Essentials of Negotiation 2024 Release - Chapter 03: Strategy and Tactics - McGraw Hill

Because learning changes everything. ® Essentials of Negotiation 2024 Release Chapter 03: Strategy and Tactics of Integrative Negotiation © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent...

Because learning changes everything. ® Essentials of Negotiation 2024 Release Chapter 03: Strategy and Tactics of Integrative Negotiation © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  Chapter 3 Learning Objectives 1. Understand the basic elements of integrative negotiation. 2. Explore the strategy and tactics of integrative negotiation. 3. Consider the key factors that facilitate successful integrative negotiation. 4. Gain an understanding of why successful integrative negotiations are often difficult to achieve. © McGraw Hill LLC  Overview Integrative negotiation allows both sides to achieve their objectives. Honesty and Discussion and mutual exploration integrity. often find alternatives for a win–win. Abundance Negotiators make one of three mistakes. mentality. Failing to negotiate when they should. Maturity. Negotiating when they should not. Systems Negotiating using the wrong strategy. orientation. Superior Rather than assume a win–lose situation, listening skills. look for win–win solutions. © McGraw Hill LLC 3  Overview of the Integrative Negotiation Process Key contextual factors. Integrative negotiations Create a free flow of create a process to: information. Identify and define the Attempt to understand the problem. other negotiator’s real Surface interests and needs and objectives. needs. Emphasize things parties Generate alternative have in common. solutions. Search for solutions that Evaluate and select meet the goals and alternatives. objectives of both parties. © McGraw Hill LLC 4  Creating a Free Flow of Information Effective information exchange promotes integrative solutions. Failure to reach integrative agreements is often linked to the failure to exchange enough information. For the necessary exchange to occur: Negotiators must be willing to reveal their true objectives and to listen to each other carefully. In contrast, a willingness to share information is not a characteristic of distributive bargaining situations. Parties distrust each other, conceal and manipulate information, which they use for a competitive advantage. © McGraw Hill LLC 5 Attempting to Understand the Other Negotiator’s Real Needs and Objectives You must understand the other party’s needs before helping to satisfy them. Realize the other’s priorities are not your own. Stimulate information exchange. Exchange information about your priorities for particular issues. But not necessarily about your positions on those issues. Understand what the other side really wants to achieve. This is in contrast to distributive bargaining. If one negotiator is inexperienced, the other may need to assist them in discovering their underlying needs and interests. © McGraw Hill LLC 6  Emphasizing Things in Common Between the Parties and Minimizing the Differences Negotiators may require a different outlook or frame of reference. Individual goals may need to be redefined through collaborative efforts directed toward a collective goal. At times the collective goal is clear and obvious, and other times it is not clear or easy to keep in sight. © McGraw Hill LLC 7 Searching for Solutions That Meet the Needs and Objectives of Both Sides Negotiators must be firm about interests and needs but flexible about how these needs and interests are met. In a competitive interaction: If the objective Negotiators want more than the other of one party is party and may block the other’s goals. to get more than In contrast, integrative negotiators define the other, and pursue their own goals. successful They are mindful of the other’s goals. integrative And search for solutions satisfying negotiation is both sides. very difficult. © McGraw Hill LLC 8  Key Steps in the Integrative Negotiation Process The first three steps are important for creating value, while the fourth step involves claiming value. It is important that creating value precedes claiming value. © McGraw Hill LLC 9 Creating and Claiming Value and the Pareto Efficient Frontier The goal of creating value is to push the solutions to the Pareto efficient frontier. This line contains the point where no agreement would make any party better off without decreasing the outcomes to any other party. © McGraw Hill LLC 10  Step 1: Identify and Define the Problem Problem identification is critical; often the most difficult step. Define the problem in a way that is mutually acceptable to both sides. State the problem with an eye toward practicality and comprehensiveness. State the problem as a goal and identify obstacles to attaining the goal. Depersonalize the problem. Separate the problem definition from the search for solutions. © McGraw Hill LLC 11  Step 2: Surface Interests and Needs Interests are the underlying concerns, needs, desires, or fears that motivate a negotiator to take a particular position. Understanding interests allows negotiators to invent a solution that meets the interests of both sides. During negotiation, parties expose their position or demands. In distributive bargaining, negotiators trade positions back and forth, attempting to achieve their own targets. In integrative negotiation, negotiators pursue the other’s logic to find what motivated them to arrive at their goals. © McGraw Hill LLC 12  Step 2: Surface Interests and Need: Types of Interests Several types of interests may be at stake, and each type may be either intrinsic or instrumental. Intrinsic—the parties value the interest in and of itself. Instrumental—the parties value the interest because it helps them derive other outcomes in the future. Substantive interests are the issues under negotiation. Process interests relate to how the negotiation unfolds. Relationship interests value the ongoing relationship between the parties and the future of that relationship. Interests in principle occurs when certain deeply held principles serve as the dominant guide to actions. © McGraw Hill LLC 13  Step 2: Surface Interests and Need: Some Observations on Interests There is almost always more than one type of interest underlying a negotiation. Parties can have different types of interests at stake. Interests often stem from deeply rooted human needs or values. There are numerous ways to surface interests. Surfacing interests is not always easy or to one’s best advantage. © McGraw Hill LLC 14  Step 3: Generate Alternative Solutions The objective is to create a variety of options or possible solutions to the problem. Techniques for generating alternative solutions. Negotiators can reframe the problem to create a win–win alternative from what appeared to be a win–lose problem. Or, take the problem as given and create a long list of options from which the parties can choose. During integrative negotiation over a complex problem, both types of techniques may be used and even intertwined. © McGraw Hill LLC 15  Step 3: Generate Alternative Solutions: By Redefining the Problem or Problem Set Techniques in this category call for the parties to define their underlying needs and develop alternatives to meet them. Logroll. Nonspecific compensation. Parties trade off outcomes One side wins, the other is on one issue. compensated. Expand the pie. Cut the costs for compliance. Both sides achieve their One side wins, the other has objectives. costs minimized. Modifying the resource pie. Superordination. To benefit both sides. Differences are replaced by Find a bridge solution. other interests. Invent new options to meet Compromise. the needs of both sides. For entrenched parties. © McGraw Hill LLC 16  Step 3: Generate Alternative Solutions: To the Problem as Given These approaches can be used by the negotiators themselves or by a number of other parties. Brainstorming. Avoid judging solutions; separate people from the problem; be exhaustive and ask outsiders. Surveys. Can be conducted in a short time but parties lose the benefit of seeing and hearing each other’s ideas. Electronic brainstorming. A facilitator asks questions, participants type their anonymous responses into a computer which aggregates and displays the entries to the group as a whole. © McGraw Hill LLC 17  Step 4: Evaluate and Select Alternatives There are a series of steps for guidance. Definitions and standards. Alternatives. Evaluation. Selection. Weigh or rank-order each option against clear criteria. May need to clarify definitions or standards. Using a decision-making process, debate the merits of each negotiator’s preferred options and agree on the best options. Make sure the process does not harm the relationship. © McGraw Hill LLC 18  Step 4: Evaluate and Select Alternatives: Guidelines for Evaluating and Selecting Alternatives Narrow the range of solution options. Evaluate solutions on quality, standards, and acceptability. Agree to the criteria in advance of evaluating options. Be willing to justify personal preferences. Be alert to the influence of intangibles in selection options. Use subgroups to evaluate complex options. Take time out to cool off. Explore different ways to logroll by looking at differences in expectations, as well as risk and time preferences. Keep decisions tentative and conditional until final. Minimize formality and recordkeeping until final. © McGraw Hill LLC 19  Factors That Facilitate Successful Integrative Negotiation Seven factors facilitating successful integrative negotiation. The presence of a common goal. Faith in one’s own problem-solving ability. A belief in the validity of the other party’s position. The motivation and commitment to work together. Trust. Clear and accurate communication. An understanding of the dynamics of integrative negotiation. © McGraw Hill LLC 20  Some Common Objective or Goal Three types of goals facilitate integrative agreements. A common goal is one that all parties share equally, each benefiting in a way that would be impossible if they did not work together. A shared goal is one that both parties work toward but that benefits each party differently. A joint goal is one that involves individuals with different personal goals agreeing to combine them in a collective effort. The key element of integrative negotiation is the belief that all sides can benefit and they will be better off working in cooperation than by working independently or competitively. © McGraw Hill LLC 21  Faith in One’s Problem-Solving Ability Parties who believe they can work together are likely to do so. Expertise in the problem area strengthens understanding of the problem’s complexity, nuances, and possible solutions. Expertise increases the negotiator’s knowledge and confidence. Direct experience in negotiation increases the negotiator’s understanding of the bargaining process. Knowledge of integrative tactics leads to an increase in integrative behavior. This suggest that faith in one’s ability is positively related to successful integrative negotiations. © McGraw Hill LLC 22 A Belief in the Validity of One’s Own Position and the Other’s Perspective Integrative negotiation requires negotiators accept both their own and the other’s attitudes, interests, and desires as valid. You must believe in the validity of your own perspective. You must also accept the validity of the other party’s perspective. The purpose of integrative negotiation is not to challenge the other’s perspective but to incorporate it into the solution. © McGraw Hill LLC 23  The Motivation and Commitment to Work Together The parties must be willing to make their own needs explicit, to identify similarities, and recognize and accept differences. Enhancing motivation and commitment to problem-solving. Negotiators agree they gain more by working together than separately. Negotiators can commit to each other in presettlement settlements. Negotiators can create an umbrella agreement that provides a framework for future discussions. © McGraw Hill LLC 24  Trust Mistrust inhibits collaboration. Ways to elicit information from the other Generating trust is negotiator when they mistrust you. a complex, Share information, encourage uncertain process reciprocity. depending in part Negotiate multiple issues on how the parties behave simultaneously. and in part on Make multiple offers at the same personal time. characteristics. © McGraw Hill LLC 25  Clear and Accurate Communication Negotiators must be willing to share information about themselves, revealing what they want and why. Mutual understanding is the responsibility of both sides. Multiple communication channels are helpful. Make sure messages are consistent. Follow a procedure that gives everyone a chance to speak. © McGraw Hill LLC 26 An Understanding of the Dynamics of Integrative Negotiation Negotiators frequently assume the distributive bargaining process is the only way to approach negotiations. Training in integrative negotiation enhances the ability of the parties to successfully pursue the process. Also, using distributive tactics is negatively related to joint outcomes. © McGraw Hill LLC 27  End of Main Content Because learning changes everything. ® www.mheducation.com © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.