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Michael Erdle
Managing Partner
© 2009, Michael Erdle

 Negotiation Problems
 Negotiation Skills
 Dispute Resolution
In theory there is no difference between
theory and practice. In practice, there is.
-- Jan van de Snepscheut

 Everything can be negotiated.
 Business Relationships
• “I want a raise.”
• “I thought we were partners!”
 Personal Relationships
• “What movie to you want to see?”
• “Can I borrow the car?”

 Distributing Value vs. Creating Value
 Opportunistic
 Problem-solving
 Identify Issues
 What does each side want and need?
 Consider Interests
 Mutual
 Complementary
 Conflicting

 Interests vs. Positions
 “Needs” vs. “wants”
 “Separate the People from the Problem.”
 Soft on the person
 Hard on the problem
 Consider other Options

 Use Objective Alternatives
 Determine BATNA and WATNA
 Best Alternative to Negotiated Agreement
 Worst Alternative to Negotiated Agreement
 Look for a “win-win” solution

 Successful relationships are built on
communication and trust.
 Lack of trust leads to “win-lose” or
“lose-lose” result.
 Negotiation is one way of creating trust –
or deciding whether trust is justified.
 Example: “The Prisoner’s Dilemma” a classic
risk strategy game

Scenario:
 Bob and Alice are arrested near the scene of a
robbery where victim was badly injured.
 Both are carrying stolen property.
 They are questioned separately by the police.
 There is enough evidence to convict both of theft,
but not enough to convict either one of assault.
 Each has to choose whether to confess and
implicate the other.

 Simple dilemma: confess or don't confess.
 If neither one confesses, both will serve one year
(possession of stolen property).
 If each confesses and implicates the other, both will go
to prison for 10 years.
 But, if one confesses and implicates the other, and the
other does not confess, the collaborator will go free,
and the other will go to prison for 20 years.
 The penalties are shown in the following
"payoff table”.

Payoff table for the Prisoners' Dilemma:
Alice
confess silent
confess 10 10 0 20
Bob
silent 20 0 11

 Lack of trust is fatal – neither can trust the
other to remain silent.
 So the only rational action is to confess.
 That produces the best result no matter what
the other person does.

 This is true for a “winner take all” game.
 Life is rarely like that.
 Most negotiations are based on a continuing
relationship.
 What happens if there’s a series of games?

Series Player 2 Player 2
Payoff Matrix cooperates retaliates
Player 1
cooperates
3, 3 0, 5
Player 1
retaliates
5, 0 -1, -1

 “Tit-for-Tat” strategy is most successful.
 Four key conditions:
 Nice
 Retaliate
 Forgiving
 Generous

1. The player will always cooperate, unless
provoked.
2. The player will retaliate, if provoked.
3. The player is quick to forgive.
4. The game must continue long enough for
the ‘retaliation and forgiveness’ pattern to
affect opponent’s behaviour.

 Assertiveness vs. Empathy
 Three common negotiation styles
 Competitive
 Accommodating
 Avoidance
 Effective negotiator is assertive and
empathetic

 Communication is the key to effective
negotiation.
 What you say is often less important
than how you say it.
 Tone
 Body language

 Understanding and recognition do not
mean compromise and concession.
 “I understand” vs. “I agree”.
 Your own emotions and subconscious
brain can hinder your ability to
negotiate effectively.

 The automatic processing of words interferes
with the task of naming the colors.
 Selecting an appropriate response involves
conflict between the right and left halves of
the brain.
 This conflict is involved in a wide range of
thought processes and emotional responses.
 Source: PBS Online
http://www.pbs.org/wgbh/nova/everest/exposure/stroopdesc.html

 Listening
 Develop “active listening”.
 Understanding
 Acknowledge the other person’s perspective.
 Flexibility
 Be open to other options.
 Pragmatism
 Be ready to accept the best available option.

 Classic “Hard Bargaining” Ploys
 Extreme claims, small concessions
 “Take or leave it.”
 Unreciprocated offers
 Threats and warnings
 Attacking the alternatives
 Good cop, bad cop

 Extreme claims, small concessions
 Tit for Tat – make equally small concessions
 “Take or leave it.”
 Make a counter offer
 Offer an alternative
 Don’t be afraid to walk away.

 Unreciprocated offers
 Don’t negotiate against yourself.
 Wait for a counter offer.
 Threats and warnings
 Don’t make a counter-treat.
 Challenge the underlying assumptions .

 Attacking the alternatives
 Askfor an explanation.
 “Why do you have a problem with…?”
 Good cop, bad cop
 Negotiate with the boss.
 Use the “good cop” to your advantage.

 Negotiation
 Mediation
 Arbitration
 Litigation

Litigation
Arbitration
Mediation
Negotiation

 Interest-based Mediation
 Mediator is a facilitator
 Focus on interests, not legal rights or
obligations
 Options for creative solutions
 Evaluative Mediation
 Neutralevaluation
 Based on legal rights & obligations

 Qualities of a successful mediator:
 Subject area knowledge
 Negotiation & mediation process skills
 Lets parties make key decisions
 Creative approach to the problem
 Patience

 Effective alternative to a law suit, especially
for commercial disputes
 Quicker
 Less expensive
 Private
 Especially good for international disputes
 Avoid uncertain court systems
 Easier to enforce an award

 Cohen: You Can Negotiate Anything,
Bantam, 1980
 Fischer, Ury and Patton: Getting to Yes,
Penguin, 1991
 Ury: Getting Past No, Bantam, 1993
 Mnookin, Peppet and Tulumello: Beyond
Winning, Harvard University Press, 2000