Chapter 1:

Introduction to
Negotiation

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 CHAPTER ONE

The Nature of
Negotiation

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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
There are two or more parties
There is a conflict of needs and desires
between two or more parties
Parties negotiate because they think they can
get a better deal than by simply accepting
what the other side offers them
Parties expect a “give and take” process

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 Characteristics of a
Negotiation Situation
Parties search for agreement rather than:
Fight openly
Capitulate
Break off contact permanently
Take their dispute to a third party
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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 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 is better
for 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 one’s own
moves and the other’s responses

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 Mutual Adjustment and
Concession Making
When one party agrees to make a change
in his/her position, a concession has been
made
Concessions restrict the range of options
When 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
These negotiations are the most complex

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 Functions of Conflict
1. Makes organizational members more aware
and able to cope with problems through
discussion.
2. Promises organizational change and
adaptation.
3. Strengthens relationships and heightens
morale.
4. Promotes awareness of self and others.
5. Enhances personal development.
6. Encourages psychological development—it
helps people become more accurate and
realistic in their self-appraisals.
7. Can be stimulating and fun.
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 Dysfunctions of Conflict
1. Competitive, win-lose goals
2. Misperception and bias
3. Emotionality
4. Decreased communication
5. Blurred issues
6. Rigid commitments
7. Magnified differences, minimized
similarities
8. Escalation of conflict

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 The Dual Concerns Model

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 Styles of Conflict
Management
1 Contending
Actors pursue own outcomes strongly, show little
concern for other party obtaining their desired
outcomes
2 Yielding
Actors show little interest in whether they attain
own outcomes, are quite interested in whether
the other party attains their outcomes
3 Inaction
Actors show little interest in whether they attain
own outcomes, little concern about whether the
other party obtains their outcomes

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 Styles of Conflict
Management
4 Problem solving
Actors show high concern in obtaining own
outcomes, as well as high concern for the
other party obtaining their outcomes
5 Compromising
Actors show moderate concern in obtaining
own outcomes, as well as moderate concern
for the other party obtaining their outcomes

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