Learning objectives

• Define negotiation and explain the key

elements of negotiation process and the
distinct types of negotiation.
• Describe how people use negotiation to
manage the situations of interdependence.
• Explain how negotiation fits within the
broader prospective of processes for
managing conflict.
Negotiations occur for several reasons:

• To agree on how to share or divide a limited

resource
• To create something new that neither party
could attain on his or her own
• To resolve a problem or dispute between the
parties
 Approach to the Subject
• Difference between Bargaining and
Negotiation:
• Bargaining: often describes the competitive,
win-lose situation – Fixed pie
• Negotiation: refers to win-win situations –
Creating more value jointly than by ourselves
 Negotiation
• It refers to decision making situations in which
two or more interdependent parties attempt
to reach an agreement .
• We negotiate whenever we can achieve our
objectives single handedly.
 Characteristics
• 1. There are two or more parties
• 2. There is a conflict of needs and desires
• 3. Parties they think they can get a better deal
(than by simply accepting what the other side
offers them)
• 4. Parties expect a “give and take” process
 Characteristics of a Good Negotiation
Situation
• Parties search for agreement rather than:
--Fight openly - Capitulate (give in)
– Break off contact permanently (quit)
--Take their dispute to a third party (court) •
Successful negotiation involves: –
Management of tangibles (e.g., the price or the
terms of agreement)
Resolution of intangibles (the underlying
psychological motivations) • such as winning,
losing, saving face
 Managing interdependence
Independent parties : meet their own
needs without help of others

Dependent parties : rely on other for

what they need

Interdependent parties : featured by

interlocking goals.
 Interdependence
• In negotiation, parties need each other to achieve
their preferred outcomes or objectives …
• This mutual dependency is called
interdependence
• Interdependent goals are an important aspect of
negotiation
• Win-lose: I win, you lose
• Win-win: Opportunities for both parties to gain
• Interdependent parties are characterized by
interlocking goals
• – Having interdependent goals does not mean
that everyone wants or needs exactly the
same thing
• – A mix of convergent and conflicting goals
characterizes many interdependent
relationships
 Types of Interdependence Affect
Outcomes
• Interdependence and the situation shape
processes and outcomes
• Zero-sum or distributive – one winner

• Non-zero-sum or integrative – mutual gains

situation
 Distributive negotiation
• positional or hard-bargaining negotiation and attempts
to distribute a "fixed pie" of benefits.
• Distributive negotiation operates under zero-sum
conditions and implies that any gain one party makes is
at the expense of the other and vice versa.
• For this reason, distributive negotiation is also
sometimes called win-lose because of the assumption
that one person's gain is another person's loss.
Distributive negotiation examples include haggling
prices on an open market, including the negotiation of
the price of a car or a home.
 Integrative negotiation
• Interest-based, merit-based, or principled negotiation.
• It is a set of techniques that attempts to improve the
quality and likelihood of negotiated agreement by taking
advantage of the fact that different parties often value
various outcomes differently.
• While distributive negotiation assumes there is a fixed
amount of value (a "fixed pie") to be divided between the
parties, integrative negotiation attempts to create value in
the course of the negotiation ("expand the pie") by either
"compensating" loss of one item with gains from another
or by constructing or reframing the issues of the conflict in
such a way that both parties benefit ("win-win"
negotiation)
 Alternatives Shape Interdependence
• Evaluating interdependence depends heavily
on the alternatives to working together
• The desirability to work together is better for
outcomes
• Best available alternative: BATNA (acronym
for Best Alternative to a Negotiated Agreement)
 Mutual Adjustment and Concession
Making
• When one party agrees to make a change in
his/her position, a concession has been made
• Concessions restrict the range of options
• When a concession is made, the bargaining
range is further constrained
 Two Dilemmas in Mutual Adjustment
• Dilemma of honesty
– Concern about how much of the truth to tell
the other party
• Dilemma of trust
– Concern about how much negotiators should
believe what the other party tells them
Value Claiming and Value Creation
• Opportunities to “win” or share resources
– Claiming value: result of zero-sum or
distributive situations where the object is to
gain largest piece of resource
– Creating value: result of non-zero-sum or
integrative situation where object is to have
both parties do well
Value Claiming and Value Creation
• Most actual negotiations are a combination of
claiming and creating value processes
-More of one approach than the other
- Versatile in their use of both major strategic
approaches
– Negotiator perceptions of situations tend to
be biased toward seeing problems as more
distributive/ competitive than they really are
• Negotiator’s value differences include:
– Differences in interest
– Differences in judgments about the future
(perceptions)
– Differences in risk tolerance
– Differences in time preferences
 Conflict
• Conflict may be defined as a:
"sharp disagreement or opposition"
and includes…
"the perceived divergence of interest, or a
belief that the parties' current aspirations
cannot be achieved simultaneously"
 Levels of Conflict
• Intra-group Conflict
– Conflict is within a group
Among team and committee members, within
families, classes etc.
• Inter-group Conflict
– Conflict can occur between organizations,
warring nations, feuding families, or within
splintered, fragmented communities
The Dual Concerns Model
• Contending: Pedro and Jose work together in the
same department. Pedro wants to take Saturday
off to attend a family event. Jose wants to take
Saturday off to go to a sporting event. Both
people can’t have the day off. In each situation,
the men only care about their outcome (taking
Saturday off). They don’t care about the other’s
concerns. Each will try to convince their boss to
give him the day off. This is a situation
characterized by the expression, “I win and you
lose”.
• Yielding: There are many times, especially in long-term
relationships, when a person intentionally loses. This is
called yielding. Instead of, “I win, you lose”, the phrase for
yielding is, “I lose, you win.” It seems counterintuitive to
allow someone to win in a negotiation so let’s look at a
quick situation: Denise’s husband wants to go see an
action-packed movie. Denise doesn’t really care about the
type of movie they see and would prefer to have her
husband happy so she allows her husband to “win” the
negotiation. We often allow people to win in a negotiation
because we know that in the future something will come
up that we really care about and if we let the other person
win in this negotiation even, the next time it will be your
“turn” to win.
• Problem solving: The words, “win-win” capture
what occurs when people employ the problem
solving approach to conflict management. For
example, Zeluis and Hilga are trying to develop a
proposal for a client that both share. Instead of
being competitive, both want to act in the best
interests of their client. Both care about each
other’s outcomes, but also care about their own
outcomes. They will work together to resolve
conflicts.
• Inaction: There are times when you should
walk away from conflict. Inaction describes
the situation where your outcomes and the
other person’s outcomes are of no
importance. When the other person is acting
unethically, for example, you should walk
away.
• Compromising: If you have a moderate
concern for your outcomes as well as the
other’s, it is called compromising. For
example, if Jim wants to eat at a Mexican
restaurant and Dave at a Chinese restaurant,
they may find a compromise because both are
only moderately concerned about where they
eat.