)
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● BATNA (Best Alternative to a Negotiated Agreement): The best course of action if an
agreement is not reached. A strong BATNA increases a negotiator’s power, enabling them to
set higher goals.
● WATNA (Worst Alternative): The worst-case fallback. Knowing this helps manage
expectations and avoid agreements that are less favorable than the worst alternative
available.
● Alternatives allow negotiators to “walk away” if an offer does not meet their criteria,
reducing dependency on the negotiation outcome and strengthening their bargaining
position.
Settlement Point: Negotiations typically conclude at a settlement within the bargaining range,
ideally close to the other party’s resistance point. Both parties must feel they achieved the best
possible outcome; otherwise, dissatisfaction might lead to future conflict or withdrawal from the
agreement.
Chapter 3: Strategy and tactics of Integrative Negotiation
Those wishing to achieve integrative results must manage both the context and the process of the
negotiation in order to gain the cooperation and commitment of all parties. Four key contextual
factors:
1. Creating a free flow of information
a. Negotiators must be willing to reveal their true objectives and listen to each other
carefully.
b. Negotiators must create conditions for a free and open discussion of all issues.
c. This includes having both parties know and share their alternatives.
d. Resistance points get softer when negotiators are aware of each other’s alternatives.
2. Attempting to understand the other negotiator’s real needs and objectives
a. One must understand the other’s needs before helping to satisfy them.
b. Integrative agreements are facilitated when parties exchange information about
their priorities for particular issues.
c. This is in contrast to distributive bargaining (where negotiators either make no effort
to understand the other side’s needs or do so only to challenge or deny the
opportunity to have those needs and objectives met).
3. Emphasizing things that parties have in common
a. Individual goals may need to be redefined as best achieved through collaborative
efforts directed towards a collective goal.
b. Sometimes the collective goal is obvious (e.g. for a political party), but they can also
be unclear or difficult to keep in sight.
4. Searching for solutions that meet the goals and objectives of both parties.
a. Negotiators must be firm (about primary interests) but flexible (about how those
interests are met).
b. Negotiators may work to ensure that what the other obtains does not take away
from one’s own accomplishments.
c. Negotiators may attempt to block the other from obtaining their objectives because
of a strong desire to win or defeat the opponent.
Key steps in the integrative negotiation process
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