Chapter 1: The nature of negotiation

Chapter 1: The nature of negotiation

The structure and processes of negotiation are fundamentally the same at personal level as they are at the diplomatic and corporate level.

Negotiations occur for two reasons:

(1) To create something new that neither party could do on his or her own

(2) To resolve a problem or dispute between the parties.

There are several characteristics common to all negotiation situations:

(1) There are two or more parties

(2) There is a conflict of interest between them

(3) The parties negotiate duo to get a better deal

(4) The parties, at least for a moment prefer to search for agreement

(5) When they negotiate they expect to give and take

(6) Successful negotiation involves the management of intangibles (such as need to look good) as well as resolving the tangibles (such as the terms of agreement)

In negotiations both parties need each other. This situation of mutual dependency is called interdependence. Interdependent relationships are characterized by interlocking goals; the parties need each other to accomplish their goals. The structure of the interdependence (wind-lose or win-win), determines the range of possible outcomes of the negotiation and suggests the appropriate strategies and tactics that the negotiators should use. For these events in advance. The preparation must include attention to substantive items including goals, goal priorities, and multi-goal packages as well as procedural concerns dealing with agendas and bargaining histories. The choice of goals and frames are strongly interactive and the existence of one will rapidly produce evidence of other. Afterwards negotiators move to the third element in the sequence: selecting and developing a strategy. According to below suggested model, negotiators have some choices of a negotiation that is reflected in the answers to two simple questions: how much concern does the actor have for achieving the substantive outcomes at stake in this negotiation and how much concern does the negotiator have for the current and future quality of relationship with the other party. In the last part of chapter, authors explain the importance of planning. While success in negotiation is affected by how one plays the game, the most important step for success is how to one gets ready for the game. Effective planning also hard work on a number of specific steps:

·      Defining issues

·      Assembling issues and defining the bargaining mix

·      Defining interests

·      Consulting with others

·      Identifying limits

·      Setting targets

·      Developing supporting arguments

·      Analyzing the other party

Frames, goals, strategies and stages set the background for an effective planning process. If the negotiator is able to consider and evaluate each of these factors, the negotiator will know what he or she wants and will have a clear sense of direction on how to proceed. The sense of direction, and the confidence derived from it will be the single most important factor in achieving a desired negotiation outcome.

Question

1. How people negotiate: the dual concerns model?

Early conflict researchers argued that how people manage conflict depends upon the relative importance they attach to their own outcomes and the other party’s outcomes. This dual concerns model posits five different approaches for handling conflict, as depicted in Figure 1.1. People who attach substantially more importance to their own outcomes than they attach to the other party’s outcomes adopt a competitive or win-lose strategy. Accommodation is a lose-win strategy. It is used by those who place greater importance on the other party’s outcomes than their own. Those who have little concern for either party’s outcomes avoid conflict. This is a lose-lose strategy. Compromising is what people do if they are only moderately concerned about both parties’ outcomes. Collaboration is the strategy of choice for people who seek a win-win outcome— they attach great importance to both parties’ outcomes.

What does this have to do with how people negotiate? Savage, Blair, and Sorenson (1989) modified the dual concerns model by arguing that how people negotiate depends upon the relative importance they place on the substantive terms of the outcome at stake, and their relationship with the other party. If concern for the relationship” is equivalent to “concern for the other party’s outcome, this framework simply extends the dual concerns model to negotiation. Using this framework, there are two dominant strategies.

One is a competitive approach reflecting greater concern for the substantive terms of the outcome for him- or herself than for the relationship. This strategy is typically called distributive, positional, zero-sum, or win-lose negotiating. These are different names for the same phenomenon, all of which assume that the negotiation is a zero-sum exercise—if one party gains something the other must lose. This strategy is about claiming value and is most appropriately used when the parties’ goals are in fundamental conflict, resources are fixed or limited, they attach greater importance to the substantive terms of the outcome than the relationship, and trust and cooperation are lacking.

The other dominant strategy is commonly called integrative, principled, interest-based, mutual gains, or win-win negotiating. Again, these are different labels for the same phenomenon. This is a collaborative approach whereby substantial importance is attached to both the relationship and the substantive terms of the outcome for both parties. This strategy is about creating value so that both negotiators can benefit from it. It is most appropriately used when the parties’ goals are not in fundamental conflict, resources are not fixed or limited, sufficient trust or cooperation exists, and the parties want to find mutually beneficial outcomes.

2. What does a negotiation look like?

It is hard to describe a typical negotiation because no two are identical. Yet there are common themes that emerge, and common flows or patterns that they often follow. These flows or patterns are not truly linear. Many negotiations move forward, get stuck, regress, or even move sideways. Nevertheless, they will be described as if they are linear for the sake of clarity. The initial stage of a negotiation typically includes, or should include, pre-negotiation preparation and, when you meet with the other party, rapport building and more information gathering to test your assumptions. In addition, your preparation should include an analysis of the