PSS 412 NEGOTIATION:

THEORY AND PRACTICE

TOPIC: Types/ Style of Negotiation
LECTURER: NICK ESSIEN
 OUTLINE:
 TYPES/STYLE OF NEGOTIATION
 PRINCIPLES/PRECONDITIONS FOR NEGOTIATIONS
 PRE-NEGOTIATION PLANNING
 POST NEGOTIATION UNDERSTANDING
 TECHNIQUES OF NEGOTIATION
There are five types of negotiation to be examined in this course.
TYPES/STYLE OF NEGOTIATION

1. Distributive negotiation also known as Win-Lose Negotiation/Hard

Bargaining
2. Integrative Negotiation also known as Win-Win Negotiation
3. Compromising Negotiation also known as Lose-Lose Negotiation
4. Multi-Party Negotiations
5. Bad Faith Negotiation
1. Distributive negotiation: Also sometimes called “hard
TYPES/STYLE OF NEGOTIATION

bargaining,” distributive negotiation is when both parties take an

extreme position and one side’s win is believed to be the other
side’s loss (a win-lose solution). This operates on a “fixed pie”
principle, in which there is only a set amount of value in the
negotiation, and one side will walk away with the better deal.
Examples include haggling prices in real estate or at a car
dealership.
 TYPES/STYLE OF NEGOTIATION

2. Integrativenegotiation: Parties engaging in integrative

negotiation don’t believe in a fixed pie, instead asserting that
both sides can create value or mutual gains by offering trade-
offs and reframing the problem so that everyone can walk
away with a win-win solution.
 Compromising Negotiation involves finding a middle ground where both
TYPES/STYLE OF NEGOTIATION

3.

parties make concessions to reach a satisfactory agreement. It is a give-and-take

approach that focuses on finding an acceptable solution rather than maximizing
individual gains.

Furthermore, Compromising Negotiation can be useful when time is limited or

when both parties are equally powerful. It is also useful when both parties have
similar levels of importance assigned to their outcomes. Skilled negotiators in
Compromising Negotiation have the ability to identify and priorities issues,
evaluate trade-offs, and find mutually agreeable solutions.
4. Multi-Party negotiations are complex negotiations between two or more
TYPES/STYLE OF NEGOTIATION

parties.
They can be extremely challenging and may take years to complete.
International treaties between nations are often multi-party.
Multi-party negotiations require advanced diplomatic techniques.
5. Bad faith negotiation occurs when a party makes commitments that they
TYPES/STYLE OF NEGOTIATION

have no intention of keeping.

Bad faith negotiation is often used as a delay or diversionary tactic. For
example, a country may sign an environmental treaty with no intention of
implementing it just to relieve political pressure from its citizens.
If you suspect that the other side is negotiating in bad faith, it's time to start
thinking about penalties in your agreement.
There are various methods to conduct the direct dialogue between parties. However, these
PRINCIPLES OF NEGOTIATION

are based on the following four principles:

1. There must be two or more parties which have either conflict or disagreement.
2. There must be a perceived conflict of needs, positions and interests.
3. There must be interdependence so that the outcome must be satisfying to all parties.
4. Agreement must be required to be reached within reasonable time, so that it becomes
beneficial to parties.
Harvard Approach, developed by R. Fisher and W. Ury, and termed, principled negotiation.
PRINCIPLED NEGOTIATION

Below are
The Four Prescriptions of Principled Negotiation
1. Separate the People from the Problem:.
2. Focus on Interests not Positions.
3. Invent Options for Mutual Gain.
4. Insist on Using Objective Criteria.
This is the most important stage of negotiation. The success or failure of negotiation
depends on how well the homework has been done before one is in a face-to-face actual
PRE-NEGOTIATION PLANNING

negotiation situation. Pre-negotiation planning requires consideration of the following

factors:
Know thyself: One of the most significant factors is the knowledge about ones own
personality and predispositions. Some people are good in bargaining while others get
confused and irritated more easily. As a result, they either give away some very useful
information or block the process of negotiation. Evidence shows that people who have
lesser tolerance for ambiguity tend to be losers in negotiation. Weingart et al. (1988) found
high interpersonal orientation as the most significant characteristic in making negotiation
effective. It involves sensitivity to the needs of others, power balance and the requirements
of the immediate situation.
Know the adversary: Knowing ones self is not enough. It is also necessary to
do a background check on the individual/party; one is going to negotiate with,
PRE-NEGOTIATION PLANNING

particularly if it is a first-time interaction. By and large it has been seen that

parties belonging to the same background (ethnic, religious, caste, etc.) and
subscribing to the same ideology (political or otherwise) tend to cooperate
with each other. Early evidence has suggested that women tend to be more
conciliatory than men (Wall, 1976). However, some recent evidence suggests
that it is not the gender per se but rather masculine and feminine tendencies,
irrespective of biological gender, that make the difference.
Specify your goals and objective: Before walking into a face-to-face negotiation, it is
imperative to be clear as to what are your immediate and long-term objectives in the
PRE-NEGOTIATION PLANNING

negotiation. An understanding of these helps in planning the negotiation strategy. In

case there are a number of issues on which negotiation has to take place it is absolutely
necessary to prioritize your objectives most important followed by the next most
important, and so on. Not only this, it is also necessary to identify those issues which
one would be willing to trade off with the options provided by the other party. In other
words, which of the several issues one is willing to give up if some favorable option is
provided? Sometimes it is also necessary to combine various issues into a single
package instead of dealing with them one by one. The package may have greater
cumulative value than each single item.
Develop arguments/alternatives: Negotiation is not possible if there is a fixed point
argument. It involves a range within which the individuals/parties in negotiation have
PRE-NEGOTIATION PLANNING

to bargain. Therefore, before going into actual negotiation, it is necessary to decide the
entry and exit points. There is nothing like getting a deal at ones exit point because
that generally does not happen. Hence, it is necessary to decide what is it that one
would like to get, what would be a tolerable limit without losing much, and finally
what is the absolute minimum/ maximum one would finally like to have to receive a
negotiation surplus. These are different points in the range defined by the entry and
exit points. Just walking into a negotiation without these considerations may put one
in a surprise situation, getting out from which may not only be difficult but often
impossible.
Agenda/procedures: Perhaps one of the most important factors in pre-negotiation
planning has to do with agenda, site selection, physical arrangement, and time
PRE-NEGOTIATION PLANNING

availability. These are the issues/items on which negotiation has to take place. The
agenda tends to set the tone for negotiation. An agenda must be prepared in
consultation with the individual/ party involved in the negotiation and should be made
known to them before the actual negotiation. Site selection plays a significant role in
the process of negotiation. Most negotiations usually take place at a neutral place.
Negotiations taking place at either individual/partys office/city/country may provide
the individual/party in negotiation the home advantage by way of socio-moral support,
access to additional help, and control on infrastructural facilities. Alternatively, it adds
to the disadvantage of the other individual/party. It is like a cricket match on home
ground where the local public provides moral support to the home team and
discourages the winning attempts of the other team.
People often think that once an agreement is reached, the act of negotiation is
completed.
POST-NEGOTIATION UNDERSTANDING

However, the fact is that negotiation helps in finding a solution to the conflict. Once
the solution has been found, it has to be implemented. The solution is only the
beginning, it has to be seen that negotiation reaches its logical conclusion by being
implemented. Therefore, post-negotiation understanding requires a blue print to put
the agreements in action. Hence, the following agenda has to be discussed, negotiated,
and agreed upon:
Implementation Plan: Agreeing on an issue in negotiation leads to putting the
agreement into an action plan. The exact nature of the plan must be sorted out during
POST-NEGOTIATION UNDERSTANDING

the negotiation to reduce any future misunderstanding. It should include the course of
action, resource generation and resource utilization, a time table and indices for
monitoring, and evaluation of the success of the course of action taken. If such an
agreement is not made, then chances are that while implementing the agreements
arrived at in negotiation the need may arise to go back to the negotiation table.
Role Responsibilities: In addition to the blueprint suggested above, it is also
imperative to delineate the exact roles that the individual/parties in negotiation, or
POST-NEGOTIATION UNDERSTANDING

their representatives, would be performing. Such an attempt helps in allocating

responsibilities, authority, and accountability. It also saves time and energy by
avoiding unnecessary duplication of efforts and streamlines the need for coordination
between the two individuals/parties in negotiation.
Review Teams: To monitor the progress of the implementation plan, the individuals/
parties should also agree on setting up joint implementation review teams. These
POST-NEGOTIATION UNDERSTANDING

individual/parties should ensure adequate information sharing, provide timely

feedback, make mid-course correction, and by and large make sure that progress is
timely and as planned.
Typically, negotiators target points do not overlap. The seller wants more for the product
or service than the buyer is willing to pay. However, it is often (but not always) the case
that negotiators reservation points do overlap meaning that the most the buyer is willing
TECHNIQUES OF NEGOTIATION/BARGAINING

to pay is more than the least the seller is willing to accept. Under such circumstances, a
mutual settlement is profitable for both parties. However, the challenge of negotiating is
to reach a settlement that is most favorable to oneself and does not give up too much of
the bargaining zone. The bargaining zone, or Zone of Possible Agreements (ZOPA) (Lax
& Sebenius, 1986) is the region between each party's reservation point. The final
settlement of a negotiation will fall somewhere above the sellers reservation point and
below the buyers reservation point (Raiffa, 1982). Every negotiator should know certain
important principles when it comes to slicing the pie. First it is important to realize that
the bargaining zone can be either positive or negative.
Techniques One: Assess your best alternative to negotiated agreement and improve it.
Nothing can help a negotiator get a bigger slice of the pie than having a great best
TECHNIQUES OF NEGOTIATION/BARGAINING

alternative to negotiated agreement.

Techniques Two: Determine Your Reservation Point, but do not reveal it unless you
are willing to settle for your reservation point, do not reveal your best alternative to
negotiated agreement or your reservation price during the course of negotiation, even
in the friendliest of situations. If you do, the other party will simply offer you your
reservation price and you will not have any surplus for yourself. Further, your threats
to hold out wont work because the other negotiator will know that rationally, you are
better off accepting the offer.
Techniques Three: Research the other party's best alternative to negotiated agreement
and estimate their reservation point even though determining the other partys best
TECHNIQUES OF NEGOTIATION/BARGAINING

alternative to negotiated agreement may be easier said than done, negotiators often
fail to do sufficient research, which reduces their power more than anything.
Negotiators can use a variety of ways to garner information that may reveal something
about the opponents alternatives. Be careful when the other party discloses, however.

Techniques Four: Set high aspirations (Be Realistic, But Optimistic) your aspiration or
target point defines the upper limit on what you can ever expect to get in a negotiation.
Because you will never get more than your first offer, your first offer represents the
most important anchor point in the negotiation.
Techniques Five: Make the first offer (If You Are Prepared) Folklore dictates that
negotiators should let the opponent make the first offer. The experts say its better to
TECHNIQUES OF NEGOTIATION/BARGAINING

let your adversary make the opening offer. However, scientific investigation of real
bargaining situations does not support this intuition. Whichever party buyer or seller
makes the first offer, that person obtains a better final outcome.

Techniques Six: Immediately re-anchor if the other party opens first if your opponent
makes an offer, then the ball is in your court. It is wise to make a counter-offer in a
timely fashion. This move does two things. First, it diminishes the prominence of the
opponents initial offer as an anchor point in the negotiation. Second, it signals a
willingness to negotiate.
Techniques Seven: Plan your concessions. Concessions are the reductions that a
negotiator makes during the course of a negotiation. Negotiators need to consider
TECHNIQUES OF NEGOTIATION/BARGAINING

three things when formulating counteroffers and concessions: The pattern of

concessions, the magnitude of concessions and the timing of concessions.
Techniques Seven: Plan your concessions. Concessions are the reductions that a
negotiator makes during the course of a negotiation. Negotiators need to consider
TECHNIQUES OF NEGOTIATION/BARGAINING

three things when formulating counteroffers and concessions: The pattern of

concessions, the magnitude of concessions and the timing of concessions.