Stakeholder Negotiation

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Stakeholder Negotiation

• MGT 5374 Negotiation Conflict Management
• Section 002
• November 10, 2005 (Part 1)
• John D. Blair, PhD
• Georgie G. William B. Snyder Professor in
  Management

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First Thoughts?
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Steps in Stakeholder Negotiation

• Linking negotiating to business and stakeholder
  management strategies
• Assessing the stakeholders potential for threat
  and cooperation
• Diagnosing the negotiation situation by focusing
  on both relationship and substantive outcomes.
• Selecting and outcome-focused negotiation
  strategy.

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Steps in Stakeholder Negotiation Continued

• Refining the negotiation strategy based on
  sensitivity to key stakeholder contingencies.
• Implementing the negotiation strategy through
  appropriate tactics
• Changing the stakeholder-sensitive strategy as
  needed.
• Monitoring the ever-changing stakeholder
  negotiation context.

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Potentials for Threat and Cooperation

• Potential for threat
• Similar to developing a worst-case scenario
• Helps estimate the probable substantive outcomes
  of negotiation
• Potential for cooperation
• Similar to developing a best-case scenario
• Helps estimate the probable relationship outcomes
  of negotiation

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Stakeholder Types

• Supportive
• High potential for cooperation
• Low potential for threat
• Nonsupportive
• Low potential for cooperation
• High potential for threat
• Marginal
• Low potential for cooperation
• Low potential for threat
• Mixed blessing
• High potential for cooperation
• High potential for threat

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Changing Stakeholder Negotiation Context
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Negotiate with Stakeholders Under Rank-Ordered
Conditions

• Stakeholder potential for threat is low and
  potential for cooperation is high, presenting a
  highly favorable negotiation situation.
• Stakeholder potential for both threat and
  cooperation is moderate to high, presenting a
  moderately favorable negotiation situation.
• Stakeholder potential for threat is high and
  potential for cooperation is low to moderate,
  presenting a highly to moderately unfavorable
  negotiation situation.

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Diagnosing the Negotiation Situation by Focusing
on Outcomes

• Outcome Type 1 Substantive Outcomes
• Outcome Type 2 Relationship Outcomes

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Diagnosing the Negotiation Situation
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Outcome-Focused Negotiation Strategies

• Collaborate Strategy C1
• Compete Strategy P1
• Subordinate Strategy S!
• Avoid Strategy A1

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Selecting an Outcome-Focuses Negotiation Strategy
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Selecting and Refining Stakeholder Negotiation
Strategies
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Stakeholder Contingencies

• Can stakeholder representative ensure stakeholder
  acceptance?
• If no, negotiation strategy must be more
  cautious.
• Will likely stakeholder coalitions be acceptable
  to organization?
• If no, negotiation strategy must be more cautious.

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Modified Strategies Because of Stakeholder
Contingencies

• Collaborate Cautiously Strategy C2
• Compete Respectfully Strategy P2
• Subordinate Guardedly Strategy S2
• Avoid but Monitor Strategy A2

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Figure 31. Selecting and Refining Stakeholder
Negotiation Strategies
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Negotiation Phases

• Search for arena and agenda formulation
• Statement of demands and offers
• Narrowing of differences
• Final bargaining

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Stakeholder Negotiation Tactics Across Various
Negotiation Phases
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Stakeholder Negotiation Tactics Across Various
Negotiation Phases Cont.
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The Number of Partiesin a Negotiation

• The basic possible roles for parties in a
  negotiation
• A negotiating dyad
• Negotiating teams
• Agents and constituencies
• Unrepresented bystanders and audiences
• Third parties

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A Negotiating Dyad andAgents and Stakeholders

• A Negotiating Dyad
• When two isolated individuals negotiate for their
  own needs and interests
• Agents and Constituencies
• A negotiator is not acting for himself but for
  others. We will call the negotiator in such
  situations an agent and the individuals he is
  representing a stakeholder

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A Negotiating Dyad- One Represents a Stakeholder
(Often Called a Constituency)
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Bystanders and Audiences

• Bystanders
• Those who have some stake in a negotiation, care
  about the issues or the process by which a
  resolution is reached
• Negotiators do not formally represent bystanders
• Audience
• Any individual or group of people not directly
  involved in or affected by a negotiation
• They may offer
• Input
• Advice
• Criticism

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Negotiators with Stakeholders, Bystanders and
Audiences
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Third Parties

• Third parties
• Bystanders who may be drawn into the negotiation
  specifically for the purpose of helping to
  resolve it
• Third parties often can reshape a polarized
  situation into a constructive agreement

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How Agents, Stakeholders and Audiences Change
Negotiations

• The first negotiating relationship is between the
  agent and constituent who must decide on their
  collective view of what they want to achieve in
  the negotiation
• The second relationship is with the other party
  the negotiator and the opposing negotiator who
  attempt to reach a viable and effective agreement
• The third type of relationship is composed of
  external bystanders and observers.
• They are affected by the negotiation outcome or
  have a vantage point from which to observe it
• They have some strong need to comment on the
  process or the emerging outcome.

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How Stakeholders etc. Change Negotiations Cont.

• Characteristics of audiences
• Audiences may or may not be dependent on the
  negotiators for the outcomes derived from the
  negotiation process
• Audiences affect negotiations by the degree of
  their involvement in the process
• Direct involvement
• Indirect involvement
• Audiences may vary in identity composition
  size relationship to the negotiator, and role in
  the negotiation situation

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How Stakeholders etc. Change Negotiations Cont.

• Audiences make negotiators try harder
• Negotiators seek a positive reaction from an
  audience
• Pressures from audiences can push negotiators
  into irrational behavior
• Audiences hold the negotiator accountable