NEGOTIATION: FROM THEORY TO PRACTICE

Also by Jacques Rojol

COLLECTIVE BARGAINING: An Analysis and Case Study for Europe COMPORTEMENT ET ORGANISATION LABOUR LAW AND INDUSTRIAL RELATIONS IN FRANCE

Negotiation: From Theory to Practice

Jacques Rojot Professor of Management University of Paris I - Sorbonne

© Jacques Rojot 1991 Softcover reprint of the hardcover 1st edition 1991 978-0-333-52210-3 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WI P 9HE.

Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

First published 1991 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world

ISBN 978-1-349-11447-4 ISBN 978-1-349-11445-0 (eBook)DOI 10.1007/978-1-349-11445-0

A catalogue record for this book is available from the British Library.

10 9 8 7 6 5 4 3 03 02 01 00

For Elisabeth ROJOT-ANDRE and Camille ROJOT

Contents

List of Figures xiii

Acknowledgements xiv

Introduction

PART I: ANALYTICAL BACKGROUND

1 Understanding Conflict 9

Section I - The Traditional Theories 9

(a) The Mechanical Theories and their Assumptions 9 (b) Criticism of these Assumptions 11 (c) The Human Relations Theories 13

Section II - Organisations as a Network of Negotiations 15

(a) Basic Assumptions 15 1 - The Prevalence of conflict 15 2 - Conflict and negotiation 17 3 - Definition of negotiation 19

(b) Rejection of the Hypothesis of the 'One Best Way' 21 1 - Individuals are rational 21 2 - Bounded rationality 24 3 - Consequences of bounded rationality 27

1 The Parties, The Environment and Bargaining Power 31

Section I - The parties and their relationship 31 (a) The Degree of Permanence of the Relationship 32 (b) Attitudes of the Parties towards Each Other 33 (c) Individual and Collective Negotiations 34

1 - Most negotiations are collective 35 2 - Intra-party negotiations 37

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viii Contents

Section II - Analysis of the Environment 38

(a) The Parties Concerned 39 (b) Stakes 41 (c) Resources and Constraints 41 (d) Objectives 44 (e) Changes in Time 44

Section III - Bargaining Power 45

(a) Definitions of Bargaining Power 46 (b) Bargaining Power is the Essence of the Negotiation 47 (c) Characteristics of Bargaining Power 47

1 - Bargaining power is relative 47

A. Bargaining power is relative to the environment 47

B. Bargaining power is relative to the parties involved 48

C. Bargaining power is relative to the stakes of the parties 49

2 - Bargaining power is independently set 49

3 - Bargaining power is subjective 50

A. Perceptions of the environment differ between parties 50

B. Bargaining power issues from the opponent's perception 52

Section IV - The Source and Mechanics of Bargaining Power 53

(a) Sources 54 (b) Mechanism 54

1 - Conflict and co-operation: dependence 55 2 - Uncertainty 57

PART II THE PROCESS OF NEGOTIATION

3 Determinants of the Choice of a Negotiating Strategy 63

Section I - The Estimate of the Balance of Bargaining Power 63

Contents ix

Section II - Accounting for the Relationship between the Parties 65

(a) Consequences of the Degree of Permanence of the Relationship 65

(b) Consequences of the Attitudes of the Parties 67 (c) Consequences of Collective Negotiations 67

t - Intra-organisational negotiations 67 2 - The distinction party-negotiator and its

consequences 68

A. Expression of collective rationalities 68 B. Relationship between parties and relationship

between negotiators 69

Section III - Objectives 70

(a) Range of Contract 70 (b) Limits 73 (c) Goal and Resistance Point 74 (d) Costs of Conflict 76 (e) Objectives in Practice 78 (f) The Aspiration Effect and Its Limits 79 (g) Objectives and Opening Statements 81 (h) Classification of Objectives 82

Section IV - Negotiating Items 82

(a) Categories of Items 83 (b) Distributive and Integrative Items 87

1 - Conceptual differences 87 2 - Most items are mixed 90

4 The Selection of a Strategy 94

Section I - The Role of Strategy 94 Section II - The Determinants of Choice 96

(a) The Balance of Bargaining Power 97 (b) The Relationship and Attitudes between the Parties 97 (c) The Pressure of the Objectives 98 (d) The Nature of the Items tOO

Section III - The Field of Choice and the First Strategic Choice 101

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Section IV - The Second Strategic Choice - the Position 105

5 Negotiating Tactics 108

Section I - Procedural Rules 109

(a) Control Rules 109 (b) Information Rules III (c) Concession Rules 111 (d) The Linkage Principle 113

Section II - Use of the Procedural Rules 114

(a) Being under Pressure, Feeling One is Losing Control 114 (b) The Negotiations are Stuck 115 (c) The Close of the Deal 117

Section III - Specific Tactics 118

(a) Pace Tactics 120 (b) Information Tactics 123

1 - Collection 124 2 - Management 125

(c) People Tactics 128 (d) Pressure Tactics or Power Tactics 133

Section IV - Some Pressure Tactics Deserving Special Attention 139

(a) Increasing the Cost of Disagreeing with a Demand/Proposed Settlement 140

(b) Decreasing the Opponent's Costs of Agreeing 141 (c) Decreasing Our Costs of Disagreeing and of any

Subsequent Conflict 141 (d) Manipulating One's Own Costs 142 (e) Use of a Third Party 142

Section V - Tactics Towards co-operative Bargaining 143

Part III - THE INTERACTION OF THE NEGOTIATORS

6 Negotiating Styles 149

Section I - Definition 149

Contents xi

Section II - The Four Negotiating Styles 153

(a) The Tough Style 154 (b) The Warm Style 157 (c) The Numbers Style 160 (d) The Dealer Style 162

Section III - The Styles in Action 165

Section IV - Core and Adaptative Styles 171

7 The Phases or Negotiation 174

Section I - Planning 176

(a) Aexibility in Planning 176 (b) Collecting Information and Evaluating it 177 (c) Check-lists 178 (d) Preparing for the Initial Meeting 183

1 - Information 184 2 - Assumptions 185 3 - Concessions 186 4 - Contingency planning 187

Section II - The Three Phases of the Process 188

(a) Beginning 188 (b) Middle Phase 191 (c) End Phase 193

Section III - The Post-Negotiation Phase 195

8 The Tasks in Negotiating 197

Section I - Strategy Management 198 Section II - Communication 200

(a) The Importance of Communication 200 (b) The Process of Communication 200 (c) Communication and Persuasion 202 (d) Listening 203 (e) Signals 205 (f) Non-verbal Communication 206 (g) Recording 207

xii Contents

Section III - Management of the Meeting

(a) Management of the Negotiating Team (b) Management of Attitudes (c) Management of the Physical Setting

NOles and References

Index

207

208 212 216

217

225

List of Figures

1. Grid for the analysis of the environment 43 2. How two opposed negotiators see the same facts 51 3. The two possible cases for the initial contract range 71 4a. Cost of a strike to management 76 4b. Cost of a strike to employees 77 5. Distributive issue or zero-sum game 88 6. Purely integrative issue or variable-sum game 89 7. Mixed integrative item; one party gains more than the

other 91 8. Mixed integrative item; after a point the item becomes

distributive 92 9. A party's field of possible strategies 102

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Acknowledgements

It is a pleasure at this time to acknowledge the precious help of many colleagues and friends. I am particularly in debt to Professors Susan Schneider, Stephen Weiss and Hoyt Wheeler who have provided many greatly helpful comments on earlier drafts of this work. They will find their suggestions embodied in the text. I am also extremely grateful to Professor Sam Bacharach who encouraged me to publish what was at the time a very tentative manuscript.

It should also be noted that this book is the final outcome of a course in negotiation. This course has been given on numerous occasions and with varied spans of time over more than ten years. It has been attended by managers as well as students and it has taken place in universities, business schools and in-company programmes in several countries.

Like most books this one could not exist without much that has been written before on the subject. It borrows largely from two sources: research which has been published before, and negotiation folklore arising from discussions with students, participants and practitioners. Reference is made in the body of the text to the work of authors which has been used here and is drawn upon. For lack of space no reference can be made individually to all those who have attended the course or who have kindly agreed to share their experience with me but their contributions are gratefully remem­bered. Without them this book would not exist and they contributed generously.

Finally, it must be mentioned that some of the material presented, mostly in the last two parts, was developed and taught jointly by the author and Mr A. W. Gottschalk. The author regrets that Mr Gottschalk could not take part in the actual writing of the book. Without him also, this book would not exist. His contributions are explicitly mentioned in several places. Notably. I am in debt to him for the developments on tactics. in particular the classification of tactics in categories and subgroups, the developments on the four bargaining styles and the presentation of the assumptions, conces­sions and information under the 'box' model in Part III.

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