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Ei in negotiation v4 Ei in negotiation v4 Document Transcript

  • Emotional Intelligence in Negotiations Summary of findings & observations EPGP 2009-10 - Group VIII Submission 10/6/2009 Instructor: Prof. Pawan Kumar Singh Submitted by: Abhishek Pangaria Mandeepak Singh Rajendra Inani Saravanan Logu Tarandeep Singh Emotional Intelligence in Negotiations Page |1
  • Vivek Edlabadkar Emotional Intelligence in Negotiations Page |2
  • Table of Contents INTRODUCTION.....................................................................................................................................5 1.1 Emotional Intelligence Influence on Negotiation (EIIN) Model: ..................................................7 1.2 Psychological Traps of Negotiation..............................................................................................9 1.3 Failed Negotiations – Lack of EI among the parties involved in negotiations............................10 Emotionally Intelligent Negotiators – Do’s and Don’ts .......................................................................12 Emotional Intelligence ........................................................................................................................13 1.4 Emotional Intelligence in Business.............................................................................................13 1.4.1 Self-Management...............................................................................................................14 1.4.2 Social Awareness................................................................................................................14 1.4.3 Relationship Management..................................................................................................15 1.5 Branches of emotional intelligence............................................................................................15 1.6 Assessing Emotional Intelligence...............................................................................................16 Negotiation..........................................................................................................................................17 1.7 Steps of Negotiation..................................................................................................................17 1.7.1 Step 1 – Prepare..................................................................................................................17 1.7.2 Step 2 – Opening the Negotiation.......................................................................................18 1.7.3 Step 3 – Argument..............................................................................................................18 1.7.4 Step 4 – Explore..................................................................................................................18 1.7.5 Step 5 – Signals...................................................................................................................18 1.7.6 Step 6 – Package.................................................................................................................19 1.7.7 Step 7 – Closure..................................................................................................................19 1.7.8 Step 8 – Sustenance ...........................................................................................................19 1.8 Types of Negotiation..................................................................................................................19 1.8.1 Distributive Negotiation......................................................................................................19 1.8.2 Integrative Negotiation.......................................................................................................20 1.9 Role of Ethics in Negotiation......................................................................................................20 1.10 Types of Negotiators................................................................................................................21 REFLECTIONS IN PRACTICE ..................................................................................................................23 1.11 Negotiation between Walt Disney and Workers at Disney Animation....................................23 1.12 Negotiation in Child Custody...................................................................................................23 1.13 India – US agreement on Nuclear Deal...................................................................................24 Emotional Intelligence in Negotiations Page |3
  • 1.14 Additional Situations:...............................................................................................................25 CONCLUSION.......................................................................................................................................26 APPENDIX – A: Summary of EI Assessment Tools................................................................................28 Works Cited.........................................................................................................................................30 Emotional Intelligence in Negotiations Page |4
  • INTRODUCTION One of our friends, Ram, has shared this story with us: Ram was on a weekend visit to a beach near Pondicherry, with his wife and two sons. Having crossed the toy shop, his elder son, Arvind, 3 years old, got excited at the red race car in the shelf and have started pestering him to purchase that toy. Ram was upset at his son’s behaviour as there are dozen red race car toys in the home, and this behaviour of him to have one more. Ram tried to pacify Arvind, showing other toys or the beach, without any success. His son was not willing to give up. Ram really wanted to get out of the frustration and the stare from the passers-by; he yielded to Arvind’s demand and paid for that toy, red race car. This incident has happened to one of our friends, Rohit. He was working with the Vice president of a large organization, responsible for IT, discussing about the execution of upcoming change management program. As a consultant having many years of experience in the domain, Rohit was very confident about his approach and recommendation. However, the VP, wary of the cooking- cutter approaches, poured his own way of doing things. Rohit’s approach to change management adheres to some of the proven techniques and standards specified. While the VP’s ideas were same, the terms, definitions and flow changed in few of the instances. After a lot of time spent in discussing the pros and cons of the approach, Rohit was losing patience and worried about the direction of the discussion. Rohit was suddenly reminded of his boss’s advice on VP’s decision making based on his past experience with that VP. Next day, Rohit came up with revised recommendations with the words and terms suggested by VP, to essentially implement the process which he had initially proposed. VP was very glad to see his terms in the process and gave an approval to implement the proposal. Essentially in both the situations, it was a matter of how individuals have dealt with their emotions during the process f negotiation. The more self-aware and socially apt the individual is, the greater are the chances of he or she coming out as a winner in these negotiations. In addition, this behaviour provides a sense of satisfaction in those interactions and saves you from the frustrations and strained relationships. Conflict is inevitable and is the part of life. We face conflicts in all walks of life. Having the right approach, attitude and mind-set to manage the conflicts is a key element to the success of the manager. Negotiation is one of such fine human arts in managing the conflicts. Often viewed as stressful experience, negotiation is dreaded by many managers and executives. As Hertzberg explained in Managers’ role one of the four categories, where manager spend most of the time is in Negotiation. (Mintzberg) Negotiation skills have become increasing important because the need for the manager to deal with the increasingly complex structures, team-centred work forces, matrix management, and Japanese style management. (Roy J. Lewicki, 1998) Emotional Intelligence in Negotiations Page |5
  • As the English philosopher, Edmund Burke, once quoted, “All government-indeed, every human benefit and enjoyment, every virtue, and every prudent act- is founded on compromise and barter” This article makes an attempt to draw parallels between the traits of the successful negotiator, and that of the emotional intelligence. The article analyzes a few cases of failed negotiations and relates to the role played by the lack of EI in those situations. The purpose of the article is to summarize the findings of importance of Emotional intelligence in the Negotiation process. For the purpose of this article, only the emotional behaviour of the negotiator is considered, irrespective of the type of negotiation he / she is engaged. This article does not cover the other essential skills of the negotiator, such as Domain Expertise and Financial acumen. The article proposes a theoretical model that suggests the chances of increasing the success of negotiation, by focusing on the emotional intelligence traits of the persons (groups) involved in the negotiations (negotiators) The article first explains the model wherein the influence of EI in negotiation is discussed. Further the attributes of the emotional intelligence and the process of negotiation are provided. It moves on to explain how the emotionally intelligent negotiator leads the negotiations, under the various conditions and environments. It also covers the few causes of failed negotiations and its link with emotional intelligence of the parties involved in the negotiation process. Emotional Intelligence in Negotiations Page |6
  • 1.1 Emotional Intelligence Influence on Negotiation (EIIN) Model: Based on our research on existing articles and understanding of how the negotiation process works, what emotions are at stake and the what role played by emotional intelligence in those situations. We have developed these insights based on our understanding of some of the successful and failed negotiations and the emotional maturity exhibited by the negotiators. We have attempted to capture the essence of this understanding in the model proposed below: Emotional Intelligence in Negotiations Page |7
  • Influence of Emotional Outcome of Negotiation Intelligence Negotiation Psycholog Better Emotional Social Skills ical Traps Barriers Business Relationship Empathy Monetary / Self Control Non- Self benefits Monetary Self Gain / Loss Management Agreement on Terms & Self Conditions Expectatio Awareness Tactics ns Emotional Intelligence in Negotiations Page |8
  • Essentially, the negotiators can play a number of tactics, instill a variety of psychological traps on one another depending on the bargaining position of each party and come with a whole lot of emotional barriers to achieve their individual benefits. However, without self understanding and managing others in negotiation process, the negotiator is at the high-odds of failing in the process. Emotional intelligence is the ability to understand your own emotions and those of people around you. Emotional intelligence is sometimes referred to as emotional quotient or emotional literacy. Individuals with emotion intelligence are able to relate to others with compassion and empathy, have well-developed social skills and use this emotional awareness to direct their actions and behavior. (Goleman, 1998) Negotiation, as simple or tough skill it may sound, is actually a methodical process of internal and external analysis, communication, intuition, packaging and perseverance. 1.2 Psychological Traps of Negotiation A case study on psychological traps of negotiation and how you can avoid becoming a victim of it are provided in this section. For example, you are on hold in a telephone for long time and the decision you need to take between calling again and continue to wait. The nature of these traps are so well planned that the very nature of escaping will only further the grip of these traps. Consider the example of dollar-auction case study. The dollar auction is a game designed by economist Martin Shubik to illustrate a paradox brought about by traditional rational choice theory in which players with perfect information are compelled to make irrational decisions. (Dollar Auction - Case Study of Irrationality) The setup involves an auction for a one dollar bill with the following rule: the dollar goes to the highest bidder, who pays the amount he bids. The second-highest bidder also must pay the highest amount that he bid, but gets nothing in return. The second highest bidder might not have to pay on eBay, but in many real contests, both sides end up paying but only one gets the prize--like lawsuits, sports competitions, gambling and political campaigns. The process of bidding when the price is below fifty cents seems harmless, because it’s an obvious deal to buy a dollar for any amount less. The twist becomes clear about when the high bid is 80 cents. People start to think about how the second rule–the one requiring the loser to pay–would affect incentives. What might the second highest bidder think at this stage? He is offering 70 cents but being outbid. There are two choices he could make: • do nothing and lose 70 cents if the auction ends • bid up to 90 cents, and if the auction ends, win the dollar, and profit 10 cents But this action has an effect on the person bidding 80 cent, who is now the second highest bidder. This person will now make a similar calculation. He can either do nothing and lose 80 cents if the auction ends, or he can raise the bid to a dollar and have a chance of breaking even. Again, bidding Emotional Intelligence in Negotiations Page |9
  • higher makes sense. Thinking more generally, it always makes sense for the second highest bidder to increase the bid. Soon people will bid more than one dollar and fight over who will lose less money. It is the incentives that dictate this weird outcome. Consider an example when the highest bid is $1.50. Since the high bid is above the prize of $1, it is clear no new bidder will enter. Hence, the second bidder faces the two choices of doing nothing and losing $1.40, or raising the bid to $1.60 to lose only 60 cents if the auction ends. In this case, it makes just as much sense to limit loss as it does to seek profit. The second highest bidder will raise the bid. In turn, the other bidder will perform a similar calculation and again raise the top bid. This bidding war can theoretically continue indefinitely. In practical situations, it ends when someone chooses to fold. This game is played at Stanford in economics classes, and it’s not uncommon to see the game end anywhere between five and ten dollars. Finding: Based on the interview of the auction participants, it was found that the reason for this behavior, us both economic and personal. The economic reason is understandable, but the persona one is more about saving face (ego) and punishing other person as well. The emotionally intelligent negotiators, because of their increased self-awareness understand this trap and manage to come out of it become the point of no return. Suggestions to overcome the psychological traps: Some of the tricks suggested by the researcher Jeffrey Z. Rubin are, (Rubin, 1981) - Set limits on your involvement and commitment in advance - Once you set a limit, stick to it - Avoid looking to other people to see what you should do - Beware of your need to impress others - Remind yourself of the costs involved - Remain vigilant 1.3 Failed Negotiations – Lack of EI among the parties involved in negotiations A person would provoke anger or anxiety in other person by pointing out that other person was delayed for the negotiation. This behavior puts the other person a step back and prevents him or her from getting to a collaborative negotiation process. It evidently supports the emotional stress the person at the other side of the table experience. Some of the cognitive mistakes that causes the negotiation to fail are quoted by the researcher Max H. Bazerman are (Bazerman, 1986), are briefly listed in this section. Expanding the fixed pie: Emotional Intelligence in Negotiations P a g e | 10
  • When individual do not have the mind-set and patience to understand what they seek. In the case study quoted, two sisters fighting for a same orange and have decided to split the fruit into two halves. One person made the juice and threw the skin, while the other person used only the skin to make the cake and threw the other half of the fruit. Better understanding between the individuals of what they want and empathy would have provided 100% of what both of them actually needed. Dehexing the winner’s curse: Negotiators, who have achieved success in the past, tend to be aggressive and exhibit “know-all” attitude, which might lead to get lower share in the deal, than what they are eligible for, if they were not cautious enough. De-escalating Conflict: In few of the labor union strikes, the organizers have the tendency to prolong the strike, even though the organizers are aware that their demands would not be met. Calling off the strike, makes the leaders of the strike to accept the defeat, hence they continue the strike, despite the loss of income and other sufferings of the employees. Appropriately recognizing these conflicts and responding to it would save lives and inconveniences. Undercutting over confidence & reframing negotiations are other situations where in the negotiators pay much attention to the value at hand than what it used to be or the opportunity cost of procuring it. In the subsequent sections, the various stage of negotiation and the application of various dimensions of emotional intelligence in those stages are provided. Emotional Intelligence in Negotiations P a g e | 11
  • Emotionally Intelligent Negotiators – Do’s and Don’ts With the growing and opening economies around the world, the work of negotiator is only growing by leaps and bounds. There certainly is no recession in this field of work. More industries across the globe are consolidating and there are massive new mergers and acquisitions that we hear of everyday. Each such task requires seasoned negotiators. Following are the seven points that most of the negotiators who possess mastery over their emotions, observe when in the process of negotiation. 1. Keep emotions out – One of the most important aspects of negotiation is the ability to not taking it personally. However frustrating or offensive the negotiation may be, it is important to not lose the cool in the mind because it’s there that the battle is won. 2. Be prepared to say “No” – When things get extremely pressing in negotiation, it is advisable to walk out of it rather than giving in. There have been innumerable cases where the parties that gave-in during negotiation went either bust or had to reconcile, even litigate at the later date. Walking away is not a weakness but a strength that demonstrates very clearly your position and earns you respect of your team as well as opponents. 3. Draggg… - When negotiations are extended endlessly, without focus on objectives, they only gets more frustrating and more time is wasted. By pushing the opponents too far, one is only promoting bad blood in the relationship leaving no scope for reconciliation at anytime in foreseeable future. It is important to realize that negotiation is a process of give and take and when neither of the parties is willing to extend an arm, it’s better to call quits. 4. Prepare – As described above (step 1 in negotiation), this is one of the most important aspects of negotiation. Half of the battle is won if the preparation is complete in every sense of the word. Just to reiterate, preparation not only involves understanding the needs and limitations of self but also the expectations and strategy of opponents. 5. Desperation – One of the most basic points to remember while negotiating is not to appear desperate. Either explicitly or implicitly, if the opponents get a whiff of your desperation to close the deal, it will never be profitable to you. 6. Practice – Just like speeches, the negotiation needs to be practiced. It may even involve role plays and creative out-of-the-box thinking. The essential requirement here is undiluted confidence in yourself and what you are negotiating for. 7. Be Fearless and shameless – Often people are intimidated by opponents and also feel embarrassed to ask for things. These two traits are a big NO in negotiation. Also, being fearless and asking for things directly often gets results faster and earns more respect. Emotional Intelligence in Negotiations P a g e | 12
  • Emotional Intelligence EI has been round for over a decade, however, still relatively new in a business application, but recognised by senior executives as an important behavioural model and a key contributor to individual and business success. (Wikipedia) Dr Daniel Goleman Ph.D, a psychologist and international business consultant whose contribution in the field of Emotional Intelligence has popularised the concept defines EI as: • Knowing that you are feeling and being able to handle those feelings without them swamping you • Being able to motivate yourself to get the jobs done, to be creative and to perform at your peak • Sensing what others are feeling and handling relationships effectively 1.4 Emotional Intelligence in Business Dr Goleman asserted that “The criteria for success at work are changing. We are being judged by a new yardstick: not just by how smart we are, or by our training and expertise, but also by how well handle ourselves and each other. This yardstick is increasingly applied in choosing who will be hired and who will not, who will be let go and who retained, who past over and who promoted…” Emotional Intelligence in Negotiations P a g e | 13
  • Goleman’s definition of emotional intelligence proposes four broad domains of EQ which consist of 19 competencies: (Personality Development - EI) Self-Awareness • Emotional self-awareness: Reading one's own emotions and recognizing their impact • Accurate self-assessment; knowing one's strengths and limits • Self-confidence; a sound sense of one's self-worth and capabilities 1.4.1 Self-Management • Emotional self-control: Keeping disruptive emotions and impulses under control • Transparency: Displaying honesty and integrity; trustworthiness • Adaptability: Flexibility in adapting to changing situations or overcoming obstacles • Achievement: The drive to improve performance to meet inner standards of excellence • Initiative: Readiness to act and seize opportunities • Optimism: Seeing the upside in events 1.4.2 Social Awareness • Empathy: Sensing others' emotions, understanding their perspective, and taking active interest in their concerns • Organizational awareness: Reading the currents, decision networks, and politics at the organizational level Emotional Intelligence in Negotiations P a g e | 14
  • • Service: Recognizing and meeting follower, client, or customer needs 1.4.3 Relationship Management • Inspirational leadership: Guiding and motivating with a compelling vision • Influence: Wielding a range of tactics for persuasion • Developing others: Bolstering others' abilities through feedback and guidance • Change catalyst: Initiating, managing, and leading in a new direction • Conflict management: Resolving disagreements • Building bonds: Cultivating and maintaining a web of relationships • Teamwork and collaboration: Cooperation and team building 1.5 Branches of emotional intelligence 1. Perceiving Emotion: The initial, most basic area had to do with the nonverbal reception and expression of emotion. Evolutionary biologists and psychologists have pointed out that emotional expressions evolved in animal species as a form of crucial social communication. Facial expression such as happiness, sadness, anger and fear were universally recognizable in human beings. The capacity to accurately perceive emotions in the face or voice of others provides a crucial starting point for more advanced understanding of emotions. (Branches within EI) 2. Using Emotions to Facilitate Thought: The ability to access an emotion and reason with it (use it to assist thought and decisions). This was the capacity of the emotions to enter into and guide the cognitive system and promote thinking. For example, cognitive scientists pointed out that emotions prioritize thinking. In other words: something we respond to emotionally, is something that grabs our attention. 3. Understanding Emotions: Happiness usually indicates a desire to attack or harm others; fear indicates a desire to escape and so forth. Each emotion conveys its own pattern of possible messages, and actions associated with those messages. A message of anger, for example, may mean that the individual feels treated unfairly. Understanding emotional messages and the actions associated with them is one important aspect of this area of skill. 4. Managing Emotions: finally emotions often can be managed. A person needs to understand emotions convey information. To the extent that it is under voluntary control, a person may want to remain open to emotional signals so long as they are not too painful and block out those that are overwhelming. In between, within the person’s emotional Emotional Intelligence in Negotiations P a g e | 15
  • comfort zone, it becomes possible to regulate and manage one’s own and others’ emotions so as to promote one’s own and others’ personal and social goals. 1.6 Assessing Emotional Intelligence Emotional intelligence is difficult to measure and some psychologists doubt that it can be assessed at all. However, many more believe that it can be measured but that there are obstacles to be overcome in doing so. The easiest way to measure EQ is through what are called self-report questionnaires, although these are probably the weakest way to do it. These questionnaires ask you to report on your abilities skills and behaviors. For example, how effective you are in recognizing emotions, understanding emotions etc. The flaw with this approach is that you may not accurately report your own skills and abilities. Most of us have a tendency to exaggerate our accomplishments and minimize our shortcomings. The result is that self report questionnaires often provide an inflated picture of our skills and abilities. Even if you were to be completely honest in your answers, you may lack the necessary insight to give accurate answers. (Assessment of EI) One solution to the problem of self report questionnaires is the use of 360 degree tests. This involves questions about your behavior being answered by people who know you, for example, friends, co-workers, boss and subordinates. The advantages of this approach are that; other people are more likely to give an appraisal that is not inflated and they are also more likely to report accurately evaluate how skilful you are in social interaction. A third approach is to use performance tests to measure your EQ. These tests present you with practical problems and asked you to work out the correct answers. In other words, they ask you to actually demonstrate your EQ skills. These tests are not as vulnerable to the problems facing self- report and 360 degree tests but they are much more difficult and expensive to construct. Please refer to APPENDIX –A for a summary of the most widely used assessment tools. Emotional Intelligence in Negotiations P a g e | 16
  • Negotiation This section provides a detailed overview of the negotiation, types of negotiation stages of negotiation and how the emotions and its management play a key role in the success of negotiation. The section concludes with Dos and Don’ts of negotiation having reviewed the emotions that is at play in the negotiation. Negotiation by definition means a dialogue undertaken to resolve dispute. However, there can be varied observations on resolution obtained which can range from an agreement on individual benefit to an agreement on collective benefit. Whatever the final resolution, a successful negotiation does not result in litigation. (Wikipedia - Negotiation) Through the above definition of negotiation we understand that there are no limitations on where all negotiation can be applied. In the real sense, negotiations are a part of our day to day activities. As mentioned at the start, a negotiation can happen between a father and a child as much as it can happen between two massive conglomerates. The extent of bargain hence can range from just an emotional interchange to millions of dollars. From the above it is safe to assume that negotiation is hence a skill, a skill developed through our interactions with people, learning about their backgrounds, principle focus areas, desires in life and more. 1.7 Steps of Negotiation There are many models available that describe the stages involved in negotiation. The number of stages range from four to eight. Following is the description of the eight stages of negotiation. We have picked this as all other models largely collude two or more of these stages into one. (Changing Minds - 8 Stage process) 1.7.1 Step 1 – Prepare The first and the most time consuming stage in negotiation is that of preparation. The time spent on this stage is also directly proportional to the significance of instrument under negotiation. When preparing, one has to run through the entire cycle of negotiation, consider all exceptions, and understand boundaries, priorities and needs. Once we understand the above basics, we need to work out ways and means to reach the optimal targets. Weather we are going to take a competitive approach or collaborative one or something in between; what resources can we count on, what will be their roles and responsibilities; what will be the walk-away position. All these are defined and communicated to the team. The above mentioned steps make for a complete understanding of our approach towards negotiation. But this is still not complete preparation for negotiation. The completeness is ascertained by understanding what stand the other party is most likely to take, what will be its key strengths, strategies and approach to the issue at hand. Emotional Intelligence in Negotiations P a g e | 17
  • 1.7.2 Step 2 – Opening the Negotiation Strategically most intense phase in negotiation can be the opening. It is particularly important when at least one of the parties is looking for a competitive approach. It is one phase where both the parties size out each other. High level of confidence along with appropriate body language is essential. (Google Books on Negotiation) This stage will begin with the statement of purpose from one of the parties. This would include the context, the need and a (negotiable) position that will be defended during the course of negotiation process. The other party during this time should listen actively and make proper notes not only on content of discussion but also on the people involved, their roles, types, strengths and weaknesses. Through the position taken by the first party, the second should try to identify what are the underlying interests and goals and then probe for further understanding. 1.7.3 Step 3 – Argument This is the beginning of what we generally perceive as negotiation process. After in the initial interactions and setting up base for further discussions, the parties enter into the more serious type of meetings. There are two pronged agenda for this stage; one, to weaken the opponents’ position and two, strengthen your own arguments. To erode opponents’ position, it is important to show that there aren’t many benefits that you are getting from the deal. It is also important to drill holes into the data points communicated by them. Once the two blows have been imparted, it is important to manage the needs so as to ensure that the opponent does not discard the meeting. To emphatically ensure that your arguments stay, you need to show how the deal benefits the other side. This is normally done by further positioning data that cannot be negated. Legitimately claiming your own needs also forms an important aspect of strengthening your own arguments. 1.7.4 Step 4 – Explore Post the series of arguments, the parties need to take time out and evaluate areas of agreement and conflict. The areas of agreement should be noted and closed. The discussion should then go beyond it and never return back to the agreed common point unless absolutely necessary. The focus should be diverted to areas where there still are conflicts and acknowledge that the differences do exist, the reasons behind them and individual position on them. The parties should then explore ways to reach agreement on the conflicting issues through defined fair criteria in a process that is fair to both the parties. The desirable outcomes for both the parties should be recorded and the discussions should move in that direction. 1.7.5 Step 5 – Signals Once the exploration begins, keep giving signals on where you might consider opponents’ point of view. Also ensure that you give the other party signals on what you expect in return. This is a two way process and should be accompanied with qualifying (and not vague) statements. At this stage no concrete decision should be taken neither should you concede or else the losses could be substantial. Emotional Intelligence in Negotiations P a g e | 18
  • 1.7.6 Step 6 – Package Another important aspect of negotiation is packaging. It does not mean sugar coating in any sense of the word. It means to augment value by bringing other aspects (normally freebies) to the table. These new aspects should be of relevance to the concerned party and fall in purview of the discussion. This is often called trading in variables where variables are the things that one party does not find hard to give while the other has a substantial value for the same. The packages should not be committed at this stage, however one should arrive at “if else” kind of situation. 1.7.7 Step 7 – Closure Once an amicable package is reached, it is time to give signal for closure of the deal. If acceptable to both the parties, the formal process of summarizing and documenting details can begin. At this stage one should be aware of last minute forceful or tricked alterations to the agreement. The agreement once through should be signed and both the parties should depart on a satisfying note. 1.7.8 Step 8 – Sustenance Once the deal is closed it is essential that both the parties ensure its compliance. There should not be any going back on the deal and compliance should be rewarded if possible. In case a promise cannot be kept at all, renegotiation should be initiated but only between the key personnel from both the parties. 1.8 Types of Negotiation Even though we might not like to negotiate, we always end up into the process without realizing the same. There are two distinct types of negotiations as identified by researchers. They are distributive negotiations and integrative negotiations. 1.8.1 Distributive Negotiation As the word “Distributive” would mean, this type of negotiation deals with dividing a certain reward between two or more parties. The finiteness of the reward is crucial and the parties involved fight for getting the bigger pie of the reward. For this reason, it is also called the Fixed Pie type of negotiation. (Negotiation Dot Com) The distributive negotiation normally involves parties that have never interacted before and are not likely to interact in near future as well. There is no intention of forming a relationship either. Because of this the negotiation are normally hardnosed and have a very high potential to break off. In this type of negotiation, following points should be observed: 1. Do not disclose much information. Interests, inclinations, feelings and generic talk should be kept out of the purview of the discussion. 2. Get as much details as possible. It is important to gain advantage by getting all relevant details. These can be utilized either for furthering the negotiation with the party or at a later stage for negotiation with another party. Emotional Intelligence in Negotiations P a g e | 19
  • 3. Restrictive information sharing. Only information that is absolutely essential for the purpose of discussion should be let out. 4. Patience. Let the other party make the first offer. Never hesitate to keep negotiating or even blabbering in order to avoid giving first offer from your end. 5. Balance out. In case the discussions are headed for a break, be realistic and check your interests. 1.8.2 Integrative Negotiation As obvious as it is, integrative negotiation is converse of distributive. In this type of negotiation, all the parties involved stand to gain at least something. The main driving factors here are cooperation and relationship. This negotiation usually takes more time than distributive and also has lesser potential to break. The integrative negotiation normally involves parties that have had a relation in the past and/or are interested in having it in the long term. Because of this the negotiation are normally soft, concession based and have a very low potential to break off. In this type of negotiation, following points should be observed: 1. The depth and variability of the issues can be immense. Each side would want to part with things less valuable to themselves and gain the most valuable. 2. The parties spend time understanding each other’s situation and are willing to share and cooperate. 3. As relationship is the key, the parties often go out of the way to help the other party in resolving their concerns which might be out of context of negotiation or be tangentially related. 4. The focus is solely on building a long term relationship which will be mutually beneficial. 1.9 Role of Ethics in Negotiation As an Emotionally Intelligence Negotiator, when someone else stands in the way, the negotiator faces the core ethical issue: when are my needs and wants more important than treating this person in a moral or socially acceptable manner? Whatever choice you make may involve significant costs to yourself, to the other party, to the wider community. Often the "right" thing to do is not clear. The following suggestions are provided by the emotionally intelligence negotiator, when it comes to dealing with ethics in negotiation: (Negotiation Magazine) Emotional Intelligence in Negotiations P a g e | 20
  • 1. Ethical judgments are made in social context: The type of work you choose and the type of people you hang out with will eventually shape your ethical choices as a negotiator. If you care about having honest and forthright relations with others, think carefully about what kind of friends, colleagues, clients you want to have in your life. 2. Even if you choose to lie or be unethical, be honest with yourself: if you are deceptive, you can end up rationalizing your actions to yourself also. Over time, you may get in the habit of lying or using other tactics that are unnecessarily risky or harmful. 3. There are many unethical negotiation behaviors besides lying: For example: harmful or cruel treatment of others, illegal or unethical threats and coercion, bribes, kickbacks, corruption, preventing parties from participating or selling them out if they aren't at the table, demeaning other parties/groups of people, hate-talk, threats or actions of violence, ruining someone's reputation without cause, etc. 4. Be aware of tradeoffs: Self protection, "bluffing", and distrust also have a cost While we worry a lot about the price we might pay for being forthright or for extending a measure of trust the other party, there is also a price to pay for withholding information, lying, or being suspicious of them. In addition to the relationship costs of distrust, and the anger of feeling mistreated, you can incur significant business expenses for protective measures such as fact-finding, inspections, legal discovery processes, drawing up legal contracts, keeping detailed records, certification, etc. 5. Relationship is almost always a factor: Transactional negotiations lend themselves to unethical behavior but even in short one-time interactions, relationship matters. You may think you'll never meet someone again but you never know who your company will hire next year, who might become a potential client, a political adversary, a useful connection.... And the way you handle negotiations is noticed by the people around you with whom you may have more significant relationships. For example, let us consider negotiations happened during early 2003 between Don Carty, CEO of American Airlines and the unions. The CEO ended his 20-plus-year career when he was forced to resign over what the unions considered to be a lapse in his ethics. While Carty was asking rank-and- file employees to take deep pay cuts to save the company, he was also putting together a package that included $41 million in pension funding for 45 executives. If Carty had been upfront with the unions about this arrangement--perhaps explaining that he felt these benefits were necessary to retain an executive team that could help pull American Airlines through the crisis--the outcome may have been different. Instead, the unions got the facts from the press and demanded Carty’s resignation. (Culture at work) 1.10 Types of Negotiators There are three types of negotiators, namely the foxes, the bloodhounds and the donkeys and their names suggest their traits. (Types of Negotiators) The Foxes – These are the hard-nosed negotiators. They are compelling, cruel, competitive and ready with possibly all data and information. They negotiate only to win. Deception and manipulation are not out of question for them as they are interested only in short term gains. There Emotional Intelligence in Negotiations P a g e | 21
  • is absolutely no sign of creating long term relationship from them. As soon as they realize that they cannot win they move out of the negotiation process. The Bloodhounds – They are seasoned big deal negotiators. They too are competitive and extremely well prepared but do not indulge in manipulation and unethical means. They are tough bargainers but they also believe in a win-win situation. The focus is clearly a long term relationship. They try to create synergies for both the parties such that both stand to benefit a great deal. Often a bloodhound might play a role of fox for another competitor. This is easily possible because of their expertise in negotiation. The Donkeys – This type of negotiators are stubborn and unwilling to learn. They are often unprepared, lack logical analysis but are in their world of make believe. Most of the donkeys have a natural descent towards influencing and persuasion. They are hard to change as well because of their self-limited approach towards negotiation. Emotional Intelligence in Negotiations P a g e | 22
  • REFLECTIONS IN PRACTICE We have considered few real-life cases from the recent past and history which depict the criticality of emotions played in the negotiations and its impact in the outcome. 1.11 Negotiation between Walt Disney and Workers at Disney Animation Emotions at Play - Disapproval on part of Mr. Disney towards employees. Walt Disney was an American film producer, director, screen writer, animator, international icon and a philanthropist. Disney is famous for his influence in the field of entertainment during the twentieth century. He and his colleagues created some of the world famous cartoon/fictional characters like Mickey Mouse. Mr. Disney is remembered for his love for children. During 1941, Disney cartoonist’s called a strike. Although, Disney artists were paid the best and they worked in the best working conditions, but still there was discontent. Many of the Disney’s employees felt that despite of the success of the movie “Snow White” in 1937, the bonus that was vaguely promised to the employees was not given, instead there were layoffs. Mr. Disney was very belligerent in his negotiations with the employees. He held a hard line and there was very little opportunity given for other party to speak and give his view point. In one of the instance, he even punched one of the main strike organisers. Later, the mediators ruled everything in favour of the employees. Walt Disney’s stubborn attitude had a significant impact on the mediators. It led the employees, getting more than desired. Why and How EI could have helped – In case Disney had been more flexible, things could have been sorted out easily. Had, Walt Disney softened his stand and tried to understand the view point of the employees, both the parties would have got a better deal. Interpersonal awareness as a part of emotional intelligence is very useful to understand other persons view point. Negotiations mainly between workers and management will actually reach a conclusion when both parties understand each other’s view point. 1.12 Negotiation in Child Custody Emotions at Play – Love, trust and acceptance. Two women claimed to be the mother of a newborn. No one knew the truth for sure and no one could say which of the two women were speaking the truth. King Solomon drew his sword and told everyone that he would cut the infant two half. On hearing this, one of the two women cried out to let the other women have the child. King Solomon knew from her reaction was that she was the true mother – she can’t see any harm being done to her child. The above principle is used very successfully in negotiations involving, child custody. Emotional Intelligence in Negotiations P a g e | 23
  • Why and How EI could have helped – We can use emotional intelligence along with the above rules to find out – which of the parents will recognise the well-being of the children ahead of their personal needs. This also helps parents in making their own judgement. We create a platform where both parties can discuss and build an argument. A parent needs to understand the child emotions. Empathy can play an important role in this. There is a commitment which is required on parts of parents toward the child. 1.13 India – US agreement on Nuclear Deal Emotions at Play – Ego, Fear, Pride, Aggressiveness, Apprehension The U.S. Congress on October 1, 2008, gave final approval to an agreement facilitating nuclear cooperation between the United States and India. The deal is seen as a landmark in U.S.-India relations and by agreeing to this deal India has given a new aspect to international non-proliferation efforts. The deal and the negotiations before that can be seen very critical and historical because it had opponents and proponents internal to the countries as well as external to both the countries. On one side the US congress was divided whether to give away to India so easily, the US policy makers were seeing India agreeing to non proliferation the biggest gain. Similarly in India the opposition parties and Left parties were seeing this as to giving US the control of India’s defence capabilities on the other hand the ruling UPA was seeing it as to the biggest reform in India’s energy self-sufficiency. There were strong resentments from both side and each thought other to be not trustworthy of its commitments. When this thing comes on the negotiation tables it becomes very difficult to start upon. This could be perceived from the sense of scepticism that prevailed in both parties about each other’s intentions. The US opponents of the deal thought this to be overly beneficial for India and lacking sufficient safeguards to prevent India from enriching its nuclear warfare capabilities. While India was asserting that any U.S. assistance to its civilian nuclear energy program will not benefit its nuclear weapons program, Opponents in US, say India could use the imported nuclear fuel to feed its civilian energy program while diverting its own nuclear fuel to weapons production. New Delhi has done similar things in the past; India claimed it was using nuclear technology for civilian purposes right up until its first nuclear weapons test in 1974. The CRS report says, "A significant question is how India, in the absence of full-scope safeguards, can provide adequate confidence that U.S. peaceful nuclear technology will not be diverted to nuclear weapons purposes." . They were also of the view that there are more cost-efficient ways to improve India's energy and technology sectors. Similarly the Indian side thought this could restrict us from safeguarding our defence capabilities by signing the nuclear proliferation, given the fact that US was assisting Pakistan in War against Terror by huge funds and warfare capabilities. The left said this deal is nothing but dominance of US imperialism and India’s security interest are seriously getting damaged. Also India’s foreign policy would become subservient to that of the United States. Some fraction even said it will fuel a nuclear arms race not just with Pakistan but also with China. The Bharatiya Janata Party (BJP), which many believe would happily have accepted the same deal had it been in power, objected on grounds that it might place restrictions on India’s nuclear arsenal. Emotional Intelligence in Negotiations P a g e | 24
  • But the Deal was finally negotiated. Why and How EI could have helped There was clear cut firm stand by Indian Prime Minister Manmohan Singh who made it sure that the Government won’t come into any pressure from opposition. It may have cost him a critical vote of confidence. But he managed the internal negotiations by strictly not relenting to pressure. The external negotiation was managed by India foreign policy maker and Foreign Minister Pranab Mukherji who negotiated the deal to a level that India gained much more from what the previous Vajpayee government had agreed upon. Similarly the US side of negotiation made India to accept international safeguards on facilities it has not allowed to be inspected before. This is a major step, experts say, because the existing non- proliferation regime has failed either to force India to give up its nuclear weapons or make it accept international inspections and restrictions on its nuclear facilities 1.14 Additional Situations: Some additional situations, wherein, the Negotiations have turned Upside down due to inappropriate exhibition of Emotions are provided: (Irrational Negotiations - Examples) • After a heated and aggressive bidding war, Robert Campeau ended up buying Bloomingdale's for an estimated 600 million dollars more than it was worth. The Wall Street Journal noted that "we're not dealing in price anymore but egos." Campeau was forced to declare bankruptcy soon afterwards. • Supporters of the Iraq War have used the casualties of the conflict in Iraq since 2003 to justify years of further military commitment. This rationale was also used during the sixteen- year Vietnam War, another military example of the logical fallacy. • Two competing brands often end up spending money on advertising wars without either increasing market share in a significant manner. Though the most commonly cited examples of this are Maxwell House and Folgers in the early 1990s, this has also been seen between Coke and Pepsi, and Kodak and Polaroid. • Shakespeare's Macbeth comments, "I am in blood stepped in so far that, should I wade no more, returning was as tedious as go o'er." The metaphor represents Macbeth's crimes and rather than stop committing crimes (presumably, for fear of damnation) Macbeth says that he has "passed the point of no return" and might as well continue, even though it will inevitably lead to his downfall. Emotional Intelligence in Negotiations P a g e | 25
  • CONCLUSION A well-rounded negotiator has a broad repertoire of interpersonal skills, and exercises them most appropriately depending upon the circumstances. The skilled negotiator recognizes that one’s effectiveness within the given negotiation is likely to be enhanced by his or her ability to change the pace and approach. In addition to the negotiator’s expertise and knowledge about the client he or she has to deal in the negotiation, the mastery of emotions and managing them appropriately according to the situation pay huge dividends to the negotiator. It is clear that Emotional Intelligence is required in all stages of negotiation; however, some stages of the negotiation will require the application of different levels of the EI elements. Knowing your own EI profile at each stage is integral to personal effectiveness in negotiation. A brief summary of negotiation behaviour is provided, as quoted by the negotiation expert, N. Rackham Behaviour avoided (N. Rackkam & J. Carlisle, 1978) − Using words and phrases which irritate (e.g. describing one's own proposal as a "generous offer", self-praise, etc.) − Making immediate counter-proposals − Fueling defense/attack spirals − Diluting the strength of arguments by advancing a lot of reasons to back them up Behavior used − Behavior labeling: giving an advanced indication of the class of behavior one is about to use (e.g.: "Can I ask you a question?" or "I would like to make a suggestion") − Verifying whether one's own statements have been understood + summarizing − Seeking information − Explaining what is going on in one's own mind and expressing one's own feelings As exhibited by the characteristics of successful negotiators and their competence in emotional intelligence sets them apart. The reasons for failed negotiations enhance our understanding of impact of lack of emotional intelligence among the negotiators in the negotiation process. Emotional Intelligence in Negotiations P a g e | 26
  • It is our understanding that the negotiator has a lot to gain by enhancing his or her emotional intelligence quotient, based on our understanding and research on the articles and books on Emotional Intelligence and negotiation. At the same time, it is to be understood that lack of domain expertise or analytical skills, but having the EI quotient alone, May not fetch the right results for the negotiator. It only implies that negotiator is increasing his odds of winning the negotiation without straining the relationship by exercising his or her EI capabilities. Emotional Intelligence in Negotiations P a g e | 27
  • APPENDIX – A: Summary of EI Assessment Tools (Tools to Measure EI) Assessment Tool Description EIQ (Dulewicz & Higgs) Developed in 1999 at Henley Management College in the UK. The Emotional Intelligence Questionnaire offers both self-report and 360 questionnaires, with the latter enabling an all-round assessment of an individual's performance from peers, colleagues and managers. Multifactor Emotional The MEIS is a test of ability rather than a self-report measure. The test- Intelligence Scale taker performs a series of tasks that are designed to assess the person’s ability to perceive, identify, understand, and work with emotion. There is very little for predictive validity in work situations. MSCEIT® "Mayer, The only ability measure of EQ, the MSCEIT requires you to actually use Salovey, Caruso your abilities in taking the test with questions where you look at faces, for Emotional Intelligence example, and identify what emotions are present. It helps you understand Test" the actual intelligence behind emotions: Perceiving, using, understanding, and managing feelings. SEI™, Six Seconds Focused on self-development, the SEI is the only test based on Six Emotional Intelligence Seconds' EQ-in-action model: Know Yourself, Choose Yourself, Give Test Yourself. The test measures 8 fundamental skills in these three areas. Report comes with over 20 pages of interpretation and development suggestions. OVS, Organizational Vital Organizational Vital Signs is an organizational climate assessment that Signs™ by Six Seconds gives a clear picture of how people are relating to each other and the workplace. Unlike the other tests, OVS is designed to assess a group or an organization to show the context in which individuals perform. The test measures six factors: Trust, Collaboration, Accountability, Leadership, Alignment, Adaptability. These factors statistically predict over 50% of productivity + customer service + retention. EQ Map® by Essi Systems With a much broader perspective, the EQ Map helps people put emotional intelligence into a workplace context. The Map is self-scored, so you can do it completely on your own; it has questions along the lines of, "How well do you recognize emotions in people?" The 14 main scales include emotional awareness, emotional expression, resilience, outlook, Emotional Intelligence in Negotiations P a g e | 28
  • trust, and personal power. It also has four outcome scales to show the benefit of increasing the first 14. The EQ Map includes an interpretation guide booklet. EQ-i® by Reuven BarOn This self-report instrument was designed to assess those personal qualities that enabled some people to possess better "emotional well- being" than others. The EQ-I has been used to assess thousands of individuals, and its reliability and validity is well documented. Less is known about its predictive validity in work situations Emotional Intelligence There are 3 versions of this test. All use the Daniel Goleman 4-quadrant Appraisal® by Talent model: Self-awareness, Other-awareness, Self-management, Relationship- Smart management. All take about 7 minutes to complete, and all come with 6 months of e-learning and a valuable goal-tracking reminder system. ECI® (Emotional The ECI is a 360 degree appraisal tool where people who know the Competence Inventory) individual rate him or her on 20 competencies that are believed to be by Hay McBer linked to emotional intelligence. Emotional Intelligence in Negotiations P a g e | 29
  • Works Cited (n.d.). Retrieved from Branches within EI: http://www.carecaprice.com (n.d.). Retrieved from Personality Development - EI: http://psychology.about.com/od/personalitydevelopment/a/emotionalintell.htm (n.d.). Retrieved from Assessment of EI: http://www.unh.edu/emotional_intelligence (n.d.). Retrieved from Wikipedia - Negotiation: http://en.wikipedia.org/wiki/Negotiation (n.d.). Retrieved from Changing Minds - 8 Stage process: http://changingminds.org/disciplines/negotiation/eight-stage/eight-stage.htm (n.d.). Retrieved from Negotiation Dot Com: http://www.negotiations.com/articles/negotiating-phases/ (n.d.). Retrieved from Google Books on Negotiation: http://books.google.co.in/books? id=qkmYiYFcj-4C&pg=PA19&lpg=PA19&dq=negotiation+process+steps&source=bl&ots=- HZgVniLSP&sig=LUdpQJSaOfRix7NgjqBFmyfbQIs&hl=en&ei=r__ESrz4B82W8AbW7JQ8&sa=X&oi=book_result& ct=result&resnum=6&ved=0CBsQ6AEwBQ#v=onepage&q=negotia (n.d.). Retrieved from Types of Negotiators: http://blog.millsonline.com/2009/08/13/the-three-types-of- negotiators-foxes-bloodhounds-and-donkeys/ (n.d.). Retrieved from Negotiation Magazine: http://www.negotiatormagazine.com/article217_2.html (n.d.). Retrieved from Culture at work: http://culture-at-work.com/ethics.html Bazerman, M. H. (1986). Why Negotiations Go Wrong. Psychology Today . Dollar Auction - Case Study of Irrationality. (n.d.). Retrieved from http://2kjj.blogspot.com/2009/05/dollar- auction-irrational-escalation-of.html Goleman, D. (1998). Emotional Intelligence. Irrational Negotiations - Examples. (n.d.). Retrieved from http://2kjj.blogspot.com/2009/05/dollar-auction- irrational-escalation-of.html Mintzberg, H. (n.d.). Manager's Role. Harvard Business Review . N. Rackkam & J. Carlisle. (1978). The Effective Negotiator (Part 1) – The Behaviour of Effective Negotiators. Journal of European Industrial Training (JEIT) , 6-11. Roy J. Lewicki, J. A. (1998). Negotiation - Readings, Exercises and Cases. Rubin, J. Z. (1981). Psychological Traps. Psychology Today . Tools to Measure EI. (n.d.). Retrieved from Psychometric Success: http://www.psychometric- success.com/emotional-intelligence/emotional-intelligence-in-business.htm Wikipedia. (n.d.). Retrieved from EI: http://en.wikipedia.org/wiki/Emotional_intelligence Emotional Intelligence in Negotiations P a g e | 30
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