Chapter 1 The Nature of Negotiation “If you want to play well, you need to know the rules of the game.” What is your comment on the observation?

Chapter 1 The Nature of Negotiation Learning objectives (LO) 1. Understand the nature of negotiation and characteristics of a negotiation situation 2. Appreciate elements essential to a negotiation situation. 3. Extend and apply the fundamentals of negotiation to the nature of business negotiation (Biz Negotiation) and IB Negotiation. 4. Blueprint your course ends and means

Chapter 1 The Nature of Negotiation 1. Negotiation 2. Domestic Negotiation 3. Int’l Negotiation 4.Assignment

1 Negotiation 1.1 Characteristics of a negotiation situation Negotiation protocol in your mind? cf. Some definitions 1.2 Elements Essential to negotiation Interdependence Mutual Adjustment Value Claiming and Value Creation Conflict Effective Conflict Management

1.1 What Characterizes a negotiation situation Exercise Directions: Below write a list of the typical things that occur when two people negotiate. We are interested in the common events that occur in a typical encounter where two people negotiate over several issues. Start with the first time the two parties sit down to negotiate, and end with the successful settlement. Include about 20 actions or events and put them in the order in which they occur. Please complete your negotiation protocols, i.e. the list of sequential actions or events appropriate to negotiation within 30 minutes. (TBC-ed)

1.1 Some Definitions of Negotiation Negotiation is a voluntary process of give and take where both parties modify their offers and expectations in order to come closer to each other. (Ghauri & Usunier, 2003:3) Negotiation is an interpersonal decision-making process by which two or more people make mutual decisions concerning the allocation of scarce resources (Pruitt & Carnevale, 1993) Negotiation is a process where individuals with shared and opposed interests who wish to come to an agreement attempt to work out a settlement (D.W. Johnson & F.P. Johnson, 2002)

1.2 Elements Essential to negotiation Bear these key concepts in mind and manage them properly 1.Interdependence: Game, Negotiation Dance, Minuet 2.Mutual Adjustment: give and take, tradeoff, concession 3.Value Claiming and Value Creation: pie-slicing and pie-expanding 4.Conflict 5.Effective Conflict Management

Effective Conflict Management A Self-Assessment The Dual Concerns Model

1.2.1 A Self-assessment 1.What are your attitudes towards conflict? 2.Your perspective towards dispute settlement/conflict resolution? 3.How do you in dispute (disputants) respond? 4.How people in dispute respond?

1.2.2 Conflict Management: Two mental models

Distributive approach win-lose battles, aimed at maximizing personal gain competitive environments that encourage forcing, as disputants attempt to wrestle concessions from each other toward an agreement most favorable to oneself. (Other terms and labels?) Integrative approach mutual problem solving, aimed at maximizing joint outcomes cooperative environments where disputants have a stake in maintaining ongoing positive relationships with each other. These negotiations consist of listening to each other’s perceived needs and underlying interests, communicating understanding, and generating creative solutions that attend to each other’s concerns. (Other terms and labels?)

1.2.2 Effective Conflict Management Figure 1.3 The dual concerns model Yielding (accommodating, Obliging) Problem solving (collaborating, integrating) (compromising) Inaction (avoiding) Contending (competing, dominating) Concern about own outcomes (assertive) Concern about other’s outcomes

1.2.2 Effective Conflict Management Figure 1.4 Styles of Handling Interpersonal conflict and Situations Where They are Appropriate or inappropriate (p. 26)

2 Domestic Negotiation Generally, the parties to domestic negotiation in any country have: Same culture Same language People trust each other easily Often done by individuals (esp. in Western countries)

2 Domestic Negotiation: case It’s Tuesday afternoon, you just got back from lunch, and you find you have a voice mail message from one of your customers. You closed a deal with them about six months ago---agreeing on price, terms, service, volume, and length of contract---and the deal’s due to be re-negotiated six months from now. But in his message the customer says that he’s being pushed hard by management to reduce costs and he wants additional 5 percent off the price. What would you respond?

3. Int’l Negotiation Generally, int’l negotiation means: Btwn teams, not individuals TOS is from a different culture Interpreters & translators are usually used Btwn large corporations Take much time to know and trust one another High stakes A high rate of failures reported Professional skills highly needed And ???? What are the individual skills you need in such team int’l negotiations?

Classroom Activity: Debate Topic: Domestic negotiation is always easier than international negotiation. Pros: Cons:

4 Assignments 1.Submit/Upload a sheet of chpt-1 questions: language- and content-wise (Compulsory) 2.Preview Chapter 2 (pp.32-69) Note: Submit/Upload a sheet of chpt-1 questions: language- and content-wise (Optional) 3. Questions for you to consider: How do people’ expectations about an interaction affect their behavior? How these kinds of efforts to frame a conflict contribute to successful settlement?

5 Supplementary Readings Ruth A. Wienclaw (2008), Negotiations. Retrieved September 12, 2010, from EBSCO Online Database Business Source Complete. Kathleen M. O’Connor and Ann A. Adams. What novices think about negotiation: A content analysis of scripts. (Research Report). Negotiation Journal, April 1999: