Negotiation for conflict resolution Organizational Communication

Main take-aways Principles of negotiation can be used in any situation of interpersonal conflict Principles Negotiate over issues, not positions Separate people from the problem Expand the pie (integrative negotiation) before dividing it (distributive negotiation) Search for opportunities for log-rolling, where negotiators differ on importance & payoff for settlements Some tactics Ask questions & reveal information to find interests & opportunities for log rolling, Consider multiple issues simultaneously

How is negotiation related to organizational communication? Negotiation is the process of communication btw two or more people with divergent interests trying to reach a joint decision that affects them all Can be used in most cases of conflict between interests E.g., Setting terms of an employment contract Employer’s interest in getting best worker Employer’s need to staff an important project Worker’s interest in getting best salary Worker’s interest in getting an interesting assignment E.g., Deciding approaches to HCII website redesign Interest to have an improvement in the short term Interest to have best site in the long term E.g., Disciplining a teammate Interests of Sharon to have flexibility for family Interest of rest of team to have a predictable work environment

From task to person conflict in the HCII Task disagreement about stages in updating HCII website Update technology & then outsource new design ($80K) Update technology, redeploy old design & implement student design ($10K) Led to entrenched positions & personal attacks

Escalation A: “I asked [contractor] to do a migration of the current site, … reimplement our current theme, [and] implement the winning student design... I've asked him to do the second theme so that we can do A/B testing and have something credible with which to compare any new …design…. And [if the] new design takes longer than planned, we'll have a plausible site to present to the world in the meantime.” B: “I am surprised to hear that you are proposing to bypass the HCII website committee process. ... I cannot approve the move to implement the student design ... without meeting to talk about it further.” A: “I thought it was worth $2,600 of my discretionary money to have a fallback if a professionally designed site isn't done quickly enough or isn't good enough” B: “I can't approve the implementation of a re-design at this time, regardless of where the funds come from” A: “I encouraged this project and agreed to take it on because I thought it was important for the department, but I see continued foot dragging from you. .... With no disrespect, I’ll end by quoting General Patton: ‘lead, follow or get out of the way’” B: “I also hear your frustration with me, and I wish it did not lead you to communicate with me in this manner. It's not respectful nor is it effective.”

Positions & Interests: Position: a statement of demands or wants. Often a solution the persons sees as the only way to solve the problem. Statement of the outcome the person would like to see. Often stated as a demand. Often a win/lose proposal. E.g., Henry Tam case: MGI is making either an educational or entertainment product First, we need to understand position and interest.

Interests: Interest: a need or concern underlying a position The motivation that caused the person to arrive at a position Why a person holds his/her position. Keep asking why until you get to an interest Often people lose sight of their interests and become entrenched in their position.

Convert Positions to Interests: Arguments about position often lead to stalemates (i.e., no agreement) or low joint benefit Converting positions to interests is valuable because there are often many different ways to satisfy the same interest If you understand the interests then you can potential satisfy both sides interests

Discuss issues, not positions Jack Nicholson: Five Easy Pieces (1970)

What Does it Mean to Be an “Effective Negotiator”? Individual level Getting valued resources (money, people, projects) Maintaining & building relationships Enhancing your reputation Building/maintaining trust Enjoying peace of mind Company level Profitable deal making (effective sales force) Getting positive (rather than negative) press Enhancing reputation of company Building the brand

Two fundamental processes in successful negotiation Distributive negotiation Divvying up some fixed resource (e.g., price) Normally entails a single issue Goal is to gain as much of the resource as possible Integrative negotiation Finding solutions that maximize the resource before divvying it up Possible with multi-issue negotiations, where the parties care about the issues differently Most negotiations involve both. Rule: first grow the pie & then divide it It is generally possible to convert a distributed negotiation into an integrative one, by adding issues

Negotiators’ Mental Models Orientation Win/lose Win/win Strategy Positional, distributive; Principle-based; oriented; power-based interest-based Goal Slice the pie Expand the pie, then slice the pie Approach Single issue; Multiple issues; sequential bargaining simultaneous discussion of issues Offers Single offers; take-it-or-leave-it Multiple offers Outlook Short-term; no future relationship Long-term; build long- term relationship Claiming Value Mental Model Creating Value Mental Model Distributive Integrative Naïve Expert

Negotiating a coffee contract Do not show your confidential role instructions to the other side in the negotiation, but you are free to tell them whatever you would like about your confidential role information. You may use any strategy, short of physical violence, to reach agreement, including ingratiation, bribery, side-deals or misrepresentation. However, in selecting a strategy, it is wise to consider that using it may have ramifications that go beyond that particular negotiation. Be creative in what you offer or ask for Try to convert the distributed negotiation (win-loose over price) to a multi-issue negotiation

Role Play Spend 5 minutes negotiating Questions to consider: What are each party’s interests in the negotiation (i.e., what are all the possible things they want to achieve) How can you incorporate the inventory of interests into a deal that is better than simply haggling over price

Anderson VP of Sales

Statler, F&B Director

Target or Aspiration level What you aiming for—your ideal Since aspiration level influences the offers you make and accept, set it aggressively The best, reasonable deal you think you can get  You need to do preparation to know what is reasonable (e.g., Zillow for house prices; Career center for salaries) Setting it too low  winner’s curse I had two offers on my house at the asking price before it went on the market  set the price too low Setting it too high with no concessions may lead to partner walking away & not getting any deal Reasonable the targets in the Coffee Negotiation?

B.A.T.N.A Best Alternative To Negotiated Agreement (BATNA) What will you do if you don’t make a deal with this partner? Determined by your available alternatives Defines the most you will pay (buyer) or least you will accept (seller) Key source of power: Ability to walk away What are the BATNA in coffee negotiation?

Reservation price (RP) The offer below which you will walk away When the deal no longer makes sense for you Based on BATNA To develop a reservation point: Brainstorm alternatives Evaluate each alternative Attempt to improve BATNA Calculate reservation price as precisely as possible  Probability of alternative X value What is RP in coffee negotiation?

Coffee Contract Bargaining Zone Price to Colonial Williamsburg CEO sets min price ($6.50) based on bean cost ($5.93) + transport ($.80) – publicity investment ( $.20) Value of Anderson quality ($2.70) over current brand ($4.70) Price to typical restaurant Zone of Possible Agreement >=$5.95 $6.50 $7.40 <=$8.10 Buyer’s Target Seller’s RP Buyer’s RP Seller’s Target Why is this information useful to you in a negotiation? How should you get this information?

Getting the best deal in a distributed negotiation Appeal to norms of fairness Support your offers with facts Don’t fall for a ‘split the difference’ trap

Opening the negotiation Should you go first or wait? Where should you open the negotiation?

Anchoring effects People make estimates by starting from an initial anchor value and adjusting to yield a final answers They generally insufficiently adjust Anchors are usually based on whatever information is available, regardless of relevance First offers acts as anchor  advantage Use your target as your anchor Not your RP Not the initial offer Set aggressive, but realistic targets Get data to know what is realistic

Power in distributed negotiation: Slicing the Pie Know your BATNA & try to improve it Research partner’s BATNA Don’t reveal your BATNA/RP Set high, but realistic target Make the first offer Immediately re-anchor on others BATNA or your target if other makes a first offer Make small, graduated concessions Make bilateral, not unilateral concessions

Threats? Threats & false verbal commitments (e.g., “That’s the best I can do”) don’t work well Causes the other party to be defensive & stick to their initial position Increases risk of stalemates Harms the relationship if the deal is made

Integrative negotiations Multiple issues Differing strengths of preference Differing interests Future relationship Multiple alternatives

Log rolling The practice of exchanging favors, especially in politics by reciprocal voting for each other's proposed legislation Increase overall welfare if all parties give up something they don’t care about for something they do

Goals Grow the pie Then split the pie Look for log-rolling trade-offs If necessary, convert single issue deals to multi-issue deals Reveal priority information & ask for questions Take your time Then split the pie Know your alternatives BATNA & Reservation point Set aggressive targets Make first offer Provide facts & rationale

Ways to grow the pie Build trust and share information Ask questions Give away information about your priorities Make package offers, not one issue at a time Make multiple offers simultaneously Search for “post-settlement” settlements

Make package offers Nothing is settled until everything is settled Going issue-by-issue eliminates the possibility of trading off across issues You can use this approach even if they do not Know how issues trade off against each other in your utility function

Language to Use Distributive language leads to lower joint value & more impasses Integrative language leads to more joint value & fewer impasses Demands Threats Arguments about positions Information exchange over the positions (i.e., what I want) Concession exchanges Relationship building Rationale & explanation Information exchange, especially about priorities over the issues (i.e., what is important to me) Asking Telling

PREPARE! You: What are you worth? What do you want? What would your dream job be like? What are you worth? What are your alternatives? (your BATNA) Identify the least acceptable deal (your RP) Keep in mind a realistically optimistic deal that will take care of your wants (your target)

Developing a Scoring System Goal: Develop a metric by which any agreement can be scored How to do it: List all the issues of concern Generate alternatives for each of the issues Score each alternative Provide relative weights for all the issues