1. Managing Difficult Negotiations: Third Party Approaches
CHAPTER THIRTEEN
Managing Difficult Negotiations:
Third Party Approaches

2. Adding Third Parties to the Two-Party Negotiation Process
Negotiations are often tense and difficult, and can lead to frustration and anger
Negotiation over critical issues may reach an impasse
Third-party intervention may be a way to get negotiations back on track

3. Benefits and Liabilities of Third-Party Intervention
Providing stability, civility, and momentum
Creating breathing space or a cooling-off period
Reestablishing or enhancing communications
Refocusing on the substantive issues
Remedying or repairing strained relationships
Establishing or recommitting to time limits and deadlines
Salvaging sunk costs
Increasing satisfaction with the conflict resolution process and its outcomes

4. Benefits and Liabilities of Third-Party Intervention
Limitations and Liabilities
The involvement of third parties signals a failure of the negotiation process
Intervention by a third party may signal that the parties have failed to:
Grow
Build relationships
Become adept in managing their own interdependencies

5. Adding Third Parties to the Two-Party Negotiation Process
When Is Third-Party Intervention Appropriate?
Serious negotiators must make a realistic effort to resolve their own disputes
When negotiators can no longer manage the dispute on their own

6. Which Type of Intervention Is Appropriate?

7. Types of Third-Party Intervention
Formal
Arbitration
Mediation
Process Consultation
Informal
Inquisitorial intervention
Adversarial intervention
Providing impetus

8. Arbitration Parties present their positions to a neutral third party
The third party listens to both sides and then decides the outcome of the dispute
Types:
Voluntary arbitration
Parties not required to comply with decision
Binding arbitration
Parties required to comply with the decision

9. Arbitration Negative effects: The chilling effect The narcotic effect
If the parties anticipate that their failure will lead to binding arbitration, they lose incentive to negotiate seriously
The narcotic effect
When arbitration is anticipated, negotiators may also lose interest in the process of negotiating
The half-life effect
As arbitration frequency increases, disenchantment with the adequacy and fairness of the process develops

10. Arbitration Negative effects (cont.): The biasing effect
Arbitrators must be careful not systematically favor one side and they must maintain an image of fairness and impartiality
The decision-acceptance effect
Arbitrated disputes may engender less commitment to the settlement than alternative forms of dispute resolution

11. Mediation
Seeks to have the parties themselves develop and endorse the agreement
Has been called a form of “assisted negotiation”
Can help reduce or remove barriers to dispute settlement

12. Mediation When to use mediation
The parties need to be open to receiving help
Mediation may be imposed if doing so might prevent a situation from deteriorating
The mediator must be acceptable to all the parties to the dispute

13. Mediation Mediator models, choices and behaviors
Mediators may choose any of a variety of approaches
Stages in the mediation process can be roughly grouped into four categories:
Premediation preparation
Mediator gets to know the parties, explains process
Beginning stages of the actual mediation
Mediator manages the exchanges of proposals
Middle stages of the mediation
Mediator becomes more active to find an acceptable ‘middle ground’
Ending stages of the mediation
Mediator brings parties together to endorse agreement

14. Mediation When is mediation effective?
Mediation is effective in general
Agreements are usually reached,
Participants are ordinarily satisfied
Compliance is high
Mediation was effective about 60 percent of the time, ranging from 20 to 80 percent across a variety of settings
Greatest effectiveness occurred in situations marked by only moderate levels of conflict

15. Comparing Arbitration and Mediation
The disadvantages of arbitration include:
Negative consequences for negotiators when they anticipate a third-party intervention
Removal of outcome control from negotiators
Possible lack of commitment implementing the imposed outcome

16. Comparing Arbitration and Mediation
The disadvantages of mediation include:
Lack of impetus or initiative to adhere to any particular settlement (or to settle at all)
Possible perpetuation of the dispute, perhaps indefinitely
Possible escalation of the dispute into more damaging, more costly forms
Combining mediation and arbitration into a two-stage dispute resolution model may minimize the disadvantages of each

17. Process Consultation
“A set of activities on the part of a consultant that helps the client to perceive, understand, and act upon the process events which occur in the client’s environment”
Process consultant does not address the issues in dispute
Process consultants focus only on improving communication and conflict management procedures

18. Process Consultation Process Consultation Behaviors
The first step is often to separate the parties and interview them individually
The consultant structures a series of dialogues or confrontations between the parties
These meetings address the causes of past conflicts and each side’s perceptions of the other
The Process Consultant encourages the negotiators to confront their differences

19. Informal Intervention Methods
Approaches used informally by managers, parents counselors etc.
Inquisitorial intervention
Exerts high control over the process and the decision
Asks questions, controls who speaks, invents solution
Adversarial intervention
Exerts high control over decision but not the process
Passively listens then makes decision
Providing impetus
Exerts low control over process and no control over the decision
“If you don’t find a solution I will impose one”

20. Informal Intervention Methods

21. Which Approach Is More Effective?
Managers tend to control the solution versus true mediation (2/3rds of the time)
Five dimensions that account for form of intervention
Focus on statements of the issues versus focus on underlying problems
Degree of voluntary acceptance of solutions
Third party versus disputant control over outcomes
The third parties approach to conflict (avoids/seeks)
Whether the dispute is handled publicly or privately
Per research, mediation led to fairer outcomes
Timing of the intervention plays a role

22. Timing of the Intervention
Three general stages:
Prevention of conflict
Intervention prevents conflict from occurring
Resolving conflict
Conflicts that have emerged are managed
Containing conflict
Ongoing conflicts that are a challenge to resolve are contained

23. Dispute Resolution Systems: When the Organization Is the Third Party
Alternative Dispute Resolution Systems (ADRs)
Preventive ADR systems
E.g. clauses in contracts for disputes to go to ADR automatically
Negotiated ADR systems
Mechanisms for parties to resolve disputes without a third party
Facilitated ADR systems
Provide a neutral third party to resolve disputes

24. Dispute Resolution Systems: When the Organization Is the Third Party
ADRs (cont.)
Fact-Finding ADR systems
Use a third party expert to determine/interpret the facts
Advisory ADR systems
Use a third party to determine likely outcome if dispute went to arbitration, court etc.
Imposed ADR systems
Third party makes binding decision
Most common form of ADR