Study Material: Ch- 5

Ch.5- Perception and Cognition

I.       Framing

A frame is the subjective mechanism through which people evaluate and make sense out of situations, leading them to pursue or avoid subsequent actions

A.    Types of Frames

1.      Substantive - what the conflict is about. Parties taking a substantive frame have a particular disposition about the key issue or concern in the conflict.

2.      Outcome—a party’s predisposition to achieving a specific result or outcome from the negotiation.

3.      Aspiration—a predisposition toward satisfying a broader set of interests or needs in negotiation.

4.      Process—how the parties will go about resolving their dispute.

5.      Identity—how the parties define “who they are.”

6.      Characterization—how the parties define the other parties.

7.      Loss–gain—how the parties define the risk or reward associated with particular outcomes.

B.     How frames work in negotiation

1.      It is difficult to know what frame a party is using unless the party tells you

2.      Frames of those who hear or interpret communication may create biases of their own.

3.      Linguistic analyses of negotiation transcripts provides insight into how parties define a negotiation, and how frames are used in the process:

a.       Negotiators can use more than one frame.

b.      Mismatches in frames between parties are sources of conflict.

c.       Particular types of frames may lead to particular types of agreements

d.      Specific frames may be likely to be used with certain types of issues

e.       Parties are likely to assume a particular frame because of various factors.

C.     Another approach to frames: Interest, rights, and power

1.      Ury, Brett, and Goldberg (1988) proposed an approach to framing disputes that view parties in conflict as using one of three frames:

a.       Interests - People are often concerned about what they need, desire, or want. People talk about their “positions,” but often what is at stake is their underlying interests.

b.      Rights - People may also be concerned about who is “right”—that is, who has legitimacy, who is correct, or what is fair.

c.       Power - Negotiations resolved by power are sometimes based on who is physically stronger or is able to coerce the other, but more often, it is about imposing other types of costs— economic pressures, expertise, legitimate authority, and so on.

2.      The different frames are likely to lead to very different discussions between parties.

3.      The way a party approaches the problem will likely influence how the other party responds.

D.    The frame of an issue changes as the negotiation evolves

1.      The issue development approach focuses on the patterns of change (transformation) that occur in the issues as parties communicate with each other.

a.       Several factors shape a frame, the negotiation context clearly affects the way both sides define the issue and conversations that the parties have with each other about the issues in the bargaining mix.

b.      At least four factors can affect how the conversation is shaped:

a)      Negotiators tend to argue for stock issues, or concerns that are raised every time the parties negotiate.

b)      Each party attempts to make the best possible case for his or her preferred position or perspective.

c)      In a more “macro” sense, frames may also define major shifts and transitions in the overall negotiation.

d)     Multiple agenda items operate to shape the issue development frames.

II.     Cognitive Biases in Negotiation

A.    Irrational escalation of commitment

1.      An “escalation of commitment”  is the tendency for an individual to make decisions that stick with a failing course of action

2.      Escalation of commitment is due in part to biases in individual perception and judgment. 

B.     Mythical fixed-pie beliefs

1.      Many negotiators assume that all negotiations involve a fixed pie

2.      Those who believe in the mythical fixed pie assume there is no possibility for integrative settlements and mutually beneficial trade-offs, and they suppress efforts to search for them.

C.     Anchoring and adjustment

1.      Anchoring and adjustment are related to the effect of the standard (or anchor) against which subsequent adjustments are made during negotiation.

2.      Once the anchor is defined, parties tend to treat it as a real, valid benchmark by which to adjust other judgments, such as the size of one side’s opening offer.

D.    Issue framing and risk

1.      A frame is a perspective or point of view that people use when they gather information and solve problems.

2.      The way an issue is framed influences how negotiators perceive risk and behave in relation to it.

3.      The tendency to either seek or avoid risk may be based on the reference point against which offers and concessions are judged.

4.      Two things to keep in mind about the effect of frames on risk in negotiation are

a.       negotiators are not usually indifferent to risk, but

b.      they should not necessarily trust their intuitions regarding it.

E.     Availability of information

1.      The availability bias operates when information that is presented in vivid, colorful, or attention-getting ways becomes easy to recall, and thus also becomes central and critical in evaluating events and options.

2.      The availability of information also affects negotiation through the use of established search patterns.

F.      The winner’s curse

1.      The winner’s curse refers to the tendency of negotiators, particularly in an auction setting, to settle quickly on an item and then subsequently feel discomfort about a negotiation win that comes too easily.

2.      Recent research suggests that the winner’s curse stems, in part, from counterfactual thought processes that involve entertaining the possibility of “what might have been” if the offer hadn’t been accepted.

G.    Overconfidence

1.      Overconfidence is the tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true.

2.      Overconfidence has a double-edged effect:

a.       It can solidify the degree to which negotiators support positions or options that are incorrect or inappropriate, and

b.      It can lead negotiators to discount the worth or validity of the judgments of others, in effect shutting down other parties as sources of information, interests, and options necessary for a successful integrative negotiation.

H.    The law of small numbers

1.      The law of small numbers refers to the tendency of people to draw conclusions from small sample sizes.

2.      This tendency leads to a self-fulfilling prophecy - people who expect to be treated in a distributive manner will:

a.       Be more likely to perceive the other party’s behaviors as distributive

b.      Treat the other party in a more distributive manner.

I.       Self-serving biases

1.      People often explain another person’s behavior by making attributions, either to the person or the situation. 

2.      Fundamental attribution error - the tendency is to overestimate the causal role of personal or internal factors and underestimate the causal role of situational or external factors. 

3.      Self-serving biases effect the negotiation process in a number of ways, for example:

a.       Perception of greater use of constructive tactics than the other party

b.      Less accurate in estimating the other’s preferred outcomes

c.       Influences perception of fairness in a negotiation context.

J.       Endowment effect

1.      The endowment effect is the tendency to overvalue something you own or believe you possess.

2.      The endowment effect can lead to inflated estimations of value that interfere with reaching a good deal.

K.    Ignoring others’ cognitions

1.      Failure to consider others’ cognitions allows negotiators to simplify their thinking about otherwise complex processes; this usually leads to a more distributive strategy and causes a failure to recognize the contingent nature of both sides’ behaviors and responses.

L.     Reactive devaluation

1.      Reactive devaluation is the process of devaluing the other party’s concessions simply because the other party made them.

2.      Reactive devaluation leads negotiators to:

a.       Minimize the magnitude of a concession made by a disliked other

b.      Reduce their willingness to respond with a concession of equal size, or

c.       Seek even more from the other party once a concession has been made

M.   Managing misperceptions and cognitive biases in negotiation

1.      Misperceptions and cognitive biases typically arise out of conscious awareness as negotiators gather and process information.

2.      How best to manage the negative consequences of misperception

a.       Be aware that they occur

b.      Tell people about a perceptual or cognitive bias - discuss them in a structured manner within the team and with the party’s counterparts.

N.    Reframing

1.      Reframing might involve any of a number of approaches.

a.       Rather than perceiving a particular outcome as a loss, the negotiator might reframe it as an opportunity to gain.

b.      Trying to perceive or understand the situation in a different way or from a different perspective

Because reframing requires negotiators to be flexible during the negotiation itself, they should anticipate—during planning—that multiple contingencies may arise during negotiations.

Study Material: Ch- 4

QUIZ 1: Ch 1- Ch 4


Ch.4- Negotiation: Strategy and Planning




XVI. Goals – The Focus That Drives a Negotiation Strategy



A. Direct effects of goals on choice of strategy



1. There are four important aspects to understand in how goals affect negotiations:

a. Wishes are not goals, especially in negotiation.

b. Goals are often linked to the other party’s goals.

c. There are boundaries or limits to what goals can be.

d. Effective goals must be concrete, specific and measurable. If they are not, then it will be hard to:

(1) Communicate to the other party what we want

(2) Understand what the other party wants

(3) Determine whether an offer on the table satisfies our goals.

2. Goals can be tangible or procedural.

The criteria used to determine goals depend on your specific objectives and your priorities among

3. Short-term thinking affects our choice of strategy; in developing and framing our goals, we may ignore the present or future relationship with the other party in a concern for achieving a substantive outcome only.

4. Negotiation goals that are complex or difficult to define may require a sequence of negotiation episodes. In most cases, progress will be made incrementally, and may depend on establishing a relationship with the other party.



XVII. Strategy – The Overall Plan to Achieve One’s Goals



A. Strategy versus Tactics



1. A major difference between strategy and tactics is that of scale, perspective or immediacy.

2. Tactics are short-term, adaptive moves designed to enact or pursue broad strategies, which in turn provide stability, continuity, and direction for tactical behaviors.

3. Tactics are subordinate to strategy: they are structured, directed, and driven by strategic considerations.



B. Unilateral versus bilateral approaches to strategy



1. A unilateral choice is made without the active involvement of the other party.

2. Unilaterally pursued strategies can be wholly one-sided and intentionally ignorant of any information about the other negotiator.

3. Unilateral strategies should evolve into ones that fully consider the impact of the other’s strategy on one’s own.



C. The dual concerns model as a vehicle for describing negotiation strategies. This model proposes that individuals have two levels of related concerns: a concern for their own outcomes, and a level of concern for the other’s outcomes.



1. Alternative situational strategies

a. There are at least four different types of strategies when assessing the relative importance and priority of the negotiator’s substantive outcome versus the relational outcome: competitive, collaboration, accommodation, and avoidance

2. The non-engagement strategy: Avoidance

a. There are many reasons why negotiators may choose not to negotiate:

(1) If one is able to meet one’s needs without negotiating at all, it may make sense to use an avoidance strategy.

(2) It simply may not be worth the time and effort to negotiate (although there are sometimes reasons to negotiate in such situations.

(3) The decision to negotiate is closely related to the desirability of available alternatives – the outcomes that can be achieved if negotiations don’t work out.

3. Active-engagement strategies: Competition, collaboration, and accommodation

a. Competition is distributive win-lose bargaining.

b. Collaboration is integrative or win-win negotiation.

c. Accommodation is as much a win-lose strategy as competition, although it has a decidedly different image it involves an imbalance of outcomes, but in the opposite direction.

d. There are drawbacks to these strategies if applied blindly, thoughtlessly or inflexibly:

(1) Distributive strategies tend to create “we-they” or “superiority-inferiority” patterns, which may result in a distortion of the other side’s contributions, as well as their values, needs and positions.

(2) If a negotiator pursues an integrative strategy without regard to the other’s strategy, then the other may manipulate and exploit the collaborator and take advantage of the good faith and goodwill being demonstrated.

(3) Accommodative strategies may generate a pattern of constantly giving in to keep the other happy or to avoid a fight.



XVIII. Understanding the Flow of Negotiations: Stages and Phases



A. Phase models of negotiation:



1. Initiation

2. Problem solving

3. Resolution



B. Greenhalgh (2001) suggests that there are seven key steps to an ideal negotiation process:



1. Preparation: deciding what is important, defining goals, thinking ahead how to work together with the other party.

2. Relationship building: getting to know the other party, understanding how you and the other are similar and different, and building commitment toward achieving a mutually beneficial set of outcomes.

3. Information gathering: learning what you need to know about the issues, about the other party and their needs, about the feasibility of possible settlements, and about what might happen if you fail to reach agreement with the other side.

4. Information using: at this stage, negotiators assemble the case they want to make for their preferred outcomes and settlement, one that will maximize the negotiator’s own needs.

5. Bidding: the process of making moves from one’s initial, ideal position to the actual outcome.

6. Closing the deal: the objective here is to build commitment to the agreement achieved in the previous phase.

7. Implementing the agreement: determining who needs to do what once hands are shaken and the documents signed.



XIX. Getting Ready to Implement the Strategy: The Planning Process



A. Defining the issues



1. Usually begins with an analysis of what is to be discussed in the negotiation.

2. The number of issues in a negotiation, along with the relationship between the negotiator and the other party, are often the primary determinant of whether one uses a distributive or integrative strategy.

3. In any negotiation, a complete list of the issues at stake is best derived from the following sources:

a. An analysis of all the possible issues that need to be decided.

b. Previous experience in similar negotiations.

c. Research conducted to gather information.

d. Consultation with experts in that industry.



B. Assembling the issues and defining the bargaining mix



1. The combination of lists from each side in a negotiation determines the bargaining mix.

2. There are two steps a negotiator can use to prioritize the issues on an agenda:

a. Determine which issues are most important and which are less important.

b. Determine whether the issues are linked together or are separate.



C. Defining Interests

1. Interests may be:

a. Substantive, that is, directly related to the focal issues under negotiation.

b. Process-based, that is, related to how the negotiators behave as they negotiate.

c. Relationship-based, that is, tied to the current or desired future relationship between the parties.

2. Interests may also be based on intangibles of negotiation.

D. Knowing limits and alternatives



1. Good preparation requires that you establish two clear points:

a. Resistance point – the place where you decide that you should absolutely stop the negotiation rather than continue.

b. Alternatives – other agreements negotiators could achieve and still meet their needs. Alternatives define whether the current outcome is better than another possibility.



E. Setting targets and openings



1. Two key points should be defined in this step:

a. The specific target point where one realistically expects to achieve a settlement

b. The asking price, representing the best deal one can hope to achieve.

2. Target setting requires positive thinking about one’s own objectives.

3. Target setting often requires considering how to package several issues and objectives.

4. Target setting requires an understanding of trade-offs and throwaways.



F. Assessing constituents and the social context of a negotiation



1. When people negotiate in a professional context, there may be more than two parties.

a. There may be more than two negotiators at the table. Multiple parties often lead to the formation of coalitions.

b. Negotiators also have constituents who will evaluate and critique them.

c. Negotiation occurs in a context of rules – a social system of laws, customs, common business practices, cultural norms, and political cross-pressures.

2. “Field analysis” can be used to assess all the key parties in a negotiation.

a. Who is, or should be, on the team on my side of the field?

b. Who is on the other side of the field?

c. Who is on the sidelines and can affect the play of the game? Who are the negotiation equivalents of owners and managers?

d. Who is in the stands? Who is watching the game, is interested in it, but can only indirectly affect what happens?

e. What is going on in the broader environment in which the negotiation takes place?

f. What is common and acceptable practice in the ethical system in which the deal is being done?

g. What is common and acceptable practice given the culture in which the negotiation is conducted?



G. Analyzing the other party



1. Learning the other’s issues, preferences, priorities, interests, alternatives and constraints is almost as important as determining one’s own.

2. Several key pieces of background information will be of great importance, including their:



a. The other party’s resources, issues, and bargaining mix – investigate:

(1) Other party’s business history or previous negotiations

(2) Financial data

(3) Inventories

(4) Visit or speak wt is on the other negotiator’s ability to make binding agreements.

(5) The negotiator needs to know how the other party’s organization makes decisions to support or ratify an agreement

(6)

b. Reputation and negotiation style.

(1) A negotiator’s typical style (integrative or distributive approach) is an important determinant of how to approach the other party in the negotiation.

(2) One’s impression of the other party’s reputation may be based on several factors:

(i) How the other party’s predecessors have negotiated with you in the past.

(ii) How the other party has negotiated with you in the past, either in the same or in different contexts.

(iii) How the other party has negotiated with others in the past.



c. Likely strategy and tactic

(1) Information collected about issues, objectives, reputation, style, alternatives, and authority may indicate a great deal about what strategy the other party intends to pursue.



H. Presenting issues to the other party



1. What facts support my point of view?

2. Whom may I consult or talk with to help me elaborate or clarify the facts?

3. Have these issues been negotiated before by others under similar circumstances?

4. What is the other party’s point of view likely to be?

5. How can I develop and present the facts so they are most convincing?



I. What protocol needs to be followed in this negotiation?



1. The agenda

2. The location of negotiation

3. The time period of negotiation

4. Other parties who might be involved in the negotiation

5. What might be done if negotiation fails?

6. How will we keep track of what is agreed to?

7. How do we know whether we have a good agreement?

Study Mterial Ch 2and ch 3

Ch.3- Strategy and Tactics of Integrative Negotiation


XII. The Integrative Negotiation Process

A. Choosing a free flow of information promotes the development of good integrative solutions.

1. Negotiators must be willing to reveal their true objectives and to listen to each other carefully.
2. Willingness to share information is not a characteristic of distributive bargaining situations, in which the parties distrust one another, conceal and manipulate information, and attempt to learn about the other for their own competitive advantage.
3. Research shows that negotiators who did not reveal the availability of a good alternative received some benefits to themselves, but those who did share information about their alternatives received additional benefits.

B. Attempting to understand the other negotiator’s real needs and objectives

1. Understanding the other’s needs, realizing the other party’s priorities are not the same as your own, can stimulate more exchange of information, have a better understanding of the nature of the negotiation, and achieve higher joint profits.

C. Emphasizing the commonalities between the parties and minimizing the differences

1. To sustain a free flow of information and an effort to understand the other’s needs and objectives, negotiators may require a different outlook or frame of reference.

2. Individual goals may need to be refined through collaborative efforts directed toward a collective goal. At times the collective goal is clear and obvious, and other it is not clear or easy to keep in site.

D. Searching for solutions that meet the needs and objectives of both sides.

1. The success of integrative negotiation depends on the search for solutions that meet the needs and objectives of both sides.

2. In this process, negotiators must be firm but flexible

3. A low level of concern for the other’s objectives may drive one of two forms of behavior.

a. Making sure that what the other obtains does not take away from one’s own accomplishments.

b. Attempting to block the other from obtaining his or her objectives because of a strong desire to win or to “defeat the opponent.”

XIII. Key Steps in the Integrative Negotiation Process

Pareto efficiency: The goal of creating value is to push the claiming value line to a point where there would be “no agreement that would make any party better off without decreasing the outcomes to any other party.”

A. Identify and define the problem

1. This is a critical step for integrative negotiation because it sets broad parameters regarding what the negotiation is “about” and provide an initial framework for approaching the discussion.

2. Should be comprehensive enough to capture complexities of the situation.

a. Define the problem in a way that is mutually acceptable to both sides.

b. State the problem with an eye toward practicality and comprehensiveness.

c. State the problem as a goal and identify the obstacles to obtaining this goal.

d. Depersonalize the problem.

e. Separate the problem definition from the search for solutions.



B. Understand the problem and bring interests and needs to the surface

1. Types of interests

a. Substantive interests – relate to the focal issues under negotiation – economic and financial issues.

b. Process interests – related to the way a dispute is settled. They can be both intrinsic and instrumental.

c. Relationship interests – one or both parties value their relationship with each other and do not want to take actions that will damage it

(1) Intrinsic relationship – parties value the relationship both for its existence and for the pleasure or fulfillment that sustaining it creates.

(2) Instrumental relationship – parties derive substantive benefits from the relationship and do not wish to endanger future benefits by souring it.

d. Interests in principle – principles deeply held by the parties and serve as the dominant guides to their actions.

(1) Some principles include: concerning what is fair, what is right, what is acceptable, what is ethical.

2. Some observations on interests

a. There is almost always more than one type of interest underlying a negotiation.

b. Parties can have different types of interests at stake.

c. Interests often stem from deeply rooted human needs or values.

d. Interests can change.

e. Surfacing interests.

f. Surfacing interests is not always easy or to one’s best advantage.

g. Focusing on interests can be harmful to a group of negotiators whose consensus on a particular issue is built around a unified position rather than a more generalized set of interests.

C. Generate alternative solutions to the problem

1. Inventing options: generating alternative solutions by redefining the problem or problem set.

a. Expand the pie – add resources in such a way that both sides can achieve their objectives.

b. Logroll – successful logrolling requires the parties to establish (or find) more than one issue in conflict; the parties then agree to trade off among these issues so that one party achieves a highly preferred outcome on the first issue and the other person achieves a highly preferred outcome on the second issue.

c. Use nonspecific compensation – allow one person to obtain his objectives and pay off the other person for accommodating his interests.

d. Cut the costs for compliance – one party achieves her objectives and the other’s costs are minimized if he agrees to go along.

e. Find a bridge solution – when the parties are able to invent new options that meet all their respective needs they have created a bridge solution. Successful bridging requires a fundamental reformulation of the problem so that the parties are not discussing their positions but disclosing information that will satisfy needs.

2. Generating alternative solutions to the problem as given.
a. Brainstorming – generating as many solutions to the problem as possible. The following rules should be observed when engaging in brainstorming:
(1) Avoid judging or evaluating solutions.
(2) Separate the people from the problem.
(3) Be exhaustive in the brainstorming process.
(4) Ask outsiders.
b. Surveys – asking a large number of people to list all possible solutions they can imagine.
c. Electronic brainstorming – A facilitator uses a series of questions to guide input from participants, who type their anonymous responses into a computer.

D. Evaluate those alternatives and select among them.
1. Narrow the range of solution options – focus on those that one or more negotiators strongly support.
2. Evaluate solutions on the basis of quality, standards, and acceptability – how good are the solutions? How acceptable are they to those who have to implement them?
3. Agree to the criteria in advance of evaluating options – this can be helpful in narrowing or selecting options.
4. Be willing to justify personal preferences.
5. Be alert to the influence of intangibles in selecting options – it is good practice to help the other party identify intangibles and make them public as part of the evaluation process.
6. Use subgroups to evaluate complex options.
7. Take time out to cool off.
8. Explore different ways to logroll.
a. Exploit differences in risk preference – it is possible to create a package that recognizes differences in risk preferences.
b. Exploit differences in expectations about the likelihood of future events. This can permit the parties to invent a solution that addresses the needs of both.
c. Exploit differences in time preferences – invent solutions that address the parties’ preference of either short-term needs or long-term rewards.
9. Keep decisions tentative and conditional until all aspects of the final proposal are complete.
10. Minimize formality and record keeping until final agreements are closed.


XIV. Factors That Facilitate Successful Integrative Negotiation
A. Some common objective or goal
1. A common goal is one that all parties share equally, each one benefiting in a way that would not be possible if they did not work together.
2. A shared goal is one that both parties work toward but that benefits each party differently.
3. A joint goal is one that involves individuals with different personal goals agreeing to combine them in a collective effort.

B. Faith in one’s problem-solving ability
1. Parties who believe they can work together are more likely to do so.
2. Expertise in the focal problem area strengthens the negotiator’s understanding of the problem’s complexity, nuances, and possible solutions.
3. Expertise increases both the negotiator’s knowledge base and his or her self-confidence, both of which are necessary to approach the problem at hand with an open mind.
4. Direct experience in negotiation increases the negotiator’s sophistication in understanding the bargaining process and approaching it more creatively.
5. There is also evidence that knowledge of integrative tactics leads to an increase in integrative behavior.

C. A belief in the validity of one’s own position and the other’s perspective
1. Integrative negotiation requires negotiators to accept both their own and the other’s attitudes, interests, and desires as valid.
2. One must believe in the validity of your own perspective—that what you believe is worth fighting for and should not be compromised.

D. The motivation and commitment to work together.
1. For integrative negotiation to succeed, the parties must be motivated to collaborate rather than compete.
2. Motivation and commitment to problem solving can be enhanced in several ways:
a. The parties can come to believe that they share a common fate.
b. The parties can demonstrate to each other that there is more to be gained by working together than by working separately.
c. The parties can engage in commitments to each other before the negotiations begin. Such commitments have been called presettlement settlements and are distinguished by three major characteristics:
(1) The settlement results in a firm, legally binding written agreement between the parties.
(2) The settlement occurs in advance of the parties undertaking full-scale negotiations, but the parties intend that the agreement will be replaced by a more clearly delineated long-term agreement which is to be negotiated.
(3) The settlement resolves only a subset of the issues on which the parties disagree and may simply establish a framework within which the more comprehensive agreement can be defined and delineated.
E. Trust
1. Mistrust inhibits collaboration.
2. Generating trust is a complex, uncertain process that depends in part on how the parties behave and in part on the parties’ personal characteristics.
3. To develop trust effectively, each negotiator must believe that both he/she and the other party choose to behave in a cooperative manner.

F. Clear and accurate communication
1. Negotiators must be willing to share information about themselves, for example, revealing what they want and why.
2. Negotiators must understand the communication, or meaning each party attaches to their statements.
G. An understanding of the dynamics of integrative negotiation
1. Several studies indicate that training in integrative negotiation enhances the ability of the parties to successfully pursue the process.

XV. Why Integrative Negotiation is Difficult to Achieve

A. The history of the relationship between the two parties - The more competitive and conflict-laden their past relationship, the more likely negotiators are to approach the current negotiation with a defensive, win-lose attitude.
B. A belief that an issue can only be resolved distributively - Conflict dynamics tend to lead negotiators to polarize issues or see them only in win-lose terms.
C. The mixed-motive nature of most negotiation situations - Most situations contain some elements that require distributive bargaining processes and others that require integrative negotiation.