basics of negotiation theory-2
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negotitoaton thoryTRANSCRIPT
Negotiation
● Explicit Bargaining
● Implicit Negotiations
● All programme and policymaking, and implementation, is
essentially indirect management. Its effectiveness requires
persuasion and implicit bargaining.
Richard Neustadt: Presidential Power
✔ “Presidential power is the power to persuade.”
✔ Three sources of effective influenceThree sources of effective influence:
1. The bargaining advantages inherent in his job with which to persuade other men that what he wants of them is what their own responsibilities require them to do.
2. The expectations of those other men regarding his ability and will to use the various advantages they think he has.
3. Those men's estimates of how his public views him and of how their public may view them if they do what he wants.
Richard Neustadt: Presidential Power
"A President, himself, affects the flow of power from these
sources, though whether they flow freely or run dry he never will
decide alone. He makes his personal impact by the things he says
and does. Accordingly, his choices of what he should say and do,
and how and when, are his means to conserve and tap the sources
of his power.
The outcome, case by case, will often turn on whether he
perceives his risk in power terms and takes account of what he
sees before he makes his choice. A President is so uniquely
situated and his power so bound up with the uniqueness of his
place, that he can count on no one else to be perceptive for him."
Richard Neustadt: Presidential Power
"'Powers' are no guarantee of power... Persuasion is a give and
take, a two-way street... The power to persuade is the power to
bargain... You get no help if you do not pay for it."
““In a democracy power is decentralized In a democracy power is decentralized
and responsibility shared.”and responsibility shared.”
Assumptions/ Features of Negotiations
✔ Two or more parties with an interdependent goal
✔ There should be a conflict of interests
✔ The parties should be voluntarily prepared to settle rather
than fight it out.
✔ An agreement should be prima facie seem possible and
should be better than the alternative of no agreement
(better than the Best Alternative to Negotiated Agreement
(BATNA).
✔ The Zone of Possible Agreement (ZOPA) lies between the
BATNAs of the parties to negotiation.
Assumptions/ Features of Negotiations
✔ Any negotiation tends to an opportunistic interaction and
hence there is a possibility of parties not cooperating fully,
engaging in less than fully open motives and methods,
withholding some information, moving to stake favourable
positions, turning situation to one's advantage and seeking
to mould perceptions and aspirations to one's own
advantage.
✔ Negotiations are always beset with dilemmas: the
dilemma of trust; dilemmas of honesty.
Assumptions/ Features of Negotiations
✔ Negotiations are strategic interactions
✔ Negotiations can be treated as games for which game
theories become relevant
✔ Opportunistic behaviour being intrinsic to negotiations,
the course of negotiation is zigzag and ofter acrimonious.
✔ Strategic sharing of information is intrinsic to negotiations.
The extent and of information to share and the mode of
sharing are important decisions.
Assumptions/ Features of Negotiations
✔ Every negotiation has two aspects: substantive and
psychological.
Issue, Position and Interests
✔ An issue is the item on which an agreement is sought
✔ A position is the stand a party takes on an issue
✔ An interest is the basic objective or concern underlying
the issue.
Position and Value
✔ Given the opportunistic interaction inherent in the
negotiations, a party's position on an issue may not reflect
the true value that it attaches to that issue.
✔ For negotiations to succeed we need to move from
positions to real issues that parties attach to the issues.
✔ Principled Negotiations: Negotiations that employ
interest-based approach.
Getting to Yes (Roger Fisher and W. Ury)
✔ Four fundamental principles of negotiation:
✔ Separate the people from the problem
✔ Focus on interests, not positions
✔ Invent options for mutual gain
✔ Insist on objective criteria
1973 – David Camp Negotiations
Getting to Yes (Roger Fisher and W. Ury)
✔ Four fundamental principles of negotiation:
✔ Separate the people from the problem
✔ Focus on interests, not positions
✔ Invent options for mutual gain
✔ Insist on objective criteria
1973 – David Camp Negotiations1973 – David Camp Negotiations
Land AcquisitionsLand Acquisitions
Substantive and Relational Outcomes
✔ A part of series of Negotiations
✔ Isolated and discrete
✔ Idea of psychological fairness
✔ Trade off between substantive and relational outcomes
✔ Repetitive negotiations and past relations
The Ultimate Game: A classic psychology/ The Ultimate Game: A classic psychology/
economics experimenteconomics experiment
Internal and External Negotiations
✔ (Group A) (Group B) (A+B)
✔ Internal Negotiations:
1. Selecting the negotiating team
2. Defining the issues
3. choosing the goals
4. Trip wire (tea break) for assessment
5. Negotiation strategy
6. Reviewing the progress
7. aligning the negotiation strategy and tactics to the evolving
situation
8. Clinch the deal or break off
Multiparty Negotiations and Coalitions Dynamics
✔ Block-type coalitions and issue-base coalitions
✔ Issue based coalitions are ad-hoc (threat-opportunity
coalition)
✔ Divergence and negotiation
✔ Multiple issues and complexity of negotiations
✔ More contentious issues need to be dropped
✔ A+B+C
✔ Integrative and Distributive negotiations
Integrative and Distributive Negotiations
Integrative DistributiveWin – Win Negotiations Win-Lose Negotiations
Cooperation for solving the problem through value creation
Opportunistic interaction (Clash of Interests)
Expansion of Pie Maximization of one's share of the Pie
Cooperative Games Zero-sum games and Non-cooperative Games
Policy Negotiations should be integrative Negotiations
Game Theory and Negotiations
✔ Adam Smith – Invisible Hand
✔ Von Neumann –
Zero-Sum Games
» Cooperative Games
✔ John Nash
» Cooperative Games
» Non-cooperative Games
» Nash Equilibrium
A negotiation may include both the distribute as well as integrative negotiation
3 Ds of Negotiations
✔ David A Lax and James K. Sebenius: 3 – D Negotiation:
Playing the Whole Game (2003)
“Savvy negotiators not only play their cards well, they design the game in their favor even before they get to the table”✔ Tactics
✔ Deal design
✔ Set up
Tactics
✔ Interpersonal processes and the tactics at the bargaining
table
Common Barriers:
» lack of trust between two parties
» poor communication
» Hard ball tactics
✔ Resolution of these
Deal Design
✔ Creating lasting value for the negotiators
✔ Economic and non-economic value
✔ Political and non-political value
✔ A deal having creative concepts and structure
Negotiating Set up
✔ Negotiations with:
Right parties
» Right set of issues
» Right sequence of negotiators
» Right time
» Right set of expectations
» Right no-deal options