Change management paper

I. Negotiation: process by which two or more parties interact in an attempt to reach an agreement that will guide and regulate their future interactions. (Guetzkow & Sawyer)

· If we look at negotiation as a process, than it changes during different phases. It is an evolving process.

· Two or more parties: most research is on dyads , the interactions between them

· Could mean two individuals, parties, nations, etc.

· It becomes more complex if we try to go beyond two parties so most research is not done on multiparty negotiation. In most of these negotiations, they reduce the numbers down to two anyway.

· Interaction: indirect and direct means

· At the very least, they need to be able to exchange offers.

· good faith: genuinely trying to reach an agreement

· not necessarily ethical or through ethical means

· In other words, good faith does not mean that there is no deception

· There is a rule in negotiation that says that if I put an offer on the table and you accept it, I am honor bound to follow through with it.

· Sometimes people engage in bad faith negotiation

· Sometimes it is done deceitfully which is where there is a problem.

· Minimum requirement for success in a negotiation is reaching an agreement

· Gives a minimum feeling of success, but not necessarily a tremendous one.

II. Planning

A. Set Goals

a. Utility Schedule: range of possible settlement points

· It is utility because there is a use for the resources you get…money, status, etc.

· minimum amount(----(maximum amount

· Status quo point: the value that you put in…what is it currently worth

· So…if you settle for the status quo, you break even, but don’t profit

· Resistance Point: The least you are willing to take over walking away

· It is an anchor, very stable, protects you

· If you’re desperate the status quo point = resistance point

· Protects you from the settlement bias

· Level of Aspiration (Target Point): amount you are really going to try to get

· Tends to change because it is more of a guess

· Changes during the negotiation

· Initial Offer: Generally thought to yield more than your actual level of aspiration so you have room to dicker.

Status Quo--------Resistance Point-----------Level of Aspiration------------Initial Offer

B. Identify Obstacles

1. Understanding Opponent

· Opponent’s motives: what do he want versus what is given to you

· competitive: want to win and want other to lose

· absolute competitive: wants to beat you regardless of how much they beat you by (victory by 1 point is the same as by 100 points)

· proportional competitive: want to beat you bad (the size of the victory matters to them)

· $300/$200 vs. $10/1$ … proportional comp people will choose the second

· what makes someone competitive?

· Face saving situation

· Publish outcomes

· Personality: believe everyone is as competitive as they

· Cooperative people become competitive when against a competitor ( self defense

· Aggressive: want you to do bad regardless of what happens to them

· When you really hate the other side

· When you’ve been embarrassed or humiliated

· Individualistic: want what’s best for them and don’t care what happens to opponent

· Flexible

· Demonstrate to them that they will do best if they cooperate with you

· If they cooperate once it doesn’t mean they will again

· (scarce resources

· Altruists: want to maximize other’s outcomes regardless of what happens to them

· Outcomes mean more to opponent than to you

· Probably also like the opponent

· Cooperative: want both sides to do well

· occurs in teamlike settings

2. Own Biases

a. Framing

· Gain Frame: focused on rewards…what you get out of this negotiation

· Risk averse: you don’t want to run the risk of not reaching an agreement

· Premature commitment

· Are likely to reach an agreement

· May give up too much

· Loss Frame: focused on sacrifice…what you have to lose

· Risk taker: willing to say they will look elsewhere before accepting this offer

· Might sacrifice agreements: let them go when you shouldn’t

· ( role can cause you to do this

· buyer (loss) vs. seller (gain): both sides are focused on resource of money

· criminal lawyers: prosecutors are focused on gain and d.a.s are looking at it as a loss because

· therefore, prosecutors like pre-trial settlements and das like to take their chance in court

· civil lawyers: plaintiffs (gain) vs. defendant (loss) because plaintiffs are thinking about money

b. Fixed Pie Bias: the pie itself is limited, therefore, the only way to get a bigger piece is to be nasty

· Individualistic countries see pies as more fixed than the collectivistic countries

c. Overconfidence: In the process of preparing for negotiation, we become overconfident of our ability to achieve it.

· Final Offer Arbitration: arbitrator chooses one party’s final offer ( odds of success are 50/50

· However, people think their odds of success are 80/20

d. Perspective Taking Bias

· Too Little: You think what you are doing is unique…I am the only one making this move, therefore, my chances of success are good

· Dollar Auction: as long as they think they have a unique strategy, they will play

· Too Much: I am so oriented toward other people it lulls me into doing bad things

· Want to know opponents utility schedule?

· research indicates that this might be to your disadvantage.

· They come to control the negotiation: put your offers in terms of what they want

· If you are altruistic, you will be prone to give up too much

e. Escalation (psychological trap/sunk cost): people have a tendency to continue to invest in a losing course of action

· Don’t want to admit we made a bad decision

· Role models: if we are aware that someone who invested in a losing course and eventually won, then we are likely to do the same thing.

· American Dream

· Gambler’s bias

· Lionel Ritchie wrote to this lady who wanted to be an entertainer

· We don’t do a very good job of keeping track of what we’ve invested.

C. Best way to Prepare Experts vs. Novices

1. No differences

a. Time spent planning

b. Took a short term or long term impact (impact on the future)

2. Experts are more likely to:

a. look for common ground

i. it’s good to set the tone by pointing to commonalities

ii. therapists have couples focus on commonalities

b. develop a range of goals

i. set a resistance point and level of aspiration

c. consider a greater number of proposals

i. including those opponent would make or desire

d. use arguments they think the other side will find convincing…engage in perspective taking

e. engage in issue planning: think of all of the issues that will be discussed and develop a set of arguments for each issue

3. Novices are more likely to:

a. look at one fixed point (usually the level of aspiration)

b. use arguments they themselves think are convincing

c. engage in sequence planning: develop a script with the issues and the order in which they will be discussed

i. rehearsed the thing until they’re stuck in it…interrupt them and they are confused.

III. Strategies

A. Bargaining Strategy: exchange of offer and counter-offer

1. Tough Bargaining

a. Aspiration Theory: Your goal is to force your opponent to lower their level of aspiration

i. Make an extreme opening offer

1. If you set it too high, there are people who won’t even negotiate with you

ii. make few concessions

iii. make small concessions

iv. make a last clear chance offer: “Take it or leave it.”

v. maintain your own level of aspiration: stay confident that you can get it.

1. general assumption is that the other person is also engaging in tough negotiation

2. chicken games: those who do best have to convince the other side that they are a little unstable

b. Does it work?

i. If you only care about the short term

1. You don’t care if this person hates you or deals with you again

ii. opponent has no alternative way to get the resources…you have the monopoly

iii. opponent is a soft bargainer…they are a nice person

iv. Tendency to dead lock…neither side will give in so they both walk away.

v. If you reach an agreement, the person who is toughest does the best.

1. If you are tough, there is a greater probability you won’t reach the agreement at all

2. Moderately Tough Bargaining Strategies

a. Fair Bargaining Strategy: find out what the market value is…make one and only one offer and don’t budge

i. fair and efficient

ii. doesn’t involve game playing

iii. often results in dead lock

1. people were more likely to accept the offer when concessions had been made

2. the enjoyment of dickering is gone

3. the deal looks better after someone makes concessions

a. consumer satisfaction results the most from how good of a deal we got

4. don’t trust someone who says it is fair

b. Reinforcement Approach

i. You want to reward your opponent for making a concession

ii. every time your opponent makes a concession, you make a slightly bigger concession

iii. Danger: you are moving faster toward them than they are toward you.

1. (You have to make a more extreme opening offer than they do.

iv. Does work! (

c. Reciprocity Approach: you do what the opponent does.

i. If they start with an extreme offer, you do to, if they make concessions, you do to.

ii. Dangers

1. Doesn’t work with highly competitive people (tough bargainers) ( deadlock

2. Concessions

a. frequency: make them as often

b. magnitude: make them of equal value.

c. people do match frequency, but not always magnitude

3. Assumes that they will see what you are doing

d. Commitment Approach

i. two stages of negotiation (not equal in time)

1. Sham Bargaining: pretend…not trying to reach an agreement

a. trying to get an assessment of their resistance point

b. find out when they need to reach an agreement (deadline)

2. Real Bargaining: usually right before the deadline

a. At some point make a take it or leave it offer, that is only slightly above the resistance point

ii. It works because it is better than nothing and if they don’t accept they get nothing

iii. You have to be able to

1. Make a strong commitment: make them believe this is your offer and you are walking out

a. Make it in public

b. Make the commitment in writing

c. Commitments that you can’t control are believed more than others

2. Know how to respond if the opponent commits first

a. Poke fun at it

b. Ignore it and immediately make a counter offer

3. Know how to respond if you make a premature commitment (less than their resistance point)

a. new info has come to light that changes everything

b. the relationship is important

c. make initial commitment sufficiently vague that they could back off the specifics and not lose face

3. Soft Bargaining

a. Pacifist Strategy

i. Studied because of historically nonviolent groups that have successfully negotiated

ii. What does it involve

1. Engage in risky trusting behavior

a. willing to make unilateral concessions: give something up without expecting anything in return

2. display their ideology

3. noncoercive

iii. ex. the message sending game

1. people zapped the pacifist

2. because are skeptical and think the pacifist is manipulative

a. willing to cooperate when they witnessed the pacifist behavior first…except high macs.

3. Pacifists were successful when subjects believed they were friends with experimenter and experimenter stayed in the room

B. Argumentation (Reason Giving): what justification are you giving for your position?

i. Donahue

1. goal: to gain relative advantage over opponent.

2. Views negotiation as a debate or adversarial process where each side is trying to out do the other by making arguments the other side can’t refute

3. Relative advantage is not fixed, but shifts throughout the negotiation

a. At the end of the negotiation try to have the most arguments standing.

i. Other side should refute them…don’t have to attack logically, can just say you don’t agree. ( this equalizes relative advantage

b. (How do you get relative advantage?

i. attack: when they make an argument, refute it.

ii. Make an argument of your own

c. If you reach an agreement, the most argumentative people did the best

4. So, don’t give up any ground…just keep arguing

5. problems in data

a. Deadlocks do occur when both sides are very argumentative

b. doesn’t take power into consideration…assumes arguments during the negotiation are all that give you relative advantage

ii. Experts vs. novice negotiators

1. Experts avoid the use of irritators which overdescribes the benefits of your offer

a. i.e. saying things like, “I am making a generous offer.”

2. Experts avoid making immediate counter-offer

a. immediate counter-offers make it seem as though they didn’t consider your option

3. Experts avoid attack/defend cycles.

a. if you become defensive simply because you are attacked you might deadlock

4. Experts avoid the dilution effect ( present fewer arguments

a. novice negotiators feel that they have to make all of their arguments no matter what ( “argument dump”

i. some arguments are good and some are not so good( the savvy opponent will attack the weakest arguments and the strong arguments will be forgotten.

1. weak arguments make the strong ones weaker

5. Experts use more behavioral labeling: signaling what you are going to do before you do it.

a. The only exception is when they disagree ( start with reason before the rejection

6. Experts engage in more summaries and paraphrasing

a. Get feedback

b. Shows that you are listening to them and respect what they have to say

7. Experts ask more questions

a. Ratio of questions to statements can predict the likelihood to find an integrative solution

8. Experts are more likely to make feeling statements

a. When you make an offer they are likely to tell you how it feels… “That feels really good to me.” “That just doesn’t feel right.”

C. Coercion Strategies: force them to give you what you want

i. Effects orientation: Bacharach and Lawler

1. Conflict Spiral Model

a. coercive potential: how much you could hurt the other side.

i. Military might: weapons, armies, etc.

ii. In labor disputes coercive potential for labor is their union strike fund and for management, it is products and non-union labor (scabs)

iii. Theory is that if one size builds coercive potential, the other side will too…Arms Race

iv. This becomes very dangerous

1. As B increases coercive potential, A fears attack and likewise

2. As B increases coercive potential, A becomes tempted to attack ( preemptive attack

2. Deterrence Theory:

a. both sides try to equalize coercive potential

i. as B builds coercive potential, A becomes fearful of retaliation, the more reluctant you will be to attack me. Plus, as B builds coercive potential B becomes more confident that they won’t be attacked

ii. Arms Race is good because it prevents attack

1. as long as coercive potential is equal, no one will attack

2. Also have to believe that an attack would destroy both sides

3. Deterrence Theory was the better predictor of human behavior

ii. Tedeschi: How do people react to threats?

1. What are reactions to threats

a. Look at probability that the threat will be carried out.

i. credibility: whether the person has carried out their threats in the past.

ii. believability: whether the person could (has the capacity to) carry out this threat.

b. Look at how much it will hurt.

i. How do you make people think it will hurt?

1. Put people under time pressure so they don’t have time to think about the actual outcome.

2. for most threats (except death and torture) the imagined harm is worse than the real harm

3. most harmful the first time

c. Added Later: It is a measure of last resort when all else fails because it doesn’t always work

i. face loss: when someone threatens you, they are implying that they are stronger and better than you.

ii. so, you have to find a way to make people to lessen the face loss if they comply

2. How to make a believable, credible, hurtful, yet face-saving threat.

a. use a promise instead of a threat because that is more face saving for the person being threatened.

i. Sort of a veiled threat

ii. “An employee who shows up on time a lot gets a good raise”

iii. So focused on the good component, you don’t feel humiliated

b. people react better to contingent threats than non-contingent threats

i. say if some conditions are met, they won’t be punished as opposed to telling them that they will be punished no matter what.

c. make an implicit threat…construct the situation so that people feel threatened without actually making the threat.

d. deterrent threats vs. compellent threats

i. deterrent is telling people not to do something where as compellent threats are telling people they have to do something

ii. people resist compellent threats more

e. use a warning instead of a threat

i. if you do this, something bad will happen to you…you never say that you will make something bad happen

f. express regret when making the threat

g. say there is no self interest…you don’t gain anything from the threat

h. say the treat is normative (other people would do/ have done the same thing)

i. review the history of things you’ve done

i. demonstrate that this is a method of last resort.

D. Where does bargaining power come from? (Bacharach and Lawler)

1. All power in a negotiation flows from alternatives

2. The party with the best alternatives wins

3. If both sides have great alternatives, the greater the likelihood of a deadlock

4. The greater the power in the system, the greater the likelihood of a deadlock