BUS641: Strategic Negotiations and Conflict Management

The Negotiation Process

The negotiation process consists of identifying one's desired goals - that is, what you are trying to get out of the exchange - and then developing suitable strategies aimed at reaching those goals. A key feature of one's strategy is knowing one's relative position in the bargaining process. That is, depending upon your relative position or strength, you may want to negotiate seriously or you may want to tell your opponent to "take it or leave it." The dynamics of bargaining power can be extrapolated directly from the discussion of power Table 14.3 and indicate several conditions affecting this choice. For example, you may wish to negotiate when you value the exchange, when you value the relationship, and when commitment to the issue is high. In the opposite situation, you may be indifferent to serious bargaining.

When to Negotiate
Bargaining Strategies
Characteristics of the Situation	Negotiate	"Take It or Leave It"
Value of exchange	High	Low
Commitment to a decision	High	Low
Trust Level	High	Low
Time	Ample	Pressing
Power distribution*	Low or balanced	High
Relationship between two parties	Important	Unimportant
* Indicates relative power distribution between the two parties; "low" indicates that one has little power in the situation, whereas "high" indicates that one has considerable power.

Once goals and objectives have been clearly established and the bargaining strategy is set, time is required to develop a suitable plan of action. Planning for negotiation requires a clear assessment of your own strengths and weaknesses as well as those of your opponents. Roy Lewicki and Joseph Litterer have suggested a format for preparation for negotiation. According to this format, planning for negotiation should proceed through the following phases:

1. Understand the basic nature of the conflict. What are the primary areas of agreement and disagreement?

2. What exactly do you want out of this negotiation? What are your goals?

3. How will you manage the negotiation process? Here, several issues should be recognized:

   1. Identify the primary issues to negotiate.
   2. Prioritize these issues.
   3. Develop a desirable package including these important issues.
   4. Establish an agenda.

4. Do you understand your opponent?

   1. What are your opponent's current resources and needs?
   2. What is the history of your opponent's bargaining behavior? What patterns can you see that can help you predict her moves?

Exhibit 14.7 Negotiating with the Referee Minnesota Gophers coach, Lindsay Whalen talks to a referee during a University of Minnesota Gophers game against Cornell University. Is this negotiation or persuasion?

Research indicates that following such procedures does, in fact, lead to more successful bargaining. In Table 14.4, for example, we can see differences in both the planning approaches and the actual behaviors of successful and average negotiators. Preparation clearly makes a difference, as does interpersonal style during the actual negotiation.

Differences Between Successful and Average Negotiations
Negotiation Behavior	Skilled Negotiators	Average Negotiators
Before the Negotiation
Number of options considered per issue	5.1	2.6
Portion of time spent focusing on anticipated areas of agreement instead of conflict	39%	11%
During Negotiation
Portion of time spent asking questions of opponent	21%	10%
Portion of time spent in active listening	10%	4%
Portion of time spent attacking opponent	1%	6%

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Source: J. Stewart Black and David S. Bright; OpenStax, https://openstax.org/books/organizational-behavior/pages/14-4-negotiation-behavior
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