Chapter Two: Negotiation Strategy

Con’d

• The first step in developing and executing a

negotiation strategy is to determine one’s
goals.
• Negotiators must anticipate what they want
to achieve in a negotiation and prepare for
these events in advance
 Con’d
• Negotiator should specify their goals and
objectives clearly.
• This includes stating all goals they wish to
achieve in the negotiation,
 Strategy
• After negotiations articulate goals, they
move to the second element in the
sequence: selecting and developing a
strategy
• Strategy: The overall plan to achieve
one’s goals in a negotiation
 Approaches to Strategy
• Unilateral: One that is made without active
involvement of the other party
• Bilateral: One that considers the impact of
the other’s strategy on one’s own
The Stages of Negotiation
Preparation:
• The first stage relates to planning and preparation.
• This is a time to assess the situation and the relationship with
the other party.
• You will want to begin collecting information needed for the
negotiations.
• Important information includes defining your needs and
objectives. What are your minimum expectations? How much
are you willing to yield? Additionally, what do you anticipate
from the other party? What are their needs and objectives?
What will they ask for?
Opening and Exchanging information:
• In this stage the parties exchange the
information gathered in the preparation stage.
• The process begins with each party laying out
and explaining their opening positions.
• Identify points of differences and conflict. Both
parties should listen and question the other
party’s positions to determine points of leverage
and counter arguments.
Bargaining:
• This stage is the essence of the game of negotiation.
• It is the classic game of give and take.
• Each party will utilize various negotiation strategies to achieve
the objectives established during the preparation process.
• A natural part of the bargaining process is making
concessions, in other words, giving up one thing to get
something else in return.
Closing and Implementation:
• This is the final stage of the negotiation process where a final
agreement is completed.
 Key Factors that Determine the Types of Strategies

Negotiation is fundamentally a communication

exercise between individuals.
• The outcome – what you might lose.
• The relationship – how the negotiation will
affect you your relationship with the other
party
• The nature of the negotiators' interaction and the relationship
that ensues has a major impact on the negotiation process.
There are three common types of relationship in negotiation
include:
• business-only
• friendship-only, and
• multiplex relationships that involve both.
In order to create a durable relationship in
negotiation, there are four basic building blocks that
can help you create effective partnerships with the
people you lead:
• Two-way communication
• A strong commitment from the leader to the
interests of those he leads
• Reliability
• Respect for the contributions followers make to the
organization
 What personal and situational factors affect
negotiation?

Negotiation Context
• The situation or conditions under which the
situation arises.
• What are the facts of the situation?
• Who are the parties to the situation?
• What is the nature of the interaction or
relationship between the parties.
Objectives or Interests of Negotiators
• The objectives and interests of the parties are often
subjective and will drive the negotiation process.
Perception or Cognition of Negotiators
• How an individual perceives the facts of the
situation.
• An individuals perception of the facts of a situation
and the negotiation process will affect the ability to
effectively process the facts or information.
Creativity of Negotiators
• A negotiators willingness and ability to search
for and develop alternative resolutions to
situations involving differing perceived interests
or objectives will affect the breadth of the
negotiation.
Strategy Used
• Each parties strategic plan for arriving at a
particular outcome.
Communication
• The ability or effectiveness of parties to a negotiation to
communicate their interests, objectives, and acceptable
resolutions of situation will affect the negotiation process.
• In a way, effective negotiation practice is a communication
exercise.
• Parties use communication techniques to derive and
understanding of the other party and their interests.
Communication is also the primary method of achieving
concessions the bring a negotiation within a zone of
potential agreement (ZOPA).
Trust Between Negotiators
• Trust between individuals affects the willingness and depth of
personal interaction.
• In this way, trust moderates the interaction between individuals
when their interests and objectives differ.
Ethics of Negotiators
• Ethics influence individuals values, perceptions of situations,
and the communication and strategic tactics employed in a
negotiation.
• Culture - Aspects of cognition, communication, trust, and ethics
are all implicated when individuals from different cultures
interact.
Medium of Communication
• The medium through which parties communicate can
affect numerous aspects of the negotiation.
• Notably, it affects the communication process and the
cognitive processing of the information exchanged. This
can, in turn, affect the strategy that the parties employ.
Intermediaries Involved
• The presence of facilitators or decision makers will have
an effect on the negotiators objectives, perceptions,
strategy, communication, and trust in a situation.
 Alternative Negotiation Strategies and when to
choose which strategies

• Competition (win-lose)
• Collaboration (win-win)
• Compromise (split the difference)
• Accommodation (lose-win)
• Avoidance (lose-lose)
Competition (win-lose):
• A competitive negotiation style is the classic model of “I win, you
lose.”
• This style of negotiation considers winning at all costs even at the
expense of the other party.
• Competitive negotiators use hardball tactics to achieve their needs
without regard to the other party’s needs.
• A competitive negotiation style is beneficial when the outcome is
important, and the relationship is not.
• This style might be useful when the goals of the party’s goals are
short term and incompatible.
• The tangible benefits are the most important.
• The competition negotiation style is, however, very risky. It can
be costly and time consuming and often lead to a deadlock/block.
Collaboration (win-win):
• In contrast to the competitive style, a collaborative negotiation
style seeks a “I win, you win” outcome.
• This win-win model focuses on making sure all parties have their
needs met.
• With this style, both relationship and outcome are important. The
purpose is to maximize outcome and preserve the relationship.
• A collaborative style is appropriate in situations where developing
and maintaining a relationship is important, where both parties are
willing to understand the other party’s needs and objectives, and
when finding a long lasting and creative solution is desired.
• A collaborative negotiation style is often the most difficult to
employ because it requires an investment in time and energy in
finding innovative solutions.
Compromise (split the difference):
• Unlike the collaborative style, the compromising negotiation
style follows a “I win/lose some, you win/lose some” model.
• Compromising is the style most people think of as
negotiation, but it is really only bargaining.
• Compromisers use this style instead of finding a solution that
fully benefits everyone.
• Often described as splitting the difference, a compromising
style results in an agreement about half way between both
party’s opening positions.
• It may result in satisfying some of each party’s needs, but it
does not maximize the situation as collaboration can.
• but still wish to achieve positive outcomes and relationships.
Accommodation (lose-win):
• This style can be described as the “I lose, you win” model and is
the direct opposite of the competitive style.
• For accommodating negotiators, the relationship means
everything and the outcome is not important.
• Additionally, this style might be preferred in order to increase
support and assistance from the other party and hope they will be
accommodating in the future.
• Accommodation is sometimes the best style to employ because it
serves to strengthen personal factors. It can build trust, show
respect, and enhance relationships.
• The major drawback, however, is that it may appear to be
condescending/superior toward the other party or cause the other
party to feel uncomfortable because of an easy win.
Avoidance (lose-lose):
• This style is the “I lose, you lose” model.
• This style is used when both outcome and relationship are not
important.
• Negotiations can be costly in terms of time and energy.
• Do the costs of negotiation outweigh the likely outcome and
relationship returns? If not, it may be preferable not to negotiate at
all.
• This strategy is implemented by withdrawing from active negotiations
or by avoiding the negotiations entirely.
• An avoidance style is used infrequently in negotiating and is often used
when the negotiation concerns a matter that is unimportant to both
parties.
 CHAPTER THREE
NEGOTIATION ACROSS CULTURE
The Nature and Characteristics of Culture

• Culture refers to a set of values, ideas, custom,

belief and other meaningful symbols that help
individuals communicate, interpret, and
evaluate as members of society. Culture does
not instincts
 Characteristics of Culture
Culture is social:
Culture does not exist in isolation. It is a product of society. It
develops through social interaction. No man can acquire culture
without association with others.
Culture Is Shared:
Culture is not something that an individual alone can possess.
Culture in sociological sense is shared. For example, customs,
traditions, beliefs, ideas, values, morale etc. are all shared by
people of a group or society.
Culture Is Learnt:
Culture is not inborn. It is learnt. Culture is often called "learned
ways of behavior". Unlearned behavior is not culture. saying
thanks' or 'namaskar', dressing etc. are cultural behavior.
Culture Varies From Society To Society:
Every society has a culture of its own. It differs from society to society.
Culture of every society is unique to itself. Cultures are not uniform.
Cultural elements like customs, traditions, morale, values, beliefs are not
uniform everywhere. Culture varies from time to time also.
Culture Is Gratifying:
Culture provides proper opportunities for the satisfaction of our needs and
desires. Thus, culture is defined as the process through which human
beings satisfy their wants.
Culture Is Transmitted:
Culture is transmitted as it is transmitted from one generation to another.
Language is the main vehicle of culture. Language in different form
makes it possible for the present generation to understand the
achievement of earlier generations. Transmission of culture may take
place by imitation as well as by instruction.
 Influence of Culture in Negotiation

Intracultural negotiation refers to negotiations within ones

own culture.
Cross-cultural negotiation concerns negotiation between
individuals from different cultures.
The following aspects of differing cultures affect the
negotiation process:

• Definition of Negotiation - The fundamental definition of

negotiation, what is negotiable, and what occurs when
we negotiate can differ greatly across cultures
• Selection of negotiators - Different cultures weigh the criteria
to select negotiators differently, leading to varying
expectations about what is appropriate in different types of
negotiations.
• Protocol - Cultures differ in the degree to which protocol, or
the formality of the relations between the two negotiating
parties, is important.
• Communication- The implications of a method of
communication for negotiation regards the ability to transmit
information necessary to reach integrative agreements
• Cultures influence how people communicate, both verbally
and nonverbally, directly and indirectly, and through the body
language used.
• Direct communication is targeted directly at the other party,
such as words spoken or written communications.
• Indirect communication uses third parties, situational
signals, or other indirect means of communication.
• Time Sensitivity - Other cultures have quite
different views about time. The opportunity for
misunderstandings because of different perceptions
of time is great during cross-cultural negotiations.
• Groups versus individuals - The United States is
very much an individual-oriented culture, where
being independent and assertive is valued and
praised. Group-oriented cultures, in contrast, favor
the superiority of the group and see individual
needs as second to the groups needs.
• Nature of agreements - Cultural differences in how to close an
agreement and what exactly that agreement means can lead to
confusion and misunderstandings.
• Emotionalism - Culture appears to influence the extent to
which negotiators display emotions.
• These emotions may be used as tactics, or they may be a natural
response to positive and negative circumstances during the
negotiation (see Kumar, 2004).
• Cognition - the way that negotiators process information during
negotiation and how this in turn influences negotiation
processes and outcomes.
• Ethics and Tactics - ethics and negotiation tactics in cross-
cultural negotiations by exploring the broad question of whether
negotiators in different cultures have the same ethical
evaluation of negotiation tactics.
 Adopt a Persuasive Style

• involves being able to convince others to take

appropriate action
• Persuasive tactics are generally separated into
central route and peripheral route.
 Adopt a Persuasive Style
• involves being able to convince others to take appropriate
action
Persuasive tactics are generally separated into central route
and peripheral route.
Central-route Persuasion
• These include direct, mindful, information-based routes to
persuasion.
• Generally, think of central-route persuasion as invoking deep
thought on the topic through logic and emotion.
Peripheral tactics, rather than use cognitive or mindful work,
employ automatic responses to subtle cues to persuade.
 Role of Expectations
• Skilled negotiators manage expectations prior to and during
negotiations. Some managers do this automatically.
• Prior to and during negotiations, people develop expectations
about the type of deal they will receive.
• negotiators automatically compare their actual outcome with
the outcome they expected prior to negotiating. As a result of
this process, two negotiators with the exact same outcome can
feel very differently about their deal.
• For example, consider two car buyers who
both purchased the same model car for
$30,000. The buyer who expected to pay
$29,000 will be dissatisfied with this deal,
while the buyer who expected to pay $31,000
will be quite pleased.
Any Questions If Not…