negotiations and the political...

Willamette University Atkinson Graduate School of Management Certificate of Public Management Program

Negotiations and the

Political Process

“A Negotiation is Not so Much a Technical Problem-Solving Exercise so Much as it is a Political Process in

which The Parties Must Work with Each Other to Create an Agreement Acceptable to Both.”

William Ury

Negotiating and the Political Process Class Reader

Certificate of Public Management – Cohort VIII Willamette University

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Overview of the Win-Win Negotiations Process

* Class Objectives * Advantages of the Win-Win Approach vs. Traditional Positional Bargaining

* Negotiating Stages * What Influences the Process?

* Labor Negotiations, Business Negotiations, Personal Negotiations - The Same or Different? * International Negotiating Variables

* Personal Factors

All negotiations have similarities which are based on the simple premise that a negotiation is a continuing process, not a single event. Everything influences the process, from external politics and financial constraints to how the parties slept the night before. Accordingly, every negotiation is different and the negotiator must plan for, or at least be able to react to, changing circumstances and those differences. To study negotiations is to study a collection of what are normally referred to as the “soft” sciences. Those include communications, psychology, political science, sociology, marketing, cultural anthropology, and conflict resolution. Skilled negotiators do not need to be formally educated in these fields, but skilled negotiators must have the ability to understand people and to work with that understanding. The negotiator becomes salesman, persuader, influencer, educator, friend, colleague, and co-conspirator. For the negotiator to accomplish the above, the first step is for the negotiator to understand the motivations of the other party, and themselves. In the end, contract negotiations and internal negotiations represent two of the most difficult types of negotiations which we will encounter. They rank in difficulty with negotiations between family members or anyone involved in an intense personal relationship - for much the same reasons. Remember, as a general rule, if your action would cause you more trouble in your personal relationship, it will probably accomplish the same in a contract or internal negotiation.



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Contents Page Introduction 2 Table of Contents 3, 4

Section 1 – Getting to the Table 6 – 15 Skilled Negotiating Behavior 6 Planning 7 – 11 Perceptual Realities 7 Risk Assessment 7 BATNAs 8 Managing Your Baggage 9 Need Based Illusions 10 Establishing Settlement Ranges 11 - 15 Issues Grid 11 Prioritizing Issues 12 The ‘100 point’ method 13 Bargaining Zones 14 Planning for Effective Concessions 14, 15

Section 2 – At the Table 16 – 25 Common Mistakes 17, 18 The Endowment Effect 18 Anchoring 19 Motivation Check List 20, 21 Power 22 Persuasion 23, 24 Framing 24 Influencing Factors 25

Section 3 – International and Cultural Factors 26 – 35 Overview 27 Non-cultural Factors Influencing International Negotiations 27, 28 Cultural Influences 28 - 35 Hosftede 29, 30 The Chinese Value Survey 29, 30 Trompenaars 30, 31 Hall’s High & Low Context Cultural Framework 32 Gudykunst and Ting-Toomey 33 Kluckhohn and Strodbeck 34, 35



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Contents Page Section 4 – Back At the Table 36 - 41 Negotiating Stages 37 Setting Ground Rules 38 First Offers 38 Dealing with Ploys, Tactics and Dirty Tricks 38, 39 Managing Difficult People 40, 41

Section 5 – Difficult Negotiations 42 - 48 Breaking Deadlocks 43 Strategic Communication 44 Using Third Parties 45, 46

Appendix 47 - 55 Hofstede’s Cultural Rankings 48 Negotiations Planning Guide 49 Styles for Handling Interpersonal Conflict 50 Refocusing Questions 51 Negotiating Question Types – The “‘do’s and don’t” 52 Questions for Tough Situations 53



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Section 1

Skilled Behavior Patterns

Perceptions

Settlement Range

Risk Assessment

BATNAs

Need-Based Illusions

Issues Grids

‘100 Point’ Method

Effective Concessions



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Behaviors of Superior Negotiators During Prenegotiation Planning: 1. Considered more outcome options for the issues being discussed. 2. Spent more time looking for areas of common ground. 3. Thought more about the long-term consequences of different issues. 4. Prepared their goals around ranges rather than fixed points. 5. Did not form their plans in strict sequential order. During Face-to-Face Bargaining: 1. Made fewer immediate counterproposals. 2. Were less likely to describe their offers in glowingly positive terms. 3. Avoided defend-attack cycles. 4. Used behavioral labeling, except when disagreeing. 5. Asked more questions, especially to test understanding. 6. Summarized compactly the progress made in the negotiations. 7. Did not dilute their arguments by including weak reasons when they were trying to persuade the other party. During Post Negotiation Review: 1. Reserved time to review what they had learned from the negotiations.

PLANNING

Most negotiations courses, books and experts recommend extensive planning prior to entering a negotiation. In general, the ratio is a minimum of 5:1 planning to at table time. This ratio can grow very fast in more complex negotiations, and in the most successful negotiations, the ratio will also increase because you have not needed as much time at the table because your planning made it easy for the other party to sign the agreement. A word of warning though, NO PLAN IS FOOLPROOF. Be ready to modify or jettison you plan if you see it isn’t working.

The first planning step is to realize that everyone has in-built biases and these influence how everyone approaches and conducts negotiations. The key is to first see how much of an influence these biases have on your own planning and then adjust your planning accordingly.



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Perceptual Reality:

Negotiators need to look at how their own Perceptual Realities influence their planning. To put it simply, there is no one reality – there is only the individual’s perception of reality. Everyone acts on their own perception of reality. This perceptual bias has been created by the life-long experiences of each individual and since no two people can ever have identical experiences how any two people view a situation can also never be identical.

Example – you feel that you have been treated badly by another person, but your reaction is very different from another person. Given exactly the same set of circumstances, will feel that they have been treated well. Everyone has experienced this. Think of the times a friend or family member has told you about something that really upset them and your response was “Why is that bothering you? There is nothing wrong here”.

The problem in negotiations is that people treat others based on their own perceptions, will differ from yours!

Risk Assessment:

Before you even decide to sit down, you need to ask yourself four questions:

1. What is the best possible outcome of this negotiation if you sit down, negotiate and . . . Succeed?

1. What is the worst possible outcome of this negotiation if you sit down, negotiate and . . . Fail?

2. What is the best possible outcome of this negotiation if you don’t sit down and negotiate? 3. What is the worst possible outcome of this negotiation if you don’t sit down and negotiate? These four questions should help you decide if the risk of negotiating is too great to proceed or at least give you a good insight of the price you might pay for failure if you have no choice but to negotiate.



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Determining Your BATNA

Your BATNA should tell you what your options are if you can’t reach agreement. Before beginning you should always ask yourself “What is my –

B –

A –

T –

N –

A –

Your BATNA should help you figure out how much you need them, as opposed to the traditional assessment of how much they need you. Remember, you ALWAYS have a BATNA, it just may not be a good or strong BATNA.

Both risk assessment and BATNA check should be performed prior to your actual planning of your issues and ranges.

Thinking Rationally About Negotiations (Bazerman and Neale, 1992)

Remedies for traps negotiators set for themselves during planning. These questions were developed by Bazerman and Neale in Negotiating Rationally.

1. What will you do if you don’t reach agreement with the other party? (your BATNA)

2. What will they do if they fail to reach an agreement with you? (their BATNA)

3. What are the true issues at stake?

4. How important is each issue to you?

5. How important is each issue to them?

6. What is the likely bargaining zone?

7. Where do trade-offs exist?

8. What is the likely degree to which your perceptions and decision making processes are affected by (these) cognitive traps?

9. What is the likely degree to which the other party is affected by them?

Managing Your Baggage



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The first step is to correct the mistaken, commonly quoted statement that you should “leave your baggage at the door”. While this is good advice for helping the negotiator recognize that he/she has baggage, it is unrealistic. Baggage consists of all those things which make up our personalities. All our fears, biases, prejudices, and loves constitute our baggage. These are things which can, and do, influence our negotiation. Baggage cannot be left at the door, but it can be managed. But to be managed, it must be recognized. List 5 words which describe who you are: 1. 2. 3. 4. 5. List 5 things which really anger or upset you: 1. 2. 3. 4. 5. Discussion Notes

Need-Based Illusions



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Taylor and Brown in Illusion and Well-being identified three major “Need-Based Illusions”. People always distort their perceptions of situations to make themselves feel more competent and secure. This applies to everyone, including you. Need-based illusions make a situation seem better than it is and that influences your decision-making and negotiating. The three need-based illusions are listed below with a discussion of each.

The Illusion of Superiority – People believe that, on the average, they are more:

1. honest,

2. capable,

3. intelligent,

4. courteous,

and fair than others. Psychologist Rod Kramer also found that negotiators in particular are likely to see themselves as more:

1. flexible,

2. purposeful,

3. competent,

4. fair,

5. honest,

6. and cooperative

than their opponents across the bargaining table. Note how the needs-based illusions change for negotiations to match the beliefs of the personal qualities a negotiator should have and how those illusions negatively impact the planning and conduct of negotiations.

People give themselves more credit for their successes and take less responsibility for their own failures than unbiased observers would. But, people also hold other people more responsible when they fail, while not giving them credit when they succeed.

This is especially dangerous for negotiators.

The Illusion of Optimism – In general, people tend to underestimate their chances of experiencing “bad” future events and overestimate their chances of experiencing “good” future events.

The Illusion of Control - People believe they have significantly more control over outcomes than they really do. An example is that people are consistently willing to bet more money on races which have not yet been run than on races which have already happened, but in which the outcome is not known. They believe that their betting on the event will influence the outcome. Another example is how we have all found ourselves ‘leaning’ to help a baseball stay fair or a football curve through the uprights and the physical strain we experience when we are “willing” the event to happen the way we want.

Establishing Settlement a Range



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Settlement ranges are nothing new, but the creation of the range itself and movement within the range tend to be spontaneous and not well thought out. Every concession sends the other party a message, which must be considered when planning a range. Finally, having a range allows you to achieve more and allows you room to help the other party avoid the Winner’s Curse. This may not help you in this negotiation, but it will help you the next time you sit down with that person. Remember, win-win negotiations focus on both today’s and tomorrow’s negotiation with an eye to improving both.

Planning Tool:

Issues Grid

Range # 1 # 2 # 3 # 4 (etc.)

Maximum Supportable

Really Asking

Minimum Supportable

Deal Breaker

This grid is designed as a planning tool. It is essential that, if at all possible, you never negotiate over a single item. Single item bargaining is guaranteed to set in motion a positional or “fixed-pie” bargaining session. All four ranges are important as they allow you maximum flexibility during the negotiation and to allow you to set the highest possible goals for yourself during the negotiations.

Maximum Supportable:

Really Asking:

Minimum Supportable:

Deal Breaker:

Testing the Viability of Your Ranges – Using WIIFTs



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One of the things negotiators tend to know, and know very well, is WIIFM – “What’s In It For Me?” That is one of the things an issues grid will help you answer. But, along with knowing your own benefits, you need to look for the WIIFTs in your offer. Ask yourself “What’s In It For Them?” You should tailor your offer so that it includes WIIFTs for the other party. This technique will allow you to do several things BEFORE you sit down at the table.

1. It will allow you to realistically appraise your offer to determine if everything is for your benefit and for the detriment of the other party.

2. It will allow you to start thinking in terms of Framing your offer for the other party. 3. It will help you decide if you need to modify your own ranges. 4. It will start you thinking about them, and how to remove obstacles to getting agreement from in front of the other

person. Remember, if YOU can’t see any benefits in your offer for the other party, the odds are very good that the other party won’t see any either. In general, people operate in their own perceived best self-interest; your offer must appeal to that self-interest. It is the other parties’ perception that counts in getting agreement.

Prioritizing Your Issues

Now you’ve developed your BATNA, set your ranges and have begun to think about the other person’s needs, you need to set priorities for your issues. To do this you need to ask yourself several more questions.

1. Ask yourself what the other party will do if they do not reach an agreement with you (their BATNA).

2. Assess the real issues facing the negotiation (see Motivations Checklist).

3. Determine, in order of importance, the priorities of each of issue facing you. Always ask yourself “why” the issue is important and don’t ignore your own personal reasons for ranking the priorities.

4. Determine, in order of importance, the priorities of each issue facing the other party.



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Weighting Priorities: The “100 – point” method.

Although the odds of both parties having exactly the same ranking of issues (most important, 2nd most important . . . least important, etc.) are low, it can happen. But the odds of each party believing that each issue is exactly the same importance are extremely low. The way to avoid this problem and to help yourself determine just how important each issue is to you is to use the 100 point method.

Instead of rank ordering the issues, take 100 points and distribute those points across all of your issues according to how important each issue is to you. Example: issue #1 – 38 points; issue #2 – 21 points; issue #3 – 16 points; issue #4 – 10 points; etc. Looking at this example is easy to see that issue #1 is not just more important than issue #2, but that it is almost twice as important as issue #2.

This helps you see where you can make concessions that will cost you minimally while giving you the maximum return. If you can make a concession on a 10 point issue that will have the other party make a concession on a 38 point issue, you will have done very well.

But, this method also increases the chance of reaching an integrative agreement. Both parties to a negotiation will virtually never put exactly the same point value on the same issues.

The chart below uses the example above as a framework.

Issue #1 Issue #2 Issue #3 Issue #4 Issue #5 Issue #6

Party #1 38 points 21 points 16 points 10 points 8 points 7 points

Party #2 25 points 24 points 8 points 15 points 20 points 8points

Since Party #2 values issue #1 less than Party #1 he/she will be much more likely to make a concession on that issue than will Party #1. It would be possible for Party #1 to make a concession on issue #5 which would be a good value for Party #2 while getting Party #2 to make a concession on Issue #1. In this way BOTH parties get something of greater value while giving away something that they do not value as much as the other party does.

This method can also help you determine when you are being too rigid . . . holding on to your position so strongly that you lose more making too many concessions on other issues to get the concession you want on your issue. The rigidity most often occurs when the issue being discussed is price.

One of our clients held out to get 6% increase in price (it was their most important issue!). But when reviewing the negotiations with the client we determined that he had made concessions (delivery costs, service costs, and payment terms) worth 7.2% in order to get that 6%. In order to get the higher price, he had achieved a net loss of 1.2% on the overall contract. With rare exceptions, the net result is what is important . . . not the results on a single issue.

Because of the settlement ranges you have developed for each issue simply totaling the points for each issue will not give you an accurate reading of when this happens. But making use of the 100 point method as a check on how much your are giving up for a single issue is a helpful start.

Remember, if the same issue is of top priority to both parties, the odds of positional bargaining increase proportionately with just how important each party feels that issue is to them. Thus, you must plan for the potential confrontation and become more creative with your approach. Find ways to avoid the “Fixed-Pie”.



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Bargaining Zones

In the diagram below, A1 to A2 represents the range of solutions acceptable to Party A. A1 is the best possible outcome and A2 represents the minimum acceptable. B1 to B2 represents the range of solutions acceptable to Party B. B1 is the best possible outcome and B2 represents the minimum acceptable for Party B.

Establishing trade-offs:

Party A

A1 (max) A2 (min)

B2 (min) B1 (max)

Party B

Any solution must fall between A2 and B2. We all want to have the solution as close to our maximum as we can get it. The art is to do that while also helping the other party have the solution as close to their maximum. The tools described next will help you do just that.

Making Effective Concessions

Effective concessions are those which keep the process moving while minimizing the amount you give the other person. They involve a delicate balancing act between your need to maximize your outcome with the other person’s need to maximize their own outcome. They also tell the other person about you, your negotiating style, and your conviction to your position.



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Concession Guidelines

1. Don’t make the first concession on an important issue.

2. Never accept the other party’s first offer.

3. Don’t give credibility to an initial very high offer by making a counteroffer.

4. Make small concessions early in the process and on major issues, unless – you agree to deal with the most important issues first.

5. Make concessions slowly.

6. Defer making concessions on important members.

7. Make every concession seem important.

8. Link every concession you make to an action taken by the other party or to an action you are requesting they take.



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Section 2

Common Negotiating Mistakes Looking at The Other Person

Model of Persuasion Framing

Anchoring Power

Common Negotiating Mistakes



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All negotiators, no matter their experience level or expertise, make mistakes. The key to minimizing them is to recognize their own mistakes and thereby either avoid the mistake or correct the mistake as quickly as possible. What follows is a list of the most common mistakes.

Irrational Escalation of Commitment: The negotiator(s) remain committed to a position or course of action even though that commitment will have a negative impact on the negotiators ability to have a successful outcome to the negotiation. Fixed-Pie Thinking: The negotiator(s) believe that they are negotiating over a fixed or limited resource; the negotiators assume that one person must lose in order for the other to win. Because of this frame of reference the negotiator cannot see that there are other solutions possible and that both parties can win in a negotiation. Anchoring and Adjusting: See page 17 for a discussion. Poor Framing: See page 22 for a discussion. Misuse/Lack of Use of Information: Information is one of the biggest keys to negotiating success. The less information a negotiator has, the more likely he/she is to misestimate the other party’s position or to overestimate their own position. Ignoring Others Cognition: This is directly related to perceptual biases and occurs when the negotiator ignores or intentionally fails to take the other party’s view of events into account when negotiating. The Winner’s Curse: This occurs when a party encounters little or no resistance during a negotiation. The party got exactly what they wanted, but questions the result because of the feeling that the other party gave in too easily, leading to a feeling that the party who won – the WINNER – didn’t really win, or at least win as much as he/she could have. Overconfidence and Negotiating Behavior: Negotiators need to be confident, but overconfidence leads to failure. Overconfidence leads to mistakes. From overestimating the strength of your own position to underestimating the strength of the other party’s position; from missing opportunities to inadequate preparation; and from failing to look for new solutions to failing to look realistically at the other party’s BATNA, overconfidence spells trouble for the negotiator. Law of Small Numbers: This behavior is based on the negotiator’s using a very small sample size to estimate outcomes. The example would be the negotiator caught one person from a company lying during a negotiation and then believed that ALL people in that company lie and then adjusts his behavior to that extrapolation. Biased Causal Accounts: Here the way the negotiator makes assumptions about what caused a situation to occur influences the negotiation. The assumption of what caused an event to occur will influence the negotiators belief of what will resolve the problem. Reactive Devaluation: This occurs in almost every negotiation when a party automatically devalues the proposal made by the other party. This happens because the proposal was made by the other party and was therefore not as good of a proposal as the negotiator’s own proposal.



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Underestimating Emotions: Human beings react to emotion. Even those who reject the role of emotion in negotiations are in fact reacting emotionally because they are reacting to their own lack of comfort with emotions influencing behavior. Negotiations are based on conflict. You and I may agree on the end result of a negotiation, but we differ on how to reach that end result. Those differences create conflict → Conflict creates stress → Stress increases the level of emotion. Expect it and plan for it, both from the other party and yourself. INFLEXIBILITY! The Endowment Effect

Related to the Needs-Based Illusions is the endowment effect. When a seller considers selling an item, the buyer must be willing to pay at least the minimum amount the seller is willing to accept. For the buyer an object’s value is normally determined by an objective standard, such as market value. For the seller the object’s value, and thereby it’s price, often includes not only it’s market value, but also a value for his/her emotional attachment to it. This added emotional value is the endowment effect.

In negotiations the endowment effect can also express itself as an added value for “Pain and Suffering”. The value/price goes up in relation to how much anguish the party has suffered during the negotiation.

The problem is thus no longer limited to the current negotiations, but also extends to future negotiations with that party. “I lost that last negotiations. I want to get even this time, and I want them to suffer like I did.” Would be a common sentiment you would hear or feel yourself if the endowment effect had taken hold.

Current price Past loss Pain & Suffering

A + B + C = The Endowment Effect With the endowment effect influencing a future negotiation the above equation might look something like this:

Current price Past loss Pain & Suffering Starting Price

$100 + $15 + $5 = $120 Instead of the normal starting price of $100, all because the party felt they lost the last negotiations! Obviously, it is much harder to reach an agreement with a $120 starting price than a $100 starting price.



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Anchoring and Adjusting An anchor is a point, both real and psychological, which people use to begin their negotiations. An anchor can be created by market prices, competitive salaries, prior offers, etc. But it also includes personal motivations. An example would be a person seeking a raise because they know they are worth more than a colleague, even though the colleague is paid the same. They have no empirical data to support their belief, they don’t work any longer hours, they haven’t been with the organization any longer than the colleague, but they know that they should be paid more. That belief, when translated into a formal request or demand, becomes their anchor.

Anchors accomplish several things:

1. Help in setting your own goals.

2. Help in determining if your initial offer will attract the other party. 3. Help in gathering objective criteria for your negotiation. Anchors can cause the following problems;

1. Restrict the amount of information you gather and the depth of thinking you use to critically evaluate the other party’s offer before, during, and after the negotiation.

2. Restricts the range of options available if the anchors are not adjusted when faced with objective criteria. 3. Restricts offers from parties who feel your anchor is TOO HIGH! You are at your most susceptible to anchors early in the negotiation. The way to resolve this problem is to learn enough about disputed issues to recognize unrealistic anchors (yours and theirs), to remain flexible during the negotiation and to slow down the negotiations to look more closely at the issue.



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Motivation Check List Looking at the other person involves uncovering the possible motivations for that person’s actions. Below is a checklist of questions to ask yourself about the other person (from Resolving Municipal Disputes, Dr. David R. Stiebel, 1992). 1. What interests prevent the other person from doing what you want? 2. Suppose you satisfied the person’s current demand. Would the problem disappear? If not, what other issues would the person raise? And if you resolved them, what matters would arise next? Keep probing to uncover the hidden agenda.

QuickCheck of Possible Motivations 1. Ego – People enjoy feeling proud of themselves, which leads to the following four questions:

a. How does the person’s current behavior enable them to feel proud?

2. Does the person enjoy recognition or praise? From whom?

a. Does the person’s current behavior enhance the person’s status?

b. Does your proposal enable the person to feel proud? How could you change your proposal to maintain or enhance the person’s self-esteem?

3. Control – The need for control is directly related to the level of insecurity an individual is feeling, the more

insecure, the greater the need for control. People need control. Does the person feel in control now? Is the person afraid to let someone else be in charge?

4. Security – This is related to risk taking. Does the person feel safe taking the present course of action? Remember,

even if the other person has shown a tendency to take risks in the past, it does not mean that they are willing to take the risk implied by your proposal.

The best thing to do is look to that person’s past behavior to see if they have taken a risk similar to the one you are proposing. Even if they have, what was the result? If the risk ended badly, the odds that they will take the risk again are greatly diminished.

5. Key Constituents - Ask yourself: Who are the key constituents the other person must serve? The answer to that question will tell you a lot about the other person’s priorities. Then ask yourself the following two questions:

6. Among those key constituents,

a. What could the person’s worst critic say? b. What could the strongest supporter say? The key here is that the person would probably not support your proposal if their strongest supporter came out against your proposal. But they would also be very suspicious if their worst critic came out in favor of your proposal.

7. Public Image – Is the person trying to maintain a public image? For which audience(s)? How would the person’s image be affected if they did what you want?



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8. Perceptions – Again, people act on perceptions. So ask yourself: What perception would lead the person to intelligently act this way? How does the person see you or your organization?

9. Principles – Does the person see his or her behavior as morally correct? Is the person acting in accordance with

some professional standard? What principles does the other person respect? Does your proposal support those standards?

Remember, people hold their principles very deeply – getting someone to go against their principles is extremely difficult!

10. Precedent – Is the person acting consistently with their previous statements or policy? Is the person now trying to

act consistent with those precedents? Is the person afraid of doing something unprecedented? Can you find a precedent for the person to do what you want?

11. Finances – Most often we think about finances in terms of: Is the person worried about having enough money to

meet this week’s payroll? Or is the person looking to make the most money possible over the longest period of time?

But, equally important is the question: Does your proposal jeopardize the other person’s personal finances or promotability? Of the two types of finance-based questions the personal finance issues are probably the hardest to overcome, both because they are more hidden AND because they mean more to the other negotiator than the organization’s financial situation . . . unless the organization’s financial situation will affect the other negotiator personally. This means that there is more room for movement and concessions in the organizational financial arena than in the personal financial arena.

12. Commitments – Does the person feel obligated to someone else? Or, does the person lack the authority to make a

commitment? 13. Other Options – Maybe the person is trying for a better deal with someone else. Maybe they want to keep other

options open. Maybe you can learn about those options and make your proposal better. A word of warning though. maybe the other person is using you to leverage a better price or agreement from another party. After they get a better deal from you, they then use your offer to leverage a better deal from the other party, then back to you, etc. The only way to stop this is to make a ‘last, best and final’ offer, and stick to it! If they leave, they leave. In the future they will know that you will follow through on your word.

14. Reflex - This is probably the most common reason for people’s actions. There is no thought involved, they simply

react. Ask yourself: Is the person responding reflexively, out of habit? Testing Your Assumptions Once you think you know what’s motivating the other person, it’s time to check out your assumptions. 1. Talk confidentially to people who know the other person and whom you can trust. 2. Consult people outside the situation who would tend to see events from the other person’s perspective.

3. Talk to people who know you to see if your own biases are influencing your assumptions.

ALWAYS remind yourself that your hypotheses may be wrong and continue to watch for evidence which would disconfirm them. The more accurate your information about the other person, the greater your ability to influence them.



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Power Definition – Power: The ability to get someone else to do something that they would not have done without your involvement. Restrictions on Power: These are based on perception . . . the perception of the other party! If you think you have power and the other person agrees, you have power. If you don’t think you have power and the other person thinks you do, you do have power because they will act as if you really do have power. However, if you think you have power and the other person does not think you have it, you have less power than you thought you did because they will act as if you do not have power.

Roger Fisher, co-author of Getting to Yes (1981) acknowledged that that book dealt very ineffectively with the issue of power. He addressed that oversight several years later in an article for the Journal of the American Psychological Association (see appendix for the full article). He identified several types of negotiating power and then discussed how and when to use them. They are: 1. The power of Skill and Knowledge – Skill and knowledge are base sources of power. Both allow you to avoid

mistakes and to tailor your proposals so as to maximize your own outcome while also not unnecessarily irritating the other party. The more you know, the better your results.

2. The power of a Strong BATNA – As discussed before, a strong BATNA give you many more options should you not

get an agreement with the other party. Basically, you have the power to walk away from a negotiation with one party to try to get a better agreement with another party.

3. The power of Commitment – This power is based on how firmly committed a negotiator is to a course of action . . .

either positive or negative. The more firmly committed, the more power because the negotiator will be less easily swayed from a course of action.

4. The power of an Elegant Solution – This is a unique and relatively rare source of power. It is based on the power of

the solutions its self . . . not the negotiator’s positions. The solution is so unique, novel or innovative, so perfect for the problem at hand that everyone focuses on HOW to make the Elegant Solution work, not on the differences between the parties.

5. The power of a Good Relationship – A good relationship allows trust to develop. Trust makes conflict lessen. If

you do not trust the other negotiator, the negotiations will proceed much more slowly as you do everything possible to make sure that any agreement with the other party will not cause you damage. With a good relationship, trust allows the process to move along more smoothly.

6. The power of Legitimacy – This is the power that is granted by a formal position in an organization, laws, or

delegated authority. Unfortunately, this power is the most often resorted to and misused. Remember, it may be necessary to use this power, but once you use it the other party will automatically perceive any agreement as being a loss and you will subsequently face the endowment effect in any future negotiations.



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Persuading the Other Person

People traditionally enter negotiations and present their positions, before they have even heard the other party’s issues. You know your position and believe in it but, because it is being presented by you, the other party, the person across the table from will not trust that your offer is in their own best self interest. You may have the best plan in the world, but they will still not trust it. Accordingly, your are limited to trying to elicit a response from them. A response that is:

1. of greatest benefit to you and

2. is realistic for them to give.

Your goal is not to present your position, but to negotiate the issues. If you present your position, they will present their own position in response and you have now made the negotiation a battle of wills with a winner and a loser. This model should help you avoid that trap.

Model of Persuasion:

Always design your approach to include all three of the following appeals.

EMOTION -- Opens minds

LOGIC -- Justifies the emotional decision

APPEAL TO VALUES -- Give Them the WIIFTs

Emotion really does open the mind, or close it. Like many things, it is a necessary element, but too much emotion will close down the negotiation just as fast as showing no emotion will. A person approaching you to sell you a product must show confidence and enthusiasm for the product or you will wonder what is wrong with it. Overselling does the same thing. If the other party is not emotionally involved, is bored, they will no longer work with you to reach agreement. Your clue indicating a lack of emotional involvement will be a lack of energy, yours or theirs, at the table. Watch for it and correct it.

Logic is based on the facts, the rational decision-making process where the other party looks at the merits of the idea or settlement and applies them to their own situation. Logic is the core of persuasion. Emotion opens the mind, but logic is used to justify the position being taken.

Appeal to Values is based on the “Dominant Receptivity Mode” which controls our most basic and deeply held value systems. These are the predominant values the person holds. Your approach must occur within this values mode. An example would be trying to convince a new college graduate to take the action you wish because it defends the status quo, because “that’s the way we’ve always done it”.

To translate the above concepts into everyday action use the following:

State a Claim – a claim is an opinion unsubstantiated by fact. Claims are used for an emotional appeal and to stimulate interest in the listener. Example: “If I could increase your monthly take-home pay by 7% would you be interested?” State a Fact – a fact is information that can be verified by independent sources, or proven through empirical investigation. The facts given must back up the claim you have just made and must refer directly to that claim. Example: “I have studies with me that show that investing in IRS approved 403(b) plans reduces the average earners tax load by 7%”. Assign a Meaning – the meaning is how people relate to the information they are given. Meanings are based on experience, thus the meaning you give must be framed in such a way as to maximize the value of your proposal to that



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individual . . . the WIIFT. The individual should be given both the meaning for the organization they are representing and the meaning to them personally. Example: “What this means is that you will be building a tax-deferred retirement savings plan for the future and you will offset the contribution you are making with a reduction in your taxes. In essence, the government will be contributing a to your retirement as those lower taxes go straight into your 403(b).” Framing Framing uses of all of the above: persuasion, motivations, influencing, etc. and is based on the idea that all approaches to the other party must be put forth in the most positive manner possible and with the most meaning possible to the other person.

Consider the following:

The U.S. is preparing for the outbreak of an unusual disease that is expected to kill six hundred people. Two alternative programs are being considered. Which would you favor?

You are presented with two choices: 1. If program A is adopted, two hundred people will be saved.

2. If program B is adopted, there is a one-third probability that all will be saved and a two- thirds probability that none will be saved. Which program would you choose? (write the answer in the space below)

__________________

You are now presented with two other choices: 1. If program A is adopted, four hundred people will die.

2. If program B is adopted, there is a one-third probability that no one will die and a two- thirds probability that all will die. Which program would you choose? (write the answer in the space below)

__________________

Influencing Factors



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The following is a list of the factors which you can use to help influence the other party. Remember, you must actually mean it when you use these influencing factors.

1. Identification – you approach the other person and explain your proposal based on the idea that you or your situation are the same as the other party is experiencing. “I used to be a buyer too; I understand what you’re going through.”

2. Uniqueness – the proposal is explained to the other person in terms of how unique it is. “No one else has this situation. It is so unusual that we have designed this solution to resolve your problems.”

3. Humanism – the proposal is explained in terms of friendship and trust between the parties.

4. Ethics – the proposal is explained in terms of its being the ethical thing to do and its consistency with ethical standards.

5. Statistics – you use statistic to support your proposal.

6. Specifics – you use the specific terms of your proposal and how those terms resolve the problems the other party has to influence the other person.

7. Testimonials – you use statements from former or current clients or customers to reinforce your reliability or the quality of product.

8. Scope – you make the scope of the agreement either broader or narrower to help meet the needs of the other party and to reduce risk. “Why don’t we make this a 1 year contract instead of the normal 2-year contract?” Or, “Why don’t we try this for a month and then come back and see how it is working and modify things if we need to?”

The final two influencing factors are the most powerful and important. If they are missing from any negotiation, the negotiation will be much more difficult.

9. Sincerity – if the other party does not feel you are sincere, they will resist your proposals. You must mean what you say.

10. Credibility – once you’ve said something, you must follow through and ACT on it. If you are not credible, you have lost your ability to negotiate.



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Section 3

International Negotiations

& Culture-Based Influences:

• Non-Cultural Cross-Border Negotiating Differences

• Hostede’s Dimensions on Cultural Values

• Kluckhohn & Strodbeck’s Variations on Values Orientations

• Chinese Value Survey

• Trompenaars’Seven Dimensions of Culture

• Hall’s High and Low Context Cultural Framework

• Verbal and Nonverbal Communication Styles



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Culture and International Negotiations – An Overview: Research conducted since the early 1980s has looked at Japanese, Brazilian, German, American, British and French Canadian, Mexican, Chinese, Russian, Saudi Arabian and Italian negotiators and how they negotiate both within their own cultures (intercultural negotiations) and in cross-cultural negotiations. The research seems to confirm that the processes negotiators used was different between cultures. But the research also showed that negotiators consistently obtain the same results, both price and satisfaction with the negotiation, when negotiating within their own cultures. In other words, the negotiating results are the same when an American negotiates with another American; an Italian negotiates with another Italian, a Brazilian with a Brazilian, etc. But, there do appear to be differences with the results of cross-cultural negotiations. Research done by Alder and Graham (1989) found that Japanese and English-Canadian negotiators received lower profit levels when they negotiated cross-culturally than when they negotiated intercultural. However American and French-Canadian negotiators negotiated the same average outcomes in cross-cultural and intercultural negotiations. Two differences Alder and Graham found were that French-Canadian negotiators used more cooperative strategies in cross-cultural negotiations than in intercultural negotiations and those American negotiators reported higher levels of satisfaction with their cross-cultural negotiations than their intercultural negotiations. The biggest finding from all of the research is that there are many ways to negotiate agreements that are, on average, worth the same value but that the negotiator must employ the process that ‘fits’ the culture they are in. Further, the culture of the negotiator appears to be an important predictor of the negotiating process that will occur and how negotiation strategies will influence negotiation outcomes in different cultures. Non-Cultural Cross-Border Negotiating Differences In addition to culture, Salacuse (1988) has identified 5 non-cultural factors that make cross-border negotiations more challenging than domestic negotiations. These factors are: 1. Political and Legal Pluralism – the differences between political and legal systems creates a major

challenge for negotiators who must craft agreements that meet BOTH standards, not just their own. 2. International Economic Factors – The fluctuation of currencies, which currency to use, etc. Research

shows that the risk is typically greater for the party who must pay in the other country’s currency and the less stable the currency, the greater the risk for both parties.

3. Foreign Governments and Bureaucracies – The differences in the extent to which a government regulates can be a major influence on the negotiation. In the U.S. the government tends to not become in individual negotiations. This allows the decision of whether or not to negotiate to be based on business reasons only. However, political considerations must be included in the negotiations. Questions such as: Will the negotiations affect the government treasury? How might they influence social conditions? May influence the negotiations more heavily than what ‘Western’ business people would consider ‘legitimate’ business reasons.

4. Instability – Even though the world continues to change at a rapid pace business likes predictability. Instability takes many forms: political, monetary, resources, shifts in government policy, etc. These



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changes create a challenge that the negotiator must offset within the terms and conditions of the contract. Salacuse even suggests the increased use of insurance policies and ‘easy cancellation’ clauses to overcome this problem.

5. Ideology – Western negotiators generally share a common ideology of individualism and capitalism. This includes a strong belief in individual rights, the superiority of private investment and the importance of making a profit in business.

6. Culture – this influences everything above. Cultural Influences Graham (1969) conducted a series of studies on American, Japanese and Brazilian negotiators and found several prominent verbal and non-verbal behavioral differences.

Time frame for all behaviors listed as number of times per 30 minutes Behaviors Brazilian Japanese American Said “No” 83 times 5 times 9 times Silence - longer than 10 seconds 0 times 5 times 3.5 times Interrupt the other person 2.5 to 3 times more often than U.S. and Japanese Touched other party * 5 times 0 times 0 times * except for initial handshake The important point to consider is not that there are behavioral differences, but why the differences occur. The following discussions will help give you tools to determine the “WHYS”.



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Hofstede’s Dimensions of Cultural Values Dutch researcher Gert Hofstede conducted a research program in over 40 nations, using 116,000 employees on work-related values and attitudes (1980). These values and attitudes directly relate to negotiating behavior. See appendix for Hofstede’s Cultural Values ranking of various nations. The four dimensions he identified are: Individualism vs. Collectivism – in individualistic countries people have concern for themselves and their families, rather than un-related others. The individual is important and each person’s rights are valued. Collectivist cultures value the overall good of the group. Individuals are expected to subordinate their individual interests and needs for the benefit of the group. Power Distance – this is based on the extent to which less powerful members of organizations (or societies) accept that power is unequally distributed. A small power distance society is less comfortable with power distances such as social class distinction and organizational ranking. In a large power distance society differences among people with different ranks are accepted, and an individual’s societal and organizational position influence how he acts and how others treat him. Uncertainty Avoidance – indicates the preferred amount of structure and ranges from strong to weak. It is directly related to risk aversion. People in strong Uncertainty Avoidance cultures prefer explicit rules of behavior and tend to have strict laws with heavy penalties for violating behavioral or legal codes. Accordingly, they tend to avoid risk. People from weak Uncertainty Avoidance cultures are more comfortable without structure and will be less risk averse. Masculinity/Femininity – is not used to describe gender-based behavior, but is associated with the values a culture places on things like success, money, assertiveness, and competition (masculine culture) vs. personal relationships, care for others, quality of life and service (feminine culture). Masculine cultures encourage independent decision-making. Feminine cultures value cooperation, a friendly atmosphere and group decision making.

THE CHINESE VALUE SURVEY

Hofstede's study presents a Western view of values. Some researchers thought that his European values influenced his findings and theory. To prevent Western values from influencing the study, Chinese social scientists developed the Chinese Value Survey (CVS) in Chinese (Chinese Culture Connection 1987), then translated it into other languages and administered it to students in 23 different countries on five continents. Twenty of the countries were also in Hofstede's study. Four dimensions of culture emerged from the study, three similar to Hofstede's dimensions of power distance, individualism/collectivism, and masculinity/femininity. The fourth dimension, however, represents Chinese values related to Confucianism. Originally called Confucian work dynamism, it was eventually labeled long-term/short-term orientation by Hofstede. Cultures high on Confucian work dynamism or long-term oriented, have greater concern with the future and value thrift and persistence. Such societies consider how their current actions could influence future generations. In countries low in Confucian work dynamism, or short-term oriented, values are toward the past and present. There is respect for tradition and fulfilling social obligations is a concern, but the here and now is most important.



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Hofstede’s Cultural Dimension Scores for Ten Countries – Including the Chinese Value Survey Dimension PD ID MA UA LT USA 40L 91H 62H 46L 29L Germany 35L 67H 66H 65M 31M Japan 54M 46M 95H 92H 80H France 68H 71H 43M 86H 30*L Netherlands 38L 80H 14L 53M 44M Hong Kong 68H 25L 57H 29L 96H Indonesia 78H 14L 46M 48L 25*L West Africa 77H 20L 46M 54M 16L Russia 95*H 50*M 40*L 90*H 10*L China 80*H 20*L 50*M 60*M II8H

PD= Power Distance; ID=Individualism; MA=Masculinity: UA= Uncertainty Avoidance;

LT=Long-Term Orientation.

H=top third. M=medium third. L=bottom third (among 53 countries and regions for the first four dimensions: among 23 countries for the fifth)

*estimated

Source: Hofstede. G. (1993). "Cultural Constraints in Management Theories," Academy of Management Executive, 7.

TROMPENAARS' SEVEN DIMENSIONS OF CULTURE Forts Trompenaars, analyzed the questionnaire responses of approximately 15,000 employees representing 47 national cultures. Trompenaars describes national cultural differences using seven dimensions. Five dimensions are about how people relate to others, including universalism versus particularism, individualism versus collectivism, neutral versus affective, specific versus diffuse, and achievement versus ascription. The sixth dimension is time orientation: past, present, or future and sequential or synchronous. The final dimension is relationship to nature: internal- or external-oriented. Universalism Versus Particularism In a universal culture, people believe the definition of goodness or truth applies to every situation. Judgments are made without regard to circumstance. A particularist society is more contingency oriented, believing circumstances and relationships are more important in deciding what is right or good. Business contracts illustrate the differences between these two types. In a universalist culture lawyers are an essential part of most negotiations because they write the contract defining a business relationship. Reliance is on the contract, and the parties refer to it when disputes arise. In a particularist country a legal contract carries very little weight. The situation and the particular individuals involved define the relationship. The contract is a starting point, and the parties' behavior toward each other evolves as circumstances develop. Individualism Versus Collectivism This dimension is similar to Hofstede's. In an individualist society, the focus is on self. The society structures laws and rules to preserve the rights of the individual and to allow individual development and achievement. A collectivist society emphasizes group membership. Belonging and contributing to a group is an essential part of the culture. However, within different countries; the definition of "group" varies



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Neutral versus Affective Relationships Expression of emotions is the focus of the neutral versus affective relationships dimension. In affective cultures, expressing emotions is natural and appropriate. Not to express these may be considered dishonest. In contrast neutral cultures try to control emotion so as not to interfere with judgement. Specific versus Diffuse Relationships This dimension focuses on how a culture treats privacy and access to privacy. In specific countries, people usually have large public spaces and relatively smaller private spaces. There is a separation between the public and private spaces, and the private space tends to remain more private, with access to it limited. In diffuse cultures, the relationship of the public and private spaces is the reverse. The public space is relatively smaller and more carefully guarded than the private space Achievement versus Ascription The achievement versus ascription dimension describes how people in a culture gain power and status. An achievement society emphasizes attainment of position and influence. Competence determines who occupies a particular position. People in more powerful positions hold them is because of their skills, knowledge, and talents. Members of ascriptive cultures believe people are born into influence. Those in power naturally have the right to be there because of their personal characteristics. Relationship to Time This looks at two aspects of a culture's relationship to time. The first is a country's focus on the past, present, or future and how these relate to each other. In a past-oriented society, tradition and history are important. In Ethiopia, for example, there is respect for great historical events and well-known people. A present-oriented country focuses on what is going on now, including activities and relationships. A future-oriented culture uses the past and present to gain future advantage. The second aspect of the time dimension is sequential versus synchronic. People in sequential cultures do one thing at a time, make appointments and arrive on time, and generally stick to schedules. In synchronic countries, people do several activities simultaneously, the time for appointments is approximate; and interpersonal relationships are more important than schedules. Relationship to Nature Trompenaars' final dimension is relationship to nature. Internal-oriented cultures believe nature is controllable. The individual, group or organization is in control of a situation. External-oriented societies are more flexible. They try to harmonize with the environment and have more focus on the "other."



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HALL'S HIGH- AND LOW-CONTEXT CULTURAL FRAMEWORK Edward T. Hall (1976), an American anthropologist, uses the concept of context to explain differences in communication styles among cultures. "Context is the information that surrounds an event; it is inextricably bound up with the meaning of that event" (Hall and Hall 1995, p. 64). Cultures can be categorized on a scale from high to low-context. "A high-context (HC) communication or message is one in which most of the information is either in the physical context or internalized in the person; while very little is in the coded, explicit. transmitted part of the message. A low-context (LC) communication is just. the opposite; i.e., the mass of the information is vested in the explicit code" (Hall 1976, p. 79). In a high-context culture family, friends, coworkers, and clients have close personal relationships and large information networks. Because of this, people in high-context cultures know a lot about, others within their networks; they do not. require extensive background information. People in low context cultures separate their lives into different aspects such as work and personal lives. Therefore, when interacting with others, they need to receive more detailed information. In a high-context culture; people do not rely on language alone for communication. Tone of voice, timing, facial expression, and behaving in ways considered acceptable in the society are major means of expression. A low-context culture depends on the use of words to convey meaning. Expressing complete, accurate meaning through appropriate word choice in important.

Examples of High- and Low-Context Countries

High-Context Low-Context China Australia

Egypt Canada France Denmark Italy England Japan Finland Lebanon Germany Saudi Arabia Norway Spain Switzerland Syria United States



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Verbal Communication Styles

Gudykunst and Ting-Toomey identified four different verbal communication styles. These are: Direct vs. Indirect; Elaborate vs. Succinct; Personal vs. Contextual; and Instrumental vs. Affective. The following chart elaborates on these four styles and the ranges within them, including Hofstede’s Cultural Dimensions and Hall’s Cultural Framework (from International Organizational Behavior, Francesco and Gold).

Verbal Style Variation Major Characteristic Cultures Where Found Direct vs. Indirect Direct Message is more Explicit, individualist, low-context Indirect Message is more Implicit Collective, high-context Elaborate vs. Succinct Elaborate Quantity of talk is relatively high, Moderate Uncertainty Avoidance, high context Exacting Quantity of talk is moderate,

Low Uncertainty Avoidance, Low-context Succinct Quantity of talk is relatively low, High Uncertainty Avoidance, High-context Personal vs. Contextual Personal Focus is on speaker, “personhood”, Low power-distance Individualistic, low-context

Contextual Focus is on role of the speaker, role relationships High power-distance, collective, high-context

Instrumental vs. Affective Instrumental Language is goal-oriented, Individualistic, low-context Sender focused

Affective Language is process-oriented Collective, high-context Receiver focused



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KLUCKHOHN AND STRODTBECK'S VARIATIONS IN VALUES ORIENTATIONS American anthropologists Kluckhohn and Strodtbeck (1961) developed a framework of six dimensions to describe the values orientation of a culture. The values orientations represent how different societies cope with various issues or problems. In the Kluckhohn and Strodtbeck framework, a culture may favor one or more of the variations or approaches associated with a particular values orientation. In the following discussion, each of Kluckhohn and Strodtbeck's dimensions is identified along with how it influences organizational behavior. Relation to Nature Kluckhohn and Strodtbeck consider a culture to cope with its relation to nature through subjugation to it, harmony with it, or mastery of it. "For example, the Inuit Eskimo culture of Canada, Russia, and the United States has a subjugation orientation. The Inuit see whatever happens to them as inevitable. They accept nature as it is rather than try to change it. A culture that is in harmony with nature, such as the Chinese, attempts to orient behavior to coexist with nature. Feng shui, "wind water," is a good example of this. The Chinese believe artificial aspects of the environment must be in harmony with nature; the orientation and layout of buildings such as homes and offices affect the lives of those who live and work in them. In selecting or building new office space, a feng shui expert or geomancer's advice often helps assess the feng shui of the location. When the feng shui, is good, business should prosper. Table 2-2 presents examples of some of the basic principles of feng shui. Mastery cultures-North America and Western Europe are examples – attempt to change aspects of the environment through technology when necessary or desirable. Land reclamation, air-conditioned buildings, chemical fertilizer, and im-munization against disease reflect this orientation. For example, after the discovery of oil at Prudhoe Bay in Alaska, engineers did not consider the severe climactic conditions an insurmountable barrier to extracting it. Some cultures-Canadian society is one example-demonstrate an almost equal preference for harmony and mastery in relation to nature. Canadians accept the harsh winter weather of their geographic location but at the same time attempt to limit its deleterious effects through a wide array of modern techniques. Time Orientation This dimension is a society's focus on the past, present, or future. A past orientation emphasizes tradition and using time-honored approaches. For example, Italians respect and value craftsmanship based on years of traditional practice, and an Italian organization treasures time-tested ways of making a product. A present-oriented culture generally focuses on the short-term. For example, in the United States businesses evaluate employee performance yearly, managers look at financial results quarterly, and people are highly conscious of time. A future-oriented society emphasizes the long term. For example, some large Japanese corporations hire employees for life and consider profitability of a venture only after several years of operation. Similarly, the Japanese often do things to benefit future generations. Basic Human Nature Basic human nature assesses a culture's belief in people as good, evil, or neutral/mixed. A society seeing good in people is basically a trusting one. For example, in Japan executives often trust each other enough to make only verbal agreements for major business deals. In a culture that believes that people are basically evil, there is a lack of trust. In making a business deal, a New Yorker, who often exhibits skepticism, is careful to guard against being cheated. He might have an attorney examine the terms of a contract and insist that every detail be in writing. A society with a mixed or neutral orientation believes people are basically good, however, in some situations they do behave in an evil manner; therefore, it is important to be cautious to protect yourself. Many pants of Canada display this ambivalence; there, a legal contract accompanies verbal business arrangements. Activity Orientation



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A culture's activity orientation is either doing, being, or containing/controlling. In a doing culture, emphasis is on action, achievement, and working. For example, in the United States, people are hard working and want recognition for their accomplishments. Motivation is through increases in salary, promotions, and other forms of recognition. A being country emphasizes enjoying life and working for the moment; people work to live rather than live to work. For example, in Mexico, businesspeople socialize and enjoy each other's company before discussing their business. Finally, a containing/controlling culture emphasizes rationality and logic. People restrain their desires to try to achieve a mind/body balance. As an example; the French approach to decision making emphasizes pragmatism, logic, and rationality. Relationships Among People Relationships among people can be individualistic, group, or hierarchical. People in individualistic societies define themselves through personal characteristics and achievements. For example, in the United States employees receive rewards for their own accomplishments; individuals have their own work goals, and managers often encourage competition. In a group-oriented society, a positive relationship to the collective is important. People relate to and take responsibility for members of the family or community. Emphasis is on harmony, unity, and loyalty. For example, the Japanese usually base organizational decisions on consensus; working from the lower levels and moving upward. Hierarchical societies also value group relationships, but emphasize the relative ranking of groups within an organization or society as a whole, making them more cuss conscious than groin, societies. For example; in India, as a result of the caste system, birth largely determines position in society. and people from certain groups are more likely to have higher- or lower-prestige Jobs. Space Orientation The space orientation dimension indicates how people relate to the ownership of space. Is it public, private, or mixed? In a public society, space belongs to all. The desks of both employees and their supervisor are in the same large to things room with no partitions. In a society that values privacy employees consider it important to have their own space. Because privacy is highly valued, higher-status members of an organization often have larger, more private space. Finally, in a mixed society, views on space fall somewhere in the middle; in people a combination of public and private spaces. For example lower-level employees in a company may share a common work area while managers have private offices. Kluckhohn and Strodtbeck's Variations in Values Orientations Values Orientation Variations Relation to Nature Subjugation Harmony Mastery Time Orientation Past Present Future Basic Human Nature Evil Neutral/Mixed Good Activity Orientation Being Containing/Controlling Doing Relationships among People Individual Group-Oriented Hierarchical Space Orientation Private Mixed Public Source: Table adapted from "Kluckhohn and Strodbeck’s Variations in Values Orientations” by H.W. Lane, J.J. DiStefano and M.L. Maznevski from International Management Behavior, 3e, 1997.



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Section 4

Back At the Table

First Offer Dilemma Stages of Negotiation

Ploys, Tactics and Dirty Trick When to Make Concessions

Ground Rules

Stages of Negotiations



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There are five negotiating stages, and a sixth which follows the negotiation. All involve both task and process facets.

Orientation and Fact-finding: In this stage the parties are learning about the negotiation and about each other. The task is to put the offers on the table and to assess the entire situation, to define issues and to prioritize them. The process is focused on setting the climate, building rapport, defining roles, and defining limits. This is the period in which the parties begin to establish trust.

Resistance: This is the stage most people dread, and yet it is the most universal, and natural stage of the negotiation. At it’s simplest; resistance is caused by a lack of trust. A lack of trust my offer (will it really benefit me, meet my needs?), my organization (bad prior dealings with others in my organization or with an organization similar in nature to mine), the situation (I’ve gone through this before and things turned out badly), or me (I don’t know you well enough to trust you, I don’t like people in your position, etc).

Reformulating Strategies: Now is the time where you find that the negotiation isn’t going quite as you planned. It’s time to look at what has worked and what hasn’t worked and to modify your plans accordingly.

Commitment: This is the phase of negotiations most people enjoy. The feeling in the room has changed from one of confrontation and minimal trust to one of problem solving – removing the barriers to agreement. The energy level is up and ideas flow forth from both (all) parties as they have become committed to getting an agreement and all that remains now is finding a way to make it happen.

Settlement: This is where the agreement is made and the parties check over the specifics to see if what they thought they had agree to is actually what was written up. Remember, it isn’t settled until the term of the contract has expired . . . and maybe not even then.

Follow-up: This should occur with all agreements, to make sure they are still working. By following up, you should be able to maintain trust for future encounters and also resolve any problems with the agreement while they are still relatively small.

A WORD OF WARNING! No negotiation proceeds in the linear manner outlined above. You may go from Orientation to Resistance to Reformulation to Commitment only to have something new pop up which throws you right back into Orientation or Resistance; From Settlement to Reformulation; from Follow-up to Orientation, etc. Do not plan your negotiations with an eye to having them follow this pattern. Instead use your knowledge of the phases of your negotiation to help yourself plan and adapt to the changing environment while minimizing your frustration level.



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Meeting the Other Person: Where, When, How, and with Whom.

Setting Ground Rules

The actual beginning round of each negotiation should consist of setting the ground rules and each item consists of a negotiation in itself. There are no hard and fast rules about where, when, how and with whom, each component should be looked at in terms of how does this influence the negotiation, first and foremost. Then you should look at how it affects your own plans. If it doesn’t look like it will hurt, concede the point, but reserve the right to modify the agreement if it isn’t working.

An example would be to negotiate in someone’s office instead of a conference room. If the other person feels more comfortable, it’s all right. It could allow that person to have information at hand when necessary which could move the process along faster. But, if the phone keeps ringing and people keep coming in, it is time to move the location.

This is where ground rules come in handy. These prior agreements about where, when, etc. as well as other agreements such as: order of presentation, no interrupting the other person, no personal attacks, no press releases, etc. allow you to get the negotiation back on track before it has a chance to deteriorate further than it already has.

First Offers

To put it simply, there are also no hard and fast rules so what follows are the advantages and disadvantages of both.

Advantages:

1. The first offer allows you to set the tone of the negotiation.

2. Allows you to get the other party thinking within your frame of reference. 3. Allows you a chance to see his or her initial reaction (too high or too low). Disadvantages:

1. You may offer more or demand less than is needed.

2. You may upset the other party if your offer is out of their range and you may be forced to make immediate concessions to get them to stay. 3. You lose the advantage of silence – the chance to learn more about them as they speak. In general, if you have looked at the options and feel that it is 50/50 to make the first offer, make it. It allows you to set the tone and to establish a positive relationship.

Ploys and Tactics

First, negotiators must realize that there is a difference between a ploy and a tactic. As in any operation, strategy outlines the overall goals of the operation, what is to be done, who will do it, what support will they need, etc. Tactics are those methods which will need to be used by those people given the task to accomplish the goal. Ploys are methods used which do not have a basis in need but are designed to manipulate the other party and to use negative power, coercion, to influence them.

It is important that negotiators recognize the difference between these two as the use of ploys tends to sour any relationship. Also, the most effective way to defuse the effect of ploys is simply to recognize them.



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Common Ploys

Authority Limits: “I don’t have the authority to make this agreement” or “I need to check with my supervisor.”

Cherry Picking: “I will agree to items 1, 4, 5, 8 & 9, but that is all I will agree to.”

Deadlines: “You need to decide right now or the proposal is off the table.”

Good Cop – Bad Cop: “You know that my partner doesn’t want this agreement with you. At least my offer gets us a deal.”

Humble and Helpless: “I simply can’t do anything. I’m really not skilled at this, I need your help.”

The Krunch: “You know you simply have to do better than that. I can’t take that back to my boss!”

Last and Final Offer: “This is it, take it or leave it.”

One More for the Road: “We’ve got a good agreement, but before I sign, how about including this item?”

Springing a Leak: “You know we have another company who is interested in this.” or, “What would happen if your clients were to find out about your position?” or the other party actually does release information in an attempt to pressure you. Straw Man: The other party puts forward proposals that they really don’t want, just so you can say no and then feel like you need to make a concession on another issue in exchange for the ‘no”. The above is not a complete list, but it does contain the most commonly used ploys. Be careful that you do not assume that a person exhibiting one of the above behaviors is always using a ploy. Sometimes it may be an honest mistake, beyond the person’s control, or . . . the truth.

One final ploy, at least some people call it that . . . is lying. Never Lie!!! No matter the cause, or the pressure, lying will always permanently damage a relationship. If someone wants information you don’t want to release, say just that. We all understand the need to retain information, we may not always like it, but we understand it. We do not give the same courtesy to lying. Once again . . . Never Lie!!!

Challenges: Dirty Tricks

Dirty Tricks are tactics that one side applies in a negotiation to put pressure on the other side to do something that is probably not in their best interest. The list above includes most of those tricks. There are several effective methods for dealing with the problem; each has strengths and weaknesses, depending upon the other person and the situation.

Dirty Trick Strategies:

1. Ignore them.

2. “Call” them on it.

3. Respond in kind.

4. Offer to change to more productive methods.



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Difficult People

When the other side exhibits a pattern of difficult behavior, two possibilities exist:

1. You may be dealing with someone who doesn’t know any other way to change his or her behavior, but might be responsive to changing their behavior. Or,

2. You are dealing with the type of person whose behaviors are consistent both within and outside of the negotiating context.

William Ury in Getting Past No (1991) has developed a general strategy for coping with this behavior.

Barriers to Cooperation Challenges Strategies

Step 1: Your natural reaction to the Don’t react Go to the Balcony other person’s behavior Step 2: Others’ negative emotions Disarm them Step to Their Side Step 3: Others’ positional behavior Change the Don’t React . . . game Reframe Step 4: Others’ skepticism about the Make it easy Build them a benefits of an agreement for them to say “Golden Bridge” yes Step 5: Others’ perceived power Make it hard to Bring them to their say no senses, not to their knees

Robert Bramson, Coping with Difficult People (1981), and several other behavioral researchers emphasize that several points need to be considered when looking at difficult people.

He recommends three steps for reviewing the behavior of difficult negotiators.

1. Recognize the behavior for what it is.

2. Understand why the behavior exists and tends to persist.

3. Cope to produce effective behavior – for you, and for them.



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Difficult People, con’t

First, all of us exhibit difficult behaviors or are difficult to read at times. These points are for those people who are invariably difficult and whose behaviors are predictable and have identifiable patterns of behavior.

Second, what is difficult behavior to one person is not difficult to another. Defining a person as difficult may say just as much about the person making that judgment as it does about the “difficult” person.

Third, difficult people do what they do because it “works” for them. Their behavior gives them control, feels comfortable, and lets them get their way. We reinforce difficult behavior by giving in to it. We give that person more reason to behave “badly” in the present . . . and the future.

Once you decide that you are going to attempt changing their behavior, six steps are involved.

1. Assess the situation realistically.

2. Stop wishing difficult people were different.

3. Get some distance between yourself and the difficulty.

4. Formulate a relevant coping plan.

5. Implement the plan assertively.

4. Monitor your effectiveness and modify your plan accordingly.



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Section 5

Troubled Negotiations

Breaking Deadlock Using Third Parties

Simplifying Complex Negotiations Using Strategic Communication



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Breaking Deadlocks

Deadlocks are a common occurrence in negotiations. They can be caused by personalities, external pressures, a lack of creativity, tiredness, stubbornness, and by a real inability on the part of both negotiators to make any further concessions. There are several ways to break deadlocks:

1. Ask Lots of Questions:

2. Build Trust and Share Information:

3. Give Away Some Information:

4. Make Multiple Offers Simultaneously:

5. Search for Post-Settlement Settlements:

6. Use Differences of Expectations to Create Mutually Beneficial Perceived Trade-offs:

7. Use Differences of Risk Preferences to Create Mutually Beneficial Perceive Trade-offs:

8. Use Different Time Preferences to Create Mutually Beneficial Trade-offs:

9. Consider Adding Issues to the Negotiation to Increase the Potential for Making Mutually Beneficial Trade-offs:

10. Search for Ways to Reduce the Costs to the Other Party of Allowing You to Get What You Want, and Vice Versa.

11. Search for Ways to Reduce or Eliminate the Scarcity of the Resource that is Creating the Conflict Between the Parties:

12. Search for Novel Solutions that Do not Meet Either Party’s Stated position, But do Meet Their Underlying Interests:

13. Always focus your discussions on The Future – Not The Past:

Tactical Methods to Break Deadlocks:

1. Change Team Members.

2. Postpone some Difficult Portions of the Agreement. 3. Recommend a Contract Grievance Procedure or Guarantees. 4. Change the Type of the Contract (make it shorter/longer or more/less detailed). 5. Set up a Joint Study Committee for the more difficult Portions of the Contract. 6. Find a More Informal Meeting Place. 7. Tell a Funny Story About Yourself or a Third Party. 8. If Non-Agreement is Unacceptable, Make a Deadlock-Breaking Concession.



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Using Strategic Communication to Break Deadlocks

Stiebel has recommended using a four step method to break deadlocks that he has described as Strategic Communication (When Talking Makes Things Worse, 1997). The steps are:

1. Decide whether you have a misunderstanding of a true disagreement.

Ask yourself the question “Would the problem disappear if we understood each other better?” If the answer is yes, you have a communication problem. If the answer is no, then you have a real dispute.

2. Create the other person’s next move.

The key to this step is to ask yourself “What is the most I can get them to do right now?” Maybe the only thing that is realistic is to get them to agree to sit down with you again. The key is to keep YOUR OWN expectations realistic and to build a series of agreements.

3. Use their own perceptions to convince them.

“What are they thinking and how can I build on it? Once again the key it to work from their perceptions . . . not YOURS!

4. Predict the other person’s response.

“How will this person respond?” If you can predict the other person’s response, you have a very good chance to influence their response to your proposal.

This method builds on the idea of people responding to stimuli. Once again, you are trying to determine what stimuli you want to use to get the response you desire from the other party.



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Using Third Parties

Facilitation, Mediation and Arbitration are the traditional means by which third parties who are not directly involved in the negotiation serve as neutral third parties to help resolve issues and settle disputes.

Agents, including attorneys and union representatives, are third parties who are brought in to a negotiation to either represent or to advise one of the parties.

In either case, third parties have a marked effect on the negotiation. You must always consider the interests, incentives and influence of the third party when planning for your negotiation. You need to think about what will motivate them. First consider whether the third party is neutral or someone with a vested interest in the outcome of the negotiation.

Neutral Parties goals are to achieve agreement, even if it is not necessarily the best agreement for you.

Agent’s goals are to get the best possible agreement for the individual they are working with.

Positives of Using Neutrals:

• they achieve agreement by controlling the environment and changing how the parties interact.

• they can help craft an agreement.

• they bring a neutral perspective to both parties.

• they can be effective “reality-checkers”.

• they exert pressure for the parties to reach agreement.

• most neutrals are inclined to “split the baby”.

• neutrals work to balance the power between the parties.

Positives of Using Agents:

• they will always work to maximize your benefits.

• they can help you look at the strengths and weaknesses of your positions.

• they can take pressure off of you by to challenging those you work with, preserving your relationship. They can be the “Bad Guys”.

Negatives of Using Neutrals:



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• they can pressure you to take an action you don’t want to take.

• they want an agreement, any agreement.

• if you use an arbitrator, you lose control of the final decision.

• they may keep parties from making concessions.

• they may try to get the more powerful party to concede to equalize power.

• they may try to get the parties to make equal concessions.

Negatives of Using Agents:

• Agents, because you pay for their services, decrease the final net gain you negotiate.

• if they are paid on commission, they may look out their best interests, not yours.

• they may not use all the information they have to promote the interests of their clients.

• selling prices and impasse rates are higher in agent-assisted negotiations than in ‘no third party’ negotiations.

• they can influence your behavior to concede when it is not necessary or to hold fast when you should concede by reinforcing your own mistaken perceptions.



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Appendix

• Negotiations Planning Guide

• Negotiations Strategies Checklist • Interpersonal Conflict Styles List • Win-Win Refocusing Questions List • Negotiations Types Question List • ‘Tough Situations’ Questions List • ‘How Well Do You Negotiate’ Quiz

• Hofstede’s Cultural Dimensions Rankings



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Ranking of Countries/Cultures on Cultural Dimensions Reported by Hofstede (1991) Rank Order On Power Individualism/ Masculinity/ Uncertainty Country Distance Collectivism Femininity Avoidance Arab Countries 7 26/27 23 27 Argentina 35/36 22/23 20/21 10/15 Australia 41 2 16 37 Austria 53 18 2 24/25 Belgium 20 8 22 5/6 Brazil 14 26/27 27 21/22 Canada 39 4/5 24 41/42 Chile 24/25 38 46 10/15 Columbia 17 49 11/12 20 Costa Rica 42/44 46 48/49 10/15 Denmark 51 9 50 51 East Africa 21/23 33/35 39 36 Ecuador 8/9 52 13/14 28 Finland 46 17 47 31/32 France 15/16 10/11 35/36 10/15 Germany 42/44 15 9/10 29 Great Britain 42/44 3 9/10 47/48 Greece 27/28 30 18/19 1 Guatemala 2/3 53 43 3 Hong Kong 15/16 37 18/19 49/50 India 10/11 21 20/21 45 Indonesia 8/9 47/48 30/31 41/42 Iran 29/30 24 35/36 31/32 Ireland (Rep.) 49 12 7/8 47/48 Israel 52 19 29 19 Italy 34 7 4/5 23 Jamaica 37 25 7/8 52 Japan 33 22123 1 7 Malaysia 1 36 25/26 46 Mexico 5/6 32 6 18 Netherlands 40 4/5 51 35 New Zealand 50 6 17 39/40 Norway 47/48 13 52 38 Pakistan 32 47/48 25/26 24/25 Panama 2/3 51 34 10/15 Peru 21/23 45 37/38 9 Philippines 4 31 11/12 44 Portugal 24/25 33/35 45 2 Salvador 18/19 42 40 5/6 Singapore 13 39/41 28 53 South Africa 35/36 16 13114 39/40 South Korea 27/28 43 41 16/17 Spain 31 20 37/38 10/15 Sweden 47/48 10/11 53 49/50 Switzerland 45 14 4/5 33 Taiwan 29/30 44 32/33 26 Thailand 21/23 39/41 44 30 Turkey 18/19 28 32/33 16/17 Uruguay 26 29 42 4 United States 38 1 15 43 Venezuela 5/6 50 3 21/22 West Africa 10/11 39/41 30/31 34 Yugoslavia 12 33/35 48/49 8 Based on G. Hoftstede, Culture and Organizations: Software of the Mind (London, England: McGraw Hill, 1991).



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Negotiations Planning Guide CONTENT

Identify Goal(s): This Conflict: Personal Goals: Identify Needs (all parties): Identify Wants (all parties): Identify Other Issues (all parties): Establish Settlement Ranges: Internal Negotiations: STRATEGY Overall Plan (where, when, etc.): Content and Support (who & what do you need to help): Order of Issues: Who’s Negotiating (who will be there): Role of the Negotiators/Parties: Tactics to be Used: Questioning Strategies: Use of Time: Control of Environment (interruptions, setting, etc.): Orchestration & Practice:



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Styles for Handling Interpersonal Conflict List From Leweicki, et al, Essentials of Negotiations, (Boston, MA, Irwin/McGraw-Hill, 1997)

Conflict Style Situations Where Appropriate Situations Where Inappropriate

Integrating 1. Issues are complex. 1. Task or problem is simple. 2. Synthesis of ideas is needed to come 2. Immediate decision is required. up with better solutions. 3. Commitment is needed for other parties 3. Other parties are unconcerned for successful implementation. about outcome. 4. Time is available for problem solving. 4. Other parties do not have problem-solving skills.

5. One party alone cannot solve the problem. 6. Resources possess by different parties are needed to solve their common problems. Obliging 1. You believe that you may be wrong. 1. The issue is important to you. 2. Issue is more important to the other. 2. You believe that you are right. 3. You are willing to give up something in 3. The other party is wrong or exchange for something from the other unethical. party in the future. 4. You are dealing from a position of weakness. 5. Preserving the relationship is important. Dominating 1. Issue is trivial. 1. Issue is complex. 2. Speedy decision is needed. 2. Issue is not important to you.

3. Unpopular course of action is 3. Both parties are equally powerful. implemented. 4. No decision is necessary 4. Necessary to overcome assertive 5. Subordinates possess high degree subordinates. of competence. 5. Unfavorable decision by the other party may be costly to you. 6. Subordinates lack expertise to make technical decisions. 7. Issue is important to you. Avoiding 1. Issue is trivial. 1. Issue is important to you. 2. Potential dysfunctional effect of 2. It is your responsibility to confronting the other party outweighs make decision.

benefits of resolution. 3. Parties are unwilling to defer, 3. Cooling-off period is needed. issue must be resolved. 4. Prompt action is needed. Compromising 1. Goals of parties are mutually exclusive. 1. One party is more powerful. 2. Parties are equally powerful. 2. Problem is complex enough to need a problem-solving approach.

3. Consensus cannot be reached. 4. Integrating or dominating style has

not worked. 5. Temporary solution to a complex

problem is needed.



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Refocusing Questions These questions should be used to help refocus the negotiation on developing win-win options. The focus of each type of question precedes those questions. These questions should be asked both of yourself and, depending on the situation, even the other party.

Expanding the Pie

1. How can both parties get what they are demanding?

2. Is there a real resource shortage?

3. How can resources be expanded to meet the demands of both parties?

Logrolling

1. What issues are of higher and lower priority to me?

2. What issues are of higher and lower priority to the other person?

3. Are issues of higher priority low for the other, and vice versa?

4. Can I unbundle and issue -- that is, make one larger issue into two or more smaller ones that can be logrolled?

5. What are things that would be inexpensive for me to and valuable for the other party for get that might be logrolled?

Nonspecific Compensation

1. What are the other party’s goals and values?

2. What could I do for the other side that would make them happy and have them allow me to get what I need on a key issue?

3. What are things that would be inexpensive for me to give and valuable for the other person to get that might be nonspecific compensation?

Cost Cutting

1. What risks and costs does my proposal create for the other person?

2. What can I do to minimize the other’s risks and cost so that they would be more willing to go along?

Bridging

1. What are the other’s real underlying interests and needs?

2. What are my own underlying interests and needs?

3. What are the higher and lower priorities for each of us in our underlying interests and needs?

4. Can we invent a solution that meets both sides’ relative priorities and their underlying interests and needs?



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Negotiating Question Types: The do’s and the don’ts

Usable Questions Types - the “dos” Examples Open-ended questions - ones that cannot be “Why do you take that position?” answered with a simple yes or no. Who, what, where, why and when questions.

Open questions – inviting the other’s thinking. “What do you think of our proposal?”

Leading questions – these questions point toward “Do you find our offer fair and reasonable?” an answer.

Cool questions – low emotional level. “How much more will we have to pay if you make the improvements we’ve requested?

Planned questions – specific questions that are “After you make those improvements to the part of an overall logical sequence of questions which property, when can we expect to move in?” were designed in advance of the session.

Treat questions – flatter the other party at the “You are an expert in this field, could you same time as you ask for information. tell us your experience with this issue?”

Window questions – aid in looking into the other “Can you tell us what factors you used in person’s mind and thought processes. deciding this?”

Directive questions – focus on a specific point. “What is the rental rate per square foot with these improvements?”

Gauging questions – used to determine how the “How do you feel about our proposal?” other person feels. “What do you feel a fair price would be?”

Unusable Question Types – the “don’ts” Examples

Close-out questions – they force the other party “You wouldn’t want us to feel you were seeing things your way. treating us unfairly, would you?”

Loaded questions – these put the other person on “Do you mean to tell me that these are the only the spot regardless of his or her answer. terms you will accept?”

Heated questions – high emotionality, guaranteed “Don’t you think we’ve spent enough time on trigger and emotional response. this unrealistic proposal of yours?”

Impulse questions – occur “on the spur of the “As long as we are discussing this, how do the moment”, without planning, and tend to get you think we should tell other departments who the conversation off-track. demand the same things from us?”

Trick questions – appear to require a frank answer, “What are you going to do, give us want, or take what we but are really ‘loaded’ in their meaning. this to court?”

Reflective trick questions – ‘reflects’ the other “Here’s how we see things -- don’t you into agreeing with your point of view. agree?” from Gerald Nierenberg, Fundamentals of Negotiations (New York,: Hawthorn Books, 1973)



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Questions for Tough Situations From Deep and Sussman, What to Ask When You Don’t Know What To Say, (Englewood, NJ, Prentice-Hall, 1993)

The Situation Possible Questions “Take it or leave it” ultimata. “If we can come up with a more attractive alternative than that, would you still want me to ‘take it or leave’ your offer?” “Do I have to decide right now, or do I have some time to think about it?”

Pressure to respond to an “Why can’t we negotiate this deadline?’ unreasonable deadline. “If you are under pressure to meet this deadline, what can I do to help remove some of that pressure?” “Is there something special about this afternoon? How about first thing in the morning?”

The other party uses highball “Can you explain the reasoning behind this position?” or lowball tactics. “What do you think I would see as a fair offer?” “What standards do you think the final agreement should meet?”

An impasse. “What else can either of us do to close the gap between our positions?” “Specifically what concession do you need from me right now to bring this to a close right now?”

“If it were already six weeks from now and we were looking back at this negotiation, what do you think we might wish we had ‘brought to the table?”

The other party is torn between “What is your best alternative to accepting my offer right now?” accepting and rejecting your offer. “If you reject this offer, what will take its place that’s better than what you know you will receive from me?” “How can you be sure that you will get a better deal from someone else?”

The other party asks if the offer “What do you see as a fair offer, and given that, what do you you just made is the same as that think of my current offer?” you offered to others. “Do you believe that it in my best interest to be unfair to you?” “Do you believe that people can be treated differently but still be treated fairly?”

You are feeling pressured, “Isn’t it better that we both walk away from this negotiation controlled, or manipulated?” feeling satisfied?” “How would you feel if our positions were reversed, and you were feeling the pressure I’m feeling right now?” “Are you getting extra pressure from outside to conclude these negotiations?”

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