Negotiation

The action or process of communicating with another so as to arrive at the settlement of some matter in dispute between two or more parties.

Negotiating involves people. People have motives. Motives are not always apparent. Learn to recognize these. Ulterior motives will affect managerial, cultural, and gender negotiations

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Critical Negotiation Ingredients

Interdependence Ability to exercise leverage or influence Some sense of urgency or deadline Issues must be negotiable A better deal may not be available elsewhere A willingness to discuss Emotions issues must not overshadow

substantive issues

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Situational Influences on Negotiations

Location Physical Setting Time Passage and Deadlines Audience Characteristics

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Physical Environment The negotiation facilities

Conference table Physical distance Relative elevation Visual aids Furnishing Lighting Space Temperature

Convey a positive message of the importance of the negotiation.

Increase self-assurance Lower the confidence of opponent

Decision Making Biases That Hinder Effective Negotiations

Irrational escalation of commitment The mythical fixed pie Anchoring and adjustments Framing negotiations Availability of information The winners curse Overconfidence

Bargaining Strategies Distributive bargaining

Assumes resources are fixed: zero sum conditions Win Lose Opposed to each other Short term relationship

Integrative bargaining Resources are flexible Win Win Convergent or congruent with each other Long term relationship

Strategy or Positioning Competitive Strategy Distributive: Positional, Win-Lose, Adversarial,

Power Negotiating, and Hardball Beat their opponents High Demands Threats Few Concessions Undermine opponents confidence Seek maximum rewards for self Identify positions

Strategy or Positioning Cooperative Strategy Integrative: Win-Win, Interest Based

Bargaining, and Problem Solving Work with opponents Reasonable opening offers Show good faith Initiate the exchange of mutual concessions Seek fair and just settlements Identify interests

Distinguish Between the Deal and the Relationship

Usual way Confirm suspicions & perceptions Reduce risk taking and creativity Create low value deal Under-invest in relationships Restrict information flow Better way Improve mutual understanding Expand scope of discussions Create valuable options Improve trust and communication Share information about interest

Personal Physical Appearance

Attractive people are likely have more self-esteem, and hence power, than unattractive people

Taller people are normally perceived as more dominant than shorter ones

Athletic looking people are normally perceived to be more self-confident & independent than non-athletic ones.

Clothes should be appropriate for the situation - Formal : emphasizes professionalism - Casual : indicates more friendly, every day in work place. - Uniform : has more power, important negotiation

Successful Negotiations Utilize Integrative instead of Distributive Bargaining

Distributive Bargaining: Negotiation that seeks to divide up a fixed amount of resources: a win-lose situation

Integrative Bargaining: Negotiation that seeks one or more settlements that can create win-win solutions

People: Separate the people from the problem. Interests: Focus on interests, not positions. Options: Generate many alternatives before deciding

what to do. Criteria: Base the result on some objective standard.

Improving Negotiation Skills Research your opponent Begin with a positive overture Address the problem, not personalities Pay little attention to initial offers Emphasize win-win solutions Create an open and trusting climate Be able to walk away from the deal.

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Summary

Prepare, Prepare, Prepare Increase mutual understanding Develop trust and respect Encourage mutual persuasion Enhance communication Aim for mutual gain Develop and discuss creative options Develop coalitions and alternatives

Third-Party Negotiations Mediator: A neutral third party who facilitates a

negotiated solution by using reasoning, persuasion, and suggestions for alternatives.

Arbitrator: A third party to a negotiation who has the authority to dictate an agreement.

Conciliator: A trusted third party who provides an informal communication link between the negotiator and the opponent.

Consultant: An impartial third party, skilled in conflict management, who attempts to facilitate creative problem solving through communication and analysis.

Culture and Negotiation Cultures vary in their approach to negotiations:

Relationships Negotiation style Time Agreement

Culture determines what should be or need not be negotiated

Culture determines how content is expressed, and how the message is interpreted.

People from different cultures interpret information differently because they apply different sets of values

Some Cultural Differences in Negotiations

Number of Participants America: one or few negotiators China: large number Japan: large number Korea: smaller than China and Japan

Preparation for Negotiation Information gathering is not always just the facts China: Know yourself, know you opponent, one hundred

battles, one hundred victories. Sun Tzu, ancient Chinese military strategist.

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Some Cultural Differences in Negotiations

Logic American: linear logic; linear causality East Asians: spiral or non-linear logic

Time Perception American: Time is Money Chinese: Time is not a scarce commodity Japanese: Understand every aspect of the situation Korean: Quickest compared to Chinese and Japanese in

making decisions.

Trang Hoai Thu Thao, MA., MPRIA, Lecturer of Public Communication.

Some Cultural Differences in Negotiations

Americans: One issue at a time Chinese: No detailed issues; only broad issues Japanese: Similar with Chinese Korean: More general than specific

Intuition-gut feeling of mood, facial expressions important

Americans: Meet to make the deal:written agreement Chinese: Meet to establish and develop a relationship;

a communication agreement Japanese: More binding force of the Contract Korean: Similar with Chinese

Cross-Cultural Negotiations

Factors That Contribute to Success Sincerity, Good Faith, and Honesty Cultural Awareness Patience of US negotiating Team Development of Personal Relationship

Factors That Can Lead to Failure Lack of Connection Personal Relationship Large Difference in Negotiating Style Lack of Sincerity by the Other Party

Cross-cultural Negotiating Negotiating the relationship: Trust must be based on

an understanding of the other partys need to conclude the deal, never depend solely upon personal feelings and empathy as a basis of trust. As a manager in the negotiation situation, you only gain trust when: It is in their interests to do business with you; They will honor any agreement made and do their best to

implement it; They will respect information and opinions made in

confidence; They will do their best to convince their constituents to

accept agreements made between you.

Cross-cultural Negotiating (Con.) Exchange Information

Prepare well Be careful in trading information Ask questions

Persuasion Tactics Silence is sometimes a strongly persuasive tool in

negotiations. It may be advantageous to delay a counter proposal. Dont take the absence of disagreement or expressions of

agreement at face value. Qualified final offers tell the other side that they must be

prepared to make concessions if the negotiation is to continue.

Cross-cultural Negotiating (Con.) Concessions

Making concessions of equivalent steps at a steady rate, matching theirs. But there is no fixed rule, and different cultures follow different styles.

For example: Brazilians tend to demand more, the Japanese ask for higher profits when making the initial offer and are consistent in making small concessions throughout, Chinese expect to spend time negotiating and expect to make concessions...

Summary Develop and nurture the relationship Try to have similar numbers, status, and

seniority in the negotiating team Have continuity in the negotiations team Clearly identify the role of the women Know the opponent Resolution stage - be patient Compromise Know the different attitudes toward legal

contracts