Unit 4International negotiation

Objetives

1. Understand the concept of negotiation and its key elements.

2. Examine how to use negotiation to manage situations of interdependence.

3. Consider how negotiations may be practical in management conflict.

4. Understand the importance of goal setting in negotiations.

5. Analyze the major elements of negotiation strategy and the process of selecting a strategy.

6. Understand how most negotiations evolve through stages and phases.

Negotiations

Negotiations occur for several reasons:

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

• To create something new that neither party could attain on his or her own

• To resolve a problem or dispute between the partiesApproach to the Subject• Bargaining.

• Negotiation.

Three Important Themes 1. Negotiation.

2. Interdependence.

3. Understanding.

Characteristics of a Negotiation Situation

• There are two or more parties

• There is a conflict of needs and desires between two or more parties

• Parties negotiate because they think they can get a better deal than by simply

accepting what the other side offers them

• Parties expect a “give-and-take” processInterdependence• This mutual dependency is called interdependence

• Interdependent goals are an important aspect of negotiation

• Interdependent parties are characterized by interlocking goals

• Having interdependent goals does not mean that everyone wants or needs

exactly the same thing

• A mix of convergent and conflicting goals characterizes many interdependent

relationships

Types of InterdependenceAffect Outcomes

• Interdependence and the structure of the situation shape processes and

outcomes.Alternatives Shape Interdependence• Evaluating interdependence depends heavily on the alternatives to

working together

• The desirability to work together is better for outcomes

• Best available alternative: BATNA (acronym for Best Alternative to a Negotiated Agreement)

Mutual Adjustment• Continues throughout the negotiation as both parties act to influence the

other

• One of the key causes of the changes that occur during a negotiation

• The effective negotiator needs to understand how people will adjust and

readjust and how the negotiations might twist and turn

Mutual Adjustment andConcession Making

• When one party agrees to make a change in his/her position, a concession

has been made

• Concessions restrict the range of options

• When a concession is made, the bargaining range is further constrained

Mutual Adjustment and Concession Making

• When one party agrees to make a change in his/her position, a concession

has been made

• Concessions restrict the range of options

• When a concession is made, the bargaining range is further constrained

Two Dilemmas in Mutual Adjustment

• Dilemma of honesty.

• Dilemma of trust.Value Claiming and Value

Creation• Opportunities to “win” or share resources.

• Most actual negotiations are a combination of claiming and creating value

processes.

Value differences that exist between negotiators include:

• Differences in interest

• Differences in judgments about the future

• Differences in risk tolerance

• Differences in time preferences

Confli

ct

Conflict may be defined as a:

“Sharp disagreement or opposition" and includes "the perceived divergence of

interest, or a belief that the parties' current aspirations cannot be achieved

simultaneously“.Levels of

Conflict• Intrapersonal or intrapsychic conflict.

• Interpersonal conflict.

• Intragroup / Intergroup conflict.Dysfunctions of

Conflict1. Competitive, win-lose goals.

2. Misperception and bias.

3. Emotionality.

4. Decreased communication.

5. Blurred issues.

6. Rigid commitments.

7. Magnified differences, minimized similarities.

8. Escalation of conflict.

Functions and Benefits of Conflict1. Makes organizational members more aware and able to cope with

problems through discussion.

2. Promises organizational change and adaptation.

3. Strengthens relationships and heightens morale.

4. Promotes awareness of self and others.

5. Enhances personal development.

6. Encourages psychological development—it helps people become more

accurate and realistic in their self-appraisals.

7. Can be stimulating and fun.

Styles of Conflict

Management

1. Contending.

2. Yielding.

3. Inaction.

4. Problem solving.

5. Compromising.

Goals – The Focus That Drives Negotiation Strategy• Determining goals is the first step in the negotiation process.

• Negotiators should specify goals and objectives clearly.

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

The Direct and Indirect Effects of Goals on Strategy• Direct effects.

• Indirect effects.

Strategy versus Tactics

• Strategy.

• Tactics.

• Planning.

Approaches to Strategy• Unilateral.

• Bilateral.

The Dual Concerns ModelAvoidance.Competition.Collaboration.Accommodation.

Strategic Options

• 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?

The Nonengagement Strategy: Avoidance• If one is able to meet one’s needs without negotiating at all, it may make sense

to use an avoidance strategy

• It simply may not be worth the time and effort to negotiate

• The decision to negotiate is closely related to the desirability of available

alternatives

Active-Engagement

Strategies

• Competition.

• Collaboration.

• Accommodation.Key Steps to an Ideal Negotiation Process• Preparation.

• Relationship building.

• Information gathering.

• Information using.

• Bidding.

• Closing the deal.

• Implementing the agreement

Getting Ready to Implement the Strategy: The Planning Process

• Define the issues.

• Assemble the issues and define the bargaining mix.

• Define your interests.

• Know your limits and alternatives.

• Set your objectives (targets) and opening bids (where to start).

• Assess constituents and the social context of the negotiation.

• Analyze the other party.

• Present the issues to the other party.

Information Needed to Prepare Effectively for Engaging the Other Party

• Resources, issues, and bargaining mix.

• Interests and needs.

• Walkaway point and alternative(s).

• Targets and opening bids.

• Constituents, social structure, and authority to make an agreement.

• Reputation and negotiation style.

• Likely strategy and tactics.

Activities To be evaluated %

Forum: Creating a global business. Watch the video “BP’s Global Brand”, and discuss it through the following questions:What are the key elements of BP’s strategy?How would you create a global business?

Interventions: content, consistent with the discussion topic and argument.

10%

Write on a paper about the strategy followed by General Motors, Google and Domino’s Pizza, considering the characteristics of each.

Structure, content, grammar, consistent with the topic of the video and argument.

10%