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Structuring Negotiations A common mistake in negotiating is “focusing too much on the substance of the deal and not enough on the process. Substance is the terms that make up the final agreement. Process is how you will get from where you are today to that agreement. My advice to deal makers: Negotiate process before substance.” Control the Negotiation Before It Begins, Focus on four preliminary factors that can shape the outcome. by Deepak Malhotra https://hbr.org/2015/12/control-the-negotiation-before-it-begins SOME FACTORS TO CONSIDER  Who will be the parties to the negotiation?  Who will be at the table for the respective parties (positions with/relationship to the parties)  Where will the negotiation take place?  What is the schedule for the negotiations?  Will there be a set timeline for completion?  Are the negotiations in person, online or multilayered?  Are the negotiations public or private?  Will there be third-party intervention (voluntary or required)?  If there is third party intervention, what will be their role(s)  If there is third-party intervention, will there be undisclosed parameters  What communication mediums are available to you in the negotiations (and how and when would you want to use each)? MAPPING OUT THE NEGOTIATION SPACE In his article, Deepak Malhotra suggests that prior to starting negotiations, you should “map out” the negotiation space to make sure that you understand outside influences on the negotiations. He describes that as follows: “This consists of every party that can affect the negotiation, along with any party that will be affected by the negotiation. In my experience, a strategy that makes perfect sense when you’re thinking bilaterally—that is, about the relationship between any two parties in the negotiation—can suddenly become ineffective or even disastrous when you take a multilateral perspective. I encouraged my client to evaluate the interests, constraints, alternatives, and perspective of all the relevant parties.” “In the real world, you’ll never have as complete a picture as you’d like, but you put yourself at further disadvantage if you focus too narrowly on the party on the other side of the table. You have to assess the perspective of all the parties that can influence or are influenced by the deal: Who has the ability to influence the person on the other side of the table? How might the strategy or actions of other parties change your alternatives, for better or worse? How does the deal affect the interests of those who are not at the table? How will this negotiation affect your leverage with future negotiation partners? If multiple parties are involved in the deal, does it make sense to negotiate with them simultaneously or in sequence, together or separately? Your analysis might suggest a change of strategy—that you should negotiate with a different party first, delay the deal or speed it up, bring others into the room, expand or contract the scope of the deal, and so on.” “Who Are the Other Parties? A party is a person (or group of people with common interests) who aces in accord with his or her preferences. Parties are readily identified when they are physically present, but often the most important parties are not present at the negotiation table. Such parties are known as the hidden table. (Citation omitted.) When more parties are involved in the negotiations, the situation becomes a team or multi-party negotiation, and the dynamics change considerably. … Sometimes, it is obvious who the other parties are, and they have a legitimate place at the table. However, in other situations, the other parties may not be obvious at all, and their legitimacy at the table may be questionable.” Leigh L. Thompson The Mind and Heart of the Negotiator 6th edition. Prentice Hall 2015, at p. 26 Who is involved at each stage of the negotiation for your side and who do you want to have involved on the other side? “Consider [this] scenario. You’ve been negotiating with someone for months. You have a few final concessions that you’ve been holding back—they’re costly but worth making if it will close the deal. With the finish line in sight, you make the concessions, and the other side responds: “This is great. I appreciate your flexibility on these issues. Let me share this with my boss to see what she thinks.” Unfortunately for you, you had no idea your counterpart even had a boss—you thought he was the final decision maker. The negotiations are clearly not over, and you have nothing left to give.” Control the Negotiation Before It Begins by Deepak Malhotra, From the December 2015 Issue of Harvard Business Review https://hbr.org/2015/12/control-the-negotiation-before-it-begins Are any of your answers to the previous slide different when: • There are multiple parties involved? • It is a tiered negotiation (i.e., your negotiation with one party hinge on your ability to negotiate successfully with another party) (e.g. You are negotiating a lease with a potential landlord but you will have roommates or subtenants) “Imagine leading negotiations involving representatives from most of the world’s nations on a contentious topic such as sustainable development. Where would you start? How would you proceed when conflict emerged? How would you know when it was time to wrap things up?” Program on Negotiation: Harvard Law School Techniques for Leading Multiparty Negotiations: Structuring the Bargaining Process Negotiation techniques from great negotiator Tommy Koh on how to lead multiparty negotiations By PON Staff — on November 25th, 2019 / Mediation https://www.pon.harvard.edu/daily/mediation/techniques-for-leading-multiparty-negotiations-structuringthe-bargaining-process/ “In every revolutionary conflict, the acceptance of the guerrillas as a negotiating partner has proved to be the single most important obstacle to negotiations, for it obliges the government to recognize the legal status of the enemy determined to overthrow it.” Henry Kissinger Identify groups and require a spokesperson for each group. • What are the pros and cons of doing this? In negotiations to end the Vietnam war, who would have a seat at the table was a crucial factor: “Eventually it was decided to include all four parties and simply to label them as ‘our side’ and ‘your side’, thereby avoiding the contentious issue of legitimacy. Four parties would still be involved, thus the Communists would be satisfied. On the other hand, officially the talks were two-sided, as the US and South Vietnamese emphasized publicly.” From: Defense in Depth: Research from the Defence Studies Department, King's College London Stuck in Endless Preliminaries: Vietnam and the Battle of the Paris Peace Table, November 1968-January 1969 DR JEFFREY MICHAELS https://defenceindepth.co/2017/05/19/stuck-in-endless-preliminaries-vietnam-and-thebattle-of-the-paris-peace-table-november-1968-january-1969/ Moreover, the talks became bogged down in negotiating the preliminaries. “The location for the proposed talks proved to be the first hurdle. From the end of March until early May 1968 there was a drawn-out exchange between the US and North Vietnamese on this topic.” Stuck in Endless Preliminaries: Vietnam and the Battle of the Paris Peace Table, November 1968-January 1969 DR JEFFREY MICHAELS “As these preliminary discussions about who would meet came to a conclusion, they were then followed with additional talks about how a meeting might be held. These discussions, which began in November 1968, were centered on questions about the shape of the conference table, how many tables there should be, and how they would be placed. These discussions became known as the ‘battle of the tables’ and would last ten weeks until mid-January 1969 as fighting continued to rage and Richard Nixon won the presidential election. From the start, it was recognized that a triangular table (with the North Vietnamese/NLF* combined but the US and South Vietnamese separate) would be a non-starter as it would imply that the Communist side was outnumbered two-to-one. North Vietnam wanted a square table in order to provide further legitimacy to the NLF, and also suggested four tables arranged in either a circular or a diamond pattern. The American preference was for a two-sided table or two rectangular tables. The North Vietnamese countered by suggesting a round table. Whereas the Americans supported the idea of a round table on the basis that people sitting at the table wouldn’t have any position, Saigon then protested that a round table meant that everyone was equal which would imply that the NLF delegation were equal to the South Vietnamese government. As a result, the US suggested six variants of a round table, including a round table bisected with a strip of baize to provide a symbolic dividing line. Later the benefits and drawbacks of an oval table were debated but the idea eventually was rejected, as were two semi-circular tables, one round table cut in half, a ‘flattened ellipse’, a ‘broken diamond’ and a parallelogram.” Stuck in Endless Preliminaries: Vietnam and the Battle of the Paris Peace Table, November 1968-January 1969 DR JEFFREY MICHAELS (*National Liberation Front (better known as the Viet Cong)) “The deadlock was finally broken by a Soviet diplomat. Anxious to get the negotiations moving ahead, the Soviets pressured the North Vietnamese to compromise and accept a round table (4.75 metres in diameter) with two rectangular tables (3 feet by 4.5 feet) alongside for secretaries (no more and no less than 4.5 centimetres away). The table would include no nameplates, flags or markings, but would only be covered in green baize. Interestingly, the furniture used for the first meeting on January 18, 1969 – later replaced – was the same unused conference table that had been built for the aborted Nikita Khrushchev-Dwight D. Eisenhower talks in 1960. A separate dispute about order of speakers was also resolved with the South Vietnamese speaking first followed by the US, North Vietnamese and NLF. At the following meeting the order would be reversed and would alternate accordingly thereafter.” Stuck in Endless Preliminaries: Vietnam and the Battle of the Paris Peace Table, November 1968-January 1969 DR JEFFREY MICHAELS NEGOTIATION PRINCIPLES “The need to negotiate can happen at any time—sometimes once a day, and sometimes more than once a day. Any time you cannot reach your goals without the cooperation of someone else, you are propelled headlong into negotiation. You may not be engaged in a hostage negotiation, or striking a deal for millions of dollars’ worth of a product or service for a company, but the importance of arriving at a point where you and the other party both feel you win is vital to your peace, sanity, and productivity. For example, if your goal is to eat dinner in peace, and your young child is demanding that you fix a toy or play a game, you must negotiate.” Leigh L. Thompson The Truth About Negotiations Second Edition. FT Press 2013 A TACIT NEGOTIATION You are walking down the middle of the sidewalk when someone coming in the other direction approaches, also walking down the middle of the sidewalk. If you both stay on course, you will collide. Now what? As the two of you get close, you step to the right and allow the person to pass. Though nothing was said, there was still an implicit negotiation as to who would move which resulted in a resolution to the situation and avoided a collision. LIST THREE THINGS THAT YOU HAVE NEGOTIATED SINCE DECEMBER 1, 2022 We negotiate every day whether we do it consciously or not. People with whom we negotiate are not only in the business context. We negotiate with: o o o o o o Roommates Parents Children Coaches Landlords Our pets About things as mundane as: o o o o o Siblings Spouses School Groups/Teams Faculty members Flea markets Now that you are living back at home, you are under my roof and must follow my rules. Which room do I set up for my office while working at home. No you can’t borrow my sweater. My essay is due when? Who is going to do what in relation to our group presentation? “[T]he most important negotiations we have – the ones that determine the quality our livesbusiness and the impact “As you go about theofordinary of our of actions are there the ones have with ourselves. every–day, are we inner Learning to communicate well and influence other commentators competing fortoyour peopleattention. are essential skills inthey business. But even more At times, speak nicely. fundamental to your is learning negotiate But often theirsuccess voices debate eachtoother effectively with yourself.” like hostile adversaries on talk radio.” Managing yourself: The Most Important Negotiation in Your Life, Erica Ariel Fox, September 3, 2013 HBR.org/2013/09/themost-important-negotiation “One false move in negotiations of major importance, such as salary negotiations, house buying, and car buying, can have a dramatic negative consequence on your economic welfare for years to come. Given that your quality of life is affected by your ability to bring home the bacon as well as eat it in quiet dignity, knowing how to negotiate in the corporate world and in the kitchen is essential for peace of mind and retirement.” Leigh L. Thompson The Truth About Negotiations Second Edition. FT Press 2013 With whom do you negotiate in business? o Partners o Investors o Employees o Supervisors o Co-workers o Customers o Suppliers o Competitors o Landlord o Unions o Anybody who has something you want (e.g. owner of a copyright on music or artwork that you want to use in an advertisement) AT WHAT POINT IN THE COURSE OF EVENTS DO WE NEED TO NEGOTIATE?  Entering into an agreement  Revisions to an agreement  Dispute resolution • Are their differences in how you would negotiate in a business v. in everyday life? • What do you believe are the three most important factors in being a successful negotiator in business? In everyday life? • Do you think you are a good negotiator? If yes why? If no, why not? “Good negotiations contribute significantly to business success, as they: • help you build better relationships • deliver lasting, quality solutions - rather than poor short-term solutions that do not satisfy the needs of either party • help you avoid future problems and conflicts. Negotiating successfully Queensland Government: Business Queensland Last updated July 17, 2017 https://www.business.qld.gov.au/running-business/marketing-sales/managing-relationships/negotiating MAJOR NEGOTIATIONS ON THE NATIONAL/INTERNATIONAL STAGE IN THE PAST FEW YEARS Brexit COVID-19 Stimulus packages COVID-19 Back to work order/masking, vaccination requirements in meat packing factories, schools, public service Paris Climate Accords Worcester Nurses’ Strike Build Back Better Bill Speaker of the House in Congress/Rules Package • Do you think it is necessary for a person in business to be a good negotiator? • Why? • Does it make a difference if the person is in management v. a nonmanagement worker? • Negotiations that you have experienced/witnessed in your work environment(s) PREPARING FOR NEGOTIATIONS https://www.sdcba.org/?pg=BusinessandCorporatePreparingfo rNegotiationANovelC Communication and Negotiation Exhibit 11.13 Key Factors: People—Situation—Negotiation Process Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall USEFUL NEGOTIATION PREPARATIONS FROM: The Truth About Negotiation by Leigh Thompson, Pearson Education, Inc. (2nd edition) 2013 • • • • • • Brainstorm all issues under consideration Arrange those issues in their order of importance to you For each issue, brainstorm all of the possible alternatives Brainstorm the issues that the other party(ies) may care about Identify your most desirable set of terms for each issue Identify and prioritize your alternative courses of action for negotiating with the other party(ies) • Identify and prioritize the other party(ies) alternative courses of action • Prepare an opening offer A Negotiation Preparation Checklist Our negotiation preparation checklist will position you to prepare as thoroughly as necessary to create value and claim value in your next important business negotiation. BY KATIE SHONK — ON DECEMBER 9TH, 2019 HARVARD LAW SCHOOL: PROGRAM ON NEGOTIATION https://www.pon.harvard.edu/daily/negotiation-skills-daily/negotiation-preparation-checklist/ Analyzing Your Perspective 1.What do I want from this negotiation? List short-term and long-term goals and dreams related to the negotiation. 2.What are my strengths—values, skills, and assets—in this negotiation? 3.What are my weaknesses and vulnerabilities in this negotiation? 4.Why is the other party negotiating with me? What do I have that they need? 5.What lessons can I apply from past negotiations to improve my performance? 6.Where and when should the negotiation take place? 7.How long should talks last? What deadlines are we facing? 8.What are my interests in the upcoming negotiation? How do they rank in importance? 9.What is my best alternative to a negotiated agreement, or BATNA? That is, what option would I turn to if I’m not satisfied with the deal we negotiate or if we reach an impasse? How can I strengthen my BATNA? 10.What is my reservation point—my indifference point between a deal and no deal? 11.What is my aspiration point in the negotiation—the ambitious, but not outrageous, goal that I’d like to reach? 12.What are the other side’s interests? How important might each issue be to them? 13. What do I think their reservation point and BATNA may be? How can I find out more? 14. What does their BATNA mean in terms of their willingness to do a deal with me? Who has more power to walk away? 15. Is there a zone of possible agreement (ZOPA) between my reservation point and the other side’s? If there clearly is no room for bargaining, then there’s no reason to negotiate—but don’t give up until you’re sure. You may be able to add more issues to the discussion. 16. What is my relationship history with the other party? How might our past relationship affect current talks 17. Are there cultural differences that we should prepare for? 18. To what degree will we be negotiating electronically? Are we prepared for the pros and cons of negotiating via email, teleconference, etc.? 19. In what order should I approach various parties on the other side? 20. What is the hierarchy within the other side’s team? What are the patterns of influence and potential tensions? How might these internal dynamics affect talks? 21. What potential ethical pitfalls should we keep in mind during the negotiation? 22. Who are my competitors for this deal? How do our relative advantages and disadvantages compare? 23. What objective benchmarks, criteria, and precedents will support my preferred position? 24. Who should be on my negotiating team? Who should be our spokesperson? What specific responsibilities should each team member have? 25. Do we need to involve any third parties (agents, lawyers, mediators, interpreters)? 26. What authority do I have (or does our team have) to make firm commitments? 27. Am I ready to engage in interest-based bargaining? Be prepared to try to create value by trading on differences in resources, preferences, forecasts, risk tolerance, and deadlines. 28. If we disagree about how the future plays out, can we explore a contingency contract—that is, stipulate what will happen if each side’s prediction comes true? 29. What parties not yet involved in the negotiation might also value an agreement? 30. Have I practiced communicating my message to the other side? How are they likely to respond? 31. Does the agenda make room for simultaneous discussion of multiple issues? 32. Is an agreement likely to create net value for society? How can we reduce potential harm to outside parties? NONE OF THE ABOVE IS USEFUL IF YOU DO NOT GATHER THE FACTS AND INFORMATION NECESSARY TO A FULL UNDERSTANDING OF YOUR POSITION ON EACH AND THAT OF THE OTHER PARTY(IES) Old McDonald has a farm. He has sold almost all of his crops and … There is only one pumpkin left. You want it! Peter Piper wants it! Sally wants it! Old MacDonald wants a bidding war so that he can afford to send his daughter to Wentworth next fall. What do you do to prepare for the negotiation with Old McDonald? You want the pumpkin to make soup for your restaurant. Peter Piper wants the seeds so he can roast them and sell them at the local farmer’s market. Sally wants to paint the pumpkin as decoration for her Halloween party. RENTAL DISPUTES Tenant is leasing/renewing lease, for 1000 sq ft Tenant will pay $23/sq ft Landlord wants $25/sq ft Possible Considerations Gain = $2/sq ft or $2,000 per year One month’s lost rent at $23/sq ft = $1,916; One month’s lost rent at $25/sq ft = $2,083.33 So essentially will take a year to make up the differential if you lose even one month of rent (Calculate out of term of lease, e.g. 5 mos lost rent will take 5 yrs to recoup differential) Non-financial benefits: Setting market rate for building for other tenants coming in or renewing. Keeping building tenancy maximized for appearances to potential new tenants and financing purposes NEGOTIATION STRATEGIES Five Negotiations Styles “Accommodating (I lose-you win). The focus of this style is to preserve relationships. It should be used when you are at fault, your position is weak, or you are unprepared. Make sure you know the consequences of conceding before you do so.” https://www.hfma.org/topics/trends/62466.html Healthcare Financial Management Association, Understanding 5 Negotiation Styles, November 26, 2018 Five Negotiations Styles “Avoiding (I lose-you lose). Use this style when the issue being negotiated is trivial or when the value of resolving the conflict outweighs the benefit. Set expectations by both parties when using this negotiation style.” • https://www.hfma.org/topics/trends/62466.html • Healthcare Financial Management Association, Understanding 5 Negotiation Styles, November 26, 2018 Five Negotiations Styles “Collaborating (I win-you win). This should be the primary negotiation style. It requires understanding the other party’s point of view and motivations. Note that this style requires more time and may not work with competitive negotiators.” https://www.hfma.org/topics/trends/62466.html Healthcare Financial Management Association, Understanding 5 Negotiation Styles, November 26, 2018 Five Negotiations Styles Competing (I win-you lose). This style often is used when relationships are not critical and one you need to get action quickly. During negotiations, use clear language (e.g., “we must have”) rather than weaker language (e.g., “we would like”). https://www.hfma.org/topics/trends/62466.html Healthcare Financial Management Association, Understanding 5 Negotiation Styles, November 26, 2018 Five Negotiations Styles “Compromising (I lose/win some-you lose/win some). In this negotiation style, both parties value fair and equal resolution. Both parties can get fast results but it’s also possible to concede to certain terms too early without regard for all aspects of the negotiation.” https://www.hfma.org/topics/trends/62466.html Healthcare Financial Management Association, Understanding 5 Negotiation Styles, November 26, 2018 “Lose-lose means that all parties end up being worse off. An example of this would be a budget-cutting negotiation in which all parties lose money. The intractable budget debates in Congress in 2012-13 are example of lose-lose situations. Cuts are essential--the question is where they will be made and who will be hurt. In some lose-lose situations, all parties understand that losses are unavoidable and that they will be evenly distributed. In such situations, lose-lose outcomes can be preferable to win-lose outcomes because the distribution is at least considered to be fair.(citation omitted) In other situations, though, lose-lose outcomes occur when win-win outcomes might have been possible. The classic example of this is called the prisoner's dilemma in which two prisoners must decide whether to confess to a crime. Neither prisoner knows what the other will do. The best outcome for prisoner A occurs if he/she confesses, while prisoner B keeps quiet. In this case, the prisoner who confesses and implicates the other is rewarded by being set free, and the other (who stayed quiet) receives the maximum sentence, as s/he didn't cooperate with the police, yet they have enough evidence to convict. (This is a win-lose outcome.) The same goes for prisoner B. But if both prisoners confess (trying to take advantage of their partner), they each serve the maximum sentence (a lose-lose outcome). If neither confesses, they both serve a reduced sentence (a winwin outcome, although the win is not as big as the one they would have received in the win-lose scenario). https://www.beyondintractability.org/essay/win-lose Win-Win / Win-Lose / Lose-Lose Situations By Brad Spangler January 2013 Original Publication September 2003, updated January 2013 by Heidi Burgess What Is Distributive Negotiation? By Katie Shonk — on December 21st, 2021 / Negotiation Skills “Distributive negotiation involves haggling over a fixed amount of value—that is, slicing up the pie. In a distributive negotiation, there is likely only one issue at stake, typically price. When you are negotiating with a merchant in a foreign bazaar, or over a used car closer to home, you are generally involved in a distributive negotiation, as it may be difficult to add issues other than price to the mix.” https://www.pon.harvard.edu/daily/negotiation-skills-daily/what-is-distributive-negotiation/ What Is Integrative Negotiation? In integrative negotiation, more than one issue is available to be negotiated. Whenever multiple issues are present—such as salary, benefits, and start date, in the case of a job negotiation—negotiators have the potential to make tradeoffs across issues and create value. Often, what looks like a distributive negotiation is, in fact, an integrative negotiation, as there may be additional issues you can add to the discussion. With integrative negotiation, creativity can lead to value-creation for both parties. https://www.pon.harvard.edu/tag/integrative-negotiation/ Zero Sum Game Best result may be to take results out of a zero sum game if possible and move both sides forward beyond the preconceived boundaries. $1,000 at issue; You want 40/60 split so I get only $400 and you get remaining $600. Can fight over the percentages of the division. But what if working together we can increase the $1,000 to $1,500. If we still split 40/60, I equal your $600, but you get $900 so we both win. Need to find way to do that. Example: Compensation package negotiation. Employee wants a $10,000 raise. Employer only willing to pay $5,000. Employee wants the additional money in order to be able to pay for medical expenses. Employer can get medical insurance for employee which will cover medical expenses for only $2,500/year. Employee wins because medical expenses paid for. Employer wins because the cost of the insurance is less than the amount of the demanded raise and is able to keep employee. Example: Middle East. Is this a zero sum game or is this a situation where both sides working together can increase the upside for everyone e.g. standard of living, safety, education, etc. Distributive negotiation Positional negotiation Zero sum game Win – Lose Integrative bargaining Win – Win negotiations Optimizing value NEGOTIATION STRATEGIES •Good faith vs. strategic •Principle vs. practical •Cost benefit analysis Good Faith v. Strategic approaches Making reasonable proposal, especially financial, when other side is not, will leave you in poor shape if ultimate negotiations process is to keep parties moving toward “middle” but may get positive result if other side is also acting unreasonably to gain the advantage. Pros of good faith approach * good faith may play well with mediators/arbitrators if no settlement is reached by parties i.e. judges, mediators, arbitrators * good faith negotiations give cover for not accepting end result * good faith negotiations build reputation for future negotiations with others even if no result reached in existing negotiation which will help in future * good faith negotiations will play well with your constituency and cast negative view of other side with not only your constituency but non parties and possibly even the other side for future negotiations, voting, etc. Examples: union negotiations; political negotiations Principle v. Practical Approach • If your principles are not being fulfilled, practical doesn’t matter • You don’t care whether you win anything in this negotiation. Your goal is to build your base by showing you are a strong leader, can stand up to management/opponent, are the person to back and/or work with going forward because you are principled as opposed to doing things primarily for the almighty buck Cost Benefit Analysis TWO IMPORTANT QUESTIONS TO ASK YOURSELF 1. Does the cost of moving forward and/or not reaching a settlement, outweigh the possible benefits to be gained? 2. Is the yardstick by which you are measuring your desired outcome the proper one? Congressional Refusal to Hold Hearings on New Supreme Court Nominee o As a strategy o Possible Outcome to be Achieved o Impact THE IMPACT OF POWER ON NEGOTIATIONS AND THEIR OUTCOMES UNDERSTANDING THE DIFFERENCE BETWEEN INTERESTS AND POSITIONS How to gain an advantage in negotiations “Many negotiators have been advised not to reveal any information to the other party. However, failure to reveal information about interests can lead to lose-lose agreements” and the failure to achieve a winwin result. Leigh Thompson The Truth About Negotiations 2nd edition Pearson Education, Inc. 2013 “The trick is to know what type of information to reveal. As a general rule, hide your BATNA but reveal your interests. … Negotiators who provide information to the other party about their interests improve their outcomes, or profits, by over 10 percent.7 “ … A major benefit of revealing your interests is that you double the probability that the other party will disclose hers.” Id. at p. 79 How to Identify and Focus on Interests “Here are some steps you can take: 1. “For each position the opposing negotiators take, ask yourself, “Why did they take it?” — that’s the underlying interest. What needs, concerns, or desires does the position serve? 2. If the other side hasn’t accepted your proposal, ask yourself, “Why not?” Consider what they might have to gain or lose by accepting — for instance, political support or group cohesion. What consequences do they face? 3. Recognize that each side has multiple interests. For instance, a tenant may want stable rent but also more favorable terms, such as the ability to sublet or have a pet. Also, different individuals on the side you’re negotiating with may have differing interests, which their negotiators are taking into account. 4. Understand basic human needs: Our most powerful interests are our human needs for such things as security, control over our circumstances, or recognition. Negotiators may mistakenly think money is the only interest involved, but behind a position involving money may be a need for security. If a basic human need is at risk, negotiations won’t progress. 5. Make a list of the interests of each side to help remember and prioritize them. If you focus on interests, not positions, you’ll have a better chance of negotiating successfully.” https://www.watershedassociates.com/learning-center-item/interests-versus-positions.html Understanding the difference between interests and positions is a cornerstone of collaborative negotiation success. Positions Interests What they say they want Why they want it Positions are surface statements of where a person or organization stands, and rarely provide insight into underlying motivations, values or incentives. Interests are a party’s underlying reasons, values or motivations. Interests explain why someone takes a certain position. Position Example: Union demands a five-year contract. Interest Example: Union wants time for workers to retool their skills before plant closings are implemented. Positions Interests Example: “Start a month early” Example: Finish project on time What people say they want Why they want it; underlying motivations Demands Concerns Things you/they say you will/won’t do Fears and aspirations Subjective wants Objective needs Examples of Interests v. Positions Project Manager’s position: Project Manager’s interest: Boss’s position: Boss’s interest: I want a one-month extension to finish the project. Before facing unforeseen obstacles in completing this project on time, she approved the lead programmer’s vacation and wants to demonstrate to her team that she fights for their needs and keeps her word. The original deadline stands and you cannot have a one-month extension. Get the project done on time. Ways to address interests: 1) Boss gives Project Manager discretion to change team members assigned to projects, and extends deadline on another project so that team members can be brought over during the lead programmer’s absence. 2) Approve budget for overtime compensation or additional support. Result: Project is done on time, without an extension, and the Project Manager keeps her word on approved vacations. Buy-Sell Example Buyer’s position: I want the price of the specialty equipment lowered by 10%. Buyer’s interest: We’re under pressure to stay under budget/improve profit. Seller’s position: The equipment must sell at full price. Seller’s interest: To increase market share for the equipment at a profitable price. Ways to address interests: Seller provides free training (or other value-added services) to Buyer’s mechanics that will result in their more effective and efficient use of the equipment, thereby increasing production time in manufacturing and lowering labor costs for over-time hours by more than the 10% reduction in price; and Buyer agrees to allow seller to publish a report showing the increase in productivity with use of this specialty equipment and the subsequent decrease in over-time labor costs. Result: Buyer increases profit and Seller has evidence to support increased sales. The Band You are the band Aerosmith. According to NME, (New Musical Express) a British music, film and culture website and brand, “Joe Perry says Aerosmith will be recording a new album ‘when the time is right.’ ” (https://www.nme.com/news/music/joe-perry-saysaerosmith-will-recording-new-album-2527501) You are negotiating with the Hard Rock Café for you to perform at one or more of their locations in the U.S. The Restaurant You are the Hard Rock Café. You are interested in re-establishing your brand in New England. You are negotiating with the Band Aerosmith for them to perform at one or more of your locations in the U.S. In the publishing company exercise: What were the stated positions of the parties and what were the underlying interests of each? How would knowing (or properly having anticipated) the other side’s interests have helped with the negotiation? “Persons appear to us according to the light we throw upon them from our own minds. -Laura Ingalls Wilder, author (18671957)” Laura Ingalls Wilder The question is not what you look at, but what you see. ” ― Henry David Thoreau Separate the People from the Problem “A major consequence of the “people problem” in negotiation is that the parties’ relationship tends to become entangled with their discussions of substance. On both the giving and receiving end, we are likely to treat people and problem as one. Within the family, a statement such as “The kitchen is a mess” or “Our bank account is low” may be intended simply to identify a problem, but it is likely to be heard as a personal attack. Anger over a situation may lead you to express anger toward some human being associated with it in your mind. Egos tend to become involved in substantive positions. Another reason that substantive issues become entangled with psychological ones is that people draw from comments on substance unfounded inferences, which they then treat as facts about that person’s intentions and attitudes toward them. Unless we are careful, this process is almost automatic; we are seldom aware that other explanations may be equally valid.” Fisher, R., Ury, W. L., & Patton, B. (2011). Getting to Yes [Kindle Android version] “How you see the world depends on where you sit . People tend to see what they want to see. Out of a mass of detailed information, they tend to pick out and focus on those facts that confirm their prior perceptions and to disregard or misinterpret those that call their perceptions into question. Each side in a negotiation may see only the merits of its case , and only the faults of the other side’s.” Id. “Tenant’s perceptions Landlady’s perceptions The rent is already too high . The rent has not been increased for a long time. With other costs going up, I can’t afford to pay more for housing. With other costs going up, I need more rental income . The apartment needs painting. He has given that apartment heavy wear and tear. I know people who pay less for a comparable apartment. I know people who pay more for a comparable apartment . Young people like me can’t afford to pay high rents. The rent ought to be low because the neighborhood is rundown. Young people like him tend to make noise and to be hard on an apartment. We landlords should raise rents to improve the quality of the neighborhood. I am a desirable tenant with no dogs or cats. His loud music drives me crazy. I always pay the rent whenever she asks for it. He never pays the rent until I ask for it. She is cold and distant; she never asks me how things are. Id. I am a considerate person who never intrudes on a tenant’s privacy” From the Textbook (The Mind and Heart of the Negotiator (6th edition)) pp. 112 – 221 “Emotions and Emotional Knowledge Emotions are inevitable in conflict and negotiations. Moreover, negotiators vary in terms of how accurate they are in assessing the emotional expression of others. Emotions are relatively fleeting states that are usually fairly intense and often a result of a particular experience. Moods are more chronic and more diffuse, meaning that whereas emotions are a result of, and can be directed at certain events or people, moods are usually not directed at someone. Unlike emotions, which are very specific, such as anger, regret, relief, gratitude, and so on, moods are often classified as simply ‘being in a good mood’ or a ‘bad mood.’ Emotions and moods can be either a consequence or a determinant of negotiation behavior and outcomes.” Genuine Versus Strategic Emotions Negative Emotion - - Real versus strategic Negative Emotion (e.g. temper tantrums) Emotional Consistency “In fact, it is when negotiators exhibit emotional inconsistency and unpredictability, that they achieve greater outcomes for themselves. In a series of experiments, the counterparty made greater concessions when the negotiator alternated between anger and happiness (inconsistent display) compared to expressing consistent anger. This was because the counterparty felt less in control of the negotiation.” Emotional Intelligence and Negotiated Outcomes “Emotional intelligence is the ability of people (and negotiators) to understand emotions in themselves and others and to use emotional knowledge to lead to positive outcomes.” Strategic Advice for Dealing With Emotions at the Table o Monitor your emotional displays (resist the urge to gloat) o Beware of what you are reinforcing (making concessions to get someone to shut up may actually encourage their behavior going forward) o Reevaluation is more effective than suppression (telling yourself not to think about something actually makes you think about it more) o Emotions are Contagious o Understand Emotional Triggers (See Table on p. 121 of textbook) Negotiation pattern: Local group organizing a community fair want off-duty police officers to help with traffic and crowd control What are the people issues?  BE AWARE OF THE ENVIRONMENT IN WHICH YOU ARE NEGOTIATING  CIRCUMSTANCES COLOR PERCEPTION AND MAY ALTER THE TRUST / RELATIONSHIP BUILDING DYNAMIC Police fire tear gas after protesters throw fireworks, water bottles in Brockton Updated: 5:36 AM EDT Jun 3, 2020 “After a peace rally at a Brockton middle school dispersed, several hundred demonstrators moved to the Commercial Street police station while local and state officers and National Guardsmen stood by in riot gear. The tense standoff escalated at 8:30 p.m. when someone from the crowd threw lit fireworks and others threw water bottles at police. Police responded with tear gas canisters to disperse the group. A few minutes later, police moved its barriers further up, as protesters continued to lob fireworks and water bottles at police. Several protesters and officers could be seen reacting to being exposed to the tear gas. About an hour later, several lines of law enforcement moved forward, pushing the crowd back to the other side of the intersection of Commercial and Centre streets. Four people kneeled with hands up in front of the front line of officers.” BOSTON POLICE HAILED AS HEROES AS FIRST RESPONDERS IN COVID-19 PANDEMIC HOW TO MOVE BEYOND PERCEPTION “Make emotions explicit and acknowledge them as legitimate. Talk with the people on the other side about their emotions. Talk about your own. It does not hurt to say, “You know, the people on our side feel we have been mistreated and are very upset. We’re afraid an agreement will not be kept even if one is reached. Rational or not, that is our concern. Personally, I think we may be wrong in fearing this, but that’s a feeling others have. Do the people on your side feel the same way?” Making your feelings or theirs an explicit focus of discussion will not only underscore the seriousness of the problem, it will also make the negotiations less reactive and more “pro-active.” Freed from the burden of unexpressed emotions, people will become more likely to work on the problem. Allow the other side to let off steam. Often, one effective way to deal with people’s anger, frustration, and other negative emotions is to help them release those feelings.” Fisher, Roger. Getting to Yes . Penguin Publishing Group. Kindle Edition.  YOU MUST ALWAYS DISTINGUISH BETWEEN FACTS, INFERENCES AND ASSUMPTIONS  IT IS NOT ALWAYS EASY AND YOU DO NOT ALWAYS KNOW THE DIFFERENCE WITHOUT REALLY BEING CONSCIOUS OF THE DISTINCTIONS “Separate the People from the Problem: Because people tend to become personally involved with the issues and their respective position, they may feel resistance to their position as a personal attack. Separating yourself and your ego from the issues allows you to address the problem without damaging relationships.” Principled Negotiation – The Harvard Approach – Fisher & Ury https://na.eventscloud.com › file_uploads “Separate the People from the Problem: Because people tend to become personally involved with the issues and their respective position, they may feel resistance to their position as a personal attack. Separating yourself and your ego from the issues allows you to address the problem without damaging relationships. It will also allow you to get a more clear view of the substance of the conflict. The authors identify three basic sorts of people problems: (1) different perceptions among the parties; (2) emotions such as fear and anger; and (3) communication problems. Fisher & Ury’s suggested solutions: • Try to understand the other person's viewpoint by putting yourself in the other's place. • Do not assume that your worst fears will become the actions of the other party. • Do not blame or attack the other party for the problem. • Try to create proposals which should be appealing to the other party. • Acknowledge emotions and try to understand their source (understand that all feelings are valid even if you do not agree or understand them). • Allow the other side to express their emotions. • Try not to react emotionally to another’s emotional outbursts. • Symbolic gestures such as apologies or expressions of sympathy can help to defuse strong emotions. • Actively listen to the other party (give the speaker your full attention, occasionally summarizing the speaker's points to confirm your understanding). • When speaking direct your speech toward the other party and keep focused on what you are trying to communicate. • You should avoid blaming or attacking the other person, speaking only about yourself.  Try using “I” statements, such as “I feel” or “I think.”  Think of each other as partners in negotiation rather than as adversaries ‘It’s hard to live in a studio apartment in San Jose with a man who’s learning to play the violin.’ That’s what she told the police when she handed them the empty revolver. ‘It’s hard to live in a studio apartment in San Jose with a man who’s learning to play the violin.’ That’s what she told the police when she handed them the empty revolver. • What do you think happened? • Why did it happen? • Possible relationships between the violin player and the woman? • How does the story end? ‘It’s hard to live in a studio apartment in San Jose with a man who’s learning to play the violin.’ That’s what she told the police when she handed them the empty revolver. Facts Inferences • Live in San Jose • Man and woman living together in apartment • Police are at apartment • Woman is with the police • There is an empty revolver • Woman shot the man • Man killed himself • Someone broke into the apartment and killed the man • Someone injured the man • The woman shot the violin BUSINESS DISPUTES Overview BUSINESS ONLY MIXED Business vs. Business Employee vs. Business Employees Executives Contract; Collections; Non-Compete; IP; Unfair Competition Internal Disputes Over Management/Money Consumers vs. Business small (close corp.) larger (stockholders) Others vs. Business (Torts; Environmental; Construction, etc.) DISPUTE RESOLUTION -Lawsuits Pretrial -Default -Negotiation -Non-trial motions Trial -by Jury -to a Judge Class Actions Business Courts Dispute Resolution – Administrative Agencies Subject Matter Expertise Efficiencies Less Technical Executive Branch (“Political”) Appointees Decision-maker’s tenure not protected “Alternative” Dispute Resolution • Mediation • Arbitration • Conciliation 95%+ of disputes settle without a formal trial Some language that can be used in contracts regarding ADR GOVERNING LAW. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Massachusetts, without giving effect to rules governing choice of law. The Parties agree that any dispute arising out of or related to this Agreement shall be resolved by the Courts of the Commonwealth of Massachusetts in Middlesex. The Smiths will give the Joneses notice of what the Smiths intend to plant and Joneses will have a reasonable right of approval so that they can object within three (3) days to plantings that are too large or otherwise objectionable. The Parties, through their respective counsel, (i.e, Attorney T.C. for the Smiths and Attorney Arlene Beth Marcus for Joneses) shall resolve any disputes regarding said plantings. Dispute Resolution: The Parties agree that, upon written notice from one side to the other of any dispute or other issue concerning the Easement, the two sides will attempt to resolve the issue or dispute amicably for 15 days before either side may file a lawsuit. In the event that either party is alleged to have materially breached a term of this Settlement Agreement, then the other party may bring a claim to enforce the Settlement Agreement in Middlesex Superior Court. The prevailing party shall be entitled to request an award of its attorneys' fees incurred in adjudicating the claim and the award of said fees shall be solely in the discretion of the Court. The Parties agree that jurisdiction and venue in Middlesex Superior Court for any such claim is proper. If the dispute cannot be settled by negotiation between the parties within 90 days of receipt of notification, upon election of either party, the dispute shall be referred to the American Arbitration Association to be settled in Boston, MA on an expedited basis in accordance with the commercial arbitration rules of said organization. Fees and expenses of such arbitration shall be shared equally. When the child commences a five day a week program such as kindergarten or fulltime preschool, the parties shall review the existing parenting schedule and if they cannot agree on an amendment/modification to the schedule in light of the child’s full time program, they shall present the issue to Judge Name for binding arbitration. The parties shall each pay one-half of any upfront cost of the arbitration but the final allocation of said costs shall be determined by the conciliator. In the event Judge Name is unable to serve or declines to serve as the arbitrator then the parties shall agree on a successor arbitrator, or request the Court to select an arbitrator if they cannot agree. At the option of a party who obtains a new job, the parties shall review the existing parenting schedule. If the parties cannot agree on an amendment/modification to the schedule in light of the child’s full time program, the parties shall first attempt to resolve the issue through mediation prior to either party filing the appropriate pleading with the Court for resolution.. . Arbitration, Mediation and Conciliation: differences and similarities from an International and Italian business perspective Twitter Facebook LinkedIn Reddit by Alessandra Sgubini, Mara Prieditis & Andrea Marighetto August 2004 “The main ADR alternatives to civil litigation are negotiation, arbitration, conciliation and mediation. Other, more particular ADR processes available are early neutral evaluation, mini-trial, summary jury trial, and the judicial settlement conference. Disputing parties use these ADR methods because they are expeditious, private, and generally much less expensive than a trial. While each of these ADR processes may be effective in various circumstances, mediation in the United States has proven to offer superior advantages for the resolution of disputes that resist resolution.” https://www.mediate.com/articles/sgubinia2.cfm “Arbitration. Arbitration is an ADR (alternative dispute resolution) method where the disputing parties involved present their disagreement to one arbitrator or a panel of private, independent and qualified third party “arbitrators.” The arbitrator(s) determine the outcome of the case. While it may be less expensive and more accessible than trial, the arbitration process has welldefined disadvantages. Some of disadvantages include the risk losing, formal or semi-formal rules of procedure and evidence, as well as the potential loss of control over the decision after transfer by the parties of decision-making authority to the arbitrator. By employing arbitration, the parties lose their ability to participate directly in the process. In addition, parties in arbitration are confined by traditional legal remedies that do not encompass creative, innovative, or forward-looking solutions to business disputes.” “Mediation. Mediation is an ADR method where a neutral and impartial third party, the mediator, facilitates dialogue in a structured multi-stage process to help parties reach a conclusive and mutually satisfactory agreement. A mediator assists the parties in identifying and articulating their own interests, priorities, needs and wishes to each other. Mediation is a “peaceful” dispute resolution tool that is complementary to the existing court system and the practice of arbitration. Arbitration and mediation both promote the same ideals, such as access to justice, a prompt hearing, fair outcomes and reduced congestion in the courts. Mediation, however, is a voluntary and non-binding process - it is a creative alternative to the court system. Mediation often is successful because it offers parties the rare opportunity to directly express their own interests and anxieties relevant to the dispute. In addition, mediation provides parties with the opportunity to develop a mutually satisfying outcome by creating solutions that are uniquely tailored to meet the needs of the particular parties. A mediator is a neutral and impartial person; mediators do not decide or judge, but instead becomes an active driver during the negotiation between the parties. A mediator uses specialized communication techniques and negotiation techniques to assist the parties in reaching optimal solutions. “ “Conciliation. Conciliation is another dispute resolution process that involves building a positive relationship between the parties of dispute, however, it is fundamentally different than mediation and arbitration in several respects. Conciliation is a method employed in civil law countries, like Italy, and is a more common concept there than is mediation. While conciliation is typically employed in labour and consumer disputes, Italian judges encourage conciliation in every type of dispute . The “conciliator” is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement. It is unlike arbitration in that conciliation is a much less adversarial proceeding; it seeks to identify a right that has been violated and searches to find the optimal solution. Conciliation tries to individualize the optimal solution and direct parties towards a satisfactory common agreement. Although this sounds strikingly similar to mediation, there are important differences between the two methods of dispute resolution. In conciliation, the conciliator plays a relatively direct role in the actual resolution of a dispute and even advises the parties on certain solutions by making proposals for settlement. In conciliation, the neutral is usually seen as an authority figure who is responsible for the figuring out the best solution for the parties. The conciliator, not the parties, often develops and proposes the terms of settlement.“ What language would you want in a construction contract? What types of dispute resolution do you think would work best in your industry? Have you been involved in, or sat in on, and dispute resolution events?
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Negotiation Techniques

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Negotiation techniques are essential in resolving conflicts and reaching mutually
beneficial agreements in various settings, including business transactions and personal
relationships. There are several negotiation techniques, including accommodating, avoiding,
collaborating, competing, and compromising, each with advantages and disadvantages. The
situation and the parties involved determine success in negotiation. Therefore, choosing the
appropriate negotiation technique that best suits the situation is vital to achieving satisfactory
outcomes. This essay will explore the different negotiation techniques, their success rates, and
the situations where each technique is most appropriate. Additionally, it will argue that
collaborative negotiation techniques are often more effective in achieving mutually beneficial
solutions and fostering long-term relationships between parties.
Accommodating is a negotiation process in which one party gives in to another party's
interests, resulting in a lose-lose situation. It is frequently used when one party believes
maintaining a positive relationship with the other party is critical and is willing to sacrifice their
interests (Spijkman & de Jong, 2020). In this case, one party in the negotiation is never satisfied,
but they are satisfied with the outcome because they have prioritized the other party's needs over
their own. An example is a business owner selling a pair of shoes to a customer. As Yu et al.
(2021) explain, the customer bargains too hard, and the seller may cave into the negotiation,
sacrificing their expected profit margins for the customer to take the pair of shoes. Essentially,
the case of accommodating is frequently used when one party has more power than the other or
has to make sacrifices and is wil...


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