Negotiation Midterm

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Lessons from Gary Kildall Case
Negotiation opportunities are not always obvious
-Having an understanding of negotiation allows you to use it as a lens to evaluate complex social reality

Negotiation is not just hard bargaining tactics, but it is managing people and relationships
-Evaluate the tie between individuals

Even non-professional negotiators can learn to take advantage of the negotiation lens!

Why take a negotiation class?
Knowledge creation
Top 10 myths about negotiation
1. Good negotiators are born, not made
2. Experience is the best teacher
3. There is one right way to negotiate
4. In every negotiation there is a winner and a loser
5. Good negotiators are tough
6. Men are better negotiators
7. It’s better to negotiate with people you know well
8. Negotiation is about the bottom line
9. You will know when you’ve had a successful negotiation
10. Always go with your gut
What is a negotiation?
Interactive communication process that happens whenever we want something from someone else or another person wants something from us
Negotiation Analysis
A lens through which the complex social world can be better understood
What are the risks/benefits of making the first offer?
When should you not make the first offer?
How to avoid anchoring on the first offer
Ask them how they arrived at that figure

Request a more reasonable offer

Make a counter offer

Takeaway from Biopharm-Seltek Negotiation
Satisfaction is not a reliable indicator of performance
Distributive Negotiation
Trade-off of value

-Goals of both parties are in direct opposition
-Resources are fixed and limited
-A gain by one party is a commensurate loss by the other party

Integrative Negotiation
Synergies of value

-Goals may be in alignment with each other
-Growing the pie as much as possible
-A gain by one party may also be a gain by the other; same with loss

Reservation Point
Bottom line – the point at which you walk away
Target Point
Goal – the outcome you realistically want to make happen
Aspiration Point
Dream – the best you could hope for (and justify)
Zone of Possible Agreement
Overlap between reservation points

Impasse is sub-optimal when positive zone

Reach agreement is a mistake for somebody when negative zone

In reality, its extent is hard to determine a priori

Key issues in developing the three key figures
How can you calculate your reservation point?

How can you set a target point or an aspiration point without knowing the other party’s reservation point?
-Preparation + Information

Best Alternative To a Negotiated Agreement

The most advantageous course of action a party can take if negotiations fail and an agreement cannot be reached

From BATNA to Reservation Point
BATNA is a possible behavior – your next best option

Reservation Point is a number – the highest (lowest) dollar amount that you must get to make the deal worthwhile for you

Turning a possible behavior into a number is tricky

Four Steps of Distributive Negotiation
1. Preparation
2. Information Exchange
3. Explicit Bargaining
4. Negotiated Agreement
Explicit Bargaining
-Leverage: use your situational advantage
-Types of leverage: positive, negative, normative

-Influence your counterpart’s perceptions to claim value

-Concession patterns and tough techniques to implement your strategy

Positive Leverage
You have something the counterpart wants
Negative Leverage
You can take away something counterpart values
BATNA =/= Leverage
BATNA = your alternatives if you don’t reach an agreement

Leverage: Which side, at any given moment, has the most to lose if they don’t reach an agreement?

But remember what really matters is the other party’s perception of your leverage. You have the leverage the other party thinks you have

Power =/= Leverage
Power = control over resources

Leverage: Capacity to cause serious damage to, or inflict a huge cost on, the other party
-You can have little or no power in terms of resources yet negative leverage (example: “I thought we were here to negotiate” clip)

Normative Leverage
Frame negotiation based on standards of conducts and norms
-Negotiate off the Kelly Blue Book Value
-Will not discuss price until all other aspects have been discussed (Many of these are cultural – national, organizational, etc.)

Provides authority, consistency, shared meaning
-e.g., Beware of “consistency traps”

Justice Norms: equity, equality, need

Strategies to Claim Value
Influence perception of ZOPA

Influence counterpart’s perceived alternatives

Get counterpart to move closer to reservation point

Get counterpart to feel this is the best settlement
-ego satisfaction and feelings matter; they don’t know your RP; subjective value

Tactics: Influence Perception of ZOPA
Anchor with an extreme offer (lowball), use shrinking concessions
Tactics: Influence counterpart’s perceived alternatives and RP
This house is very overpriced”

Offer reason, be persuasive; ask for a rationale and point out flaws

Tactics: Get counterpart to move closer to RP
Reduce their perceived leverage (convince them you have great alternatives, are in no hurry, etc.)

Make them think you are in a strong leverage position (their alternatives are much worse if no deal)

*Hardball tactics (Lewicki reading)

Tactics: Get counterpart to feel this is the best settlement
Make them feel that they’ve received a great deal (bogey)

Congratulate them on the deal

Responding to Hardball Tactics
Ignore them

Discuss them

Respond in kind

*Co-opt the other party

Sealing the Deal
Provide two final offers; let them pick
Assume the close, get out the paperwork
Split the difference, simple and effective
Exploding offers, deals that expire quickly
Sweeteners: “If we close, I’ll throw in…”
Summary: Distributive Negotiations
Preparation is mandatory! Info = Power

Identify BATNA, RP, TP, & AP

Shape counterpart’s perception of ZOPA, BATNAs, and leverage positions

Invoke standards and norms strategically

Make your counterpart believe they got the best deal possible

Signs of Integrative Potential
Does the negotiation have multiple issues?

Can you unbundle one issue into multiple issues?

Can other issues be brought in?

Can side deals be made?

Do parties have different preferences across issues?

The Negotiator’s Dilemma
How do you create value and claim value at the same time?

Have to identify which issues can help you create value (integrative) and which can help you claim value (distributive)

Value creation is determined by whether or not the negotiation is efficient

Pareto Efficiency
Achieved when no one party can do better without the other party doing commensurately worse

The pie is as big as possible

Nash’s Bargaining Solution
Max (U(partyA) – U(partyA’s BATNA)) X (U(partyB) – U(partyB’s BATNA))

The fairest solution is one that maximizes the product of the differences between the utility of the agreement and the utility of non agreement for party A and for party B

Chance of reaching efficiency
<25% of executives reach efficient agreements Half of those reach efficiency by chance
Fixed Pie Bias
Assumption that counterpart’s payoffs are same as yours

“Win/Lose” bias

End up leaving value on the table

Key Takeaways from New Recruit Negotiation
Identify Issues and where both parties stand

Negotiate on the issues that will allow you to grow the pie

Claim your part of the pie

Negotiate with integrity for a good implementation

How can you identify and take advantage of integrative opportunities in a negotiation?



Perspective Taking
-asking questions
-doing your resources

-sharing information
-act honestly
-find commonalities

-do you value the same things?

Separate the person from the problem
-don’t let emotions drive the discussions

Focus on interests, not positions
-interests: fears, concerns, unmet needs

Invent options for mutual gain
-get creative and don’t dismiss new ideas too quickly

Use objective criteria to evaluate options
-legal requirements, norms, market prices, professional standards

Avoid focusing on one issue at a time
-look for relationships between issues to capitalize on different interests
*-i.e., Logrolling

Make multiple equivalent offers simultaneously

Capitalize on different preferences!

Integrative Bargaining: Resources
Recognizing the value of differences

Perspective taking


Integrative Bargaining: Strategies
Focus on interests, look for opportunities in different interests

Invent Mutual Gain

Separate the person from the problem

Integrative Bargaining: Tactics
Make multiple offers simultaneously

Share appropriate information

Don’t let your assumptions get in the way!

Asymmetric control over another person’s valued resources

Power as a property of the relationship; not of the individual
-social power

Coercive Power vs. Influence Power
-negative sanctions vs. positive

Power vs. Leverage
Power is a source of leverage but it is a broader concept

You can have little power and a lot of leverage in a specific situation/negotiation (and vice versa)

Key sources of power
-Improve your own BATNA
-Influence the other party’s BATNA

Role Power


Psychological Power
-Feeling in control/confident

Standards of legitimacy

E.g., reciprocity, precedent, ethics, fairness
-Contractually established (most concrete)
-Legally established through precedent
-Best practices in industry
-Socially recognized norms (most abstract)

Can be invoked even (especially) by the powerless
-Influence by rights =/= Coercion by power

Needs, desires, and concerns underlying the negotiation process

Have to ask questions and do research to understand the interests
-Humble inquiry

Interests provide opportunities for creative agreements

When to use Rights and Power
When the other party refuses to come to the table

When negotiations have broken down and parties are at an impasse

When someone violates a rule or breaks a law

How to use Rights and Power
Make sure the threat is credible

Be ready to follow through with the threat if necessary to preserve your credibility

Combine threats and interests based approaches

When making a threat, give a chance to the other party to turn off your threat without losing face

Cost of using rights/power
Results in winner/lose, and losers tend to not give up

Acting on a threat takes away your power

Using power can result in higher resource consumption and/or opportunities lost
-escalation of commitment

Power contests can injure people/relationships and can lead to the desire for revenge

Rights are usually less costly, but can still impose costs

Breaking the reciprocity cycle
Stop reciprocating
-do not return rights for rights or power for power
-instead, redirect towards problem solving

No unilateral concessions
-essentially is rewarding bad behavior

Combining Communication Types
-“If you do x, I could do y, but why don’t we do z?”

Label the process
-“We both know how contract disputes work. The’s move on…”

Benefits of using interests when possible
Results in higher satisfaction with outcomes, better working relationships, and may lower transaction costs
Key takeaways from Disney’s expansion attempt
Must be able to identify interested parties and anticipate what their positions and tactics might be
-Are the public interests aligned with the organization’s interests?

Despite power advantages, rights-based opposition can be quite potent
-Rights-based moves focus from a power struggle to normative expectations

Coalitions can neutralize power advantages
-they can generate and enhance OR neutralize power

One size does not fit all
-Just because something worked in one context does not mean it can be applied blindly in another

Neoclassical Economics
How individuals act within an economy

Based on three assumptions

But, neoclassical economics is not representative of how people actually behave

Three Assumptions of Neoclassical Economics
People have rational preferences

Individuals maximize utility and maximize profits

People act on the basis of relevant information

Bounded Rationality
Humans are limited biological systems with constraints
-Limitations in access to information
-Limitations in information processing (calculating)
-Limitations in motivation to optimize (satisficing)

Systematic cognitive biases emerge: not just noise

Cognitive Bias
Systematic decision making error that can occur without the awareness of the decision maker

Systematic – we can predict directionality

Error – departure from accurate judgement

Lack of Awareness – unintended decision making error

Anchoring and Adjustment
Easy to get hung up (anchored) on reference points, even when the reference point is totally irrelevant to the problem at hand
-Last two digits of your social security number….
-Is the population of Indonesia greater than or less than 50 million?

Then they fail to adjust their scaling properly
-Making offers/concessions within the constricted zone

Anchoring in Practice
Make the first offer or use your aspiration point as a counter-offer (and have convincing arguments ready)

Question your counterpart’s offers and ask them to explain their rationale for those key figures

Plot out the pattern of offers and concessions

Framing/Loss Aversion
Choices are impacted by how information is presented

Avoid risk when problems framed positively (gains)

Seek risk when problems framed negatively (losses)

Losses loom larger than gains (by ~2 times)

Escalation of Commitment
Escalation: continue commitment to bad choices

-Done to justify prior commitment to that behavior
-Both self-justification (self-image) and others
-There is a cultural bias towards consistency
-Don’t want to be a “flip flopper” (think politics)

Escalation of Commitment in Practice
Get counterpart to spend more time/resources in negotiation: ultimatum at the end is more effective

Foot-in-the-door technique: start with a small request, makes a bigger one more likely

Recognize your own level of commitment. Stop and ask yourself whether the sunk costs are worth moving forward

Status quo Bias
Preference for the current state of affairs

Natural inclination to go with the current or previous decision

Example: organ donors

Status Quo Bias in Practice
Provide the “boilerplate” contract; default option

Ask yourself what your options are; don’t let the status quo be your only option

Confirmation Bias
Seeking only information that confirms what you already believe is true or what you want to be true

Irrationally filtering out disconfirming information

Leads to overconfidence, which is problematic
-impedes information sharing, creative problem
-leads to more impasses

Confirmation Bias in Practice
Be mindful: identify your assumptions

Have humility: your partner may hold unique information

Gain Perspective: ask others to play devil’s advocate

Self-Serving Evaluations and Overconfidence Bias
Tendency to be too optimistic in formulating probability judgements

When a person’s subjective confidence in his or her judgements is reliably greater than the objective accuracy of those judgements

Self-Serving Evaluations and Overconfidence Bias in Practice
Use objective information to overcome biases

Use third parties to help establish facts

Texoil Takeaway
When there is no ZOPA, try to incorporate other items
Paris Peace Conference & Treaty of Versailles
One of the biggest negotiation failures in history

All parties were disappointed

Raised resentment in Germany and other countries that didn’t obtain desired territories

A simplified and standardized conception or image held in common by members of a group about another group, a situation, or an object (“a picture inside our head”)

Prone to error due to the fact that our experience and knowledge is limited

Shapes information to be confirmatory

Leads to overconfidence, assumptions, and blind spots

War Guilt Clause
Simply seen by the Allies as a necessary legal basis to extract compensation from Germany, Germans viewed this clause as a national humiliation
Confirmation Bias and the German Reaction to the War Guilt Clause
When the Germans received the treaty and read article 123, they found what they were looking for and already convinced to find: a conviction and a request to admit guilty – a “violation of honor”
Stopping of the German train in Verdun
Done to show them the damages suffered by France, which Clemenceau wanted repaid

Aggravated the situation because it was interpreted as an accusation that Germany was the only country responsible for the evil of the war

Violations of Procedural Justice during the Paris Peace Conference
Germans had no chance to take part in the talks

German headquarters was in the hotel basement – with hidden microphones

Germans were left to wait without a reason

Procedural Justice
Perceived fairness of the negotiation process
Distributive Justice
Perceived fairness of the outcome of that process
Relationship between Procedural and Distributive Justice
When people feel that they didn’t have a chance to influence the negotiation process, they didn’t have a voice in the process, usually they are also dissatisfied with the outcome, and they perceive the outcome as unfair
How did Emotions affect the Paris negotiations and the implementation of the treaty?
French Prime Minister’s hatred for Germany, desire for revenge, but also ultimately fear

Made them incapable of assessing the situation objectively, which led to unreasonable sanctions

German delegation’s anger at the way they had been treated and at the supposed “war guilt clause”

German national sense of humiliation, which would then lead to nationalistic sentiments as well as an acute desire for revenge

Lessons from the Paris Peace Conference Case: Be Aware of Stereotypes
Get to know your counterpart – do not rely on stereotypes!

Don’t assume your conceptions are correct or the only existing

Be aware of the stereotypes the other party may have about you and what you can do to alter those perceptions

Lessons from the Paris Peace Conference Case: Beware of Emotions
Don’t let your anger/emotions dictate your decisions

Cool off and reappraise the situation

Think long-term: people may not forget and harbor resentment for a long time

Gender Stereotypes and Negotiation
The traits ranked as most important for a successful negotiator are all male stereotypes

The traits ranked as least important for a successful negotiator are all female stereotypes

Why do women negotiate less than men?
Women are more reluctant to negotiate

Women are less aggressive/competitive

Evidence of a Gender Gap
1% advantage in performance evaluations, accumulated over the length of a career, produces a senior leadership team with 65% men

Initial differences in salary negotiations between men and women yield $500K in accumulated wealth over the course of a career

Why are there gender differences in negotiation in the first place?
Role violation issues
-women who gain more in distributive negotiations are more negatively evaluated
-women who initiate a salary conversation with their managers are viewed as less likable than men who do the same

Stereotype threat
-women perform worse on math tests when they are subtly primed with a negative stereotype about women’s math performance

Stereotype Reactance
-on the contrary, women outperform men when they are explicitly reminded of a negative stereotype

Strategies for overcoming stereotypes
Work to improve your BATNA before the negotiation

Carefully craft your language so that it seems like a conversation and not a threat

Think about the people outside the negotiation whom you are representing

Research what male colleagues in a similar position are making; use it as a target price

Know the norms – is negotiating acceptable?

Nixon’s Madman Theory
“I want the North Vietnamese to believe I’ve reached the point where I might do anything to stop the war. We’ll just slip the word to them that ‘for God’s sake, you know Nixon is obsessed about Communism. We can’t restrain him when he’s angry–and he has his hand on the nuclear button’ and Ho Chi Minh himself will be in Paris in two days begging for peace.”
Anger and Concessions
Some disparate findings around whether or not people make concessions in response to an angry counterpart

Depends on power dynamics and appropriateness of anger (think tactical usage)

An angry opponent leads you to
Develop a negative impression of that opponent

Become angry yourself (genuinely)

Be unwilling to act with that opponent again

Make enemies

Blowback Effect
An angry opponent can cause you to become genuinely angry yourself
Managing your own anger
Recognize your own feelings
-tense body, agitated, higher heart rate

Take a Break
-do not ruminate on the incident
-think about a pleasant situation

Avoid negotiator bias (view our intentions as pure and theirs as hostile)
-are our motives really that pure?
-think of possible explanations for their behavior

Diffusing your counterpart’s anger
Acknowledge his/her anger

Assess whether it’s genuine or strategic

If genuine, determine the source

Either way, never concede to satiate anger!

Apologize if your fault

Help them to save face

Involve a mediator if necessary

Why is silence an effective tactic to diffuse anger?
Anger is a costly emotional response – con’t go on and on forever – have to stop at a certain point

Silence makes them realize that they look ridiculous or that you feel sorry for them

It deprives them of arguments to use against you

An organism’s adaptive response to its environment

Short-lived and intense reaction to a stimulus

Emotional Appraisal Process
Stimulus (externally visible)
Emotional Registration (internally experienced)
Emotional Experience (internally experienced)
Expressive Cues (externally visible)
Something that exists in the external environment
Emotional Registration
Stimulus captures your attention

Registration can run from subconscious to explicit

Emotional Experience
How the stimulus makes you feel

Two dimensions: Valence (good/bad) and activation (high/low energy)

Expressive Cues
How you express the way you feel

Both verbal and non-verbal

Expressive Cues become the stimulus for the counterpart

Being able to interpret the emotions experienced based on expressive cues (using the externally visible to determine the internally experienced)
Cognitive Empathy
Ability to understand another person’s inner experiences and feelings and a capability to view the outside world from the other person’s perspective
Affective Empathy
Capacity to enter into or join the experiences of another
Mismatch of Verbal and Nonverbal Cues
If a counterpart’s body language, tone of voice, and choice of words do not match, they may be either trying to hide their emotions or fake them

Ask Questions
-“You are telling me you like this outcome, but you seem uneasy. Is something making you uncomfortable?”
-“You say you’re angry, but you seem somewhat pleased. Are you truly upset about something? Or are you trying to intimidate me?”

Emotional Intelligence
Self Awareness – understanding emotion
Other Awareness – perceiving emotion
Using Emotions – facilitating emotion
Regulating Emotion – managing emotions
How to improve Empathy
Practice mindfulness
Importance of Mindfulness in Negotiation
Mindfulness is helpful for understanding the perspective of others

Understanding their motives, cognition, and emotions can enhance your position

Slowing thinking down and being more aware will help you avoid falling victim to biases and stereotypes

Helps build trust between you and your counterpart

Humble Inquiry
The fine art of drawing someone out, of asking questions to which you do not already know the answer, of building a relationship based on curiosity and interest in the other person
Confrontational Inquiry
Leading questions

Examples: Did that make you angry? Why didn’t you say something to the group?

Diagnostic Inquiry
Help person see cause and effect

Examples: How did you feel about that? What are you going to do next?

Process-Oriented Inquiry
Help understand where we are in the process

Example: What is happening right her, right now, between us?

Humble or Pure Inquiry
You don’t know the answer

Examples: What’s going on here? Can you give me an example?

Passive Listening
Listener receives the message without any need to respond

Listener does not give any cue nor looks for any cues

Active Listening
Reflects the content of your messaging back to the speaker

Tests your understanding of what they are saying (verbal content)

Shows your sensitivity to how they are saying it (non-verbal cues)

Blocks to Inquiry/Listening
“Why” questions
Quick reassurance
Digging for information
Luna Pen Case: Key takeaways
Culture shapes tactical choices and their interpretation
-fundamental notions of bargaining, what is expected, what is acceptable, etc. is in part determined by culture

Culture exists on many levels
-level in an organization
-organizational culture

A pattern of shared basic assumptions learned by a group as its solved problems of external adaptation and internal integration – a product of joint learning

A way of thinking, behaving, or working that exists in a particular society

Culture as an Iceberg
Behavior and Artifacts of a culture are just the visible tip of the iceberg

Values, beliefs, and norms lie much deeper

Assumptions come from an even deeper part of the culture iceberg

Culture as a Double-Edged Sword
Cultural differences create enormous integrative potential because they parties have differential resources and knowledge of their respective markets

At the same time, because there are cultural differences, it may be very difficult to tap that potential

Individualism vs. Collectivism
-Priority given to the self (i.e., assertive)
-Organizations reward individuals
-Preference for more formal dispute resolution

-Priority given to the group (i.e., cooperative)
-Organizations reward groups
-Preference for more informal dispute resolution

Implications for negotiation:
-Identification of the parties involved
-Duration of the negotiation process
-In-group favoritism

High/Low Power Distance
High power distance:
-People treated according to social status
-Superiors have power in resolving conflicts

Low power distance:
-People generally are treated equally, regardless of social status
-People are empowered to solve conflicts together

Implications for negotiation:
-Choosing representatives
-Negotiation conduct
-Finalizing the deal

High/Low Context Cultures
Low-context (direct communication):
-Information is communicated directly and explicitly
-The message holds the meaning

High-context (indirect communication):
-Information is communicated implicitly, thorough the context and behavioral cues
-Meaning may need to be inferred

Implications for negotiation:
-Difference in information-exchange strategies
-Integrative agreements

Three Dimensions of Culture that Matter for Negotiation
Individualism vs. Collectivism

High power distance vs. Low power distance

High-context vs. Low-context

Lessons from Case
Look to increase value by identifying trade offs

Look for side issues that could be added to the deal

Search for differences in the parties’ perceptions that could be capitalized on by a contingent contract

Contingent Contracts
Offering insurance against an external circumstance that makes the deal unprofitable in exchange for a profit sharing agreement

-an if/then agreement
-utilizes parties’ different forecasts or preferences
-specifies the actions negotiation parties are to take if a certain circumstance (a contingency) materializes

Based on differences in expectations of outcomes

Why to Use Contingent Contracts
Betting on biases and thereby circumventing them

Leveling the playing field

Diagnosing deceit

Reducing risk

Motivating performance

Betting on Biases
-Each of two companies is confident that it can sell 50M of the other’s product in the first year

Contingent Contract
-Each side’s ownership hinges on first year sales
-If both achieve targets or miss by same amount, they each own half of the venture
-If one side misses more than the other, it will forfeit its equity

Leveling the Playing Field
The problem of asymmetric information: How does a big company know what to pay for a small company?

A contingent contract with a baseline payment and a sliding scale of payments based on post-acquisition performance allows the sale to go forward but delays the determination of terms until the information has become symmetrical

Diagnosing Deceit
Information asymmetry can lead to deceit

Contingent contracts are particularly useful because they allow a negotiator to test the other side’s veracity in a nonconfrontational matter

Reducing Risk
Contingent contracts are a way to share risk

Example: A retailer is making a purchase from a vendor. Demand is uncertain.
-If demand is higher than expected, vendor receives a share of profits
-If demand is lower than expected, vendor takes back merchandise and reimburses buyer

Motivating Performance
Motivating parties to perform above contractual obligation

-salary based on productivity
-sales commissions
-CEO compensation based on stock performance
-Athlete salary based on field performance

-Consultancy fee based on the actual success of the project or performance after the intervention; not flat fee

Potential Risks of Contingency Contracts
Delay conflict without resolving it

May signal distrust if not presented and discussed openly

Could create perverse incentives

Additional Requirements for Contingency Contracts
Continuing interaction
-ongoing relationships

-deferred value

-need to observe and measure both sides’ performance

Can we change the SCOPE of the negotiation?
Negotiating about the right issues?
-think about both perspectives
-Ground yourself in context of neg

Negotiating with the right parties?
-who else involved? need to bring people in to fix issues?
-who else has a stake?
-what relationships exist among parties?
-who can I bring on my side? who might join the other side?

Can we change the SEQUENCE of the negotiation?
Approaching the parties in the right order?
-whom should I talk to first?
-whom should I contact simultaneously?

Approaching the parties at the right time?
-strengthen BATNA enough beforehand

What information to provide to each of the parties?
-let them know I have other options without scaring or threatening them

Three types of Multiparty Negotiations
Multiparty Negotiations – all parties interact with one another

Third party dispute intervention – each party interacts with the mediator/arbitrator

Principal-Agent Negotiation – Agents interact with one another on behalf of their respective principals

Multiparty Negotiation
3+ parties, each representing their own interests, who attempt to resolve perceived differences of interest
Coalition Game: Key Takeaways
If there was no agenda control; any individual could suggest a move at any point – then the results would have been completely unpredictable

Agenda Control does induce some stability and predictability

Coalitions help agenda setters to achieve goal

People tend to have “coalitional integrity”

Provide an opportunity to enhance resources and power in negotiation

Can provide an opportunity to reduce competition by finding common interests among traditionally competitive parties

Bind people together, even in non-rational ways

Purpose of Coalitions
Parties join behind a mutual interest

Work together for common effectiveness and results

What Makes Coalitions Work
Single responsible leader who is committed and has time

Members have group-interest, not self interest

Practical knowledge of relevant environment (i.e. lobbying, finding allies, effective talking points, media/PR)

What Makes Coalitions Fail
One (larger, more powerful) member dominates

Conflicting goals (what to do) and strategies (how to do it)

Jealousy between members, minor disagreements

Too much time required, formality, etc. (by definition, coalitions are secondary to their organizations)

Coalition Considerations
Too large – hard to satisfy interests
Too small – low power

How to divide pie within the coalition? (Think norms!)

Limitations of the Legal System
Litigation is lengthy and costly

Litigation limits the involvement of represented parties

Litigation puts a decision in the hands of a judge or jury (remember that we’re all prone to cognitive biases!

Litigation is often more distributive in nature even though the dispute in question likely has non-legal issues at stake

Characteristics of Third-Party Intervention
-Voice: high
-Process Control: low
-Outcome Control: high
-Satisfaction: high

-Voice: high
-Process Control: high
-Outcome Control: low
-Satisfaction: medium

-Voice: low
-Process Control: low
-Outcome Control: low
-Satisfaction: low

Most common form of third party dispute intervention

The parties retain control over the process, but a third party is given control of the outcome
-each party presents position
-arbitrator makes decision
-can be voluntary or binding
-can rule in favor of one party of suggest a split

Benefits of Arbitration
Always results in settlement

Motivates parties to make settlement before arbitration

Saves face because disputants can blame the arbitration process
-gives voice to participants

Keeps disputants out of court system

Limitations of Arbitration
Parties relinquish control of outcome

Not public (unlike litigation)

Not under auspices of legal system

Not available for all disputes

A third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques

The parties retain control of the outcome, but a third party guides the process
-Each party explains the facts to help a mediator identify and understand the issues
-The mediator does not impose or recommend a solution, but works with the parties to achieve a negotiated agreement

Benefits of Mediation
Gives disputants voice (unlike court)
-Let them vent, then cool off, then get to work

Motivate parties to find a solution before litigation

Gives disputants control over the outcome, which must be agreed to by both sides
-Parties are satisfied and committed to the solution

Restore civility and trust into the relationship

Limitations of Mediation
Time consuming

Non binding

When parties refuse to cooperate/emotions are high/parties don’t want to be involved in the problem solving process

Parties are not able to talk face-to-face

No legal counsel present; if issue deserves legal attention this could be a problem

How might you use mediation at work?
Mediating disputes between employees

Performance issues

Harassment Complaints


ADR Spectrum
Ranges from Informal/Consensual processes where parties retain control and decide the outcome to Formal/Adjudicative processes where parties cede control and a Neutral decides outcomes

Early Neutral Evaluation

Arbitration and Mediation Differ in Which Ways?
Who controls the process and decides the outcome


Attorney/Client Centricity

Focus (factual/legal issues vs. problem resolution)

Split the Baby vs. Creative solutions

Contractually obligated vs. Voluntary

Binding vs. non-binding

Purpose of an Ombudz is fourfold
Lessons from Bullard Houses
Agents do not always share the same interests

It is necessary to think clearly about how much information you are authorized to reveal

Lying and half truths can get you into trouble

Bias towards agreements: if your BATNA is better – walk away!

Categories: Negotiation