International NegotiationStephan Langdon, MBA M.Ed

Negotiation

• Isabella has worked as the executive assistant to Martina for ten years.  Isabella has worked overtime on many occasions when Martina had special projects to complete.  Martina has not given Isabella a raise in her salary for three years and Isabella is thinking about looking for a new position which could pay her more money.  Martina is concerned about losing Isabella to another employer but is worried that her own company has not made a profit in the last two years.  Isabella and Martina sit down in the conference room to negotiate a possible raise in salary for Isabella.

• ROLE #1: ISABELLA• ROLE #2: MARTINA• ROLE #3: OBSERVER (Take notes and report about

negotation)

More Theory

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Distributive Negotiation• Goals of one party are in fundamental, direct conflict to

another party.• Resources are fixed and limited.• Maximizing the share of resources is the goal.• Distributive negotiation is all about who gets (or pays) how

much. It is also where more for me means less for you.

• Las metas de un partido están en el fundamental, conflicto directo a otro partido.

• Los recursos son fijos y limitados. • La maximización de la parte de recursos es la meta. • La negociación distributiva está todo sobre quién consigue

(o paga) cuánto. Está también donde más para mí los medios menos para usted.

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Integrative Negotiation• Create a free flow of information.• Attempt to understand the other negotiator’s real

needs and objectives.• Emphasize the commonalties between the parties

and minimize the differences.• Search for solutions that meet the goals and

objectives of both sides.

• Cree un libre flujo de información. • Intente a entender las necesidades verdaderas y

los objetivos del otro negociador. • Acentúe los las cosas en campo común entre los

partidos y reduzca al mínimo las diferencias. • Busque para las soluciones que logran las metas

y los objetivos de ambos lados.

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Distributive Concepts• Resistance Point.• BATNA/ MAAN.• ZOPA.• Range.• Frame.• Anchor.• Concession. • Leverage.

• Punto de la resistencia. • BATNA/MAAN. • ZOPA. • Gama. • Marca. • Ancla. • Concesión. • Palancada.

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Reservation Price/Ultima Precio

• The least favorable point where one will accept.

• The “walk-away”.• Example: you are

looking for larger office space. You set your BATNA at $20 and your Reservation Price at $35

• If owner won’t budge from $35, you walk away and take advantage of your BATNA

• El menos punto favorable donde uno aceptará. • El "walk-away". • Ejemplo: usted está buscando un espacio más grande

de la oficina. • Usted fijó su BATNA en $20 y su precio de reservación

en $35. • Si el dueño no bulle a partir del $35, usted camina

lejos y se aprovecha de su BATNA

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ZOPA• Zone of Possible

Agreement (ZOPA).• The difference between

the Seller’s Reservation Price and the Buyer’s Reservation Price.

• What happens if positions below are reversed?

• Zona del acuerdo posible (ZOPA).

• La diferencia entre el precio de reservación del vendedor y el precio de reservación del comprador.

• ¿Qué sucede si se invierten las posiciones abajo?

ZOPA

$275k$250

k

Seller’s Reservation Price

Buyer’s Reservation Price

10Reference Text: Contract Negotiations, by Gregory A. Garrett, CCH, Inc. (2005), pg. 13.

Contract Negotiation Competencies• Mark H. McCormack, best-selling author of “What

They Don’t Teach You at Harvard Business School,” has stated the perfect negotiator should have:

• Faultless people sense

• A strong competitive streak

• A view of the big picture

• An eye for the crucial detail

• Unimpeachable integrity

11

Contract Negotiation Competencies

Negotiation Process

Negotiation Process 3 Steps (Cronkite)

Find opponents

bottom line.

Find your bottom

line.

Push’s opponent

to lower bottom

line.

Negotiation Process 4 Steps (Shell)

Negotiation planning and preparation. • Extremely

important.

Beginning to interact• orientation to

situation, • relationship with

other side,

• information exchange.

Initial proposal• offer or demand• making

concessions• narrowing of

differences.

Closing• Getting

commitment.

Seven Stages (Folberg, Golann)

Preparation and Setting Goals

Initial Interactio

n and Offers

Exchanging &

Refining Informati

on

Bargaining

Moving toward Closure

Bridging impasse & make

decisions

Finalizing Agreeme

nt

Negotiation Considerations

Cooperation

Competition

Enlightened self-

interest.

Negotiation Considerations

Triad of Concerns

Economic

Social

Emotions

• Social• How will others view the

agreement

• Emotional• How will you feel about

the agreement• Successful Negotiations • Lewicki and Fisher

• Economic• Will you be satisfied with

the economic results

Triad of concerns

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Concessions

• The Role of Concessions.– Without them there is either capitulation or deadlock.

• Patterns of Concession Making.– The pattern contains valuable information.

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Commitments: Tactical Considerations

• Establishing a Commitment.– Three properties:

• Finality.• Specificity. • Consequences.

• Preventing the Other Party from Committing Prematurely.– Their commitment reduces your flexibility.

• Establecimiento de un compromiso . • Tres características:

– Finalidad. – Especificidad. – Consecuencias.

• Evitando que el otro partido confíe prematuramente.– Su compromiso reduce su flexibilidad.

2005/09/08

Commitments: Tactical Considerations (cont.)

• Ways to Abandon a Committed Position:– Plan a way out.– Let it die silently.– Restate the commitment in more general terms– Minimize the damage to the relationship if the other

backs off

• Establecimiento de un compromiso. • Tres características: • Importancia determinante. Especificidad.

Consecuencias. Evitando que el otro partido confíe prematuramente. Su comisión reduce su flexibilidad.

Perception• Subjective. Always check your views, opinions

and analysis of your position• One’s view of fairness. (Barry Bond’s homerun).• Be very careful of your client's (and your own)

perception of fairness. • Frames

Role of Perception• Subjective. Always check your views, opinions

and analysis of your position!!• One’s view of fairness. (Barry Bond’s homerun).• Be very careful of your client's (and your own)

perception of fairness.

Bias Perception: Fixed Pie• the erroneous belief that the other party’s

interests are directly opposed to one’s own interests when, in fact, they are often not completely opposed.

Bias Perception: Thompson and Hastie• Explored the consequences for outcomes. • They measured individual fixed-pie

perceptions after just five minutes of negotiation

• They found fixed pie predicted individual and joint negotiation payoffs such that fixed-pie perceptions were associated with lower individual and joint profits.

• Negotiators with strong fixed-pie perceptions failed to identify interests that could be profitably logrolled or that were completely compatible.

Bias Perception: Why does this occur?• Biased information search • (negotiators’ faulty search for necessary information)

• Biased information processing • (negotiators’ faulty processing of available information).

Bias Perception: Extremism• Partisan perceivers believe that their own

perceptions map onto objective reality.• When they realize that the other side’s

views differ from their own, they first attempt to “straighten out” the other side; when this does not work, they regard the other side as extremist.

• partisan perceivers tend to view the other side as having interests that are more opposed to their own than is actually the case.

Bias Perception: Problems with Extremism1. Exacerbates conflict

1. Partisan perceivers ascribe more negative traits to their negotiating partner even when partisanship has been randomly assigned right before the negotiation

2. Reduces the likelihood of reaching comprehensive integrative agreements during face-to-face negotiations

Bias Perception: Reactive Devaluation Bias• Negotiators discount or dismiss concessions made

by the other party merely as a function of who is offering them

Bias Perception: Stillinger, Epelbaum, Kelter, and Ross (1990)

• Experiment• Participants negotiated with a confederate over the policy of their university

regarding a political issue. • Constant

• The antagonism of the negotiating confederate was held constant. • During the negotiation, the confederate for a time adopted a stubborn

position. • Concession

• In two experimental conditions, however, the confederate ultimately made a concession; in the third (control) condition, no concession at all was made.

• Rating• Subsequently, participants rated the attractiveness and significance of a

number of different proposals, including the ones that had been offered in their negotiation session.

• Results • Non-offered concessions were rated as more attractive and significant than

offered concessions: • The very fact that their counterpart offered them a concession diminished its

value in the eyes of the participants.

Bias Perception: Fundamental Attribution Error• People tend to view

A. their own behavior as largely determined by the situation

BUT B. regard other’s behavior as driven by chronic

dispositions

• Larrick and Su (1999) • Demonstrated this bias operated in negotiation. • Negotiators erroneously attributed tough bargaining

behaviors to difficult personalities rather than to situational factors.

• Fundamental attribution error often results from lack of sufficient information about the opponent’s situation.

Bias Perception: Coercion Bias• People erroneously believe that

A. coercive tactics will be effective in generating concessions when dealing with opponentsBUT B. believe that these same tactics, when applied to the self, will have the opposite effect—that is, to increase their resolve not to concede.

• Rothbart and Hallmark (1988) in-group and outgroup members differed in the judged efficacy of coercion and conciliation as social influence strategies.

• Out-group members perceived coercion as more effective than conciliation when applied to others,

• In-group members perceived coercion as less effective than conciliation when applied to their own social or categorical group members.

Perceptions: Framing• Framing: constructing and representing

interpretations.• Defining key issues and key problems.• Perspective.• Separates issue from other ideas.• Aggregate and process information.• Language we choose engage. notion of what we are doing: discussion, argument, fight

• Frames persist as long as they are useful. • When people hold to their frames, conflict can

occur. • Frames can be transformative.• Change frame, change conversation.• Frames can be shifted.

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Modify the Other Party’s Perceptions• Make outcomes appear less attractive.• Make the cost of obtaining goals appear higher.• Make demands and positions appear more or less

attractive to the other party-whichever suits your needs.

• Haga que los resultados aparecen menos atractivos. Haga el coste de obtener metas para aparecer más arriba. Haga que las demandas y las posiciones aparecen más o menos atractivas a la otra partido-cualquiera se adapta a sus necesidades

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Manipulate the Actual Costs of Delay or Termination• Plan disruptive action:

– Raise the costs of delay to the other party.• Form an alliance with outsiders:

– Involve (or threaten to involve) other parties that can influence the outcome in your favor.

• Manipulate the scheduling of negotiations:– One party is usually more vulnerable to delaying than

the other.

• Acción que disturba del plan: Levante los costes de esperar al otro partido. Forme una alianza con otras: Implique (o amenace implicar) otros partidos que puedan influenciar el resultado en su favor. Manipule la previsión de negociaciones: Un partido es generalmente más vulnerable al retraso que el otro.

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Positions Taken During Negotiations• Opening Offer

– Where will you start?• Opening Stance

– What is your attitude? Competitive? Moderate?• Initial Concessions

– Should any be made? If so, how large?

• Oferta de abertura ¿Donde usted comienzan? Postura de la abertura ¿Cuál es su actitud? ¿Competitivo? ¿Moderate? Concesiones iniciales ¿Deben cualesquiera ser hechas? ¿Si es así cómo grande?

Why Frames are Critical• Negotiators who

understand framing may understand how to have more control over the negotiation process.

• Frames may be malleable and, if so, can be shaped or reshaped during negotiation.

• Frames shift and change as the negotiation evolves.

• Los negociadores que entienden enmarcar pueden entender cómo tener más control sobre el proceso de la negociación.

• Los Marcas pueden ser maleables y, si es así se pueden formar o formar de nuevo durante la negociación.

• Los arcas cambian de puesto y cambian mientras que la negociación se desarrolla.

Perceptions: Three Views of Frames• Categories of experience

• Interests, rights, power

• Process of issue development

Language• Ohio negotiation.• Environmentalist.• Developers.

• Environmentalists.• Called polluters developers.

• Conflict.• Result of nonverbal looks and glances.• Polarizing language.

Trust/Distrust Frame

• Trust distrust different frames.

• Main role of negotiator / mediator.

• Decide which you are doing: • Building trust.• Managing distrust.

• Marcos de la desconfianza de la confianza diversos.

• Posicion principal del negociador/del mediador.

• Decida cuál usted está haciendo: • Confianza del edificio. • Desconfianza de manejo.

Trust/Distrust Frame• Trust Frame.

• Little step by step process.• Reliability.• Competence.

• Distrust Frame.• Apologies.• Reparation.• Say vs Do.

• Marco de la confianza. • Marcos de la desconfianza

de la confianza diversos. • Papel principal del

negociador. Poco proceso paso a paso. Confiabilidad. Capacidad.

• Marco de la desconfianza. • Apologías. • Reparación. • Diga contra hacen.

Managing Trust• Creating positive

expectations.• Confident expectations

about the other.• Shape them by: • Language.• Clear exceptions.• Manage expectation.

• Crear expectativas positivas.

• Expectativas confidentes sobre la otra.

• Fórmelas cerca: • Lengua. • Excepciones claras. • Maneje la expectativa.

Managing distrust• Tools.• Boarders.• Boundaries.• Processes.• Not trust building.

• Manages downside risk.• Distrust binding.• Prenuptial agreement.

• Herramientas. • Huéspedes. • Límites. • Procesos. • No edificio de la

confianza.

• Maneja riesgo de baja. • Atascamiento de la

desconfianza. • Acuerdo Prenuptial.

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Frames as Categories of Experience

1 Substantive.– What the conflict is about.

2 Outcome.– The predispositions the parties have to achieving a

specific result.3 Aspiration.

– Predispositions the parties have towards satisfying a broader set of interests.

4 Conflict Management Process.– How the parties will go about resolving their dispute.

1. Substantivo. 1. Sobre cuál el conflicto

está. Resultado 2. Las predisposiciones

1. los partidos tienen que alcanzando un resultado específico.

3. Aspiración.1. Predisposiciones que los

partidos tienen hacia la satisfacción de un sistema más amplio de intereses.

4. Proceso de la gerencia del conflicto. 1. Cómo los partidos irán

alrededor a resolver su conflicto.

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Frames as Categories of Experience (cont.)

5 Identity.– How the parties define “who they are”.

6 Characterization– How one party defines the other party.

7 Loss-gain.– How the parties view the risks of particular outcomes.

5. Identidad. Cómo los partidos definen “quién son”.

6. Caracterización Cómo un partido define el otro partido.

7. Pérder-gane. Cómo los partidos ven los riesgos de resultados particulares.

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Other Frames• Process.

– Certain Process Needed.• Worst case/Loss Orientation frames:

– All chance to lose.– They know all is bad.– Civil war: if I agree to anything I will be murdered.

• Risk and information frames: – Intractable disputes often involve expectations about

future events.– The events are risky and the likelihood of the events

occurring is uncertain..

• Proceso. – Cierto proceso necesario.

• Marcos de la orientación del peor caso/de la pérdida: – Toda la ocasión de perder. – Saben que todos son malos. – Guerra civil: si convengo

cualquier cosa me asesinarán.

• Marcos del riesgo y de información: – Los conflictos insuperables

implican a menudo expectativas sobre los acontecimientos futuros.

– Los acontecimientos son aventurados y la probabilidad de la ocurrencia de los acontecimientos es incierta.

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Key Decision Elements

Framing

Gathering Intelligence

Coming to Conclusions

Learning From

Feedback

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Decision Trap: Frame Blindness• Understanding Frames.• Framing Traps.

– Boundaries. – Reference Points .– Yardsticks .

• Metaphors.• Thinking/Cultural Frames.• Dealing With Frames.

• Marcos de comprensión. • Trampas que enmarcan.

– Límites. – Puntos de referencia. – Criterios.

• Metáforas. Pensamiento/marcos culturales. El ocuparse de los marcos.

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Decision Trap: Lack Frame Control• The Question is the Frame.

– Know Your Frames. – Know Frames of Others.– Challenge All Frames. – Reframe When Needed.

• When Frames Are Important.– Communication.– Strategy. – Negotiation.

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Reframing Change• Substance.

– Positions, issues, assessment, action.• Process.

– Perceptions, others’ viewpoint.• Values.

– An understanding of different stakeholder values ad ability o communicate.

• Phrasing.– From win-win, lose lose, won lose.

• Sustancia. – Posiciones, asunto,

evaluación , acción. • Proceso.

– Opiniones, otras punto de vista.

• Valores. – Una comprensión de

diversa capacidad o del anuncio de los valores del tenedor de apuestas comunica.

• Cambiar Lengua. – De provechoso para ambas

partes, pierda pierden, ganado pierden.

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Use of dialogue to reframe intractable conflicts• Reduce tension and manage the de-escalation of hostility:

– techniques such as listening projects, study circles, and some forms of mediation.

• Perspective taking: – techniques such as acknowledging critical identities,

imaging of identities

• Reduzca la tensión y maneje el decapado de la hostilidad:– técnicas tales como proyectos que escuchan, círculos de

estudio, y algunas formas de mediación. • Tomar de la perspectiva:

– técnicas tales como reconocimiento de las identidades críticas, proyección de imagen de identidades

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Use of dialogue to reframe intractable conflicts• Establish a common ground as a basis for agreement:

– techniques such as search for common ground and visioning/search processes enable reframing around a smaller set of issues. and characterizations, narrative forums, and listening circles allow disputants to understand the conflict and its dynamics.

• Enhance the desirability of options and alternatives:– Several approaches exist that may enhance the desirability of

alternative options when presented to parties with divergent frames.

• Establezca un terreno común como base para el acuerdo: – las técnicas tales como

búsqueda para los procesos del terreno común y el visioning/de la búsqueda permiten reframing alrededor de un sistema más pequeño de ediciones. y las caracterizaciones, los foros narrativos, y los círculos que escuchan permiten que los disputants entiendan el conflicto y su dinámica.

• Realce la deseabilidad de opciones y de alternativas: – Varios acercamientos existen

que pueden realzar la deseabilidad de opciones alternativas cuando están presentados a los partidos con los marcos divergentes.

Motivational Biases

Motivational Biases• Self-enhancement, • Closure and consistency, • Cooperation (maximization of shared goals)• Accountability (or constituency pressure)

Self-Enhancement• One of the most fundamental goals of human life

is the preservation and maintenance of self-identity.

• De Dreu, Nauta, and van de Vliert (1995) found that negotiators tend to make self-serving evaluations of conflict behavior.

• self-serving evaluation of conflict behaviorwas associated with increased frustration,

• reduced problem solving, and enhanced likelihood of future conflict.

• Thus, self-enhancement may be a central motivational antecedent of conflict escalation.

Egocentric Bias• Egocentrism leads negotiators to perceive

fairness in a biased manner • Specifically, the egocentric bias tends to

make parties believe that it is fair for them to have more of the negotiated

• Negotiators claim what they want and, at the same time, believe that their claim is fair.

• Egocentrism leads parties to anticipate that others will make over-harvesting decisions and deplete common goods

Self-affirmation theory• People experience a threat to their self-esteem,

they need to affirm the self (Steele, 1988).• When people are given feedback indicating that

they have not performed well on a task, they are more likely to promote themselves

• Derogating a stereotyped target increases the self-esteem of people whose self-image has been threatened (Fein and Spencer, 1997).

• More likely to evaluate that person stereotypically if their self-images have been threatened by negative feedback (Fein and Spencer, 1997).

Closure• Need for closure (NFC) refers to the notion that

some situations elicit an epistemic state of wanting a quick solution through, for instance, time pressure and proximity to decision deadline.

• Some individuals have a chronic tendency to terminate hypothesis testing and information searches prematurely (Webster and Kruglanski, 1994).

• People are more likely to engage in thoughtful or novel information processing when their NFC is low.

Cooperation• In general, this research has consistently found

that negotiators who A. Anticipate future interaction with another party B. Adopt a communal or a social value orientation

• are more likely to behave more cooperatively and attain outcomes of higher joint value.

Accoutablity• Negotiators who are accountable to their

constituents make higher demands and are less willing to compromise than those not accountable to constituents

• Two motivational processes may explain this finding: • decision-making vigilance• evaluation apprehension.

Decision-making vigilance• Decision makers who are accountable for their

actions are vigilant in that they consider relevant information and alternatives more carefully than those who are not accountable (Tetlock, 1985, 1992).

Evaluation apprehension

• Tendency for accountable negotiators to be concerned with how they are viewed by others and, consequently, to use face-saving strategies.

• Research suggests that wanting to save face leads to negotiators being more aggressive and uncompromising in negotiation (Neale, 1984; Wilson, 1992).

Two More Motivational Theories

• Defensive bolstering •When people are accountable for positions to which they feel committed, they devote the majority of their mental effort to justifying those positions

• Preemptive self-criticism •When people do not know the views of the audience and are unconstrained by past commitments, they are motivated to think in relatively flexible, multidimensional way.

Single Text

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Single Text Negotiation

• Mediation that employs the use of a single document.

• Ties in the often wide-ranging interests of stakeholders in a conflict.

• Parties to the conflict add, subtract and refine the text, which represents a "placeholder agreement".

• Mediación que emplea el uso de un solo documento.

• Lazos en los intereses a menudo vastos de tenedores de apuestas en un conflicto.

• Los partidos al conflicto agregan, restan y refinan el texto, que representa un "acuerdo del placeholder".

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Single Text Negotiation

• Intended to be the foundation for a final ratified agreement.

• Since all parties must agree to the final document and offensive entries may lead to a cessation of the process, disputants must be sensitive to how their changes to the text will be perceived by the other parties.

• Se prepuso ser la fundación para un acuerdo ratificado final.

• Puesto que todos los partidos deben convenir el documento final y las entradas de la ofensiva puede conducir a una cesación del proceso, los disputants deben ser sensibles a cómo sus cambios al texto serán percibidos por los otros partidos.