85035443 Negotiation and Counselling Unit 1 2 3

NEGOTIATION

CONCEPT OF NEGOTIATION

Negotiation: It is a process in which two or more individuals or groups having common or conflicting goals, state and discuss proposals for specific terms of a possible agreement.

Types of Negotiation:

Distributive:

Often referred to as a fixed pie or fixed sum. Also known as competitive or hard bargaining negotiation.

A win – lose situation.

Example: Purchasing a car or a house. Interest of both the parties are self – serving.

CONCEPT OF NEGOTIATION

Integrative:

Often described as the win-win situation.

Parties form a long term relationship for mutual

gains,

ELEMENTS OF NEGOTIATION-

negotiating essentials – carrel,heavrin

1. The parties and their interests: The parties to a

negotiation can be friends trying to agree on what

movie to see or world leaders trying to avoid war.

2. Interdependency

3. Common goals

4. Flexibility

5. Ability to make a decision.

NATURE OF NEGOTIATION-lewicki,

saunders

A negotiation situation is one in which

1. Two or more parties must make a decision about

their interdependent goals and objectives.

2. The parties are committed to peaceful means for

resolving their dispute.

3. There is no clear or established method or

procedure for making the decision.

FEAR OF NEGOTIATING-lewicki,

saunders

Very often parties shun negotiation. But the fact is

we all negotiate. The basis of most negotiations is

some form of conflict and people are afraid of

conflict.

The concerns are –

Sharing a scarce resource.

If we truly fear conflict, we avoid taking any position

and not get what we want and we take an

unrealistic position and still not get what we want.

CHARACTERISTICS OF NEGOTIATION-

the essence of negotiation hiltrop, udall

1. Negotiation is a voluntary activity: either party can

break away from or refuse to enter into

discussion at any time.

2. A negotiation usually starts because at least one

of the parties wants to change the status quo and

believes that a mutually satisfactory agreements

is possible.

3. Timing is a critical factor in negotiation and

affects the ultimate outcome of the discussion.

4. The progress is strongly influenced by the

personal values, skills, perceptions and emotions

of the parties.

TACTICS OF DISTRIBUTIVE

BARGAINING-negotiation-lewicki, saunders,

minton 1. Delay

2. Silence and Bracketing. Bracketing is directing the concentration to a specific area of negotiation and then listen aggressively.

3. Limited Authority

4. The Bottom Line- This is the point below which you will not go.

5. No

6. Nibbling- Ability to withdraw and then return and then keep the pressure on.

7. Expectation and Control-This is where you say, this part is not negotiable but that part is.

8. Auctions- eg. I can get it cheaper somewhere else.

9. Concessions

10. Rationale

11. Message Sending

12. Deadlines

TACTICS OF INTEGRATIVE BARGAINING-

p112, lewicki, saunders, minton

1. Ostrich Approach: To postpone making a decision for as long as possible and hope the problem will go away.

2. To take side with one or more of the parties (in case of multiple parties).

3. Hands off, let the experts decide: To rely on legal or expert advisers for decision making.

4. Traditional approach: Holding public hearings in which interested parties can raise their concern. But this often raises community expectations beyond what public officials can deliver. It often leads to less than satisfactory solutions, which are often not accepted by the public.

TACTICS OF INTEGRATIVE BARGAINING-

p112, lewicki, saunders, minton

5. Collaboration: It is a process through which

parties who see different aspects of a problem

can explore their differences and search for

solutions that go beyond their limited vision of

what is possible. To assemble a representative

sample of the stakeholders and let them work out

on an agreement among themselves.(in the given

example). This option has the advantage of

dealing with interrelated issues. It allows for a

solution that is acceptable to all.

NATURE OF COLLABORATIVE

PROBLEMS

The problems for which Collaboration offers an advantage over other methods are:

1. The problems are ill defined or there is a disagreement about how they should be defined.

2. Several stakeholders have a vested interest in the problems and are interdependent.

3. These stakeholders are not necessarily organized.

4. There may be a disparity of power/resources among the stakeholders.

5. Technical complexity can be present.

6. Existing processes have been insufficient

STRATEGY-negotiating essentials-

carrell, heavrin

Negotiation strategy can be defined as the overall

approach chosen when confronted with a

bargaining situation. It is very often confused with

tactics which are the techniques used at the

bargaining table. It does not include the efforts that

occur away from the bargaining table, to set up the

most promising situation.

NEGOTIATION STRATEGY-carrel,

heavrin

Following are the key elements to identify before

choosing a strategy.

1. Time (deadline). If you have a firm deadline, you

should chose one of the three strategies

a. Without revealing your deadline, work to reach a

settlement well in advance.

b. Declare an earlier deadline before your real

deadline.

c. Question negotiators on the other side about their

deadlines – and if you find out their deadline is

before yours, work to meet it. If it’s a deadline for

both sides, then neither has an advantage.

NEGOTIATION STRATEGY

2. Information: This is the heart of negotiations. It

shapes our appraisal of reality, our negotiation

strategy, our BATNA, our expectations of what

can be achieved and the outcome of a

negotiation. The most important information we

need is BATNA.

3. Power: In the words of Patrick J. Cleary, former

chairman of the National Mediation Board –

―More than anything else-yes even more than

money-the negotiation process is about power,

ego and saving face

STRATEGIES-negotiating essentials-

carrell, heavrin

. There are 5 strategies recommended for various negotiation situations. We can chose them on the basis of time, information and power.-page 155 negotiating essentials-carrel, heavrin

1. Increments of Concession( focus on the number)-

Example: one time purchase of a house or car-you make concession that enable you to achieve a price or cost according to your BATNA.

2. Principled Negotiation- If integrative bargaining is preferred, this strategy can be practiced. Roger Fisher and William Ury in their book, ―Getting to Yes‖ introduced the strategy of principled negotiation.

1. Principled negotiators openly discuss

the issues and interests that are

important. They separate positions

from interests

2. Separate the people from the

positions.

3. Develop mutual gain options.

4. Discuss on objective criteria such as

principles and facts

1. Position versus interest

A position may be defined as a

specific demand that the party has

chosen.

Interests include the needs desires

concerns and fears that caused the

party to chose that position.

Position versus interest of neighbours

smith and jones

Smith

Position-the dog must go.we will not

move

Interest-we need peace and quiet

place, our house is new and so we

prefer to stay in it.

Jones-

Positions-the dogs must stay, we will

not move.

Interests – we must let the dogs out in

our enclosed yards, we love the

neighbourhood and want to stay in the

same street near our friends.

2.Separate people from positions.

People conduct negotiations. They have feelings, ego, anger and other human emotions. Position is the specific demand that a party has chosen.human responses to the positions taken by other parties can easily derail a bargaining situation that might otherwise be successful. This is practically true if the parties can maintain a long term relationship.

Example- a wife and a husband

planning for a weekend. The husband

wants to gout to play golf with friends

and the wife to their farmhouse. The

issue is not where but how do they

want to spend the weekend and what

do they want.

Focus on objective criteria

Parties present offers based on

objective criteria such as facts,

principles or standards.

Develop mutual gain options- case

Page 150 west coast music inc

Page 161 explanation

2. Multiple Equivalent Simultaneous Offers(MESOs)

It provides for a creation of a scoring system to compare qualitatively different issues so that the best option can be defined.

3 steps-

1. Identify and then prioritize issues in the negotiation, determining their weights in relative values to the parties.

2. 2. identify the different outcomes or options available for each issue establishing one as the standard and thus worth 100 points and then consider the ralative value of each other option by comparison to that standard.

Create three different offers, three

because research indicates that

parties can effectively compare three

offers, without feeling overwhelmed by

too many options

STRATEGIES-CONT.

4. The Economic Matrix-It is applicable when a negotiation situation involves several issues of economic value and a fixed amount of resources available for the parties to negotiate.

5. 3-D Negotiation- Negotiators David A.Lax and James K Sebenius developed this unconventional tactics. The first dimension consists of the tactics used at the bargaining table. The second dimension is the deal design i.e. specifics of a proposal. The third dimension is the set up of the negotiation- the parties involved, the issues, the sequence of issues to be decided, outside influences and the timing of negotiation. They suggest that the negotiators will be more successful, if they involve all three dimensions in bargaining

NEGOTIATION STRATEGY-

P23,essence of negotiation,hiltrop,udall

Key points in developing strategy:

1. What points should we ask in the first session?

2. What questions are the other party, likely to ask?

3. How will we answer these questions?

4. What is our opening position?

5. Do we have enough factual data and information

to support this position?

6. If not, what extra information could be available?


When negotiating as a team, following points

should also be considered.

1. Who will lead the discussion?

2. Who will verify facts?

3. Who will ask what questions? Who answers the

other side’s questions?

4. Who will work to reduce tension? (optional,

according to the situation)


In addition to determine the strategy, the style to

adopted should also be decided. According to

Thomas and Kilmann the approaches can be

grouped into five categories:

1. Collaborating: To manage by maintaining

interpersonal relationships and ensuring that both

parties to the conflict achieve their personal goals.

2. Compromising: This approach assumes that win-

win solution is not possible. The objective is to

find mutually acceptable solution which partially

satisfies both the parties.


3. Accomodating: It refers to maintaining the

interpersonal relationship at all cost, with little or

no concern for goals of the parties involved:

4. Controlling: The focus is to take steps for goals of

the parties, whatever the cost to the relationship.A

power oriented approach.

5. Avoiding: the avoider views conflict as something

to be shun at all costs. The style might take the

form of diplomatically diverting an issue,

postponing or withdrawing from a threatening

situation.

STRATEGIES-CONT.

The MESO technique involves three basic steps:

1. Identify and then prioritize three or more issues in

the negotiation, determining their weights and

relative values to the parties.

2. Identify the different outcomes or options,

available for each issue, establishing one as the

standard and then consider the relative value by

comparing with the standard value.

3. Create three different offers, three because

research indicates that parties can effectively

compare three offers, without feeling

overwhelmed by too many options.

PLANNING FOR NEGOTIATION-the

neg handbook Patrich j. cleary

Collect your facts – It is critical to accumulate as much

information as you can. If you are buying a car you can

get the information on price and on the dealer’s actual

cost. These are the empirical facts. Facts include a

person’s background, history, drive and goals.

Know your principles – Knowing your own principles is

important. It should be reaffirmed periodically.

Know your priorities – You should divide your priorities

into two lists. One should contain the items you would

like to have from negotiation (what you want) and the

other list should have items you must have as part of

the final deal(what you have got).

PLANNING-negotiating essentials-

carrell and heavrin

1. Clearly define the expected goals i,e, what exactly do you expect to gain from the process.

2. Clearly decide upon your BATNA-Best Alternative to a Negotiated Agreement.

3. Identify the issues-

a. The greater the number, the better.

b. Intangible issues should be listed as well as tangibles like price and quantity. Intangibles could include things like timing of payment, mode of payment etc.

c. Add throwaways i.e. issues which have little or no value to you but could be of value to the other party.

PLANNING

4. Set Priorities- This can be done by

a. Ranking all the issues from the highest priority to the lowest priority.

b. Assigning percentage weights (relative importance ) to the items –the total weight must be 100% and throwaway items can be given a 0% weight.

c. Dividing the items into four broad categories-

Essential items that must be gained for a settlement.

Important items that you would like to gain but are willing to trade to achieve essential or other important items.

Desirable items that have secondary value.

Throwaway items that may have value only to the other party.

PLANNING

5. Develop Support Arguments- Why about each

issue should be thought of supported with facts

logic and argument which could be based on

certain data or a similar deal.

UNIT 2

PERCEPTION, COGNITION, AND

EMOTION IN NEGOTIATION

The basic building blocks of all social encounters are:

Perception

Cognition

Emotion

PERCEPTION

Perception is:

The process by which individuals connect to their

environment.

A complex physical and psychological process

A ―sense-making‖ process

THE ROLE OF PERCEPTION


The process of ascribing meaning to messages

and events is strongly influenced by the perceiver’s

current state of mind, role, and comprehension of

earlier communications.

◦ People interpret their environment in order to

respond appropriately

◦ The complexity of environments makes it

impossible to process all of the information

◦ People develop shortcuts to process information

and these shortcuts create perceptual errors


Negotiators approach each negotiation guided by

their perceptions...

Determine exactly what is being said and what is

meant.

Defined as ―the process of screening, selecting,

and interpreting stimuli so that they have meaning

to the individual.‖

PERCEPTUAL DISTORTION

Four major perceptual errors:

◦ Stereotyping

◦ Halo effects

◦ Selective perception

◦ Projection

STEREOTYPING

One individual assigns attributes to another solely

on the basis of the other’s membership in a

particular social or demographic group.

◦ For example

Age

Gender

Race

Religion

HALO EFFECTS

People generalize about a variety of attributes

based on the knowledge of one attribute of an

individual.

◦ For example

Positive halo effect

Smiling person is honest.

Negative halo effect

Frowning person is dishonest.

HALO EFFECTS CONTINUED...

Halo Effects Occur in Perception when...

◦ Very little experience with the party

Generalization occurs based on knowledge of

the party in other contexts

◦ Party is well known

◦ Qualities have strong moral implications

SELECTIVE PERCEPTION

Occurs when the perceiver singles out certain

information that supports or reinforces a prior

belief, and filters out information that does not

confirm that belief.

◦ For example

Smiling

Frowning

PROJECTION(PERCEPTUAL

DISTORTION)

Occurs when people ascribe to others the

characteristics or feelings that they possess

themselves.

◦ For example

Frustration

Delays

COGNITION

Cognition refers to mental processes that include

attention, remembering, producing and

understanding, solving problems, and making

decisions.

Cognitive psychology is the branch of psychology

that studies mental processes including how

people think, perceive, remember and learn.

As part of the larger field of cognitive science, this is

related to attention, memory, perception, problem

solving, decision making, judgement

COGNITIVE BIASES IN NEGOTIATION

Negotiators have a tendency to make systematic

errors when they process information. These

errors, collectively labeled cognitive biases, tend to

impede negotiator performance.

COGNITIVE BIASES

Irrational escalation of commitment

Mythical fixed-pie beliefs

Anchoring and adjustment

Issue framing and risk

Availability of information The winner’s curse Overconfidence The law of small numbers Self-serving biases Endowment effect Ignoring others’ cognitions Reactive devaluation

COGNITIVE BIASES

Irrational escalation of commitment

◦ Negotiators maintain commitment to a course of

action even when that commitment constitutes

irrational behavior

Mythical fixed-pie beliefs

◦ Negotiators assume that all negotiations (not just

some) involve a fixed pie

COGNITIVE BIASES CONT.

Anchoring and adjustment

◦ The effect of the standard (anchor) against which

subsequent adjustments (gains or losses) are

measured

◦ The anchor might be based on faulty or

incomplete information, thus be misleading

Issue framing and risk

◦ Frames can lead people to seek, avoid, or be

neutral about risk in decision making and

negotiation


Availability of information

◦ Operates when information that is presented in

vivid or attention-getting ways becomes easy to

recall.

◦ Becomes central and critical in evaluating events

and options

The winner’s curse

◦ The tendency to settle quickly on an item and

then subsequently feel discomfort about a win

that comes too easily


Overconfidence ◦ The tendency of negotiators to believe that their

ability to be correct or accurate is greater than is actually true

The law of small numbers ◦ The tendency of people to draw conclusions from

small sample sizes

◦ The smaller sample, the greater the possibility that past lessons will be erroneously used to infer what will happen in the future

COGNITIVE BIASES CONFIDENCE

OR OVERCONFIDENCE? We came to Iceland to advance the cause of peace. .

.and though we put on the table the most far-reaching arms control proposal in history, the General Secretary rejected it.

President Ronald Reagan to reporters,

following completion of presummit arms control discussions

in Reykjavik, Iceland, on October 12, 1986.

I proposed an urgent meeting here because we

had something to propose. . .The Americans came to this meeting empty handed.

Secretary General Mikhail Gorbachev,

Describing the same meeting to reporters.


Self-serving biases ◦ People often explain another person’s behavior

by making attributions, either to the person or to the situation

◦ The tendency, known as fundamental attribution error, is to: Overestimate the role of personal or internal factors Underestimate the role of situational or external

factors

Endowment effect ◦ The tendency to overvalue something you own or

believe you possess

Managing Misperceptions and

Cognitive Biases in Negotiation

The best advice that negotiators can follow is:

Be aware of the negative aspects of these biases

Discuss them in a structured manner within the

team and with counterparts

Mood, Emotion, and Negotiation

The distinction between mood and emotion is

based on three characteristics:

◦ Specificity

◦ Intensity

◦ Duration

Emotion, and Negotiation

Aspects of the negotiation process can lead to

positive emotions

◦ Positive feelings result from fair procedures

during negotiation

◦ Positive feelings result from favorable social

comparison

◦ Emotions can be used strategically as

negotiation gambits

Emotion and Negotiation

Aspects of the negotiation process can lead to negative emotions

◦ Negative emotions may result from a competitive mindset

◦ Negative emotions may result from an impasse

EMOTION-neg counselling-

chandel,chhabra,puneet mohan Emotions play an important role in the process of negotiation.

Affect effect: Disposition of mind or affectivity influences the various stages of the negotiation process. We divide it into two parts.

Positive Affect- It says that happy people are more likely to exchange information and be creative in negotiations. Its drawback is that it distorts perception of self performance, such that performance is judged to be relatively better than it actually is.

Positive emotions generally have positive consequences for negotiations

◦ They are more likely to lead the parties toward more integrative processes

◦ They also create a positive attitude toward the other side

◦ They promote persistence

EMOTION

◦ Negative Affect-It has detrimental effects on various stages in the negotiation process. The most researched negative emotion is, ―Anger‖. Anger disrupts the process of negotiation and angry negotiators cooperate less.

◦ Negative Emotions-

◦ They may lead parties to define the situation as competitive or distributive

◦ They may undermine a negotiator’s ability to analyze the situation accurately, which adversely affects individual outcomes

◦ They may lead parties to escalate the conflict

◦ They may lead parties to retaliate and may thwart integrative outcomes

CONDITIONS FOR INFLUENCE OF

EMOTION IN NEGOTIATION

There are two conditions for emotional effect-

1. Identification of the Affect

2. Determination that the affect is relevant and

important for the judgement

COMMUNICATION

COMMUNICATION

Communication is the process of passing information and understanding from one person to another. Communication processes, both verbal and nonverbal, are critical to achieving negotiation goals and to resolving conflicts.

What Is Communicated during Negotiation?

Offers, counteroffers, and motives

Information about alternatives

Information about outcomes

Social accounts

◦ Explanations of mitigating circumstances

◦ Explanations of exonerating circumstances

◦ Reframing explanations

Communication about process

Basic Models of Communication

Communication is an activity that occurs between two people: a sender and a receiver

A sender has a meaning in mind and encodes this meaning into a message that is transmitted to a receiver

A receiver provides information about how the message was received and by becoming a sender and responding to, building on, or rebutting the original message (processes referred to as ―feedback‖)

What Is Communicated

during Negotiation?

Offers, counteroffers, and motives

Information about alternatives

Information about outcomes

Social accounts

◦ Explanations of mitigating circumstances

◦ Explanations of exonerating circumstances

◦ Reframing explanations

Communication about process

How People Communicate

in Negotiation

Use of language ◦ Logical level (proposals, offers)

◦ Pragmatic level (semantics, syntax, style)

Use of nonverbal communication ◦ Making eye contact

◦ Adjusting body position

◦ Nonverbally encouraging or discouraging what the other says

How People Communicate

in Negotiation

Selection of a communication channel • Communication is experienced differently

when it occurs through different channels

• People negotiate through a variety of communication media – by phone, in writing and increasingly through electronic channels or virtual negotiations

• Social presence distinguishes one communication channel from another.

• The ability of a channel to carry and convey subtle social cues from sender to receiver

Four Biases that Threaten

E-mail Negotiations

1. Temporal synchrony bias

◦ Tendency for negotiators to behave as if they are in a synchronous situation when they are not

2. Burned bridge bias

◦ Tendency to do risky things during e-mail that would not be used in a face-to-face encounter

3. Squeaky wheel bias

◦ Tendency to use a negative emotional style

4. Sinister attribution bias

◦ Overlooking the role of situational factors

How to Improve

Communication in Negotiation

Use of questions: two basic categories

◦ Manageable

Cause attention or prepare the other person’s thinking for further questions:

―May I ask you a question?‖

getting information

―How much will this cost?‖

generating thoughts

―Do you have any suggestions for improving this?‖

How to Improve


Use of questions: two basic categories

◦ Unmanageable questions

Cause difficulty

―Where did you get that dumb idea?‖

give information

―Didn’t you know we couldn’t afford this?‖

bring the discussion to a false conclusion

―Don’t you think we have talked about this enough?‖

How to Improve


Listening: three major forms

1. Passive listening: Receiving the message while providing no feedback to the sender

2. Acknowledgment: Receivers nod their heads, maintain eye contact, or interject responses

3. Active listening: Receivers restate or paraphrase the sender’s message in their own language

How to Improve


Role reversal ◦ Negotiators understand the other party’s

positions by actively arguing these positions until the other party is convinced that he or she is understood

◦ Impact and success of the role-reversal technique 1. Effective in producing cognitive changes and

attitude changes

2. When the positions are compatible, likely to produce acceptable results; when the positions are incompatible, may inhibit positive change

3. Not necessarily effective overall as a means of inducing agreement between parties

Special Communication Considerations

at the Close of Negotiations

Avoiding fatal mistakes ◦ Keeping track of what you expect to happen

◦ Systematically guarding yourself against self-serving expectations

◦ Reviewing the lessons from feedback for similar decisions in the future

Achieving closure

◦ Avoid surrendering important information needlessly

◦ Refrain from making ―dumb remarks‖

BEST PRACTICES IN

NEGOTIATION AND BATNA

TEN BEST PRACTICES FOR

NEGOTIATORS

1. Be prepared

— Understand and articulate your goals and interests

— Set high but achievable aspirations for negotiation

2. Diagnose the fundamental structure of the negotiation

— Make conscious decisions about the nature of the

negotiation: is it a distributive or integrative

negotiation or blend of the two

— Choose strategies and tactics accordingly


NEGOTIATORS

3. Identify and work the BATNA

— Be vigilant about the BATNA

— Be aware of the other negotiator’s BATNA

4. Be willing to walk away

— Strong negotiators are willing to walk away

when no

agreement is better than a poor agreement

— Have a clear walkaway point in mind where

you will

halt the negotiation

BEST PRACTICES

5. Master the key paradoxes of negotiation

— Claiming value versus creating value

— Sticking by your principles versus being resilient to

the flow

— Sticking with the strategy versus opportunistic pursuit

of new options

— Facing the dilemma of honesty: honest and open

versus closed and opaque

— Facing the dilemma of trust: trust versus distrust


NEGOTIATORS

6. Remember the intangibles

— ―See what is not there‖

— Ask questions

— Take an observer or listener with you to the

negotiation

7. Actively manage coalitions

— Coalitions against you

— Coalitions that support you

— Undefined coalitions that may materialize for or

against you


NEGOTIATORS

8. Savor and protect your reputation

— Start negotiation with a positive reputation

— Shape your reputation by acting in a consistent and

fair manner

9. Remember that rationality and fairness are relative

— Question your perceptions of fairness and ground

them in clear principles

— Find external benchmarks of fair outcomes

— Engage in dialogue to reach consensus on fairness


NEGOTIATORS

10. Continue to learn from the experience

— Practice the art and science of negotiation

— Analyze each negotiation

Plan a personal reflection time after each

negotiation

Periodically take a less from a trainer or a

coach

Keep a personal diary on strengths and

weaknesses and develop a plan to work on

weaknesses

BATNA

BATNA=best alternative to negotiated agreement

◦ The alternative that negotiators can turn to if no

agreement is reached in negotiation

examples of BATNAs in

◦ Car Sale Negotiation

◦ Salary Negotiation

◦ Union-Management Negotiation

BATNA

ELEMENTS OF BATNA 1. Deadlines

2. Alternatives

3. One’s resources

4. Other party’s resources

5. Information

6. Experience

7. Knowing the interests of negotiation

BATNA

DISCOVERING BATNA Prepare a list of all possible actions that you will

take if no agreement is reached

Focus on some of the bright options

Select the one most suited

BATNA

Following points have to be kept in

mind while determining one’s BATNA

Cost

Feasibility

Impact

Consequences

UNIT 3

INTERNATIONAL AND

CROSS CULTURAL

NEGOTIATION

INTERNATIONAL AND CROSS-

CULTURAL NEGOTIATION

Factors of International Negotiation-

Environmental context

◦ Political and legal pluralism

◦ International economics

◦ Foreign governments and bureaucracies

◦ Instability

◦ Ideology

◦ Culture

◦ External Stakeholders

FACTORS OF INTERNATIONAL

NEGOTIATION

Immediate Context

◦ Relative bargaining power (not just investment)

◦ Levels of conflict

◦ Relationships between negotiators

◦ Desired Outcomes

◦ Immediate Stakeholders

THE CONTEXTS OF

INTERNATIONAL NEGOTIATIONS

HOW DO WE EXPLAIN INTERNATIONAL

NEGOTIATION OUTCOMES?

International negotiations can be much

more complicated

Simple arguments cannot explain conflicting international negotiation outcomes

The challenge is to:

◦ Understand the multiple influences of several factors on the negotiation process

◦ Update this understanding regularly as circumstances change

Conceptualizing Culture

and Negotiation

Culture as learned behavior

◦ A catalogue of behaviors the foreign negotiator

should expect

Culture as shared values

◦ Understanding central values and norms

Individualism/collectivism

Power distance

Career success/quality of life

Uncertainty avoidance

DIMENSIONS OF CULTURES

Hofstede studied 50 cultures and found four

main dimensions to explain differences:

◦ Individualism/collectivism

◦ Power distance

◦ Career success/Quality of life

◦ Uncertainty avoidance

INDIVIDUALISM/COLLECTIVISM

Definition: the extent to which the society is organized around individuals or the group

Individualism/collectivism orientation influences a broad range of negotiation processes, outcomes, and preferences

◦ Individualistic societies may be more likely to swap negotiators, using whatever short-term criteria seem appropriate

◦ Collectivistic societies focus on relationships and will stay with the same negotiator for years

POWER DISTANCE

Definition: ―The extent to which the less powerful

members of organizations and institutions (like the

family) accept and expect that power is distributed

unequally‖

Cultures with stronger power distance will be more

likely to have decision-making concentrated at the

top of the culture.

CAREER SUCCESS/QUALITY OF LIFE

UNCERTAINTY AVOIDANCE

Definition: ―Indicates to what extent a culture

programs its members to feel either uncomfortable

or comfortable in unstructured situations‖

Negotiators from high uncertainty avoidance

cultures are less comfortable with ambiguous

situations--want more certainty on details, etc.

Hofstede’s Cultures Ranking

in the Top 10 TABLE 16.1

CONCEPTUALIZING CULTURE

AND NEGOTIATION

Culture as dialectic ◦ All cultures contain dimensions or tensions that

are called dialectics

Example: Judeo-Christian parables ―too many cooks spoil the broth‖ and ―two heads are better than one‖ offer conflicting guidance

This can explain variations within cultures

Culture in context ◦ No human behavior is determined by a single

cause

◦ All behavior may be understood at many different levels simultaneously

CULTURE AND NEGOTIATION

Cultural attribution error: tendency to

overlook situational factors in favor of

cultural explanations.

Culture as shared values.

THE INFLUENCE OF CULTURE ON NEGOTIATION:

MANAGERIAL PERSPECTIVES

Definitions of negotiation

Negotiation opportunity

Selection of negotiators

Protocol

Communication

Time sensitivity

Risk propensity

Groups versus individuals emphasis

Nature of agreements

Emotionalism

THE INFLUENCE OF CULTURE ON

NEGOTIATION: RESEARCH

PERSPECTIVES Negotiation outcomes

◦ Research suggests that culture has an effect on negotiation outcomes, although it may not be direct and it likely has an influence through differences in the negotiation process in different cultures

◦ Some evidence suggests that cross-cultural negotiations yield poorer outcomes than intracultural negotiations



PERSPECTIVES Negotiation process ◦ Culture has been found to have significant effects

on the negotiation process, including: How negotiators plan

The offers made during negotiation

The communication process

How information is shared during negotiation

Effects of culture on negotiator cognition ◦ Accountability to a constituent influenced

negotiators from individualistic and collectivistic cultures differently



PERSPECTIVES Effect of culture on negotiator ethics and tactics

◦ Differences exist in the tolerance of different negotiation tactics in different cultures

◦ Negotiators who trusted the other party were less likely to use questionable negotiation tactics

Effects of culture on conflict resolution

◦ Within collectivistic countries, disagreements are resolved based on rules, whereas in individualistic countries, conflicts tend to be resolved through personal experience and training

CULTURALLY RESPONSIVE

NEGOTIATION STRATEGIES

When choosing a strategy, negotiators should: ◦ Be aware of their own and the other party’s

culture in general

◦ Understand the specific factors in the current relationship

◦ Predict or try to influence the other party’s approach

Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture

LOW FAMILIARITY

Employ agents or advisers (unilateral strategy)

◦ Useful for negotiators who have little awareness of

the other party’s culture

Bring in a mediator (joint strategy)

◦ Encourages one side or the other to adopt one

culture’s approaches or mediator culture approach

Induce the other party to use your approach (joint strategy)

◦ The other party may become irritated or be insulted

MODERATE FAMILIARITY

Adapt to the other negotiator’s approach (unilateral

strategy)

◦ Involves making conscious changes to your

approach so it is more appealing to the other

party

Coordinate adjustment (joint strategy)

◦ Involves both parties making mutual adjustments

to find a common process for negotiation

HIGH FAMILIARITY

Embrace the other negotiator’s approach (unilateral strategy) ◦ Adopting completely the approach of the other negotiator

(negotiator needs to completely bilingual and bicultural)

Improvise an approach (joint strategy) ◦ Crafts an approach that is specifically tailored to the

negotiation situation, other party, and circumstances

Effect symphony (joint strategy) ◦ The parties create a new approach that may include

aspects of either home culture or adopt practices from a third culture

Documents

85035443 Negotiation and Counselling Unit 1 2 3