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Chapter 4: Negotiation Strategy and Planning

Overview

• In this chapter, we discuss what negotiators should do before opening negotiations.

• Effective strategy and planning are the most critical precursors for achieving negotiation objectives.

• With effective planning and target setting, most negotiators can achieve their objectives; without them, results occur more by chance than by negotiator effort.

There are some consequences of failed planning:

• Negotiators fail to set clear objectives or targets that serve as benchmarks for evaluating offers and packages. As a result, negotiators may agree to deals that they later regret.

• Negotiators may not be able to formulate convincing arguments to support their own position or rebut the other party’s arguments.

• Negotiators need to consider their alternatives to doing this deal, as it gives them more confidence and power to walk away from a bad deal.

In the planning process, skilled negotiators:

• Explored a wider range of options for action

• Worked harder to find common ground with the other party.

• Spent more time considering the long-term implications of the issues.

• Were significantly more likely to set upper and lower limits, or the boundaries of a range of acceptable settlements.

Goals, Strategy and Planning

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I. Goals – The Focus That Drives Negotiation Strategy

• Determining goals is the first step in the negotiation process (substantive goals, intangible goals, and procedural goals)

• Negotiators should specify goals and objectives clearly

• The goals set have direct and indirect effects on the negotiator’s strategy

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The Direct and Indirect Effects of Goals on Strategy

• Direct effects

• Wishes are not goals

• Wishes may be related to interests or needs that motivate goals.

• Goals may be linked to the other party’s goals

• i.e. in buying a car, buyer’s and seller’s goals

• There are limits to what ‘realistic’ goals can be

• Goals must be attainable

• Effective goals must be concrete/specific and measurable

• i.e. “to get a car cheaply” is not a very clear goal.

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The Direct and Indirect Effects of Goals on Strategy

• Indirect effects

• Forging an ongoing relationship

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II-Strategy – The Overall Plan to Achieve One’s Goals

Strategy versus Tactics

• Strategy: The overall plan to achieve one’s goals in a negotiation

• Tactics: Short-term, adaptive moves designed to enact or pursue broad strategies

• Tactics are subordinate to strategy

• Tactics are driven by strategy • i.e. strategy: integrative; tactics: describing your interests, using open-ended questions and active

listening.

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Approaches to Strategy

Unilateral versus bilateral approaches to strategy

• Unilateral: One that is made without active involvement of the other party (one-sided and intentionally ignorant of any information about the other negotiator)

• Bilateral: One that considers the impact of the other’s strategy on one’s own (gaining information about the other party)

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Strategic Options The Dual Concerns Model as a vehicle for describing negotiation strategies

• Per the Dual Concerns Model, choice of strategy is reflected in the answers to two questions:

• How much concern do I have in achieving my desired outcomes at stake in the negotiation?

• How much concern do I have for the current and future quality of the relationship with the other party?

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The Dual Concerns Model

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Strategic Options Non-engagement and active-engagement strategies

• Non-engagement strategy: Avoidance

• Active-engagement strategies: Competition, Collaboration, and Accommodation

• Accommodation: “I lose, you win” • It is used when the primary goal of the exchange is to build or strengthen the relationship

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Key Steps to an Ideal Negotiation Process

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III-Getting Ready to Implement the Strategy: The Planning Process

• Following things are important

• We assume that Single planning process can be followed for a distributive and an integrative process

• We assume that negotiations will be conducted primarily one to one, that is you and another individual negotiator

• The first iteration through the planning process should be tentative, and the negotiator should be flexible enough to modify and adjust previous steps as new information becomes available.

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III-Getting Ready to Implement the Strategy: The Planning Process

1. Define the negotiating goal

2. Define the major issues related to achieving the goal (Single issue - multiple-issue negotiations)

3. Assemble the issues, ranking their importance, and define the bargaining mix - The bargaining mix is the combined list of issues

4. Define your interests • Why you want what you want

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Getting Ready to Implement the Strategy: The Planning Process

5. Know your alternatives (BATNAs)

6. Know your limits, including a resistance point

7. Analyzing and understanding the other party’s goals, issues, and resistance

points

8. Set your own target and opening bids

• Target is the outcome realistically expected

• Asking price is the best deal one can hope to achieve

9. Assess the social context of the negotiation

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The Social Context of Negotiation: “Field” Analysis

A and B --(negotiating parties)

C --Indirect actors

D--Indirect observers

E--Environmental factors

• Who is, or should be, on the team on my side of the field?

• Who is on the other side of the field?

• Who is on the sidelines and can affect the play of the game? Who are the negotiation equivalents of owners, managers and strategists?

• Who is in the stands? Who is watching the game, is interested in it, but can only indirectly affect what happens?

• What is going on in the broader environment in which the negotiation takes place?

• What is common and acceptable practice in the ethical system in which the deal is being done?

• What is common and acceptable practice given the culture in which the negotiation is conducted?

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Getting Ready to Implement the Strategy: The Planning Process

10. Presenting the issues to the other party: substance and process

• Why do they want what they want?

• How can I present my case clearly and refute the other party’s arguments?

• What facts support my case

• What is the other party’s point of view

• Etc.

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What protocol needs to be followed in this negotiation?

• The agenda • The location of negotiation • The time period of negotiation • Other parties who might be involved in the negotiation • What might be done if negotiation fails? • How will we keep track of what is agreed to? • How did we create a mechanism for modifying the deal if necessary?