Negotiation Chapter 1:The Nature of Negotiation

ESSENTIALS OF NEGOTIATION

Chapter 1: The Nature of Negotiation

Introduction
Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for organized labor; it is something that everyone does, almost daily. The structure and processes of negotiation are fundamentally the same at the personal level as they are at the diplomatic and corporate levels.

Negotiations occur for one of two reasons:1) to crate something new that neither party could do on his or her own, or 2) to resolve a problem or dispute between the parties. A large number of perspectives can be used to understand different aspects of negotiations, including theory and research from economics, psychology, political science, communication, labor relations, law, sociology, and anthropology. The same negotiation outcome may also be explained simaltaneously from several different perspectives.

Sometimes people fail to negotiate because they do not recognize that they are in a bargaining sittuiation. Therefore, people should be well prepared to recognize negotiation situations; understand what the process of bargaining invloves; know how to analyze, plan, and implement successful negotiations.

Characteristics of a negotiation situation
There are several characteristics common to all negotiation situations:
There are two or more parties-that is, two or more individuals, groups, or organizations.
There is a conflict of interest between two or more parties-that is, what one wants is not necessarily what the otherone wants.
The parties negotiate because they think they can use some form of influence to get a better deal that way than by simply taking what the other side will voluntarily give them or let them have.
The parties, at least the moment, prefer to search for agreement rather than to fight openly, have one side capitulate, permanently break off contact, or take their dispute to a higher authority to resolve it. Negotiation occurs when there is no system-no fixed or estiblished set of rules or procedures-for resolving the conflict, or when the parties prefer to work outside of the system to invent their own solution.
When e negotiate, we expect give and take. We expect that both sides will modify or give in somewhat on their opening statements, requests, or demands. However, truly creative negotiations may not require compromise; instead the parties may invent the solution that meets the objectives of all sides.
Successful negotiation involves the management of intangibles( the underlying psychological motivation that may directly or indirectly influence the parties during a negotiation.) as well as the resolving of tangibles.

Interdependence
In negotiation, both parties need each other. Interdependent relationships are characterized by interlooking goals-the parties need each ather in order to accomplish their goals. Interdependent goals are an important aspect of negotiation. The structure of the interdependence between different negotiating parties determines the range of posible outcome of the negotiatiation and suggests the appropriate strategies and tactics that the negotiators should use.

The interdependence of people’s goals is the basis for much social interaction. By examining the ways in which the goals are interdependent, we can estimate what type of behavior is most likely to emerge.So, the nature of the intedependence will have a major impacy on the nature of the relationship, the way negotiations are conducted, and the outcomes of a negotiation.

Fisher, Ury, and Patton, in their popular book Getting to yes: Negotiating Agreement without Giving In, suggest that knowing and developing alternatives to reaching an agreement with the other party in a negotiaton is an important source of power. They note that, “whether you should or should not agree on something in a negotiation depends entirely upon the attractiveness to you of the best available altrnative.” They call this concept BETNA (an acronym for Best Alternative To a Negotiated Agreement).

Mutual adjustment
Interdependent relationships-those in which people are mutually dependent-are complex. Both parties know that they can influence the other’s outcomes and that their outcomes can, in turn, be influenced by the other. It is important to recognize that negotiation is a process that transforms overtime, and mutual adjustment is one of the key causes of the changes that occur during a negotiation. The effective negotiator needs to undrstand how people will adjust and readjust what they say during negotiations based on what the other party does and is expected to do.

Behavior in interdependent relationship is frequently calculated on the promise that the more information one has about the other person, the better. There is the possibility, however, that too much knowledge only confuses, or it may accentuate differences in perceived fairness. Problem solving is essentially a process of specififying the elements of a desired outcome, examining the components available to produce the outcome, and searching for a way to fit them together. Hence, a necessary step in all negotiation is to clarify and share information about what both parties really want as outcomes.

As negotiations evolve, at least some part of the combined set of desired outcomes becomes known, usually through statements of bargaining positions or needs. If the suggested outcomes don’t immediately work, the negotiation continues as a series of proposals. When one party accepts achange in his or her position, a concession has been made. Concessions restrict the range of options within which a solution or agreement will be reach. There are two dilemmas that all negotiators face:
The dilemma of honesty; concerns how much of the truth to tell the other party.
The dilemma of trust; concerns how much to believe of what the other party tells you.

The search for an optimal solution through the processes of giving information and making concessions is greatly aided by trust and a belief that you’re being treated nonestly and fairly. Two efforts in negotiation help create such trust and belief-one is based on perceptions of outcomes and the other on perceptions of the process.

Interdenpendence and perceptions
Understanding the nature of the interdependence of the parties is critical to successful negotiation. Negotiators make judgement s about the nature of the independence in their negotiation situations, and negotiator perceptions about interdependence become an important as the actual structure of the interdependence.

Two potential consequences odf interdependent relationships are :
1. Value creation
One of the main sources of value creation is contained in the differences that exist between negotiators. The key differences among negotiators may include:
- Differences in interest. Negotiators seldom value all items in a negotiation equally.
- Differences in opinions. People in their evaluation of what something is worth or the future value of an item.
- Differences in risk aversion. People differ in the amount of risk that they are comfortable assuming.
- Differences in time preference. Negotiators frequently differ in how time affects them.
In summary, it is important that negotiators be aware that potential differences between them may be the critical factors that they can use to reach an agreement.

2. Conflict
Conflict may be defined as a “sharp disagreement or opposition, as of interests, ideas,etc” and includes :the perceived divergence of interest, or a belief that the parties’ current aspirations cannot be achieved simultaneously.”

- Level of Conflict. There are four levels of conflicts to indentify :1)Intrapersonal or intrapsychic conflict; occurs within an individual., 2) Interpersonal conflict; occurs between individual people., 3) Intragroup conflict; occurs within a small group. 4) Intergroup conflict; occurs between unions and management.

- Functions and dysfunctions of conflict. There are many of elements that contribute to conflict’s destructive image:
1) Competitive processes. Parties compete against each other because they believe that their goals are in opposition and that the two of them cannot both achieve their objectives.
2) Misperception and bias. People tend to view things consistently with their own perspective on the conflict.
3) Emotionality. The parties become anxious, irritated, annoyed, angry, or frustruated.
4) Decreased communication
5) Blurred issues
6) Regid commitments. The parties becomes locked into position.
7) Magnified differences, minimized similarities.
8) Escalation of the conflict.each side becomes more entrenched in its own view.

- Factors that make conflict difficult to manage

Conflict management
Many approaches to managing conflict have been suggested and inventories have been constructed to measure negotiators’ tendencies to use theseapproaches. Each approach begins a fundamentally similar two-dimentional framework or called the dual concerns model. The model postulates that individuals in conflict have two independent levels of concern: concern about their own outcomes and concern about the other’s outcomes.In the dual concerns model, ther are five strategies for conflict management to identify:

1. Contending(competing or dominating) – parties who employ this strategy maintain their own aspirations and try to persuade the other party to yield.

2. Yielding(accommodating or obliging) – let the other win.

3. Inaction(avoiding) – the party prefers to retreat, b silent, or do nothing.

4. Problem solving(collaborating or integrating) – the two parties actively pursue approaches to maximize their joint outcome from the conflict, so that both sides “win.”

5. Compromizing – it represents amoderate effort to pursue one’s own outcomes and a moderate effort to help the other party achieve his or he outcomes.