Skills 20-
Negotiation (AgEc 404) Larry D. Makus Professor of Ag. Econ. Univ. of Idaho-Moscow [e-mail] [phone]
http://courses.ag.uidaho.edu/aers/agecon40402/
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Day 1 1. Introductions 2. Course syllabus. 3. Questions??
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Introduction
Negotiation is something that everyone does, almost daily
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Negotiations
Negotiations occur for several reasons:
To agree on how to share or divide a limited resource. To create something new that neither party could attain on his or her own. To resolve a problem or dispute between the parties.
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Approach to the Subject
Most people think bargaining and negotiation mean the same thing; however, we will be distinctive about the way we use these two words: Bargaining: describes the competitive, win-lose situation. Negotiation: refers to win-win situations such as those that occur when parties try to find a mutually acceptable solution to a complex conflict.
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Three Important Themes
1. The definition of negotiation and the basic characteristics of negotiation situations. 2. Interdependence, the relationship between people and groups that most often leads them to negotiate. 3. Understanding the dynamics of conflict and conflict management processes which serve as a backdrop for different ways that people approach and manage negotiations.
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Characteristics of a Negotiation Situation
1. There are two or more parties. 2. There is a conflict of needs and desires between two or more parties. 3. Parties negotiate because they think they can get a better deal than by simply accepting what the other side offers them. 4. Parties expect a give and take process.
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Characteristics of a Negotiation Situation
5. Parties search for agreement rather than:
Fight openly. Capitulate. Break off contact permanently. Take their dispute to a third party.
6. Successful negotiation involves:
Management of tangibles (e.g., the price or the terms of agreement). Resolution of intangibles (the underlying psychological motivations) such as winning, losing, saving face.
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When not to Negotiate
1. When you are betting the farm. 2. When you are operating at capacity. 3. When demands are unethical. 4. When you do not care about outcome. 5. When time pressure is excessive. 6. When the other party acts in bad faith (trust?). 7. When time may be on your side. 8. When you are not prepared.
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Interdependence
In negotiation, parties need each other to achieve their preferred outcomes or objectives:
This mutual dependency is called interdependence Interdependent goals are an important aspect of negotiation Win-lose: I win, you lose Win-win: Opportunities for both parties to gain
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Interdependence
Interdependent parties are characterized by interlocking goals:
Having interdependent goals does not mean that everyone wants or needs exactly the same thing. A mix of convergent and conflicting goals characterizes many interdependent relationships.
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Types of Interdependence Affect Outcomes
Interdependence and the structure of the situation shape processes and outcomes:
Zero-sum or distributive one winner Non-zero-sum or integrative mutual gains situation
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Alternatives Shape Interdependence
Evaluating interdependence depends heavily on the alternatives to working together:
The desirability to work together may provide better outcomes. Best available alternative: BATNA (acronym for Best Alternative to a Negotiated Agreement).
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Mutual Adjustment
Continues throughout the negotiation as both parties act to influence the other. One of the key causes of the changes that occur during a negotiation. The effective negotiator needs to understand how people will adjust and readjust and how the negotiations might twist and turn, based on ones own moves and the others responses.
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Mutual Adjustment and Concession Making
When one party to agrees make a change in his/her position, a concession has been made:
Concessions restrict the range of options, since you cannot return to the previous position. Whenever a concession is made, the bargaining range is further constrained.
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Two Dilemmas in Mutual Adjustment
Dilemma of honesty:
Concern about how much of the truth to tell the other party.
Dilemma of trust:
Concern about how much negotiators should believe what the other party tells them.
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Value Claiming and Value Creation
Opportunities to win or share resources
Claiming value: result of zero-sum or distributive situations where the object is to gain largest piece of resource. Creating value: result of non-zero-sum or integrative situation where object is to have both parties do well.
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Value Claiming and Value Creation
Most actual negotiations are a combination of claiming and creating value processes:
Negotiators must be able to recognize situations that require more of one approach than the other. Negotiators must be versatile in their comfort and use of both major strategic approaches. Negotiator perceptions of situations tend to be biased toward seeing problems as more distributive/competitive than they really are.
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Value Claiming and Value Creation
Value differences that exist between negotiators include:
Differences in interest. Differences in judgments about the future. Differences in risk tolerance. Differences in time preferences.
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Conflict
Conflict may be defined as a: "sharp disagreement or opposition" and includes "the perceived divergence of interest, or a belief that the parties' current aspirations cannot be achieved simultaneously"
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Levels of Conflict
Intrapersonal or intrapsychic conflict
Conflict that occurs within an individual We want an ice cream cone badly, but we know that ice cream is very fattening.
Interpersonal conflict
Conflict is between individuals Conflict between bosses and subordinates, spouses, siblings, roommates, etc.
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Levels of Conflict
Intragroup Conflict
Conflict is within a group Among team and committee members, within families, classes etc.
Intergroup Conflict
Conflict can occur between organizations, warring nations, feuding families, or within splintered, fragmented communities. Th...