Lecture 1: Introduction Negotiation Strategies
Examples of conflicts and negotiation
Who has been involved in a conflict recently?
Dividing rooms in your student house (who get the big one, who get the small one).
Conflict and Negotiation 1
Two neighbors argue about the parking space in front of their house. Why negotiate? Because you see
each other every day and have a social relationship. What is a possible solution? Build a new parking
place and split the costs for that one. It is a fair solution, but money is involved. First check who has the
most rights and check your assumptions.
Conflict and Negotiation 2
In spite of the task schedule you introduced, the kitchen in your student home remains a mess. One of the
occupants simply never does his cleaning task. Someone is a policemen who checks if the work is done,
when it is not, the person gets a fine. Other option is manage to convince his/her.
Occurrence of Negotiations
Negotiations occur for several reasons:
1. To agree on how to share or divide a limited resource, such as land, money, or time.
2. To create something new that neither party could do on his or her own.
3. To resolve a problem or dispute between the parties.
People fail to negotiate
• When they do not recognize that they are in a negotiation situation
• They choose other options than negotiation and fail to achieve their goals or to get what they need
• People misunderstand the process
• Lack of good negotiating skills
Definition of negotiation
What is negotiation?
• Negotiation is a form of decision making in which two or more parties talk with one another in an effort
to resolve their opposing interests.
• Negotiation is a process by which one or more parties attempt to resolve their opposing interests.
Difference between bargaining and negotiation
• Use the term bargaining to describe the competitive, win-lose situations such as haggling over the price
of an item at a yard sale, flea market, or used car lot.
• Use the term negotiation to refer to win-win situations such as those that occur when parties are trying to
find a mutually acceptable solution to a complex conflict.
Negotiation is a very complex social process
It is nog just a give-and-take process used to reach an agreement. Many of the most important factors that
shape a negotiation result do not occur during the negotiation; they occur before the parties start to
negotiate, or shape the context around the negotiation.
, Characteristics to negotiate
Several characteristics common to all negotiation situations:
1. There are two or more parties involved. We consider negotiation as a process between individuals,
within groups, and between groups.
2. 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. What one wants is not necessarily what the other one wants.
3. The parties negotiate by choice. They negotiate because they think they can get a better deal by
negotiating than by simply accepting what the other side offers them.
4. Parties expect a ‘give-and-take’ process that is fundamental to our understanding of the word
negotiation. We expect that both sides will modify or move away from their opening statements,
requests or demands. If the parties do NOT consider it a negotiation, then they don’t necessarily
expect to modify their position and engage in this give-and-take.
5. The parties prefer to negotiate and search for agreement rather than to fight openly.
6. Successful negotiation involves the management of tangibles (e.g., the price or the terms of
agreement) and the resolution of intangibles (often rooted in personal values and emotions).
Intangibles
Intangible factors
Intangible factors are the underlying psychological motivations that may directly or indirectly influence the
parties during a negotiation.
Examples of intangibles
A. The need to win, beat the other party, or avoid losing to the other party.
B. The need to look good, competent, or tough to the people you represent.
C. The need to defend an important principle or precedent in a negotiation.
D. The need to appear fair or honorable or to protect one’s reputation.
E. The need to maintain a good relationship with the other party after the negotiation is over, primarily by
maintaining trust and reducing uncertainty.
Intangibles become a major problem in negotiation when negotiators fail to understand how they are
affecting decision making or when they dominate negotiations on the tangibles.
Interdependence
One of the key characteristics of a negotiation situation is that the parties need each other in order to
achieve their preferred objectives or outcomes. Either they must coordinate with each other to achieve
their own objectives, or they choose to work together because the possible outcome is better than they
can achieve by working on their own.
When the parties depend on each other to help achieve their own preferred outcome, they are
interdependent.
Most relationships between parties may be characterized in one of three ways:
1. Independent
Independent parties are able to meet their own needs without the assistance of others; they can be
relatively detached, indifferent, and uninvolved with others.
2. Dependent
Dependent parties must rely on others for what they need.
,3. Interdependent
Interdependent parties are characterized by interlocking goals. The parties need each other in order
to accomplish their objectives and hence have the potential to influence each other.
Types of interdependence affect outcomes
The interdependence of people’s goals and the structure of the situation in which they are going to
negotiate, strongly shapes negotiation processes and outcomes.
Zero-sum or distributive situations
• Goals of two ore more people are interconnected.
• Only one can achieve the goal (competitive situation).
• There can only be one winner.
• Individuals are so linked together that there is a negative correlation between their goal attainments.
• This situations are also present when parties are attempting to divide a scarce resource (pot of money or
a fixed block of time).
• Parties are attempting to get the larger share or piece of a fixed resource (raw material, money or time).
• To the degree that one person achieves his or her goal, the other’s goal attainment is blocked.
Non-zero-sum or integrative or mutual gains situation
• When parties’ goals are linked so that one person’s goal achievement helps others to achieve their
goals.
• Many people can achieve their goals and objectives.
• There is a positive correlation between the goal attainments of both parties.
• To the degree that one person achieves his or her goal, the other’s goals are not necessarily blocked,
and may in fact be significantly enhanced.
Alternative shape of interdependence
Interdependence
Parties choose to work together because the possible outcome is better than what may occur if they do
not work together.
Evaluating interdependence therefore also depends heavily on the desirability of alternatives to work
together.
BATNA alternative (Best Alternative To a Negotiated Agreement)
Whether you should or should not agree on something in a negotiation depends entirely upon the
attractiveness to you of the best available alternative
Mutual adjustment (wederzijdse aanpassing)
Negotiation is a process that transforms over time, and mutual adjustment is one of the key causes of the
changes that occur during a negotiation.
What is the best strategy for successful mutual adjustment?
It might seem that the best strategy for successful mutual adjustment to the other is grounded in the
assumption that the more information one has about the other person, the better. The parties need to
exchange information, attempt to influence each other, and problem solve.
Mutual adjustment and concession making
When one party agrees to make a change in his or her position, a concession has been made.
Concessions restrict the range of options within which a salutation or an agreement will be reached; when
, a party makes a concession, the bargaining range (range of possible agreements between the two parties’
minimally acceptable settlements) is further constrained.
Two dilemmas in mutual adjustment
1. The dilemma of honesty
Concerns how much of the truth to tell the other party. On the one hand, telling the other party
everything about your situation may give that person the opportunity to take advantage of you. On the
other hand, not telling the other person anything about your needs and desires may lead to a
stalemate.
2. The dilemma of trust
How much should negotiators believe what the other party tells them? If you believe everything the
other party says, then he ors he could take advantage of you. If you believe nothing the other party
says, then you will have a great deal of difficulty in reaching an agreement. How much you should trust
the other party depends on many factors, including the reputation of the other party, how he or she
treated you in the past, and a clear understanding of the pressures on the other in the present
circumstances.
Two efforts in negotiation that help to create trust and beliefs
1. Perceptions of outcomes
Managing how the receiver views the proposed result.
2. Perceptions of the process
Perceptions of the trustworthiness and credibility of the process can be enhanced by conveying
images that signal fairness and reciprocity in proposals and concessions.
Satisfaction with a negotiation is as much determined by the process through which an agreement is
reached as with the actual outcome obtained.
Value claiming and value creating
Distributive bargaining
In distributive situations, negotiators are motivated to win the competition and beat the other party or to
gain the largest piece of the fixed resource they can. To achieve these objectives, negotiators usually
employ win-lose strategies and tactics. This approach to negotiation - called distributive bargaining -
accepts the fact that there can be only one winner.
Purpose of the negotiation is to claim value
To do whatever is necessary to claim the reward, gain the lion’s share of the prize, or gain the largest piece
possible (e.g., purchasing a used car).
Integrative negotiation
In integrative situations the negotiators should employ win-win strategies and tactics. This approach to
negotiation - called integrative bargaining - attempts to find solutions so both parties can do all and
achieve their goals.
Purpose of the negotiation is to create value
Find a way for all parties to meet their objectives, either by identifying more resources or finding unique
ways to share and coordinate the use of existing resources (e.g., planning a wedding so that the bride,
groom, and both families are happy and satisfied and the guests have a wonderful time).
