International Negotiation Stephan Langdon, MBA M.Ed
Isabella has worked as the executive assistant to Martina for ten years. Isabella has worked overtime on many occasions when Martina had special projects to complete. Martina has not given Isabella a raise in her salary for three years and Isabella is thinking about looking for a new position which could pay her more money. Martina is concerned about losing Isabella to another employer but is worried that her own company has not made a profit in the last two years. Isabella and Martina sit down in the conference room to negotiate a possible raise in salary for Isabella. ROLE #1: ISABELLA ROLE #2: MARTINA ROLE #3: OBSERVER (Take notes and report about negotation)
Mark H. McCormack, best-selling author of “What They Don’t Teach You at Harvard Business School,” has stated the perfect negotiator should have:
Faultless people sense
A strong competitive streak
A view of the big picture
An eye for the crucial detail
Reference Text: Contract Negotiations, by Gregory A. Garrett, CCH, Inc. (2005), pg. 13. 5 Contract Negotiation Competencies
Contract Negotiation Competencies 6
Negotiation Process 3 Steps (Cronkite)
Negotiation Process 4 Steps (Shell)
Seven Stages (Folberg, Golann)
Negotiation Considerations Social How will others view the agreement Emotional How will you feel about the agreement Successful Negotiations Lewicki and Fisher Economic Will you be satisfied with the economic results Triad of concerns
Perception Subjective. Always check your views, opinions and analysis of your position One’s view of fairness. (Barry Bond’s homerun). Be very careful of your client's (and your own) perception of fairness. Frames
Bias Perception: Fixed Pie the erroneous belief that the other party’s interests are directly opposed to one’s own interests when, in fact, they are often not completely opposed.
Bias Perception: Thompson and Hastie Explored the consequences for outcomes. They measured individual fixed-pie perceptions after just five minutes of negotiation They found fixed pie predicted individual and joint negotiation payoffs such that fixed-pie perceptions were associated with lower individual and joint profits. Negotiators with strong fixed-pie perceptions failed to identify interests that could be profitably logrolled or that were completely compatible.
Bias Perception: Why does this occur? Biased information search (negotiators’ faulty search for necessary information) Biased information processing (negotiators’ faulty processing of available information).
Bias Perception: Extremism Partisan perceivers believe that their own perceptions map onto objective reality. When they realize that the other side’s views differ from their own, they first attempt to “straighten out” the other side; when this does not work, they regard the other side as extremist. partisan perceivers tend to view the other side as having interests that are more opposed to their own than is actually the case.
Bias Perception: Problems with Extremism Exacerbates conflict Partisan perceivers ascribe more negative traits to their negotiating partner even when partisanship has been randomly assigned right before the negotiation Reduces the likelihood of reaching comprehensive integrative agreements during face-to-face negotiations
Bias Perception: Reactive Devaluation Bias Negotiators discount or dismiss concessions made by the other party merely as a function of who is offering them
Bias Perception: Stillinger, Epelbaum, Kelter, and Ross (1990) Experiment Participants negotiated with a confederate over the policy of their university regarding a political issue. Constant The antagonism of the negotiating confederate was held constant. During the negotiation, the confederate for a time adopted a stubborn position. Concession In two experimental conditions, however, the confederate ultimately made a concession; in the third (control) condition, no concession at all was made. Rating Subsequently, participants rated the attractiveness and significance of a number of different proposals, including the ones that had been offered in their negotiation session. Results Non-offered concessions were rated as more attractive and significant than offered concessions: The very fact that their counterpart offered them a concession diminished its value in the eyes of the participants.
Bias Perception: Fundamental Attribution Error People tend to view their own behavior as largely determined by the situation BUT B. regard other’s behavior as driven by chronic dispositions Larrick and Su (1999) Demonstrated this bias operated in negotiation. Negotiators erroneously attributed tough bargaining behaviors to difficult personalities rather than to situational factors. Fundamental attribution error often results from lack of sufficient information about the opponent’s situation.
Bias Perception: Coercion Bias People erroneously believe that A. coercive tactics will be effective in generating concessions when dealing with opponents BUT B. believe that these same tactics, when applied to the self, will have the opposite effect—that is, to increase their resolve not to concede. Rothbart and Hallmark (1988) in-group and outgroup members differed in the judged efficacy of coercion and conciliation as social influence strategies. Out-group members perceived coercion as more effective than conciliation when applied to others, In-group members perceived coercion as less effective than conciliation when applied to their own social or categorical group members.
Perceptions: Framing Framing: constructing and representing interpretations. Defining key issues and key problems. Perspective. Separates issue from other ideas. Aggregate and process information. Language we choose engage. notion of what we are doing: discussion, argument, fight Frames persist as long as they are useful. When people hold to their frames, conflict can occur. Frames can be transformative. Change frame, change conversation. Frames can be shifted.
05/09/08 24 Modify the Other Party’s Perceptions
Make outcomes appear less attractive.
Make the cost of obtaining goals appear higher.
Make demands and positions appear more or less attractive to the other party-whichever suits your needs.
Haga que los resultados aparecen menos atractivos. Haga el coste de obtener metas para aparecer más arriba. Haga que las demandas y las posiciones aparecen más o menos atractivas a la otra partido-cualquiera se adapta a sus necesidades
05/09/08 25 Manipulate the Actual Costs of Delay or Termination
Plan disruptive action:
Raise the costs of delay to the other party.
Form an alliance with outsiders:
Involve (or threaten to involve) other parties that can influence the outcome in your favor.
Manipulate the scheduling of negotiations:
One party is usually more vulnerable to delaying than the other.
Acción que disturba del plan: Levante los costes de esperar al otro partido. Forme una alianza con otras: Implique (o amenace implicar) otros partidos que puedan influenciar el resultado en su favor. Manipule la previsión de negociaciones: Un partido es generalmente más vulnerable al retraso que el otro.
05/09/08 26 Positions Taken During Negotiations
Where will you start?
What is your attitude? Competitive? Moderate?
Should any be made? If so, how large?
Oferta de abertura ¿Donde usted comienzan? Postura de la abertura ¿Cuál es su actitud? ¿Competitivo? ¿Moderate? Concesiones iniciales ¿Deben cualesquiera ser hechas? ¿Si es así cómo grande?
Why Frames are Critical Negotiators who understand framing may understand how to have more control over the negotiation process. Frames may be malleable and, if so, can be shaped or reshaped during negotiation. Frames shift and change as the negotiation evolves. Los negociadores que entienden enmarcar pueden entender cómo tener más control sobre el proceso de la negociación. Los Marcas pueden ser maleables y, si es así se pueden formar o formar de nuevo durante la negociación. Los arcas cambian de puesto y cambian mientras que la negociación se desarrolla.
Perceptions: Three Views of Frames Categories of experience Interests, rights, power Process of issue development
Language Ohio negotiation. Environmentalist. Developers. Environmentalists. Called polluters developers. Conflict. Result of nonverbal looks and glances. Polarizing language.
Trust/Distrust Frame Trust distrust different frames. Main role of negotiator / mediator. Decide which you are doing: Building trust. Managing distrust. Marcos de la desconfianza de la confianza diversos. Posicion principal del negociador/del mediador. Decida cuál usted está haciendo: Confianza del edificio. Desconfianza de manejo.
Trust/Distrust Frame Trust Frame. Little step by step process. Reliability. Competence. Distrust Frame. Apologies. Reparation. Say vs Do. Marco de la confianza. Marcos de la desconfianza de la confianza diversos. Papel principal del negociador. Poco proceso paso a paso. Confiabilidad. Capacidad. Marco de la desconfianza. Apologías. Reparación. Diga contra hacen.
Managing Trust Creating positive expectations. Confident expectations about the other. Shape them by: Language. Clear exceptions. Manage expectation. Crear expectativas positivas. Expectativas confidentes sobre la otra. Fórmelas cerca: Lengua. Excepciones claras. Maneje la expectativa.
Managing distrust Tools. Boarders. Boundaries. Processes. Not trust building. Manages downside risk. Distrust binding. Prenuptial agreement. Herramientas. Huéspedes. Límites. Procesos. No edificio de la confianza. Maneja riesgo de baja. Atascamiento de la desconfianza. Acuerdo Prenuptial.