Negotiation Strategies - PowerPoint Presentation

SESSION 5 Course: COMM 4BC3 Professor: Sean O’Brady The subprocesses of negotiation 2 Sub-process #1: Distributive bargaining  A zero-sum game  Involves cutting the pie  One’s loss is another’s gain  Types of issues: wages, fringe benefits, etc.  I...

SESSION 5 Course: COMM 4BC3 Professor: Sean O’Brady The subprocesses of negotiation 2 Sub-process #1: Distributive bargaining  A zero-sum game  Involves cutting the pie  One’s loss is another’s gain  Types of issues: wages, fringe benefits, etc.  Issues are resolved through the exercise of bargaining power  Example: Strike and lock-out threats 3 Sub-process #2: Integrative bargaining  A positive-sum game  Integrative bargaining is difficult to maintain  Difficulties in dividing mutual gains  Difficult to get employers to think about long-term  Involves expanding the pie goals  Joint gains are possible  Trust (between and within organizations)  Example: Introducing changes that augment organizational performance  Issues are resolved through information sharing and joint problem solving  Example: Formation of committees dedicated to improving work practices 4 Sub-process #3: Intra-Organizational bargaining  Addresses negotiations within teams  Intra-organizational conflict is common in some circumstances  Poor unity in one team can lead to shadow boxing (or surface bargaining)  When a negotiator does not have sufficient authority to negotiate Source: CUPE, https://cupe.ca/collectiv e-bargaining 5 Sub-process #4: Attitudinal structuring  Addresses the perceptions each side generates vis-à-vis the other over time  More collaborative and trusting relationship = integrative bargaining  More hostile actions, and distrust = distributive bargaining Source: http://www.washingtonlaborandemploy mentblog.com/category/public-sector-co llective-bargaining-rights/duty-to-bargai n/bad-faith-bargaining/page/2/ 6  Exercise The Two-Dollar Game 7 Defining strategy, tactics, and the factors underlying their formulation 8 Strategies and Tactics Defined  Strategy  An overall plan for achieving an objective (e.g. partnership)  Big picture in scope  Involves focusing long-term outcomes  Tactics  Specific actions geared towards achieving the strategy (e.g. making a compromise)  Narrow in scope  Involves focusing on short-term outcomes 9 Weighing Alternatives  At its root, negotiation strategies are weighed against alternatives.  These reflect parties’ BATNA and WATNA  Best Alternative To a Negotiated Agreement (BATNA)  Negotiators must consider the best case alternative to an agreement  Worst Alterative to a Negotiated Agreement (WATNA)  Negotiators must consider the worst case alternative to an agreement 10 Weighing Alternatives  Information matters  Power matters  Time matters  Pareto’s law – 80/20 rule 11 Common bargaining tactics in all situations 12 Common Bargaining Tactics  Face saving  Negotiators need to paint concessions in best light  Unions = typically vocal about gains  Management = typically silent, to give union credibility  Throwaway items  The inclusion of low-priority items, to exchange for high priority items  Packaging  Putting items together for negotiations  Makes negotiating more efficient  Mitigates conflict 13 Common Bargaining Tactics  Caucusing  Separate intra-party meetings on proposals  To maintain committee’s poker face  Promotes intra-party solidary  Flexibility and compromise are also relevant Effective posturing early on in negotiations influences the effectiveness of these tactics  Sets the pattern for negotiations (e.g. expressing willingness to negotiation, identify basic positions, setting the tone). 14 Distributive Bargaining in Action 15 Distributive Bargaining in Action Opening offers  Anchoring  An opening offer that influence’s a counter- party’s zone of agreement  Three types:  Facts  Extreme Offers  Precedents  Bracketing  Moving towards a middle point, as constructed by the opening offers (brackets) 16 Distributive Bargaining in Action Norms matter (social beliefs or attitudes)  Relational  Desire to maintain relationships  Fairness  Equality  Equity  Need  Status quo 17 Distributive Bargaining in Action Norms matter (social beliefs or attitudes)  Reciprocity  Matching proposals  Good faith  Maintaining integrity of negotiations 18 Distributive Bargaining in Action Framing matters  Relates to how issues are presented to the other side  Slanted?  Non-judgmental?  Reframing is useful  Asking questions is more effective than arguing positions  Why?  Why not?  What if?  Advice? 19 Distributive Bargaining in Action Reaching Agreement in Distributive Bargaining  Framing and norms both interact over the conclusion of a final agreement  Framing affects interpretation of norms  Norms affect framing  They demonstrate that distributive bargaining is a social process  Not merely an expression of force 20 Integrative Bargaining in Action 21 Integrative Bargaining in Action  How does one strategize for integrative bargaining?  Principled negotiations (i.e. interest-based bargaining) has been suggested as a best practice (exists along other alternatives)  Developed by Fisher and Ury in the 1980s  Suggests an alternative to distributive bargaining  Argues that mutual gains are possible through cooperation 22 Integrative Bargaining in Action Principled Negotiations: Outlining the Method 1. Focus on interests, not positions  E.g. Avoid “my position is that we introduce a 2% raise”, instead “my interest is in improving the quality of working life for employees” 2. Separate people from issues  Avoid “Larry is greedy, always trying to cut costs for a promotion”, instead “cost-cutting is the issue” and not Larry’s personality 3. Focus on objective criteria  Concrete evidence: performance criteria (e.g. profits, sales), employee satisfaction surveys, etc. 4. Develop mutual gains options  E.g. Union’s goal is greater quality of life for members, employer’s goal is greater productivity and profits – there are ways to achieve both (e.g. health and safety programs, improvements to training, higher wages to reduce turnover) 23 Integrative Bargaining in Action Another form of integrative bargaining: Categorization Method  Encourages integrative bargaining by relegating distributive practices to the end  Different steps are taken during most of the negotiation  Except for the final phases  Similar to interest-based bargaining, by emphasizing high-road negotiation practices 24 Integrative Bargaining in Action The Steps in the Categorization Method 1. Exchange Information 2. Develop a common list of all issues 1. Common issues 2. Exchange issues 3. Distributive issue 3. Reach agreement on common issues  Which are then removed from the list 4. Trade issues of equal value 5. Distributive bargaining ensues on final issues 25 Final Note on This Session’s Reading  Read pages 162 – 163 before negotiating 26