Negotiation Cultural Analysis Framework Salacuse 1991

Definition of Negotiation: Process by which we pursue the terms of getting what we want from people who are in control of those wants and also want something from us It is essentially a mutually beneficial exchange of tangibles or intangibles between two parties

Negotiation as a decision-making technique is appropriate when: People voluntarily want to exchange things that they have for things that they want, creating wealth in the process. Each party needs the consent of the other party and thereby effectively has veto-power. Because parties cannot simply take what they want, each party must accommodate the other party as well.

This course will look at Negotiation as the process of : –trading and exchanging tangible and intangible things and –the conditions under which such an exchange takes place.

Distributive Bargaining Goals of parties are at odds or appear that way to parties involved. Central to conflict is the belief that there is a controlled amount of key resources to be distributed (fixed pie) Both parties want to be winners or claim more than half that is available. Both want to win on the same dimension (control of certain policies) and so their goals are mutually exclusive and hence leads to conflict.

Strategies: Distributive Bargaining Guard information carefully Give information only when it provides strategic advantage Attempt to get as much information from other party Try to get as much of the limited resource as possible

Why study Distributive Bargaining? 1.Some interdependent situations you face ARE distributive and to do well you need to understand how they work. 2.Some negotiators will use DB strategies and tactics exclusively so need to know how to counter their effects.

Distributive Bargaining Problem: DB can often be costly and counterproductive. Often cause the negotiating parties to focus so much on their differences that they ignore what they have in common. People issues often arise as a result of “selfish” perception of negotiation (reputation and trust)

When is Distributive Bargaining effective for you : Distributive Bargaining strategies and tactics are quite useful when a negotiator wants to: maximize the value obtained in a SINGLE DEAL the relationship is UNIMPORTANT

Integrative Negotiation: Goals of parties are not mutually exclusive. If one side achieves goal the other is not necessarily precluded from achieving its goals. One party’s gain is not necessarily at the expense of the other. Although conflict may appear initially to be win-lose to the parties, discussion and mutual exploration will usually suggest win-win alternatives

Overview Integrative Negotiation Process 1.Create a Free Flow of Information 2.Attempt to Understand the Other Negotiator’s Real Needs and Objectives (Interests- Positions) 3.Emphasize What is in Common Between Parties and Minimize the Differences 4.Search for Solutions That Meet Goals/Objectives of Both Sides

What Makes Integrative Negotiation Different: Focus on commonality rather than differences Attempt to address needs and interests not positions Commit to meeting the needs of all involved parties Exchange information and ideas Invent options for mutual gains Use objective criteria for standards of performance

Terms BATNA- Best alternative to a negotiated agreement Entry Point- initial offer Buyer-low Seller-high Exit Point- point in which your BATNA provides a better alternative Winner’s Curse- opponent accepting your first offer Interests, Issues, Positions

10 Factor Framework Negotiating goals Attitudes to negotiation process Personal styles Styles of communication Time sensitivity Emotionalism Agreement form Agreement building process Negotiation team organization Risk taking

Negotiating Goals Contract Relationship Some cultures view contracts as a definitive set of rights and duties that strictly bind the two sides and determine their interaction thereafter while others view the contract as the beginning and the relationship dictates interaction thereafter.

Negotiating Attitudes Win/Lose Win/Win 1/ negotiation is a win/win where both sides can win as both sides have compatible goals (integrative) 2/ negotiation is a win/lose where one side wins and other side loses as there are incompatible goals (distributive)

Personal Styles Informal Formal Concerns the form a negotiation uses to interact with counterparts at the table Each culture has its own formalities and they have special meanings within that culture

Communication Direct Indirect Indirect style often make assumptions about the level of knowledge possessed by their counterparts; communicate with veiled references, figurative and body language Direct style use clear and definitive responses to proposals and questions.

Sensitivity to Time High Low Cultural discussions concerning time in negotiation often refer to two elements: 1.Promptness in meeting deadlines 2.Amount of time devoted to negotiation

Emotionalism High Low Accounts of negotiation behavior almost always point to a particular groups tendency or lack thereof to display emotions Various cultures have different rules as to the appropriateness and forms of displaying emotion and these rule are brought to the negotiating table.

Negotiating Goals General Specific Cultural factors may influence the form of written agreement that the parties make. Some prefer detailed contracts that attempt to anticipate all possible eventualities no matter how unlikely Some claim that essence of the deal is the relationship between parties, if unexpected circumstances arise parties should address the relationship and not the contract

Building an Agreement Bottom-up Top-down Related to the form of agreement, is it a inductive or deductive process Inductive (bottom-up)- does it begin with agreement on specifics (price, quantity) and the sum total of this becomes the contract. Deductive (top-down) does it begin with agreement in principle and proceed to specific items.

Team Organization One leader Group consensus Some cultures emphasize the individual while others stress the group and these values may influence the organization of the team

Risk Taking High Low In negotiation the culture of negotiators can affect the willingness of one side to take risks in negotiation for example to divulge information, try new approaches, or to tolerate uncertainties in a proposed course of action.