1. PowerPoint Presentation by Charlie Cook Copyright © 2005 South-Western. All rights reserved. Module 12 Negotiation and Conflict Resolution

2. Copyright © 2005 South-Western. All rights reserved.12–2 Negotiation as a Form of Conflict Management Conflict is ubiquitous and negotiation is only one of many ways to deal with difference Ways of resolving conflict:  Forcing behavior  Smoothing  Avoidance  Negotiating  Third-party assistance Class Note: Negotiation and Conflict Resolution

3. Copyright © 2005 South-Western. All rights reserved.12–3 Dealmaking: Building Blocks of Negotiation Building blocks of dealmaking process are:  Parties  Issues  Interests Dealmaking can resemble market transaction where parties pursue individual gain or can be one where parties pursue mutual gain Class Note: Negotiation and Conflict Resolution

4. Copyright © 2005 South-Western. All rights reserved.12–4 Dealmaking (cont’d) Negotiation takes place between and among parties Parties can be people negotiating on their own behalf or be agents acting on behalf of others Negotiations among parties affected by:  Relationships between parties  Number of parties  Negotiator characteristics  Organization context Class Note: Negotiation and Conflict Resolution

5. Copyright © 2005 South-Western. All rights reserved.12–5 Dealmaking (cont’d) Issues are the matters over which parties disagree and seek to reach agreement on Most common distinction people make about issues concerns number of them Issues can differ in terms of specificity and clarity Issues are not etched in stone; issues can change during negotiation Class Note: Negotiation and Conflict Resolution

6. Copyright © 2005 South-Western. All rights reserved.12–6 Dealmaking (cont’d) Interests are what parties seek to advance in negotiations Substantive interests relate directly to what’s being negotiated Negotiators should be as specific as possible about articulating interests Parties value interests and issues differently A major challenge in negotiating is talking about interests Class Note: Negotiation and Conflict Resolution

7. Copyright © 2005 South-Western. All rights reserved.12–7 Dealmaking (cont’d) Bargaining power is the capacity to achieve agreement on one’s own terms Sources of power:  Ability to reward or coerce another party to make particular concessions  “Best alternative to a negotiated agreement” (BATNA) Bargaining power also derives from how negotiators use the power and influence they have Class Note: Negotiation and Conflict Resolution

8. Copyright © 2005 South-Western. All rights reserved.12–8 Dealmaking (cont’d) Dealmaking is the means by which parties work out their differences over issues and pursue their interests Two basic processes of negotiating:  Distributive negotiations—parties view each other as adversaries  Integrative or mutual gains negotiations—parties focus on interests, not positions, and search for options that meet interests Class Note: Negotiation and Conflict Resolution

9. Copyright © 2005 South-Western. All rights reserved.12–9 Dealmaking (cont’d) Identifying mutual gains requires open sharing of interests, then searching for agreements that meet both parties’ needs Ways to meet mutual needs:  Finding new resources  Logrolling  Nonspecific compensation  Cost cutting  Bridging Class Note: Negotiation and Conflict Resolution

10. Copyright © 2005 South-Western. All rights reserved.12–10 Dealmaking (cont’d) Negotiator’s dilemma:  Pursuing distributive negotiation tactics makes it unlikely we will move to a process of option creation that leads to mutual gain  Pursuing integrative negotiation tactics means we still face the issue of how to distribute the new value created Class Note: Negotiation and Conflict Resolution

11. Copyright © 2005 South-Western. All rights reserved.12–11 Dealmaking (cont’d) Shadow negotiations:  Where parties position themselves and each other for the negotiation  Where negotiators work out the personal dynamic of their exchange  Where negotiators vie for control over who sets the terms of the discussion or whose interests will be heard Class Note: Negotiation and Conflict Resolution

12. Copyright © 2005 South-Western. All rights reserved.12–12 Assisted Negotiations Assisted negotiation is more akin to mediation Mediators assist negotiators by helping parties manage dilemmas and difficulties Mediators can:  Cool things down and keep parties focused on issues  Explore for areas of flexibility without causing a party to make a public commitment to a deal  Create options that the two parties have not seen  Help parties explore consequences of no agreement Class Note: Negotiation and Conflict Resolution

13. Copyright © 2005 South-Western. All rights reserved.12–13 Assisted Negotiations (cont’d) Challenges of assisted negotiation:  Tendency to want to tell people what to do rather than assist them to resolve their own differences  The question of neutrality; absolute neutrality is virtually impossible in organizations  When parties reach an impasse in negotiations, it’s often difficult to help them come to an agreement Class Note: Negotiation and Conflict Resolution

14. Copyright © 2005 South-Western. All rights reserved.12–14 Table 12.1 Costs and Customers Relevant to Lakeside-Tonicron Joint Venture The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations

15. Copyright © 2005 South-Western. All rights reserved.12–15 Table 12.2 Timing and Restraints on Lakeside-Tonicron Sales The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations

16. Copyright © 2005 South-Western. All rights reserved.12–16 Focusing on Differences as the Material for Joint Gains Cost/ revenue structure Capability Interest and priority Agenda management Forecast or belief about the future Attitudes toward risk Attitudes toward time Tax status Accounting treatment and reporting sensitivity The Press: Dealcrafting: The Substance of Three-Dimensional Negotiations

17. Copyright © 2005 South-Western. All rights reserved.12–17 Breakthrough Bargaining Strategies Power moves  Offer incentives  Put a price on the status quo  Enlist support Process moves  Seed ideas early  Reframe the process  Build consensus Appreciative moves  Help others save face  Keep the dialogue going  Solicit new perspectives The Press: Breakthrough Bargaining