negotiations section 1 integ negot

8/13/2019 Negotiations Section 1 Integ Negot

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Section 1.

Integrative Negotiations and

Collective Decision Making:

Principles and Concepts


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Let us begin anew, remembering on both sides that civility is not a sign of

weakness, that sincerity is always subject to proof. t us never negotiate out of

fear. But let us never fear to negotiate.

John F. Kennedy

What Is Negotiation?

Negotiation Is Collective Decision Making

Internal Negotiations

Collective decision making occurs when more than one entity is required to make a

decision. Simply stated, negotiation is the process by which collective decisions are made.

In ourorganizational lives we encounter negotiations when making decisions both within

the organization and with entities external to the organization.

The word "negotiation" is from the Latin expression, "negotiatus" meaning "to carry on

business". When managers consider how they spend their time carrying on business

they soon realize that they much of their time is spent in negotiation-related activity,

whether preparing for negotiations, negotiating agreements or implementing those

agreements. It is what managers and others in an organization do. Working on teams,

coordinating projects, and getting cooperation just getting our work done all require

negotiation. Indeed, negotiation is the way in which we address and define challenges and

opportunities, craft strategies, policies and solutions, and ensure the understanding andcommitment to implement them. It is a major determinant of our success.


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One indicator of the extent to which we share decision making within an organization is

the number of work groups, project teams and committees we are a part of and the many

meetings we attend where decisions are made. All require negotiation.1

is the result of a choice made by a decision maker to involve

others in the decision making process. The goal of the decision maker may be to improve

the information brought to bear on a matter, to increase the knowledge and skill available,

to ensure buy-in when the decision is made, or some other motivating factor. Generally,

internal negotiation decision is more likely to engage those with a significant level of

common knowledge and goals. It is built on an expectation that a solution (agreement)

that considers the concerns or interests of all parties may be possible. As a result, thiscan lead to a problem-solving atmosphere where there is a shared effort to generate

alternatives. There is an expectation that there may synergies that could lead to

expanding the pie. The goal can become to find the common ground rather than the

middle ground. This type of negotiation is often referred to as interest based

negotiations.

The consequence of not agreeing in internal negotiation is that a decision will be made by

the decision maker. Ideally, that decision will be informed and improved by the failedattempt to negotiate a shared agreement.2

When our decisions involve entities that are external the organization there is no

common authority structure. Rather, each participating entity has its own authority and

structure for making decisions and the independent authority to agree or disagree.Therefore, there is one predominant decision-making rule:

1. We will make a joint decision with agreement based upon our independent internal

Shared decision making

External Negotiation


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pursue their own proposals and predetermined positions rather than search for

commonalities and synergies. They will typically begin negotiation with their own

proposals for a decision or agreement based on internal planning and processes. There is atendency to see the issues in win-lose terms, assuming that any concessions to the

other side are a corresponding loss for themselves. They may be concerned about

leaving something on the table. They may define their efforts as seeking the middle

ground, a softer way of describing compromise. This type of negotiation is often

referred to as positional bargaining.

The consequence of a failure to agree in external negotiation is for each party to make its

own decision on how to proceed, independent of and without their negotiating partner.

There are two general foci in negotiation: agreement uilding and dispute settlement In

agreement building negotiations the primary focus is on the future. There is theopportunity to create or build on a relationship and anticipation of gains to be made.

In dispute settlement negotiations the parties are focused backward on problems that have

arisen. The issues may be in the context of a prior agreement where problems have arisen

or may be the first negotiations between the parties. The question being addressed is,

Whose fault is it? If there is an existing relationship the challenge is to resolve the

dispute in a manner that salvages the relationship.

Determining who is at fault in the situation can further damage the relationship. It is

possible to shift dispute settlement negotiations to agreement building by redefin ing the

ti H d fi th bl d it d t h i ?

Negotiation Is Agreement Building And Dispute

Settlement

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interests. However, perhaps 90% of all negotiations are within the context of an ongoing

relationship. As we will explore in greater depth later, when negotiating in a continuing

relationship it is important to consider the value of that relationship and the cost of a failedrelationship. The relationship may be more important than prevailing on a particular

issue. In militaryterms, it is important to differentiate between prevailing in a battle and

winning the war.

Externally, we may have a choice of those with whom we will have relationship.

Internally, however, we must learn to work within the lationships that exist. An

important concern for the negotiator is the impact of the negotiation process on the

relationship. Negotiation will always impact an existing relationship, for better or worse.An adversarial approach will shift the relationship in an adversarial direction. A problem

solving or shared decision making approach will shift it in a collegial direction.

Some negotiations are over matters where the agreement concludes the effort as, for

example, in a simple purchase agreement with no warranties, delivery requirements or

other future interaction. Most negotiation agreements, however, create or affect an on-

going relationship. In general, the more complex the implementation tasks, the more

important it is that the agreement have the informed support of all the parties and that the

expectations, tasks and responsibilities pertaining to the implementation are clear.

Success in negotiations is reaching an agreement that all parties are committed to

honoring. The purpose is not to defeator even do better thanthe other side. It is

to achieve your goals and meet your interests. Where agreements require shared

implementation, success will be enhanced if the other are also successful in

achieving their goals and addressing their interests.

Negotiation Is a Process


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The second stage is developing and agreeing upon the process by which the negotiations

will proceed. Matters that may require discussion and prior agreement between the parties

include the scope of the issues, participants, timelines, and understandings regarding howthe negotiators will approach the issues and each other.

The third state is negotiating the substantive agreement. In this stage the negotiator will

make a number of strategic decisions regarding tactics and acceptable outcomes. We will

discuss, below, how to ensure a shared decision making process that maximizes the

quality of agreements for both parties.

Assessing

Structuring

Agreeing

Implementing

The fourth stage is implementing theagreement. This is the real purpose for

entering into

the negotiations and it is important that

agreements reached will be and can be

implemented. Experienced negotiators will

consider what understandings are required to

ensure timely and effective implementation

and make them a part of the agreeing

process.

Failure to proceed through these stages in an

orderly manner can result in wasting time

and resources on a situation where

agreement is not possible or reaching

agreements that cannot be implemented.Following this structure can build a solid

foundation for addressing difficult issues,

building the relationship and ensuring that

Figure 1.

Negotiation Stages


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characterized by the steps

illustrated in Figure 3.

In a typical negotiation this

process is first applied with in the

organization or team as they

prepare for negotiation. It can also

be used as a format for the

negotiation process.

he first step is to clearly define the

problem. This will identify theissues or specific subjects on

which agreement must be

achieved. One challenge at this

point is to focus on underlying

problems and goals rather than on

symptoms or assumptions.

The second step is to definesuccess and set criteria for

measuring that success. How will

we know we have solved the

problem? What constraints and

objectives must be considered

(cost, time, quality, breadth of

acceptance, etc.)?

The third step is to assemble the

necessary information and data to

d l l ti Wh t

Am I clear regarding m y internal goals, authority, and

expectations?

Have I identified my interests and constraints?

HaveI defined criteria for agreements?

Have Iprioritized the issues?

Do I know my Best Alternative to a Negotiated Agreement

(BATNA)?

Do Ihave internal agreement on the above?

Have Iconsidered the interests and constraints of the otherparty?

Have we agreed on the issues?

Have we identified who needs to be engaged?

Do weunderstand how agreements will be ratified?

Are we in agreement on schedule and deadlines?Have we discussed

how we will negotiate ?

information that may be required and its use?

how meetings will be managed

Am I focusing on my interests --not positions?

Am I keeping decision-makers informed?Are we identifying mutual interests and expanding thepie?

Do my proposals meet my interests?

Do my proposals address their interests?

Figure 2.Negotiation Stage Strategy Questions

Assessing the Situation

Establishing the Process

Negotiating the Agreement

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he fifth step is to compare and evaluate the

alternatives using the criteria and measures that

were established in step two and other criteria thatmay have emerged as a result of the process.

At step six, aresult of careful evaluation will oftenbe to identify an alternative that is an improvement

upon any of those originally identified.

Finally and, perhaps, most important, we must

implement the decision. Ideally, the process andresponsibilities for implementation have been

identified as part of the decision making process.

In a negotiation the implementation is contingent

upon the acceptance of the other parties with

whom you will be negotiating.

Internal agreement on a best solution will

typically precede negotiations. Meanwhile, theother negotiating team has been employing a

similar process to identify the best solution to their

problem and issues.

Those separately derived solutions willbe based

on different problem definitions, different sets ofinformation and differing priorities and

perspectives. If they form the only basis for

proposals brought to the negotiation, the

Define

the Problem

Establish Criteria for

Success

Assemble the

Information

Develop

Alternatives

Evaluate

Alternatives

SelectPreferred Alternative

From Internal to External Negotiations

Figure 3

Stages in a Decision Process


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whatever its actual

acceptabilit

One strategy for avoiding this

problem is to agree that internal

discussions will not result in asingle preferred alternative.

Rather, the strategy is to craft

two or three alternative solutions

that are roughly equivalent: that

is, where achieving any one of

the alternatives will be

perceived as a success. This

approach has severaladvantages. First, it helps to

keep the focus on the underlying

problem and criteria rather than

on a single solution. Second, it

fosters an internal awareness

that there is no single right

answer to most problems and a

greater willingness to considernew alternatives that may

emerge during negotiation.

Third, the negotiator has a much

better likelihood of getting an

innovative agreement ratified

and viewed as successful.

The structured approach to

decision making illustrated in

Figure 4 can also serve as an

are the specific topics of discussion that are

expected to arise within a negotiation. In labor-

management negotiation the issues typically include

wages, benefits and hours. In a sales negotiation

they may include price, quality and delivery. They

may also include specific tasks, milestones, and

funding arrangements. Experienced negotiators

increase the range of issues that are on the table.

Less effective negotiators are more concerned with

what they leave on the table.

describes the solution for addressing an

issue or issues developed by one party and conveyed

to the other. When each party places a position on

the table as a basis for discussions, the result is li ly

to be positional negotiations or joint decision

making where each tries to achieve as much of its

proposal as possible. The issues on the table are lesslikely to be expanded and shared benefits are

unlikely.

A describes the manner in which a position

is presented. The more formally and specifically a

position is placed before the other party, the more

likely it is to be perceived as a demand. And, when

a position is perceived as a demand, it tends to meetincreased resistance,

.

Issues

Position

demand


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Three Negotiation Lenses

Interests

Power

Relationships

Figure 4

Decision Process and Negotiation

INTERESTS

CRITERIA

OURS/THEIRS

We view and interpret situations

through a set of lenses shaped by our

experience, education and values and

beliefs. Many managers use the

lenses of organization structure,

authority and responsibility to

interpret how things work in an

organization. Similarly experiencednegotiators have developed a set of

lenses that they use to analyze

interactions and behaviors in

negotiations.

1. are those matters that

are of fundamental importance..2. isour ability to influence

the choices and behavior of

others.3. arethe set of

authorities, commitments,

expectations and behaviors

through which we engage with

others.

These three lenses reveal critical

aspects of negotiation analysis,

SOCIAL/SUBTANTIVE

W ANTS/FEARS

OBJECTIVES

CONSTRAINTS

Define

the Problem

Establish Criteriafor Success

Assemble theInformation

Develop

Alternatives

Evaluate

Alternatives


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if we are to build mutual solutions, we must be aware one anothers interests An

interest based approach will consider the following elements:

Interests describe those matters of fundamental concern that underlay the issues in

negotiation. Interests can be categorized as substantive or personal andsocial.

Substantive interests are directly related to the issues which are being negotiated.

Personal and social interests are those matters that related to the negotiators own needs

and to relationships with others. They will include such factors as reputation, respect,

perceptions of fairness, a sense of success, and perso lationships.

Both substantive and personal/social interests can also be differentiated in terms of whatwe want and what we fear or wish to avoid. We want to achieve a set of substantive

objectives in the negotiations but we may wish to avoid uncertainties. We want to be

respected and seen as successful but we wish to avoid loss of face. It is important to

consider carefully all aspects of our interests. Substantive interests and objectives or goals

are usually explicit matters for discussion. Personal/social interests and what we fear or

wish to avoid are much less likely to be discussed and addressed. However, it is personal

interests and fears that are often motivating the negotiators. They are as likely to be the

cause of failed negotiations as are differences over to substantive matters .

Unfortunately, there is an almost genetic fear that providing information about our real

interests to the other party somehow weakens our hand and strengthens theirs. However,considerable experience indicates that those negotiators who are most effective in

conveying their interests tend to be most successful in achieving them. If the other party

is aware of what is important to us and why it is important, they may be able to suggest

alternative ways of delivering on those interests at less cost to themselves. If they areunaware of our interests, it is impossible for them to make proposals on how to achieve

them.


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Figure 5

Relative Power and Influence in Negotiations

Power Is Relative

B

A To N

A ility to influence choices

and behavior of other party

increase pressure decrease resistance

Some of us are uncomfortable discussing power managers because they see it as an

exchange of threats and counter-threats. Fortunately, there is an often overlooked facet of

power that can be even more effective than bringing pressure and making threats.

Power in negotiations is

always relative. That is,

we have more power over

some parties than over

others. If those we are

negotiating with have

other, good choices, they

are less likely to be

affected by our power.

Our power may also vary

over time. Therefore, it is

important to consider bothyour own est

lternative a egotiated Agreement (BATNA)3 and that of the party you are

negotiating with. If you fail to do so, you are at risk of agreeing to s hing that is not as

good as your alternative or failing to agree to something that is better than your

alternative. Power may also be affected by time. A party may react quite differently when

they are facing a deadline than they might when time is not an immediate issue. Our

concern is with the relative balance of power between them at any point in time.

There are two very different ways in which we can bring influence to bear in negotiation.

As illustrated in Figure 5, we can apply more pressure in an attempt to overcome eresistance of the other party or we can use strategies that reduce the resistance of the other


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A major state agency contracted for a

complete overhaul of its informationtechnology systems and equipment.

They entered into a contract with a

reputable national firm to undertake the

project. Unfortunately, 18 months later

the new system was not yet in place.

Files were lost, scheduling was in chaos

and the budgeting process was in

danger of collapse.

The media published a series of highly

critical investigative articles and the

legislature held a series of hearings on

the matter. As a result, the contract was

cancelled (and litigation commenced).

The agency then prepared an RFP

seeking proposals to take the currentstate of affairs and build a functioning

IT system. The RFP specified a numberof criteria for consideration including,

performance specifications for

hardware and software, price, time,

service and other standard items.

A number of responses were received.

One company thought carefully about

the interests of the agency managers,

not only in terms of the goals specifiedin the RFP, but in terms of their major

fears or concerns. They concluded that

assurances that this contact would be

completed successfully and on time

whelm the other side. Even in this circumstance

there are risks. For example, the other party may

prefer to not agree even at apparent significant costin order to ensure that you are not successful the

classic lose-lose scenario. The use of pressure

will usually damage a relationship. A party that

feels it has been coerced into an agreement has little

commitment to its successful implementation.

Wedecrease resistance when we employ strategies

and develop proposals that make it easier for the

other party to agree with us. There are a number of

ways of achieving this, all of which are based on an

understanding of what is important to the other

party. In marketing it is said that, You dont know

what you are selling if you dont know what theyare buying. Our effective power in a negotiation

is, therefore, directly related to our understanding

of the interests (substantive and personal/social,

wants and fears) of those we are negotiating with.

We can apply this knowledge in two key ways:

1. By ensuring that our proposals are crafted in amanner that avoids their fears while addressing

their desires and objectives. With careful

thought we may find that we can accomplish

Decreasing Resistance


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Conversely, the winning bidder dispensed with the need for trust from an agency that

experience had taught to be untrusting and instead gave guarantees. By putting

together a timeline with clear goals they indicated their concern for staying on track andon time. They reduced resistance at little or no cost o themselves. Indeed, in their

conversations they had discovered that one of the problems that the original contractor had

encountered was an inability to get timely responses from senior agency managers. The

series of targets and required meetings with senior managers when targets were not met

was as much benefit to them as it was to the agency!

The third lens in our triumvirate is relationships. Relationships are one of our most

valuable assets. Within an organization both formal and informal relationships are the keyto accomplishing goals. They are the linkages through which information, ideas and

commitments flow between and among individuals.

Formal relationships, those established in

organization charts for example, have more or less

defined parameters of authority and responsibility.

However, it is often the less formal relationships

that can have the biggest impact on our success.

When managers are asked to identify those

individuals or groups who have most influencetheir

ability to be successful, many of thoserelationships

will not be represented by lines on an organizationchart. Indeed, many including clients, suppliers,

advisors, colleagues, and competitors will not be

within the organization. In the public sector external

Positive relationships indicators:predictable responses

a mutual desire to identify

mutually acceptable solutions

being given the benefit of the doubt

priority attention and commitment

to the process

Negative relationship indicato rs:

uncertain reactions and unexpectedresistance

a lack of concern for the interests

The Relationship Lens


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Figure 6

Relationship Types

Team

Partnership

Joint venture

Professional/client

Continuing contract

Competitive continuing relationship

: the primary purpose is to attain a common objective. On an effective team

personal interests may be subordinated to that common objective.

: independent partners work together to achieve success on shared goals

important to both organizations. A true partnership is, in effect, a new entity whether or

not a formal structure is created.

: an agreement important to both parties but less likely to be critical to

their central goals than in a partnership. A joint venture will usually result in the

creation of a new, formal entity.

: an independent, continuing, contractual relationship where trust

and respect are especially important. The relationship will be of primary importance to

one partner (the professional) and important to the other.

: buyer/seller/supplier relationships are typical exa The

intent is an ongoing relationship with benefits to both parties. Ho he relationship

may be replaced with relative ease.

: these relationship are characterized by

potentially divergent goals can separate the parties. Labor-manage ment relations are an

l Th i th ibilit f f i i t d i t t d h i

agreement to the success of the parties and the greater the need to learn while doing, the

more important will be the relationship.

There are a variety of typical relationships within which negotiation and shared or joint

decision making take place. They differ widely in respect to the importance of the

relationship as a part of the agreement. Typical relationships, ranked in terms of their

importance, are illustrated in Figure 6.


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Airline p ilots are said to have

one rule that is inviolateif youare not on the plane for takeoff,

ou will not be permitted to take

the controls for landing!

an inbox full of messages we respond to some immediately while others always seem to

slip to the bottom of the list. This is a simple indicator of the quality of a relationship.

In a continuingrelationship there will a series of negotiations. Each negotiation experience

will either enhance or detract for the quality of the relationship. Therefore, the negotiator

must prioritize and value his or her interest in the relationship as an asset. Eachnegotiation will either enhance or detract from the quality of the relationship. The

negotiator should consider success in each negotiation in the context of the overall

relationship.

There are a number of relationships with which the negotiator should be concerned:between the negotiator and theirinternal team, organization or reference group

between the negotiator and those who will ultimately be responsible for approvingthe agreement

between the negotiator and those who will implement the agreement

between the negotiator and the representative (negot iator) for the other party

betweenthe parties being represented in the negotiations

the other negotiators internal relationships

It is important to ensurethat the relationships that will

be required toimplement the agreement are establishedbefore final agreements are reached. The negotiators

may have established a good working relationship but

they will be handing-off the agreement to others for

implementation. If the implementers do not have a

relationship with those they must work withimplementation will be rocky at best and may ultimately fail. An example is corporate

mergers where senior executives and financial and legal representatives put together the

agreement and then hand it off for implementation to those who are at best uninformed


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THE FOUR STAGES OF NEGOTIATIONS: TICKLER REFERENCE GUIDE

ASSESSING STRUCTURING AGREEING IMPLEMENTING

Q

UES

TI

ONS

TI

PS

The negotiation process has a series of discreet stages. Successfully addressing the requirements of each stage establishes a solid foundation formoving to the next. The inability to achieve the key components of a prior stage suggests that it may not be possible to achieve agreement. Note the use

of the three negotiating lenses.

Am I clear regarding myinternal goals, authority, andexpectations?

Have I identified my interestsand constraints?

Have I defined criteria foragreements?

Have I prioritized the issues?

Do I know my Best

Alternative to a NegotiatedAgreement (BATNA)?

Do I have internal agreemenon the above?

Have I considered theinterests and constraints ofhe other party?

Have we agreed on theissues?

Have we identified who needso be engaged?

Do we understand howagreements will be ratified?

Are we in agreement onschedule and deadlines?

Have we discussed

How we willnegotiate?How meetings will bemanaged?Information that maybe required and itsuse?

Am I focusing on my interests -- not positions?

Am I keeping decision-makersinformed?

Are we jointly identifyingmutual interests andexpanding the pie?

Do my proposals meet myinterests?

Do my proposals addresstheir interests?

Am I open to new ideas?

Are we building a relationshiphat will support

implementation?

Are agreements clearlyspelled out in writing?

Did we test drive theimplementation?

Are responsibilities forimplementation c lear?

Is there a provision forassessing and improvingimplementation?

Are there procedures forjointly resolving disputes in a

imely manner?

How will we maintain ourrelationship?

Get internal commitmentsearly.

Ensure that your priorities

and organizational prioritiesare in sync.

Consider early, informaldiscussions about possibilityof working together

Review the questions who,what, when, where and howogether.

Jointly draft a memo or noteshat set forth expectationsand ground rules for theprocess.

During the negotiations setaside time to discussimprovements to the process.

Provide opportunities forinformal discussions.

Present proposals as

packages.Consider offering alternatives.

Reach agreement at aconceptual level, and thenmove to details.

Develop a joint working

Document.

Keep decision-makersinformed.

Use joint agendas.Consider meeting notes.

Assign specificresponsibilities forimplementation.

Check that implementationschedules are realistic.

Establish points of contact.

Consider timely, scheduledmeetings to implementationchallenges and opportunities.

Create an expectation forchange and improvement.

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Gerald W. Cormick

The CSE Group Integrative Negotiations: Principles and Concepts Page 20


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THE THREE NEGOTIATING LENSES: EXPRESS REFERENCE GUIDE

INTERESTS POWER AND INFLUENCE RELATIONSHIPS

Quick Summary

Ask

Tips

I n t e r e s t s

I s s u e s

P r o p o s a l s

P o w e r i n f lu e n c e r e la t i o n s h i p are those fundamentalconcerns and desires which motivate anegotiator. are matters whichneed to be addressed in thenegotiations. are ways toaddress the issues and meet theinterests.

is our ability to othersin negotiations. There are two broadoptions: overcome resistance to ourproposals by increasing pressure orreduce resistance by addressing theinterests of the other party.

The type of we wish tocreate affects our negotiatingstrategies. The more it will benecessary to work together and thegreater the uncertainties faced, themore important is the quality of therelationship.

hat do we most want to achieve?hy?

hat do we most want to avoid?hy?

hat are my personal interests?

Ask the same questions for them

Do our proposals reflect ourinterests?

hat do their proposals tell usabout their interests?

Have I considered my BestAlternative to a Negotiated

Agreement (BATNA)?

4

How might my proposals bettermeet their interests?

If their proposals arent acceptable,have I made my interests clear?

Are they agreeing with me becausehey want to or because they feelhey have to?

hat type of the relationship arewe intending to establish?

ill our relationship be effectivewhen implementing theagreement?

Are there a common expectationsregarding our future relationship?

Do we accept as legitimate ourmutual and our separate interests?

Do we feel safe to ra isingconcerns and trying out ideas?

Personal interests are of ten

unstated.Fears are often unexpressed.

If you think someone is actingirrationally, you don know theirinterests!

Bad behavior in negotiationsoften results from fears regardingpersonal interests.

Agreements based on meeting

interests (reducing resistance) areeasier to implement?

Agreements reached byovercoming resistance damagerelationships.

hen presenting a proposal bespecific on how it is intended tomeet their interests.

hen unable to accept a proposalsuggest how it could be changed tomeet your interests.

Share ownership of and

responsibility for the process.Provide informal opportunities forrelationship building.

Be predictable.

Follow through on commitments

Talk about how you will workogether under the agreement.

4Roger Fisher and William Ury, Getting to Yes, Penguin: New York, 1983.


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Gerald W. Cormick

The CSE Group Integrative Negotiations: Principles and Concepts Page 22

negotiations section 1 integ negot

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