Unit I Negotiation Conflict

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Negotiation

Section 01: Negotiation Fundamentals

Chapter 01: The Nature of Negotiation

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Overview

Everyone negotiates, almost daily.

Negotiations occur for several reasons.

To agree on how to share or divide a limited resource.

To create something new that neither party could do on their own.

To resolve a problem or dispute between the parties.

People fail to negotiate because they do not recognize they are in a negotiation situation.

Options other than negotiation fail to achieve goals or needs.

Or, people misunderstand the negotiation process and do poorly.

Style and Approach

First a brief definition of negotiation.

Negotiation is a form of decision making in which two or more parties talk with one another in an effort to resolve their opposing interests.

Bargaining describes the competitive win-lose situation haggling.

Negotiation refers to win-win situations mutually acceptable solutions.

-and-take.

Negotiation is complex, factors may shape the negotiation before it begins, or shape the context around the negotiation.

Personal experience, the media, and research.

Characteristics of a Negotiation Situation

Characteristics common to all negotiation situations.

Two or more parties, individuals, groups, or organizations.

There is a conflict of needs and parties search for a resolution.

Parties think they can get a better deal by negotiating.

In negotiation, a give-and-take is expected.

The parties prefer to negotiate and search for an agreement.

Successful negotiation manages tangibles and resolves intangibles.

Tangibles include the price or the terms of agreement.

Intangibles are the underlying psychological motivations that directly or indirectly influence the parties during negotiation

Often rooted in personal values and emotions and impossible to ignore.

Interdependence

Relationships are characterized in one of three ways.

When parties have interlocking goals, they are interdependent.

Dependent parties must rely on others for what they need.

Interdependence and the structure of the situation shapes negotiation processes and outcomes.

A zero-sum, or a distributive situation is competitive with one winner.

A non-zero-sum, or integrative situation is a mutual-gains situation.

Interdependence depends on the desirability of alternatives.

Mutual Adjustment

As parties influence each other, they engage in a mutual adjustment causing changes to occur during negotiation.

Effective negotiators understand how people will adjust and re-adjust, how negotiations might twist and turn.

The best strategy is grounded in the assumption that the more information available about the other party, the better.

When one party alters their position based on the other

Concessions constrain the bargaining range.

acceptable settlements.

Two Dilemmas in Mutual Adjustment

Dilemma of honesty

Concerns how much of the truth to tell the other party.

Telling the other party everything may allow them to take advantage of you.

Not telling the other party about your needs may lead to a stalemate.

Dilemma of trust

Concerns how much to believe what the other party tells you.

If you believe everything, you may be taken advantage of.

If you believe nothing, you may not reach an agreement.

Current trust depends on:

Their reputation.

Their past treatment of you.

Their current pressures.

Perceptions and Patterns

Two efforts in negotiation create trust and the belief of fairness.

One is based on perceptions of outcomes.

Shaped by managing how the receiver views the proposed results.

The other is based on perceptions of the process.

Enhance credibility of the process with images that signal fairness.

When people make a concession, they trust the other party and the process far more if a concession is returned.

The pattern of give-and-take is essential to joint problem solving.

Satisfaction is determined as much by the process through which an agreement is reached as with the actual outcome obtained.

Value Claiming and Value Creation

The purpose of distributive bargaining is to claim value.

Using whatever necessary to claim the reward or gain the largest part.

The purpose of integrative negotiation is to create value.

Or find a way for all parties to meet their goals and share the reward.

Most negotiations combine claiming and creating value.

Negotiators must recognize when to use one approach or the other.

Negotiators must be versatile and comfortable using either approach.

Negotiators see problems as more competitive than they really are.

Coordination of interdependence has the potential for synergy.

Creating Value Through Differences

There are some key differences among negotiators.

Differences in interests.

Finding compatibility is often the key to value creation.

Differences in judgments about the future.

How parties see what is possible creates opportunities to get together.

Differences in risk tolerance.

A company with a cash flow problem can assume less risk.

Differences in time preference.

The seller wants to close the deal but the buyer may not be ready.

Value is often created by exploiting common interests, but differences can also serve as the basis for creating value.

Conflict

Interdependent relationships have the potential for conflict.

Negotiation can play a role in resolving conflict effectively.

Conflict is a sharp disagreement of interests, ideas, etc.

Includes the perceived divergence of interest or a belief that current aspirations cannot be achieved simultaneously.

There are four levels of commonly identified conflict.

Intrapersonal conflict occurs within an individual.

Interpersonal conflict occurs between individuals.

Intragroup conflict happens within a group.

Intergroup conflict is between groups the most complex.

Functions and Dysfunctions of Conflict

Discussion raises awareness.

Brings change and adaptation.

Strengthens relationships and boosts morale.

Promotes self-awareness.

Enhances personal development.

Encourages psychological development.

Can be stimulating and fun.

Win-lose goals lead to competitive processes.

Misperception and bias increase.

Emotionality may increase.

Productive communication decreases.

Blurred central issues.

Rigid commitments locked in.

Magnified differences.

Escalation of the conflict.

Factors When Managing Conflict

Difficult to Resolve

Issue is a matter of principle.

Large stakes, big consequences.

A zero-sum situation.

A single interaction.

No neutral third party available.

Unbalanced conflict progress.

Easy to Resolve

Divisible issues.

Small stakes, little consequences.

A positive-sum situation.

A long-term relationship.

Trusted, powerful third parties available.

Balanced conflict progress.

Figure 1.3: The Dual Concerns Model

Jump to slide containing descriptive text.

Effective Conflict Management

Individuals in conflict have two independent levels of concern.

Concern about your own outcomes.

Five major conflict management strategies are identified in the dual concerns model.

The contending strategy is used for trivial issues, not complex issues.

Yielding is helpful if you were in the wrong, not with important issues.

Inaction is appropriate for a cooling off period, not when you are responsible for a decision.

Problem-solving is needed with complex situations needing commitment from others for success, not for simple, or timely, issues.

The compromising strategy is appropriate when power is equal, not when power is not equal, or when the problem is very complex.

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End of Chapter 01.