Art and Strategy of Negotiation Substantive and Relationship OutcomesPart 1

1
Art and Strategy of Negotiation--Substantive and
Relationship OutcomesPart 1

• Negotiation Conflict Management
• January 23, 2006
• John D. Blair, PhD
• Georgie G. William B. Snyder Professor in
  Management

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The Nature of Negotiation

• Negotiation is something that everyone does,
  almost daily
• Process involving interested parties who
• Resolve disputes
• Identify courses of action
• Engage in bargaining for win/lose outcomes--or
• Engage in bargaining for win/win outcomes
• Involve individuals or groups
• Is pervasive throughout ones life

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Negotiations

• Negotiations occur for several reasons
• To agree on how to share or divide a limited
  resource
• To create something new that neither party could
  attain on his or her own
• To resolve a problem or dispute between the
  parties

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What is Included in Negotiation?

• Many people treat bargaining and negotiation as
  distinctive phenomena
• Bargaining describes the competitive, win-lose
  situation
• Negotiation refers to win-win situations such
  as those that occur when parties try to find a
  mutually acceptable solution to a complex
  conflict
• We will use Negotiation to include both kinds of
  situations.

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Negotiation Style or Strategy ?

• People who are only good with hammers see every
  problem as a nail. -- Abraham Maslow

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Changing Nature of Business Today

• Intensifying competition
• Increased knowledge expertise among business
  people
• Changing expectations
• Various Descriptors
• Strategic Alliances/Partnerships
• Relationship Marketing
• Characterized by
• Closer and more integrated ties between
  organizations
• Collaborative 2-way communication
• More business with fewer suppliers

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Skills Necessary for Business

• Key skills will be the ability to win friends
  and influence people at a personal level, the
  ability to structure partnerships, and the
  ability to negotiate and to find compromises.
  Business will be much more about finding the
  right people in the right places and negotiating
  the right deals.
• Charles Handy 2002

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Characteristics of a Skilled Negotiator

• Mindfulness alert to subtle changes or
  differences
• Active and effective listener
• Keen observer
• Always prepared
• Versatile and flexible in their communication
  style (See Reardon)
• Versatile and flexible in their negotiation
  strategy (See SBS Model)

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Understand the Context

• If you don't know where you're going, you'll end
  up somewhere else. -- Yogi Berra

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Characteristics of aNegotiation Situation

• There are two or more parties
• There is a conflict of needs and desires between
  two or more parties
• Parties negotiate because they think they can get
  a better deal than by simply accepting what the
  other side offers them
• Parties expect a give and take process

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Characteristics of aNegotiation Situation Cont.

• Parties search for agreement rather than
• Fight openly
• Capitulate
• Break off contact permanently
• Take their dispute to a third party
• Successful negotiation involves
• Management of tangibles (e.g., the price or the
  terms of agreement)
• Resolution of intangibles (the underlying
  psychological motivations) such as winning,
  losing, saving face

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Interdependence

• In negotiation, parties need each other to
  achieve their preferred outcomes or objectives
• This mutual dependency is called interdependence
• Interdependent goals are an important aspect of
  negotiation
• Win-lose I win, you lose
• Win-win Opportunities for both parties to gain

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Interdependence Cont

• Interdependent parties are characterized by
  interlocking goals
• Having interdependent goals does not mean that
  everyone wants or needs exactly the same thing
• A mix of convergent and conflicting goals
  characterizes many interdependent relationships

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Types of InterdependenceAffect Outcomes

• Interdependence and the structure of the
  situation shape processes and outcomes
• Zero-sum or distributive one winner
• Non-zero-sum or integrative mutual gains
  situation

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Value Claiming and Value Creation

• Opportunities to win or share resources
• Claiming value result of zero-sum or
  distributive situations where the object is to
  gain largest piece of resource
• Creating value result of non-zero-sum or
  integrative situation where object is to have
  both parties do well
• SBS Model focuses both on zero-sum and
  non-zero-sum situations.

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Value Claiming and Value Creation

• Most actual negotiations are a combination of
  claiming and creating value processes
• Negotiators must be able to recognize situations
  that require more of one approach than the other
• Negotiators must be versatile in their comfort
  and use of both major strategic approaches
• Negotiator perceptions of situations tend to be
  biased toward seeing problems as more
  distributive/ competitive than they really are

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Negotiating Styles

• Which is Yours?
• Which do you expect of Others?

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Whats Your Style?
Employ soft tactics
MOTIVATOR
MEDIATOR
ANALYZER
ACHIEVER
Employ hard tactics
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Negotiating Styles
MEDIATOR
MOTIVATOR

• Focuses on joint, overarching goals
• Seeks mutual understanding
• Persuades with vision not dry data
• Uses agendas as guidelines rather than
  restrictions

• Cares about mutual gain
• What others might derive
• Encourages listening sharing opinions
• Doesnt hurry

ANALYZER
ACHIEVER

• Presents data or information
• Willing to use time to develop understanding
• Persuades rather than demands or insists
• Likely to propose and reason through an agenda

• Utilize words that suggest urgency
• More direct
• Uncomfortable with chit-chat
• Assertive in identifying key issues
• Exact in the proposal of an agenda

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Negotiating Styles- Your Others
MEDIATOR
MOTIVATOR
ANALYZER
ACHIEVER