Unit 2: Negotiation Strategies and Biases
According to the Stanford Graduate School of Business, "successful bargaining means looking for positives in every possible circumstance". You cannot accomplish this without careful planning. The product of the careful negotiation planning is your negotiation strategy. The strategy you use in a negotiation is heavily reliant on the outcome that you desire.
Understanding the principles, strategies, and tactics effective negotiators use will help you become more confident as you choose a negotiation strategy that will help you accomplish your goals. Perhaps more important than planning an appropriate strategy is to become knowledgeable about what motivates us and our counterparts to make decisions. In this unit, we explore various biases that affect our decision making and how we can use this knowledge to overcome obstacles to clear, objective, and effective negotiations. In subsequent units, we study how to apply these concepts to specific negotiation theories in order to add or create value for all participants to the negotiation.
Completing this unit should take you approximately 13 hours.
Upon successful completion of this unit, you will be able to:
- explain the distinction between positional bargaining and interest based bargaining;
- identify framework of four negotiation strategies and their strengths and weaknesses in resolving conflict;
- identify types of biases which influence our emotions and attitudes and impact our decision making; and
- explain the importance of controlling our emotions in order to succeed in negotiating.
2.1: Problem Solving
Read this section to define interpersonal conflict, compare and contrast the five styles of interpersonal conflict management, explain how perception and culture influence interpersonal conflict, and list strategies for effectively managing conflict. For the time being, skip the "Culture and Conflict" section, which we will cover in Unit 6.
Read this section to learn about common components/characteristics of problems and the five steps in group problem-solving. This article also describes the brainstorming and discussion that should occur before group decision-making, compares and contrasts decision-making techniques, and discusses various influences on decision-making.
2.2: Contending
Read this section to learn how people often employ a contending (or competing) style to reach their goal regardless of what others say or how they feel. Take a look at the exercise questions at the bottom of the section. Do you deal with conflict differently with friends and family than you do with your coworkers? If so, why do you think that is? The yielding (or accommodating) style is cooperative and unassertive. In this style, the person gives in to what the other side wants, even if it means giving up their personal goals. Have you employed this style in either a work or home situation? Was the outcome successful? The compromising style is one where individuals have some desire to express their own concerns and get their way but respects the other person's goals. Does it sound good to compromise? Is the compromising style always appropriate? Why or why not?
2.3: Building Relationships
Read section 1.3 on pages 24–27 to learn how others' perceptions may not be identical or compatible with our own. Perception is the driving force behind our reaction to things. Then, read Chapter 9 on pages 256–293 to refresh your knowledge of conflict management styles and effective management techniques, including changing organizational structures to avoid built-in conflict, changing team members, creating a common enemy, using majority rules, and problem-solving.
2.4: Understanding Bias
Read this article for an overview of how to improve critical thinking by moving beyond biases and stereotypes. While we may recognize a bias (or the preferred way of looking at things) in others, it is easy to overlook our own biased thoughts or emotions.
The authors suggest two methods for developing a way to apply critical thinking to question information and situations and consider their context. These include recognizing assumptions and examining information for accuracy, assumptions, biases, or specific interests. This article also discusses how biases create obstacles to effective decision-making, especially in our negotiations.
This article explains how decision making is a cognitive activity. Our predispositions can be an obstacle or an enabler to the decision-making process. It briefly describes the most common types of cognitive bias: confirmation bias, anchoring, halo effect, and overconfidence bias. Awareness of these concepts enables us to negotiate and resolve conflicts more effectively.
Read this chapter, which explains that interpretation is the part of the perception process in which we assign meaning to our experiences using mental structures known as schemata. Our previous knowledge and experience help us make sense of the perceptual cues around us. The perception process affects our communication because we respond to stimuli differently based on how we perceive them. Take time to review the questions at the end of each section.
Read the introduction to this case study and then read part 1. Forensic scientists (who are supposed to remain impartial) can become partisan and see their function as helping the police. Motivation bias is usually conscious and may depend on one's personal situation. You may be interested in reading the rest of the article and noting the Supreme Court's statement in the conclusion.
Read this section to learn why our emotions can help or hurt us in our decision making. Emotions that allow you to deny reality generally produce undesirable results. In contrast, emotions that encourage you to explore alternatives based on fairness and justice can produce very desirable results.
The endowment effect explains that people are willing to pay less for something than the amount they require to sell the same item if they own it. The stronger the link between the self and the item, the more one would be willing to pay or require to sell an item. Do you agree? Why or why not? This article focuses on women's willingness to accept risk (WTA) and willingness to pay (WTP). Read the introduction, section 1.1, and section 5. The researchers test a popular theory that women are more risk-averse than men.
2.5: Shared Interests
Read the section on negotiation to learn why managers need to generate options that advance shared interests. This article cites Vijay Verma's description of four principles of negotiation:
- separate people from the problem,
- focus on common interests,
- generate options that advance shared interests, and
- develop results based on standard criteria.
Read the "Strategy Overview on Collaborative Problem Solving" section. Collaboration is necessary to craft plans, policies, and programs that are regarded as legitimate and sustainable. The strategy builds consensus by having participants analyze the issue, hear from experts, generate and evaluate options, review draft documents, and revisit group agreements at every stage. This article takes us through nine stages in the process and offers helpful key tasks, checklists, and vignettes for each of the stages.
Robert Cooper and Ayman Sawaf define emotional intelligence as the ability to sense, understand, and effectively apply the power and acumens of emotions as a source of human energy, information, connection, and influence. Daniel Goleman said that the emotional intelligence quotient (EQ) is more important than IQ in predicting leadership success. Emotional Intelligence is critical to managers. The more complex the project profile, the more important the project manager's EQ becomes to project success.
Unit 2 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.