1 A Dispute Resolution or Deal Making Negotiation

Dispute Resolution Deal Making

Backward looking Forward looking
Position-Based Interest-Based
Adversarial Problem Solving

1.1 Main process resolving the dispute

1) Avoidance 2) Negotiation 3) Mediation 4) Arbitration 5) Litigation 6) Power
Mediation, Arbitration and Litigation, all these involve third party to settle down the resolution.

1.1.1 Mediation
Mediation is a non-binding process. Mediation is an effective way of resolving disputes without the need
to go to court. It involves an independent third party - a mediator - who helps both sides come to an
agreement.
Mediator help to reach a solution and outcome where both the parties are agree. Mediators avoid taking
sides, making judgements or giving guidance. They are simply responsible for developing effective
communications and building consensus between the parties. The focus of a mediation meeting is to reach
a common sense settlement agreeable to both parties in a case. Mediation is a voluntary process and will
only take place if both parties agree. It is a confidential process where the terms of discussion are not
disclosed to any party outside the mediation hearing.

1.1.2 Litigation and Arbitration

Dispute resolution processes fall into two major types: Adjudicative processes, such as litigation or
arbitration, in which a judge, jury or arbitrator determines the outcome. Consensual processes, such as
collaborative law, mediation, conciliation, or negotiation, in which the parties attempt to reach agreement.
1.1.2.1 Arbitration vs. Litigation: A comparison chart
Arbitration Litigation

a) Private/Public Private - between the two Public - in a courtroom

parties
b) Type of Proceeding Civil - private Civil and criminal

c) Evidence allowed Limited evidentiary process Rules of evidence allowed

d) How arbitrator/judge Parties select arbitrator Court appoints judge - parties have
selected limited input

e) Formality Informal Formal

f) Appeal available Usually binding; no appeal Appeal possible

possible
g) Use of attorneys At discretion of parties; Extensive use of attorneys
limited
h) Waiting time for case to be As soon as arbitrator Must wait for case to be scheduled;
heard selected; short long

i) Costs Fee for arbitrator, attorneys Court costs, attorney fees; costly

2 Analyzing the Negotiation

What question should I ask to complete the analysis?
Key Question in analysis
First, what's your overall goal in reaching the negotiated agreement with Pooja? (Sell your car)
Second,What are the issues are most important to you in reaching this goal? Why are these issues impotant?
Price (Because you need money to buy truck) Transfer date ( because you need the car for the next 3 weeks)
What is your BATNA with pooja? ( Sell car to your friend)
What is your reservation price? ( in this negotiation with Pooja, the lowest price that you will accept) $4500
What is your most likely price? $5000
What is your stretch goal? $6000

3 Best Alternative to a Negotiated Agreement

3.1 Your BATNA in a Dispute Resolution Negotiation
3.2 Using Decision Trees to Complete Your BATNA Analysis

4 Cross-Cultural Negotiations
In any negotiation, you start by analyzing your own interests, as we did earlier. And then you try to analyze
the other side's interests. Moving beyond positions. Asking why they want what they're interested in. With
a cross cultural negotiation, it's especially challenging analyzing the other side's interests, because there are
two hurdles that you must leap to find out their interests. First of all, there's the question of their
negotiation style. And second, their underlying values and beliefs. Negotiation style is often referred to
as the surface culture. Whereas the underlying values and beliefs are referred to as the deep culture.
culture can influence the results of a negotiation and the success of a negotiation. So the variations can even
occur within a country, as well as cross, across country.
But it is common around the world. And so the basic question is when you're negotiating in another country
should you adopt the other sides style? Why don't you ask yourself that question?
Yes or no? Basically many people would say no, or a qualified no. Because there are problems when you
try to modify your behavior and act as the other side does. For example, what happens if you adopt the
negotiation style of the other side, and then they adopt your style? You're both going to feel a little foolish
acting out the surface culture of the other side. Somebody told me once that they saw a picture of an
American businessman meeting a businessman from Japan for the first time. And as they walk up to each
other, the Japanese businessman reaches out to hug the American just as the American bows to the Japanese
businessperson. And so the hug completely misses the American.
I think that the success of negotiation between cross-national companies depends on respect of each other
rather than style.
Just let me add a final tip that might be useful as you prepare for a cross-cultural negotiation, and that is to
try a role reversal. That is, once you identify differences in your styles, go through an exercise where you
play the role of the person in the other culture. This is called a role reversal. When they play that role, they
learn that being silent can be a very powerful negotiation tactic.
I found that when presented with periods of silence, the other side will just keep talking. This can lead to
revelations of information that I never would have sought in the first place.
So, a couple of benefits from the role reversal. Number one, deeper understanding of the other side. Number
two, possibly introducing new negotiation tactics for your own arsenal.

5 Ethical Issues and Standards

5.1 How to Handle Ethical Issues
We're now ready to look at an especially important issue relating to preparing for a negotiation. And that
is, the question of how you should handle ethical issues.
There are two clusters of standards to consider
A. Law-Based Ethical Standards
B. General Ethical Standards
So when we look at law-based ethical standards, there are three standards that are especially important in
negotiation. First of all, we'll be talking about fraud, which is defined as false representation of a material
fact that is relied on by the other side.
Second, we'll look at fiduciary duty, which is a high duty of trust and loyalty. And third,
one unconscionability, that is conduct that violates principles of good conduct.
So let's start with fraud. And let me ask you this question would you ever deliberately commit fraud during
a negotiation? And for those of you who said no, let's do a quick test. Let's assume that you are the seller
in this situation. You have offered to sell your house for $300,000 to the buyer. Let's also assume that your
reservation price is $250,000. That is, you would be willing to sell it to the buyer for as low as
$250,000. During the negotiation, the buyer asks you, are you willing to sell your house for $250,000? And
you say to the buyer, no, absolutely not. Now, have you committed fraud?
we've decided that you are willing to sell the house for 250,000 and you're lying to the buyer when you say
you arent willing. You're bluffing in other words. So, is that fraud? Is that illegal? Take a look at the
definition of fraud again, and try to answer that question. Have you committed fraud when you lie about
your reservation price? The answer to that question, although it might be a close call, is that even though it
isn't a deliberate lie, it is not fraud in the legal sense of the word. Yes, you have made a false representation,
you've lied.
Okay, let's move on to fiduciary duty, high duty of trust and loyalty. In other words, when you're in a unique
situation with the other side. Let's say you're an employee negotiating something that affects your
employer. You owe the highest duty of trust and loyalty to your employer. An employee owes a fiduciary
duty to the company where he or she works.
here's the situation, again based loosely on an actual case. Let's say that you worked for a mining company
and your company has made a huge discovery of a valuable mineral in a remote area. You want to keep the
discovery quiet so that you can buy up mineral rights and real estate in this area. So, the discovery is
secret. On behalf of the company, you then enter into a contract with a local farmer where you basically
buy the farmers land which includes the mineral rights. So that's contract number one that you make in
April. In May, you make another contract on behalf of yourself. You buy stock in your company from
another shareholder. In June, your company finally decides to disclose the discovery and the stock price in
the company doubles. Any problems here with these two contracts that you've made? Contract number one,
you bought the farm from the farmer and the mineral rights from the farmer without disclosing the discovery
of the minerals. And number two, you bought stock in the company from another shareholder without
disclosing the discovery of the minerals. Although in certain cultures, certain countries, you might discover
there is a duty, but generally, no duty to disclose the discovery, this person is a stranger. Big problem with
the purchase of the stock, You are buying stock from one of the company owners. You owe a fiduciary
duty to the company. And to that owner and you have breached your fiduciary duty by buying the
stock without disclosure so this is a breach of fiduciary duty and this breach of fiduciary duty has been
included in legislation in most counties of the world and the legislation is known as insider trading
laws. Which you have done here in buying the stock is to violate insider trading laws. So those are
illustrations of how the concept of fiduciary duty works. The final law-based ethical standard is
unconscionability.
And Hooters initiated what they called an ADR program, Alternative Dispute Resolution program, which
basically said that if you work for Hooters, you have to sign a document stating that you agree not to sue
Hooters. Instead, if you have a claim against Hooters, the claim would go to arbitration rather than to the
courts. Well, a waitress at Hooters had a sexual harassment claim, she wanted to go to court, and she did
not want to go to arbitration. And so she filed her suit in court and challenged this arbitration
agreement. And the Court had to decide is this agreement unconscionable. Is it a case of a large corporation,
powerful corporation forcing terms on an employee who might have very little choice. And are those terms
fair. This is what the arbitration agreement provided. It provided first of all that employees in the arbitration
had to provide notice of claims, not Hooters. Hooters could select the arbitration panel. Presumably they
could select their own managers as arbitrators. Hooters could record the arbitration hearing. Employees
could not record the hearing. Hooters could cancel the agreement to arbitrate at any time, not
employees. Hooters could change the rules of the arbitration at any time, perhaps even in the middle of the
arbitration, not employees. Guess what the court decided? This arbitration agreement is unconscionable
and void in this decision was affirmed by a federal court of appeals.
we've decided that you are willing to sell the house for 250,000 and you're lying to the buyer when you say
you arent willing. You're bluffing in other words. So, is that fraud? Is that illegal? Take a look at the
definition of fraud again, and try to answer that question. Have you committed fraud when you lie about
your reservation price? The answer to that question, although it might be a close call, is that even though it
isn't a deliberate lie, it is not fraud in the legal sense of the word. Yes, you have made a false representation,
you've lied.

5.2 General Ethical Standards

Organizational Standard
Mentor: Someone you admire
Personal Standards
Gut Test
Newspaper Test
Family Test
Golden Rule