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Chapter 3. Negotiation / Conflict Resolution
Negotiating is trying to reach agreement with
another party when the two parties share an objective, but have a
conflict about other matters. Synonyms for negotiating include:
bargaining, haggling, dickering, give-and-take, conflict-resolution or
"improving the agreement obtained through influencing."
If you have a conflict with another party and do not
share any objectives with them, the correct strategy choices are
avoidance or self-defense. If you believe that you share an
objective with another party, and you seek specific actions from them,
the correct strategy is to use influencing techniques, as discussed in
Chapter 2.
Sometimes, group processes evolve from one type of
activity to another. You may influence someone and proceed to
negotiate in order to iron out some conflicts. Alternately, you
may be negotiating with another party and both sides may find that the
shared objective is really not at all important compared to the
conflict and the conclusion is that there is nothing more to talk about.
Examples of situations that provide negotiating opportunities include:
1. Jack Wilson’s employer wants to promote him
to Assistant Branch Manager. Jack wants a promotion, but to the
higher level of Branch Manager.
2. Susie Quinn wants to rent a particular
apartment and the landlord wants to rent it to her. The landlord
wants Susie to move in on May 1 but she wants to move in on June 1.
3. Rose and Franz Taugwalder are going to
Europe on vacation. Franz wants to hike for three weeks in
Switzerland but Rose wants to spend a week in Paris, a week in Athens
and cruising the Aegean Islands and a week in Italy, visiting Rome,
Florence and Venice.
We will refer to these examples in the discussion of the negotiating process.
The Negotiating Process
1. Define Objectives and Conflicts
In negotiating, as in the
practice of every other skill discussed in this book, the first step is
to define objectives. In negotiating, you explore three kinds of
objectives:
1. Your objectives.
2. The other party’s
objectives. Do a mini-SCAN, (see Chapter 1) from their point of
view. Do not assume that the other party wants or needs what you
would want if you were in their position. Their background may be
different, their culture may be different, or their position in the
organization may require behaviors that are different from yours.
3. The objectives shared by both parties.
4. The conflicts between the two parties.
2. What Are You Willing to Trade? What Will They Offer?
The essence of negotiation is
give and take. Prepare a list of the things you want and evaluate
each of them in terms of how valuable it is to you and its probable
cost to the other party. Prepare another list of things you are
willing to give and evaluate each of them in terms of its cost to you
and probable value to the other party. Pick out the trading items
that are:
a)Bargaining
Chips: Of low value to you, but of great value to the
other side. These are things that you are willing to give away in
exchange for something else that is more valuable to you.
b) Non-Negotiable
Demands: Valuable to you, but cheap to them. These are
are things you must have get if you are to reach an agreement.
They are less valuable to the other side than they are to you.
Let’s take as an example the
promotion to Assistant Branch Manager that was offered to Jack Wilson
when he wanted to be Branch Manager.
Jack’s best bargaining chip was
that he was willing to take the Branch Manager position that was open
in Cheyenne, Wyoming. He had confidence in his ability to network
(Chapter 4) his way out of Cheyenne and back to the Big Apple within
two years. If he accepted an Assistant Branch Manager position,
he would have to stay in that job for two years, before he could expect
a promotion to Branch Manager. The way it looked to him was that
the company would gain something valuable, they would place a competent
performer in a hard-to-fill job. His non-negotiable demand was
that he wanted to complete his work toward his night-school MBA degree
before moving out of town. This was very important to him, and
would represent no great sacrifice to the company because Jack was only
three months away from graduating.
Brief review. Jack’s
willingness to work in Cheyenne was a bargaining chip. It was
cheap to Jack but valuable to his employer. Staying in town for
three months was valuable to Jack but cost the company little.
This was Jack’s non-negotiable demand.
3. Determine Your Best Alternative to Negotiated Agreement (BATNA)
How well off are you if the
negotiation fails to reach a compromise? The answer to this
question will determine how eagerly you reach for settlement at the
negotiating conference. Let’s look at the example of Susie Quinn
and the apartment. The market for apartments had softened
considerably during the previous three years. If the landlord
insisted on the May first starting date, Susie would be able to find
another apartment with a later starting date. On the other hand,
she liked this apartment because of its good location and attractive
layout and view. She decided that she was not too happy about her
Best Alternative to Negotiated Agreement (BATNA) and that she would
enter the negotiation with a flexible attitude.
4. Your Most Important Decision: How High Should You Aspire?
How much should you ask for at
the start of the negotiating conference? Should you ask for
everything your heart desires and risk a deadlock or should you
moderate your demands and aim for a quick settlement? Experience
shows that those who ask for more and support their demands with
reasonable arguments, usually get more. They also encounter a
higher risk of deadlock. Two strategies are available for
reducing the risk of standoff when you ask for more of what you want:
<b>prepare</b> very thoroughly, and be patient.
Let’s use the Mr. and Mrs.
Taugwalder example. Mrs. T. wants to go to Paris, Greece and
Italy and Mr. T. wants to spend the entire three week vacation hiking
in the Alps. Mrs. Taugwalder decides to open the negotiation by
demanding that they do it her way. However, she also wants to
continue her happy married life with Franz. She engages in
intense preparation. She asks Franz what appeals to him about
hiking in the Alps. He reveals that two things motivate him: he
wants to do a lot of walking for health reasons and he wants to eat
some delicious Swiss food. (Franz is descended from a family of
distinguished Alpine guides in Zermatt, at the base of the Matterhorn,
in the Valais canton of Switzerland and his parents have told him many
times that when you hike in Switzerland, you are never far from a
restaurant that serves wonderful soups, salads and meat dishes and
outstanding pastries and freshly brewed coffee.)
Rose Taugwalder assures Franz
that her itinerary will provide opportunities for walking and as for
delicious food, Paris, Athens, Rome, Florence and Venice will provide
quality and variety. On the Greek island cruise, the ship has a
gym, as well long decks for jogging and food and drink will be
outstanding. Rose starts the negotiation early to give Franz
enough time to get used to the idea that the Taugwalders will visit
Switzerland on the European vacation following this one.
Because Rose prepared her demands
with Franz' concerns in mind, there’s a good chance she will get what
she wants. If Franz insists on visiting Switzerland, Rose will
allow him to extract a week in the Alps in trade for the Greek week, so
she’ll get two out of three. If Rose had not prepared thoroughly
and had not opened with a high demand, she probably would be spending
three weeks looking at snow covered mountains and cows munching grass
instead of visiting the most beautiful cities of Europe and strolling
through some of the finest museums and specialty shops in the world.
5. Options to Consider before the Negotiating Conference
The first option is to refuse to
attend the conference until one of your conditions has been met.
Officially, the President of the United States does not negotiate with
hostage takers, although he will discuss grievances after the hostages
have been released. The President refuses to negotiate with
hostage holders because if he did, he would encourage terrorists all
over the world to take American travelers as hostages. At any one
time there are hundreds of thousands of Americans traveling all over
the world. To expose this many American citizens would be
intolerable.
In my own experience, I once
refused to attend a negotiation unless my proposal would be discussed
first because I knew that if the alternative proposal were discussed
first, time would run out before my proposal would come up. The
other side was inflexible, so there was no meeting. This shows
the risk you take when you establish pre-conference conditions. I
had nothing to lose by setting the precondition. The fact that
the other side was inflexible showed that they had no interest in my
proposal. In negotiating terms, the two sides did not share
objectives. My precondition proved this and saved me time and
grief.
The second option, is to send
someone to represent you at the conference. This is standard
practice at Summit conferences. Lower level representatives
complete the negotiating before the heads of state meet to sign the
agreements. During the negotiating sessions, the bargainers often
say "I need to contact my principals for instructions." This
provides flexibility that the principals themselves would not have if
they were doing the negotiating.
In more common situations, it is
not unusual for parties to a negotiation to use agents. Actors,
authors, baseball players and others use experienced negotiators on the
assumption that these professionals will obtain better terms than they
could themselves.
6. Preparing for the Conference
Many people feel pressured to
compromise when they enter a negotiating conference. Having such
a feeling is dangerous because it may lead to a less favorable result
for your side. Here are some suggestions distilled from the
experience of thousands of hours of negotiating by some of the leading
practitioners of the art.
1. Do not accept deadlines,
targets or any time-based goals. Allow negotiations to proceed at
whatever pace develops. Accept the fact that the outcome of any
individual meeting, or of the entire process may be any of the
following: settlement, continuation of the conference at another time
or deadlock. If the perception of common objectives is strong and
the conflicts are small, settlement will occur, unless there is a
misunderstanding or one of the parties irritates the other.
Do not assume that the other side
is under less pressure to settle than you are. Do not allow the
other party to pressure you into accepting an inferior settlement.
2. Do not underestimate your
power. The fact that other party is meeting with you proves that
they need something from you. It is in your power to grant or to
deny their aspirations. For purposes of the conference, your
power is equal to theirs. Prepare yourself for the possibility
that the other party will try to weaken your negotiating strength by
various forms of bullying, such as: boorishness, irrationality, citing
principles, regulations, customary practice, or by flaunting their
status. Don’t allow them to intimidate you by these methods, or
by anything else. Don’t accept any of their demands or offers as
being non-negotiable. Almost everything is negotiable.
3. In preparing your demands,
remember that the more you ask for, the more you’ll get. Remember
also that to fulfill high aspirations you require excellent
preparation, great patience and acceptance of risk of deadlock.
4. In preparing for the
negotiation conference, use preparation methods similar to those
recommended in Chapter 2 for influencing:
Role-playing consists of
practicing your negotiating effort with a willing associate before
doing it at the conference. You have to prepare your role-playing
partner by telling him or her how the other party is likely to behave
at the conference. The more you role-play, the more confident and
skillful you will be when you do it in reality.
Imagery may be used instead of
role-playing or in addition to role playing. In a quiet
environment, you imagine yourself in the negotiating situation.
You enter the conference room, state the common objective, wait for the
other side to state its demands, respond appropriately and continue the
give and take.
As you imagine the situation many
times, trying different approaches to different obstacles (always with
a successful conclusion) you gain familiarity with the entire process
and build up your confidence and thereby increase your probability of
success at the real negotiating encounter.
7. At The Negotiating Conference
Wait for the other party to
speak. They may make you an offer that exceeds your wildest
dreams. Why not give them a chance?
If the other party declines to
speak, encourage them. If they still decline, wait. If
nothing happens, you have two options: make a statement or continue
waiting and risk that they may leave. If you decide to make a
statement, announce the shared objective that brings you together,
offer to take notes on what happens at the conference and turn
attentively to the other party and wait for them to make a demand or an
offer.
If they absolutely refuse to make
a demand or an offer, what you do next depends on your need to reach a
settlement. If you decide that you want a settlement, start by
making the strongest demand or lowest offer that you can support with a
reasonable argument. Have in mind, but do not mention your
bargaining chips (items that are not important to you and are likely to
be important to the other side). You will use these bargaining
chips for making low cost concessions in exchange for something you
want.
If on the other hand, your
negotiating partner does make a demand or an offer, state firmly that
it is unacceptable. Say that you simply can’t afford it. If
you are a good actor, recoil in shock and exclaim "What?! You
can’t expect me to do that!" Consider using some of the intimidation
tactics listed in Part 6, above: boorishness, irrationality,
statistics, principles, regulations, "customary practice," or flaunting
of status.
Try to get the other side to
lower their demand or to improve the offer they are making, without
your offering any concessions. If you sense that you may have
irritated the other side, repeat the shared objectives. In case
of doubt, it never does any harm to repeat the shared objectives and in
fact, it may do a great deal of good in helping the other side to be
more cooperative.
Delay your first concession as
long as possible. Allow silences to develop. Silences build
pressure and they cost you nothing. For yourself, resist pressure
engendered by silence, by spending the silent time in reviewing what
has happened so far and rethinking your position in view of what has
happened and developing alternative settlements that might be
acceptable to both sides.
To increase your toleration of
silences, tell yourself mentally: "You can’t give anything away
when you are not speaking."
When you finally do make a
concession, make it small and make the other side earn it by giving you
a concession in return. The smallest concession is to promise to
consider making a concession in the future. Next on the smallness
scale, would be a concession that costs you very little. If the
other side complains that the concession is too small, state firmly: "I
can’t afford more."
Repeat the shared objectives from
time to time. If you do not understand something that the other
side has said, ask them to explain it. Never take a chance on
misunderstanding the statements or the positions of the other side and
never make any assumptions. Allow them to explain their positions
fully and clearly. Also, clarify your own position from time to
time, to make sure that the other side understands your needs.
Never tell them about any of your weaknesses or any threats that you feel.
If you feel at any time during
the conference that the flow of events is not favorable to your side,
step out. Depending on the effect you want to create, you may say
that you will return in fifteen minutes, or you want to adjourn the
meeting for another time, or you may declare a deadlock and abandon the
negotiation.
If you wish, you may say that you
need to consult someone: your spouse, a trusted friend, an
expert. It is entirely at your discretion whether you actually
consult someone or whether you just take some quiet time to think over
the progress of the negotiation.
Another option is to leave
without saying anything and let the other side worry about what will
happen next.
What you do and how you do it
depends on how strong your need for settlement is relative to the need
of the other side and the extent to which you want to shake their
intransigence. If you decide later that you want to resume
negotiating, remember that almost everything is negotiable.
Another tactic for softening up a
hard-nosed adversary is to set a deadline, for example: “In
ninety minutes, I’m walking out of here, with or without an
agreement!” Use this tactic only if your BATNA is acceptable to
you.
You may conclude during the
conference that the other side does not really understand their best
options. You may also conclude that a settlement that would
satisfy you is within reach, if the other party would only understand
that this settlement is also good for them. In such a situation,
use influencing techniques from Chapter 2.
8. After the Conference
After every negotiating
conference, learn as much as you can from the experience. Review
everything that was said or happened, and when it was said or
happened. If you kept good notes, you should have no trouble
doing this. Ask these questions: What could we have done
better? What could they have done better? What should we do
differently next time we are in a similar situation? Review every
recommendation in this chapter against what you did and experienced.
9. Is Negotiating Ethical?
Negotiating takes place among
parties that are equal, at least for the negotiation. It is
cooperative and adversarial, at the same time. Any impulse to
make excessive demands is tempered by the fact that the other side may
not yield to them, or may even walk out. You
should never yield undemanded concessions on the grounds that your
bargaining position is stronger and you want to be fair to the other
side.
Negotiation is a self-regulating
process. The balance of power between the parties insures that
settlements will be perceived by both sides as being the best they
could have obtained. After settling, if either side feels
that it can’t live with the agreement reached, it can reopen the
negotiation. After all, nearly everything is negotiable.
My conclusion is that negotiating
is as ethical as any activity known to human beings. The less we
fight and the more we negotiate, the better off we will be.
10. Next Steps
Your next steps should be to
practice and observe negotiating. Review this chapter and apply
the techniques. Well conducted negotiating is fun and helps you
to achieve your goals and to help other people, as well. You can
also learn a great deal by observing other people as they attempt to
negotiate with you or someone else.
Another valuable experience is to
look for negotiating opportunities at meetings that are not announced
as negotiating meetings. If you participate in what is supposed
to be a decision-making meeting, and a conflict develops, try to apply
the tactics discussed in this chapter.
A Negotiating Experience
Conduct a new
negotiating experience following <b>all</b> the suggestions
presented in this chapter. Prepare a report on the entire
negotiating experience, covering the topics listed below. Your
paper must report a real, new negotiating encounter. A report
based on a hypothetical or old encounter will not be accepted.
('Old encounter' is an negotiating encounter that occurred before you studied the "Negotiation / Conflict
Resolution" Chapter in this book.)
Follow this outline in writing
your report of the Negotiating experience. Your report must
contain all of the following headings:
A. Before the Negotiating Encounter
1. Your objective for this negotiating experience - what did you want?
2. Who was your negotiating counterpart for this experience?
3. Your counterpart’s Mini-SCAN: Steps 1 to 4 of the SCAN Process. See Chapter 1.
Which objectives and SWOTs did you use for the negotiating experience?
4. Your analysis before the negotiating encounter.
a)
What was (were) the objective(s) shared by both sides?
b) What were the conflicts between the two sides?
c) What were /
was your . . . ?
1) Bargaining (trading) chips (cheap to you, valuable to them)?
2) Non-negotiable demands (very valuable to you, cheap to them)?
3) Your BATNA? Your attitude about your BATNA?
4) Initial aspirations (planned starting position)?
d. Regarding
your negotiating partner what did you estimate as their . . .?
1) Bargaining chips?
2) Non-negotiable demands?
3) BATNA? Their attitude about their BATNA?
4) Starting offer?
5. Your preparation for the negotiating encounter.
a) What opener did you prepare?
b) How did you conduct the imagery and role-play?
c) What else did you do to prepare for the encounter?
6. Did you you use any non-conference tactics? What were they?
B. What happened at the conference?
1. Who spoke first? What did this person (you or your counterpart) say?
2. Did you encounter challenges and/or refusals? If yes, how did you respond?
3. Did you reach a negotiated agreement? What was it?
C. Analysis and thoughts after the meeting.
1. Were there any surprises at the negotiating encounter?
2. Should you have done anything differently?
3. Should they have done anything differently?
4. What are the three most important things you learned from this experience?
5. What are your plans for future negotiating encounters?
This Page was last update:
Thursday, August 18, 2005 at 2:30:14 PM
This page was originally posted: 8/17/2005; 1:55:21 PM.
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