1. 10-1 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved CHAPTER TEN Relationships in Negotiation

2. 10-2 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Negotiating through Others within a Relationship The Adequacy of Established Theory and Research for Understanding Negotiation within Relationships Forms of Relationships Key Elements in Managing Negotiations within Relationships

3. 10-3 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Adequacy of Theory and Research for Understanding Negotiation within Relationships Current negotiation theory is based on trans-actional research. Only recently have researchers begun to examine negotiations in a relationship context: Negotiating within relationships takes place over time Negotiation is often not a way to discuss an issue, but a way to learn more about the other party and increase interdependence Resolution of simple distributive issues has implications for the future

4. 10-4 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Adequacy of Theory and Research for Understanding Negotiation within Relationships Distributive issues within relationships can be emotionally hot Negotiating within relationships may never end –Parties may defer negotiations over tough issues in order to start on the right foot –Attempting to anticipate the future and negotiate everything up front is often impossible –Issues on which parties truly disagree may never go away

5. 10-5 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Adequacy of Theory and Research for Understanding Negotiation within Relationships In many negotiations, the other person is the focal problem. In some negotiations, relationship preservation is the overarching negotiation goal, and parties may make concessions on substantive issues to preserve or enhance the relationship

6. 10-6 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Forms of Relationships Four fundamental relationship forms: 1. Communal sharing 2. Authority ranking 3. Equality matching 4. Market pricing

7. 10-7 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Forms of Relationships 1. Communal sharing –A relation of unity, community, collective identity, and kindness, typically enacted among close kin –Such relationships are found in: Families Clubs Fraternal organizations Neighborhoods

8. 10-8 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Forms of Relationships 2. Authority ranking –A relationship of asymmetric differences, commonly exhibited in a hierarchical ordering of status and precedence –Examples include: Subordinates to bosses Soldiers to their commander Negotiators to their constituents

9. 10-9 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Forms of Relationships 3. Equality matching –A one-to-one correspondence relationship in which people are distinct but equal, as manifested in balanced reciprocity (or tit-for- tat revenge) –Examples include: College roommates

10. 10-10 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Forms of Relationships 4. Market pricing –Based on metrics of valuation by which people compare different commodities and calculate exchange and cost/benefit ratios –Examples can be drawn from all kinds of buyer–seller transactions

11. 10-11 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Four Key Dimensions of Relationships

12. 10-12 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Negotiations in Communal Relationships Parties in a communal sharing relationship: Are more cooperative and empathetic Craft better quality agreements Perform better on both decision making and motor tasks Focus their attention on the other party’s outcomes as well as their own Focus attention on the norms that develop about the way that they work together

13. 10-13 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Negotiations in Communal Relationships Parties in a communal sharing relationship (cont.): Are more likely to share information with the other and less likely to use coercive tactics Are more likely to use indirect communication about conflict issues, and develop a unique conflict structure May be more likely to use compromise or problem solving strategies for resolving conflicts

14. 10-14 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Reputation Trust Justice

15. 10-15 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Reputation –Perceptual and highly subjective in nature –An individual can have a number of different, even conflicting, reputations –Influenced by an individual’s personal characteristics and accomplishments. –Develops over time; once developed, is hard to change. –Negative reputations are difficult to “repair”

16. 10-16 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Trust –“An individual’s belief in and willingness to act on the words, actions and decisions of another” –Three things that contribute to trust 1.Individual’s chronic disposition toward trust 2.Situation factors 3.History of the relationship between the parties

17. 10-17 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Two different types of trust: Calculus-based trust –Individual will do what they say because they are rewarded for keeping their word or they fear the consequences of not doing what they say Identification-based trust –Identification with the other’s desires and intentions. Trust exists because the parties effectively understand and appreciate each other’s wants; mutual understanding is developed to the point that each can effectively act for the other.

18. 10-18 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Trust (cont.) Trust is different from distrust –Trust is considered to be confident positive expectations of another’s conduct –Distrust is defined as confident negative expectations of another’s conduct – i.e., we can confidently predict that some other people will act to take advantage of us –Trust and distrust can co-exist in a relationship

19. 10-19 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Actions To Manage Different Forms of Trust in Negotiations How to increase calculus-based trust Create and meet the other party's expectations Stress the benefits of creating mutual trust Establish credibility; make sure statements are honest and accurate Keep promises; follow through on commitments Develop a good reputation How to increase identification-based trust Develop similar interests Develop similar goals and objectives Act and respond like the other Stand for the same principles, values and ideals

20. 10-20 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Actions To Manage Different Forms of Trust in Negotiations How to manage calculus-based distrust Monitor the other party’s actions Prepare formal agreements Build in plans for “inspecting” and verifying commitments Be vigilant of the other’s actions; monitor personal boundaries How to manage identification-based distrust Expect disagreements Assume that the other party will exploit or take advantage of you; monitor your boundaries regularly Verify information, commitments and promises of the other party Minimize interdependence and self-disclosure “The best offense is a good defense”

21. 10-21 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Recent Research on Trust and Negotiation Summary of findings about the relationships between trust and negotiation behavior: Many people approach a new relationship with an unknown other party with remarkably high levels of trust Trust tends to cue cooperative behavior Individual motives also shape trust and expectations of the other’s behavior Trustors, and those trusted, may focus on different things as trust is being built The nature of the negotiation task can shape how parties judge the trust

22. 10-22 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Recent Research on Trust and Negotiation Summary of findings about the relationships between trust and negotiation behavior (cont.): Greater expectations of trust between negotiators leads to greater information sharing Greater information sharing enhances effectiveness in achieving a good negotiation outcome Distributive processes lead negotiators to see the negotiation dialogue, and critical events in the dialogue, as largely about the nature of the negotiation task.

23. 10-23 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Recent Research on Trust and Negotiation Summary of findings about the relationships between trust and negotiation behavior (cont.): Trust increases the likelihood that negotiation will proceed on a favorable course over the life of a negotiation Face-to-face negotiation encourages greater trust development than negotiation online Negotiators who are representing other’s interests, rather than their own interests, tend to behave in a less trusting way

24. 10-24 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Key Elements in Managing Negotiations within Relationships Justice Can take several forms: –Distributive justice The distribution of outcomes –Procedural justice The process of determining outcomes –Interactional justice How parties treat each other in one-to-one relationships –Systemic justice How organizations appear to treat groups of individuals

25. 10-25 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Repairing a Relationship Diagnostic steps in beginning to work on improving a relationship: –What might be causing any present misunderstanding, and what can I do to understand it better? –What might be causing a lack of trust, and what can I do to begin to repair trust that might have been broken?

26. 10-26 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Repairing a Relationship Diagnostic steps (cont.): –What might be causing one or both of us to feel coerced, and what can I do to put the focus on persuasion rather than coercion? –What might be causing one or both of us to feel disrespected, and what can I do to demonstrate acceptance and respect?

27. 10-27 McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Repairing a Relationship Diagnostic steps (cont.): –What might be causing one or both of us to get upset, and what can I do to balance emotion and reason?