Essay 2000 Words tomorrow 3pm

MAN 4441-01 & 02 Conflict Management and Negotiation NEG OT IATION WIT H M ULT IPLE PA RT IES A ND M A NAG ING IM PA SS E

I N S T R U C TO R : DA R R E N B R O O K S , P H . D.

Multiparty Negotiations

• NEGOTIATION SITUATIONS OFTEN INVOLVE MORE THAN TWO PARTIES, AND INVOLVE A MYRIAD OF RELATIONSHIPS AND ISSUES.

• A MULTIPARTY NEGOTIATION IS A GROUP OF THREE OR MORE INDIVIDUALS, EACH REPRESENTING HIS OR HER OWN INTERESTS, ATTEMPTING TO RESOLVE PERCEIVED DIFFERENCES OF INTEREST.

Multiparty Negotiations

Multiparty Negotiations – Type Evolution

1. Multiparty

2. Coalitions

3. Principal - Agent

4. Constituencies

5. Team Negotiation

6. Intergroup

P1

P2 P3

P1

P2 P3

P1

P2 P3

P1

P2 P3

P1

P2 P3

P 1

P 2

A1 A2P 1

P 2

A1 A2

C 3

P 2

C 4

C 3

P 2

C 4

P

M

M M

P

M

M M

P

M

M M

P1

M

M M

P2

M

M M

P1

M

M M

P1

M

M M

P2

M

M M

P2

M

M M P: principal; C: constituency group;

M: group member; A: agent

C 1

P 1

C 2

C 1

P 1

C 2

Multiparty Negotiations - Challenges

THERE ARE SEVERAL CHALLENGES OF MULTIPARTY NEGOTIATIONS:

• DIVIDING RESOURCES

• COALITIONS/ALLIANCES

• FORMULATING TRADE-OFFS

• VOTING AND MAJORITY RULE

Case Activity Review case scenario

Answer the following questions: ◦ Identify the parties involved (those who have interest in

the outcome)

◦ Where there coalitions/alliances? Who were they?

◦ How did the parties work to advance their position?

◦ Was the position taken by the Secretary wrong? Why or Why not?

◦ What mistakes or misinterpretations were made by the Secretary?

◦ What could the Secretary have done differently?

Multiparty Negotiations – Majority Rule

IF NOT USED WISELY, VOTING RULES AND THE USE OF MAJORITY RULE CAN NEGATIVELY EFFECTIVE NEGOTIATION OUTCOMES.

• MAJORITY RULE FAILS TO RECOGNIZE THE STRENGTH OF INDIVIDUAL PREFERENCES.

• CONSEQUENTLY, MAJORITY RULE DOES NOT PROMOTE INTEGRATIVE TRADEOFFS AMONG ISSUES.

• GROUPS NEGOTIATING UNDER UNANIMOUS RULE REACH MORE EFFICIENT OUTCOMES THAN GROUPS OPERATING UNDER MAJORITY RULE.

Multiparty Negotiations – Voting Paradoxes

A VARIETY OF PARADOXES CAN AFFECT NEGOTIATING OUTCOMES BY AGGREGATING THE PREFERENCES OF TEAM MEMBERS THROUGH VOTING, SUCH AS:

• CONDORCET PARADOX

• IMPOSSIBILITY THEOREM

• STRATEGIC VOTING

• CONSENSUS AGREEMENTS

Multiparty Negotiations – Strategies

GIVEN THAT MULTIPARTY NEGOTIATIONS PRESENT SPECIAL CHALLENGES, THE FOLLOWING ARE STRATEGIES NEGOTIATORS CAN USE TO ENHANCE THEIR ABILITY TO EXPAND AND SLICE THE PIE IN A MULTIPARTY CONTEXT.

◦ Know who will be at the table.

◦ Manage the information and systematize proposal making.

◦ Brainstorm options (make sure to engage everyone).

◦ Develop and assign process roles.

◦ Stay at the table.

Multiparty Negotiations – Strategies (Cont.)

◦ Strive for equal participation.

◦ Allow for some points of agreement, even if only on process.

◦ Avoid the “equal shares” bias (split the middle).

◦ Avoid the agreement bias (satisficing).

◦ Avoid sequential bargaining, when appropriate.

Multiparty Dilemmas People behave more competitively in groups than in two-person situations – why?

• The costs of defection are spread out. • Multiparty social dilemmas are riskier largely due

to the issues of complexity. • People in multiparty dilemmas have less control

over the situation.

Multiparty Dilemmas There are two major types of approaches for maximizing cooperation in social dilemmas:

• Structural strategies • Psychological strategies

Strategies for maximizing cooperation in social dilemmas

Multiparty Dilemmas: Structural Strategies

Structural strategies involve fundamental changes in the ways that social dilemmas are constructed and often require and act of a regulatory entity to enact.

• Align incentives • Monitor behavior • Regulation • Privatization • Tradable permits

Multiparty Dilemmas: Psychological Strategies

Psychological strategies are usually engaged in by the organizational party(s) and are inexpensive.

• Psychological contracts and the norm of commitment • Economics • Communication • Personalize others • Social sanctions • Focus on benefits of cooperation

Multiparty Dilemmas

How to encourage cooperation in multiparty social dilemmas when the negotiating parties should not collude:

• Keep your strategy simple. • Signal via actions. • Do not be the first to defect. • Focus on your own payoffs, not your payoffs relative to

others. • Be sensitive to egocentric bias.

Escalation of Commitment The escalation of commitment refers to the unfortunate tendency of negotiators to persist with a losing course of action, even in the face of clear evidence that their behaviors are not working and the negotiation situation is quickly deteriorating.

Escalation of Commitment

Ways to avoid the escalation of commitment in negotiations:

• Set limits. • Avoid decision myopia. • Recognize sunk costs. • Diversify responsibility and authority. • Redefine the situation.

Negotiation Impasse

Nature of Impasse

Impasse is a condition or state of the conflict in which there is no apparent quick or easy resolution.

• Impasse is not necessarily bad or destructive

• Impasse does not have to be permanent

• Impasse can be tactical or genuine o Tactical impasse: parties deliberately refuse to proceed

as a way to gain leverage

o Genuine impasse: parties feel unable to move forward without sacrificing something important

Nature of Impasse

Impasse perceptions can differ from reality

• The perception of impasse can be created by an intransigent negotiator who is looking to extract concessions from the other party

• Intransigence can be defined as a party’s unwillingness to move to any fallback position through concession or compromise

Causes of Impasse and Intractable Negotiations A negotiation becomes more tractable when it becomes easier to resolve, and intractable when it is more difficult to resolve

• Intractable conflicts vary along four dimensions o Divisiveness

o Intensity

o Pervasiveness

o Complexity

• Value differences o Vary from minor differences to major differences in

ideology, lifestyle, of what is considered sacred and critical

• High-stakes distributive bargaining o Parties may have inflated their negotiating positions to

the point where there is no apparent zone of agreement

• Risk to human health and safety o The threat to human welfare is clear and apparent

Causes of Impasse and Intractable Negotiations

Discussion Activity Write down a conflict you have experienced in which an apparent solution to resolve the conflict was not apparent or you were unable to resolve the conflict at all.

Reflecting on the causes of impasse answer the following: ◦ What was the cause of the impasse in your

situation? ◦ What prohibited you from determining

alternative solutions?

Characteristics of the Conflict Resolution Process Processes that increase the likelihood of impasse: • The atmosphere is charged with anger, frustration and

resentment • Channels of communication are closed or constrained • Original issues have become blurred and ill defined • Parties tend to perceive great differences in their

respective positions • As anger and tension increase, parties become locked in

their initial positions • Those on the same side view each other favorably.

Characteristics of the Parties that Contribute to Impasse

• How one defines one’s self o Identity – “Who am I?”

o Conflict occurs when people’s identities are threatened

• Comparing one’s self to others o Characterization – “Who are they?”

o Blame others when things go wrong, take credit for successes

• Perceptions of power o A negotiator may bargain tough because they believe they can

effectively exercise coercive power

Characteristics of the Parties that Contribute to Impasse • Revenge and anger

o To correct injustice

o To stand up and express one’s self-worth

o To deter future occurrences of undesirable behaviors

• Conflict management styles

o Parties often avoid conflict in creative ways: • Aggressive avoidance—intimidate others to keep them

away

• Passive avoidance—try to ignore the other

• Passive aggressive avoidance—blame the other party and walk away

Characteristics of the Parties that Contribute to Impasse

• Conflict management styles (cont.) • Avoidance by claiming hopelessness — “What’s the

use…?”

• Avoidance through surrogates — use a “surrogate” to take the other on

• Avoidance through denial — make believe it isn’t there

• Avoidance through premature problem solving — “I fixed everything.”

• Avoidance by folding — “We’ll do it your way; now can we talk about something else?”

Characteristics of the Negotiation Environment Leading to Impasse

Renegotiations of existing agreements occur frequently and are in response to three situations:

• Postdeal negotiations – occur as an existing agreement is expiring

• Intradeal negotiations – occur when an agreement states that negotiations should be reopened at specific intervals

• Extradeal negotiations – occur when there is a violation of the contract

o Have the largest probability of leading to impasse as a result of a large shift in the environment

Characteristics of the Negotiation Environment Leading to Impasse

• The negotiation setting o Changing locations can be a new start

• Temporal (time) issues o Earlier compromises re-packaged may break impasse

• Relational issues o Replacing an aggressive team member can signal

change

• Cultural issues o Changing strategy can change attitudes (i.e. bring in

a mediator)

Fundamental Mistakes that Result in Impasse • Neglecting the other side’s problem

• Too much of a focus on price

• Positions over interests

• Too much focus on common ground

• Neglecting BATNAs

• Adjusting perceptions during the negotiation

Resolve Impasses: Levels of Resolution Impasse can be resolved on three levels:

• Cognitive resolution

o Change how the parties view the situation

• Emotional resolution

o Change how the parties feel about the impasse

• Behavioral resolution

o Specify ways the parties can stop difficult conflict dynamics

Strategies for Resolving Impasses 1. Reaching agreement on rules and procedures

(social contracts)

2. Reducing tension and synchronizing de- escalation of hostility

3. Improving the accuracy of communication

4. Controlling the number and size of issues

5. Establishing common ground

6. Enhancing the desirability of options and alternatives

Strategies for Resolving Impasses • Reaching agreement on rules and procedures

o Obtain mutual agreement about the rules that will govern the negotiation

o Determine a site for a meeting

o Set a formal agenda

o Determine who may attend the meetings

o Set time limits for individual meetings

o Set procedural rules

o Follow specific dos and don’ts

Strategies for Resolving Impasses • Reducing tension and synchronizing de-

escalation

o Separate the parties

o Manage tension

o Acknowledge the other’s feelings: active listening

o Synchronize de-escalation • Decide on a small concession that each side could make to

signal good faith

Strategies for Resolving Impasses • Improving the accuracy of communication

o Role reversal

o Imaging parties engage in the following activities:

1. how they see themselves

2. how the other party appears to them

3. how they think the other party would describe them

4. how they think the other party sees themselves

Strategies for Resolving Impasses Controlling the number and size of issues

• Fractionate the negotiation 1. Reduce the number of parties on each side 2. Control the number of substantive issues involved 3. State issues in concrete terms rather than as

principles 4. Restrict the precedents involved, both procedural

and substantive 5. Search for ways to divide the big issues 6. Depersonalize issues: Separate them from the

parties advocating them

Strategies for Resolving Impasses • Establishing common ground

1. Superordinate goals

2. Common enemies

3. Common expectations

4. Manage time constraints and deadlines

5. Reframe the parties’ view of each other

6. Build trust

7. Search for semantic resolutions

8. Use analogical reasoning

Strategies for Resolving Impasses • Enhancing the desirability of options to the other party

1. Give the other party a “yesable” proposal

2. Ask for a different decision

3. Sweeten the offer rather than intensifying the threat

4. Use legitimacy or objective criteria to evaluate solutions