BUS403: Negotiations and Conflict Management (2016.A.01)

There are multiple negotiation styles and negotiation strategies that can be combined to yield different strategies.

Learning Objectives

• Illustrate various perspectives on negotiation in the business world

• Give examples of negotiation strategies.

Key Points

• In the broader view, negotiation has been broken down into its components in two similar fashions: the first being process, behavior, and substance, and the second being strategy, process, tools, and tactics.
• Understanding the different styles utilized in the negotiating process can be a useful tool while observing other parties and reflecting upon one's own style. Overall, there are five different styles, each of which is useful independently and interdependently (see.
• There are three different negotiating types to express these styles: soft, hard, and principled.
• Emotion is a relatively new application to negotiation but fits well within the context of strategies and styles as the consideration of emotion may dramatically affect both the choice of a given style and the effectiveness of its execution.

Terms

• Principled

  Based on having or manifesting principles. Adhering to ethical expectations.

• Collaborate

  To work together with others to achieve a common goal.

Negotiation strategies and tactics revolve around distributive negotiation (hard-bargaining and haggling) and integrative negotiation (value-added negotiation). It is useful to understand the basic components of a negotiation, the five negotiating styles, the three types of negotiation, and how emotion affects the negotiation process.

The Process Components

In the broader view, negotiation has been broken down into its components in two similar fashions. The first algorithmic description defines negotiation elements in three parts: process, behavior, and substance. In this perspective, the process is the actual act of negotiation and bargaining. The relationships and communication styles guide the behavior of the negotiators, and the substance of the negotiations is guided by the actual commodity, service, or agenda in question.

The second description is comprised of four parts: strategy, process, tools, and tactics. Strategy refers to each group's objectives and is a central component to understanding how to best achieve an integrative negotiation. Processes and tools refer to the assets available to either party in the bartering process. Tactics refers to the strategy being employed. Keeping both of these perspectives in mind is useful in understanding the process as a whole.

Negotiating Styles

Recognizing the different negotiation styles utilized can be a useful tool both through observing other parties and reflecting upon one's own style. Overall, there are five different styles, each of which is useful independently and interdependently:

• Accommodating – This style is sensitive to the emotions of those being bargained with and in touch with verbal and nonverbal signals. Individuals using this style tend to seek mutual benefit and long-term relationship building.
• Avoiding – In this style, individuals do not like the confrontational elements of negotiating, and by default, tend to stay away from it wherever possible. Avoiding negotiation can also be a useful way to be perceived as tactful and diplomatic.
• Collaborating – Collaborators thrive on negotiating and perceive it as a constructive process that can create mutual benefit (integrative). Collaboration requires strategic thinking, and individuals particularly aligned with this style tend to focus more on the content/agenda than their negotiating counterparts (sometimes overlooking relationships).
• Competing – This is a common perspective in variable income models, where negotiators compete for contracts and derive benefits from success. Competing styles tend to have strong instincts and good strategic understanding but neglect the relationships involved.
• Compromising – This style is defined by an eagerness to close a deal equitably, which results in good relationships but often not the ideal outcome for the party using this model (as concessions are often given too quickly).

Types of Negotiation

In conjunction with the above styles, there are three different negotiating types to express these styles. The types are soft, hard, and principled:

• Soft – Soft negotiators don't push or create confrontation but use trust to maintain strong relationships. They try to build long-term relationships that have value intrinsically, though this does not mean that they are unconcerned with reaching an optimal outcome.
• Hard – Hard negotiation is often used in the competitive style above, where contentious strategies are leveraged to influence other parties. 'My final offer' is an example of this type of negotiation. Pressure and scarcity are utilized to intimidate the other party into closing the deal.
• Principled – Negotiation in which the focus is on the problem and the pragmatic and organized pursuit of solving it. It tends to minimize influence or pressure but instead pursues moral standards, fairness, professionalism, and tradition.

Emotion

The consideration of emotion may dramatically affect both the choice of a given style and the effectiveness of its execution. Indeed, negative emotions psychology results in irrational and unpredictable behavior that dilute synergy and limit the potential of realizing a reasonable solution. Inversely, positive emotions raise confidence and clear the mind, allowing a clearer cooperative strategy to emerge and take hold.

At this juncture, cross-cultural management becomes absolutely integral, as emotional reactions will largely result from adhering to and understanding values, ethics, traditions, and etiquette. Without these critical cross-cultural skills, negotiators are much more likely to suffer negative effects within the process of bargaining, minimizing the potential for capturing mutual value.

Source: Boundless
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