© 2009 Bird. Not be used or reproduced without permission. International Negotiations - Day Two Professor Allan Bird, Ph.D. University of Missouri-St. Louis St. Louis, MO USA

2 I. Before we get to work

3 Negotiation Log After each negotiation exercise, do the following  Narrative Section: Whether and how your actual negotiation deviated from your plan and why; Details describing the negotiation outcome; Your assessment of any deal reached;  Log Section: Negotiation Context/Point/ ‘Learning Event’ Your Role/Action Counterpart(s) Role/Action Your Assessment of What happened Implication(s) for future IBN (Lesson/take- away) Beginning of negotiation. Host team was not talking. I took control and began to state our needs and question the needs of Barkan. Slowly they began tanswering questions. My interpretation is that we were trying to establish if we could trust each other. Building the relationship from the beginning is crucial to success in the end. Sitting down for a

4 Negotiation Plan Before each negotiation, do the following for each team:  Identify: Position Interests BATNA Reservation Point Aspiration/Target Other key facts  Issues, plans ItemAlphaBeta Position Interests

5 II. Trust

6 The Three Essential Attributes of Trust  Sharing of Information  Acceptance of Influence  Relinquishing of Control

7 A Model of Trust TRUST INFORMATION Disclose more accurate, relevant and complete data about the problem, one’s thoughts and one’s feelings Increase one’s vulnerability to others whose behavior one cannot control CONTROL Accept more inter- dependence with others. Impose less procedures to control others. Greater confidence others will do what they agree to do. Greater commitment to do what one agreed to. INFLUENCE Accept more influence from others in selection of goals, chose of methods, evaluation of progress

8 (1) Manager A Mistrusts B (4) Manager B Withholds Information Resists Influence Imposes Control (5) Manager A Perceives Mistrust Confirms Expectation (3) Manager B Expects Mistrust Perceives Mistrust (2) Manager A Withholds Information Resists Influence Imposes Controls The Cycle of Trust

9 Trust & Decision Behavior Low TrustHigh Trust Conceal Reveal Accept Reject Self External Form of Control Attitude toward Influence Flow of Information

Types of Trust I  Traditional bases  Institutional bases

Types of Trust II  Calculus-based (deterrence)  Knowledge-based  Identification-based

Types of Trust III  Competence  Contractual  Goodwill  Judgement

Types of Trust IV  Quick Trust Task-oriented Tentative Temporary

14 III. Negotiation & Conflict Handling Modes

15 Two Dimensions of Behavior When Interacting Concern for Others Cooperativeness Concern for Self Assertiveness

16 Concern for Self UnexpressiveExpressive Timid Bold Diffident Confident Yielding Persistent PassiveActive LethargicEnergetic SoftFirm Risk AvertingRisk Taking Self Denying Self Enhancing ModestImmodest AssertiveUnassertive

17 Concern for Others Distrustful Trustful Unfriendly Friendly Unhelpful Helpful Defensive Non defensive Concealed Open Indirect Direct Non-Empathic Empathic Distant Intimate Dishonest Honest Intolerant Tolerant Cooperative Uncooperative

18 Two Dimensional Zones of Behavior Low High Assertive, Uncooperative Unassertive, Uncooperative Unassertive, Cooperative Assertive, Cooperative Concern for Self Assertiveness Concern for Others Cooperativeness Low High

19 Modes of Conflict Management Competitive (Domination) Compromise (Sharing) Accommodative (Appeasement) Collaborative (Integration) Avoidant (Neglect) Low High Concern for Self Assertiveness Concern for Others Cooperativeness Low High

20 Dimensions of Conflict Management Accomodative (Appeasement) Collaborative (Integration) Avoidant (Neglect) Competitive (Domination) Low High Concern for Self Assertiveness Low High Concern for Others Cooperativeness Compromise Integrative Distributive

21 Choice of Conflict Handling Mode MODE CHOICE is a function of:  Personal Predispositions  Social Norms  Other Party’s Behavior  Underlying Situation More on this in a moment...

Determinants of Appropriate Conflict Behavior Accomodative (Appeasement) Collaborative (Integration) Avoidant (Neglect) Competitive (Domination) Low High Low High Concern for Others Cooperativeness Relationship Quality Interest interdependence Concern for Self Assertiveness Stakes/Outcome Relative Power Compromise

23 S-P-I-R Determinants Assertiveness Cooperativeness Relative Power Outcome Stakes Relationship Quality Interest Interdependence Capability Motivation

24 Sequential Patterns of Mode Use Accomodative (Appeasement) Collaborative (Integration) Avoidant (Neglect) Competitive (Domination) Low High Concern for Self Assertiveness Low High Concern for Others Cooperativeness Relationship Quality Interest interdependence Stakes/Outcome Relative Power Compromise

25 IV. Distributive Strategies

26 V. Alpha-Beta Negotiations

27 Simulation Objectives  To experience negotiating people from another culture  To experience adapting to different role requirements  To practice analytical skills relative to culture  To practice negotiating skills and styles

28 Timeline Briefing/Preparation1:30 – 2:20 Break2:20 – 2:30 Negotiations2:30 – 3:30 Break3:30 – 3:40 Debriefing3:40 – 4:30

29 VI. Alpha-Beta Debriefing

30 Prescribed Styles Betan StyleAlphan Style Individual Informal Impatient Direct Emotional Aggressive Collective Formal Patient Indirect Unemotional Passive

31 Real-life Parallels JapaneseAmerican Individual Informal Impatient Direct Emotional Aggressive Collective Formal Patient Indirect Unemotional Passive Typical Negotiating Style

32 Effects on Process  Amount of communication static  Amount of confusion & misperception  Complexity of process  Time required to reach an agreement  Resources required  Importance of face saving  Need for third-party assistance

33 Implications for Outcomes  Likelihood of agreement  Comprehensiveness of agreement  Clarity of agreement  Satisfaction with agreement  Stability of agreement

34 The 1981 Agreement - Hitachi  Proprietary know-how (patent) included  Exclusivity: Non-exclusive  Royalties: Not announced (“Top Secret”)  Duration: 7 years, with option to renew

35  3 Models  Several hundred (200?) over 2-3 years  Territory: Worldwide  Label: GE  Initial delivery date: Fall, 1981 The 1981 Agreement - GE

36 Beginning Negotiations  When do we begin?  Who makes the first move?  What opening offer should we make?  How should we react to opening offers?  How do we make concessions?

37 Initial Discussions  Make opening arguments Present positions and interests  Gather information Explore other parties positions and interests Critical Ratio = Number of arguments Number of questions Critical Ratio = 0 No arguments Only questions

38 Probing Valuation & Information Differences  Information Bias: Overestimate our own ability to assess the other side’s limits  Valuation Bias: Underestimate the range of possible outcomes 1 st Task: Probing for information & valuation differences 2 nd Task: Set clear benchmarks

39 Who makes the first move?  Opening offer determined by information Reveals critical information Sets an anchor  Make the opening offer when: The other party is ill-informed or confused We have an aura of expertise

40 Team & Personal Reflection  In what area of the negotiation were you more effective? Describe it; why?  In what area of the negotiation were you less effective? Describe it; Why?  What can you learn from this negotiation experience?  What will you do differently the next time you are in a negotiation situation?

41 VII. Next Session

Assignments Read: Chs. 3 & 4 Complete the survey online and print out your results: