Negotiation Techniques MIM Course 2003

Jorge Correia Jesuino

Kennedy, G. (1998). The new negotiating edge: The behavioral approach for results and relationships. London: Nicholas Brealey Publishing.

Negotiation as a Universal Process

Negotiation defined behaviorally

The process by which we search for the terms to obtain what we want from somebody who wants something from us.

Key elements of negotiation

Interdependence

Some perceived conflict

Opportunitic interaction

The possibility of agreement

Definition

Negotiation is a process of potentially opportunistic interaction by which two or more parties, with some apparent conflict, seek to do better through jointly decided action than they could otherwise.”

Lax & Sebenius (1986). The manager as negotiator. NY: Free Press.

Negotiation is central to the manager’s job

Dealing outside the chain of command Indirect management

Dealing with subordinatesCommandsManagement systemsThe cooperative approachBeyond pure command,

systems and cooperation

Dealing with superiors

Some ways we make decisions

Persuasion

Giving in

Instruction

Coercion

Litigation

Problem solving

Chance

Arbitration

“ We deserve a break”

“Ok, you deserve a break”

“Give me a break”

“Give me a break – or else!”

“I’ll sue to get a break”

“How can we both get a break?”

“Heads I get a break”

“Which of us deserves a break?”Source: The Negotiate Trainer’s Manual, 1996, Negotiate Ltd, Edinburgh,

p.4

When to negotiate

When we need someone’s consent

When the outcome is uncertain

When the time and effort of negotiating are justified by the potential outcome

Not the Bedford truck drivers’ insurance policy

Years ago, truck drivers were offered what appeared to be good deal by an insurance company.

They could insure their life for a single shilling and their family would receive the equivalent of their annual wage if they were killed while driving a Bedford truck.

The small print revealed that their family was only eligible for the award if they were killed by another Bedford truck.

The tasks of the four phases

Phase

Prepare

Debate

Propose

Bargain

Source: The Negotiate Trainer’s Manual, 1996, p.4

Task

What do we want?

What do they want?

What wants might we trade?

What wants will we trade?

Attitudes, Beliefs, and Behaviors of Negotiators

A simple model

Beliefs

Attitudes

Behavior

The red-blue continuum

10 5 0 5 10

Extreme Red

Extreme Blue

Points on the continuum

No. red No. blue Point on continuum10 0 Red 10

9 1 Red 4

8 2 Red 3

7 3 Red 2

6 4 Red 1

5 5 0

4 6 Blue 1

3 7 Blue2

2 8 Blue 3

1 9 Blue 4

0 10 Blue 10

A basic (red) assumption of negotiation

“In a successful negotiation, both parties gain – but one gains more than the other.”

Source: Colin Robinson (1990). Winning at Business Negotiations: A Guide to Profitable Deal Making, Kogan Page, p.33.

Extreme red attitudes

“We recognise that, far from being honest, negotiation is a web of ever more delicate lies. A skilled negotiator will appear friendly if this is the role he considers to be most effective, but will never sacrifice profit for friendship in his business dealings. He will never help unless that is the way to get what he wants and then only if it gives him more than it costs. He will never co-operate if he can avoid it, since this implies giving up something, or worse still, sharing a gain.”

Red attitudes Be aggressively competitive and non-cooperative.

Dominate your opponents.

Seek always to win.

All deals are “one-offs”.

Use ploys and tricks.

Bluff and coerce.

Exploit the submissive.

Source: The Negotiate Trainer’s Manual, 1996, p.55.

Blue attitudes Be co-operative – even with aggressive partners.

Show respect to all partners.

Seek to succeed.

All deals lead to others.

Eschew manipulation.

Be open and play it straight.

Source: The Negotiate Trainer’s Manual, 1996, p.55.

Extreme blue style“What makes Win-Win negotiators important, both socially and historically, is that, in modifying their perception of what they need to win, they have redefined what winning means. They consider not just their own goal, but the other person’s goal and the common goal. They know that negotiating is not solely a question of how much they will win, but how much the loss will afect the other person. They have no desire to live in an unstable environment of a few winners and a multitude of embittered losers. In short, they don’t have to win it all; what’s there can be shared.”Source: Tessa A. Warschaw (1981). Winning by Negotiation, McGraw-Hill, p.62.

The prisoner’s dilemmaTwo prisoners, Slug and Gripper, are under arrest on suspicion of having committed a major crime. They are in separate cells and cannot communicate with each other. The authorities do not have enough evidence to convict them of the crime for which they were arrested. Instead, the prosecutor speaks to each of them separately and offers them the same deal:

“If you confess to the crime and turn state’s evidence, you will go free and your former associate will receive a 10-year sentence. If you do not confess but your associate does, then he will go free and you will receive a 10-year sentence. If you both confess, you will receive 5 year each. If neither of you confesses, you will each be charged with the misdemeanour and receive a 1-year sentence.”

Player’s choices and pay-offs

Players’s choices

Both play blue

Both play red

One plays blue, other plays red

Pay-offs

+ 4 points each

- 4 points each

Blue player loses 8 points (-8)Red player gains 8 point (+8)

Source: The Negotiate Trainer’s Manual, 1996, p.11.6

Naive blue plays in red-blue

Round

1

2

You

Blue

Blue

Them

Red

Red

Recommended play in red-blue

Round

1

2

3

You

Blue

Red

?

Them

Red

?

The negotiators dilemma

Stone’s Choice

Good

Good

Great

Terrible

Terrible

Great

Mediocre

Mediocre

Create

Claim

Claim

Create

Ward’s Choice