3StrategyandTacticsofIntegrativeNegotiation.pptx

LOGO3 Strategy and Tactics of Integrative NegotiationDu Xiao-rong3.1 What is Integrative negotiationvThe fundamental structure of an integrative negotiation(is also known as cooperative,collaborative,win-win,mutual gain)is such that it allows both side to achieve their objectives.When parties have different strengths of preferences across multiple negotiation issues,an integrative,win-win agreement is possible.vSeparate the people from the problemsvFocus on interests,not positionsPosition What you say you wantInterest Why do you want what you want3.2 Key Principles in Integrative NegotiationA good negotiator should1.Never take positions for granted2.Look for underlying interests3.2 Key Principles in Integrative NegotiationCase:Territory negotiation between Israel and Egypt Since the 1967 war between Israel and Egypt,Israel had overtaken the Naci Peninsula from Egypt.In 1978 the two nations began to negotiate this territory issue.Israel insisted on overtaking the peninsula while Egypt persisted in each inch of the land should be returned to Egypt.Can you push the negotiation go ahead.What should you do?vInvent options for mutual gainQuestion Does a stronger position mean the more options you have?The success of integrative negotiation depends onthe search for solutions that meet the needs and objectives of both sides.3.2 Key Principles in Integrative NegotiationvInsist on using objective criteriaCase:The insurance claiming after a traffic accidentIndependent standards:1.Market value 2.Industry standard 3.Precedent3.2 Key Principles in Integrative Negotiation3.3 Key Steps in the Integrative Negotiation ProcessvIdentify and define the problem Case:In a large electronics plant,there was considerable difficulty with one of the subassemblies used in the final assembly department.Various pins and fittings that held the assembly in place were getting bent and distorted.When this happened to a unit,it would be laid aside as a reject.At the end of the month these rejects would be returned to the subassembly be reworked.3.3 Key Steps in the Integrative Negotiation ProcessConflicts:1.The reworking effort had to be done in a rush and on overtime.2.The cost of the reworking did not fit into the standard cost allocation system.Solution:1.Returning damaged assemblies in small batches,allowing them to be worked on during the slack time periods in the subassembly department.2.Temporarily transferring some workers in the final assembly department to learn more about the subassembly department.Define the problem in a way that is mutually acceptable to both sides.State the problem with an eye toward practicality and comprehensiveness.3.3 Key Steps in the Integrative Negotiation ProcessNote:Problem definition should be separate from any effort to generate or choose alternatives from parties impatient with careful integrative negotiation.Stating the problem as succinctly as possible while at the same time ensuring that the most important dimensions and elements are included in the definition.State the problem as a goal and identify the obstacles to attaining this goal.Depersonalize the problem.Separate the problem definition from the search for solutions.“We have different viewpoints on this problem.”3.3 Key Steps in the Integrative Negotiation ProcessvUnderstand the problem fully identify interests and needsInterests are underlying concerns,needs,desires or fears that motivate a negotiator to take a particular position.3.3 Key Steps in the Integrative Negotiation Process3.3 Key Steps in the Integrative Negotiation ProcessCase:Two men quarreled in library.One wanted the window open to get some fresh air.And the other wanted it closed to avoid the draft.They bicker back and forth about how much to leave it open.The positions are“window open”and“window closed”.The interests are“to get some fresh air”and“to avoid the draft”ExerciseRecruiter:What were you thinking about as a starting salary?Applicant:I would like$40,000.Recruiter:We can only offer$35,000.Applicant:Thats not acceptable.3.3 Key Steps in the Integrative Negotiation ProcessPositions Now revise their dialogue to help them focus on interests:Recruiter:$40,000 is a problem for our company.Can you tell me why you decided you wanted$40,000.Applicant:Well,I have lots of education loans to pay off,and I will need to pay for a few more courses to finish my degree.I cant afford to pay these bills and live comfortably for less than$40,000.3.3 Key Steps in the Integrative Negotiation ProcessRecruiter:Our co.has a program to help new employees refinance their education loans.And we have a grogram to provide tuition assistance for new courses if the courses you need to take are related to your job.Would these programs help you with your problems?Applicant:Yes!3.3 Key Steps in the Integrative Negotiation Process Solution:The recruiter was able to bring the applicants interests paying off education loans and future education costs to the surface and offer a financial package that met the needs of both the recruiters company and the applicant.3.3 Key Steps in the Integrative Negotiation ProcessTypes of interests (1)Substantive interests:Related to the focal issues under negotiation.(2)Process interests:Related to the way a dispute is settled.(3)Relationship interests:One or both parties value their relationship with each other and do not want to take actions that will damage it.3.3 Key Steps in the Integrative Negotiation Process (4)Interests in principles:Certain principles that are deeply held by the parties and serve as the dominant guides to their action.3.3 Key Steps in the Integrative Negotiation Process E.g.Three students(who are also good friends)collaborate on an essay and submit it for a major prize competition.Two of the students contributed equally,and together they did 90%of the work.The three students win the prize of$300.How to split the prize money?3.3 Key Steps in the Integrative Negotiation ProcessNote:Each type may be(1)Either intrinsic:the parties value it for its essence.(2)Or instrumental:the parties value it because it helps them derive other outcomes in the future.Some observations on interests (1)There is almost always more than one type of interest underlying a negotiation.(2)Interests can change.(3)Surfacing interestsNote:Surfacing interests is not always easy or to ones best advantage.3.3 Key Steps in the Integrative Negotiation ProcessNote:The categories of interests are not exclusive.Respect needsRespect needsPhysiological needsPhysiological needsSafety needsSafety needsq Affirmation needsAffirmation needsSelf-actualization needsSelf-actualization needs(4)Interests stem from deeply rooted human needs or values3.3 Key Steps in the Integrative Negotiation ProcessvGenerate alternative solutionsInventing options by redefining the problem E.g.The negotiation between two partners Samantha and Emma in a successful consulting firm.The partners are deciding where to locate their new office;half of their clients are downtown and half are in suburbs.Samantha Prefers the downtown location.Emma prefers the location in the suburbs.3.3 Key Steps in the Integrative Negotiation Process (1)Expand the pie:To add resource in such a way that both sides can achieve their objectives.Solution:The firm could lease offices both downtown and in the suburbs.3.3 Key Steps in the Integrative Negotiation Process(2)Logroll:To find more than one issue in conflict and to have different priorities for those issues.Then the parties agree to trade off among these issues.Solution:The firm could lease the downtown location and give Emma the bigger office.3.3 Key Steps in the Integrative Negotiation Process (3)Use nonspecific compensation:To allow one person to obtain his objectives and pay off the other person for accommodating his interests.Note:Such compensation is nonspecific because it is not directly related to the substantive issues being discussed.Solution:The firm could lease in the suburbs and give Samantha all new office furniture.3.3 Key Steps in the Integrative Negotiation Process (4)Cut the costs for compliance:Through cost cutting,one party achieves her objectives;and the other party minimizes her costs if she agrees to go along.Note:The difference between nonspecific compensation and cost cutting 3.3 Key Steps in the Integrative Negotiation ProcessSolution:The firm could lease in the suburbs and provide Samantha with a travel subsidy and a new company car and reserved parking space.Receiving somethingMinimizing the costs(5)Find a bridge solution:To invent new options that meet all parties respective needs.Solution:The firm could expand the number of partners and lease a larger space downtown,with new office furniture for everyone and a prestigious street address.3.3 Key Steps in the Integrative Negotiation ProcessRules to be observed三、谈判计划的制订三、谈判计划的制订1.Avoid judging or evaluating solutions2.Separate the people from the problem3.Be exhaustive in the brainstorming process4.Ask outsidersGenerating options as the problem as given (1)Brainstorming:Small groups of people work to generate as many possible solution to the problem as they can.(2)Surveys:To distribute a written questionnaire to a large number of people.Summary:Insisting on several related processes:Information exchange Focusing on interests rather than positions Firm flexibility3.3 Key Steps in the Integrative Negotiation ProcessvEvaluate and select alternativesNarrow the range of solution optionsEvaluate solutions on the basis of quality,objective standards and acceptabilityBe willing to justify personal preferenceBe alert to the influence of intangibles in selecting optionsTake time to cool out3.3 Key Steps in the Integrative Negotiation ProcessExplore different ways to logroll Case:Suppose 2 enterpreneurs are discussing a future business inveture.One has little to risk at the moment and everything to gain in the future;the other has a lot on the line now that he does not want to risk losing if the future is bad.3.3 Key Steps in the Integrative Negotiation Process(1)Exploit differences in risk preference The solution is to proctect one enterpreneurs current investment first while providing long-term profits for the other enterpreneur as well(2)Exploit differences in expectations The optimist may be willing to gamble more on the future profibility and payout,whereas the pessimist may be willing to settle for a smaller but more assured payment.(3)Exploit differences in time preferences3.3 Key Steps in the Integrative Negotiation ProcessKeep decisions tentative and conditional until all aspects of the final proposal are complete.Minimize formality and record keeping until final agreement are closed.3.3 Key Steps in the Integrative Negotiation Process3.4 Three Levels of Integrative NegotiationvAgreement exceeds parties BATNAvAgreement is better for all than other possible agreements,but could be improved.vAgreement is along Pareto-efficient frontier.Pareto-efficient frontier is a point where there is no agreement that would take any party better off without decreasing the outcomes to any other party3.4 Three Levels of Integrative Negotiation FigureofPareto-efficientfrontierFigureofPareto-efficientfrontier Increasing value to buyer Claiming value Pareto efficient frontier creating value Increasing value to sellerIts not easy to achieve integrative negotiation Less than 25%of executives in negotiation simulations reach the Pareto-efficient frontier.and 50%of them do so by chance!3.4 Three Levels of Integrative Negotiation3.5 Factors Facilitating Successful Integrative NegotiationvThe presence of common objective or goalA common goal:All parties share the result equally.A shared goal:Both parties work toward a common end but benefit differently.A joint goal:Individuals with different personal goals agree to combine them in a collective effort.vFaith in ones problem-solving abilityExpertise in the focal problem areaDirect experienceKnowledge of integrative tacticsvA belief in the validity of ones own position and the others perspective3.5 Factors Facilitating Successful Integrative NegotiationPut yourself in other persons shoesvThe motivation and commitment to work together3.5 Factors Facilitating Successful Integrative Negotiation Q:For successful integrative negotiation to occur,each party should be just as interested in the objectives and problems of the other as his or in his own.Is this judgment right?vTrustWe are more likely to trust someone we perceive as similar to us.We trust people who depend on us.We are more likely to trust people who initiate cooperative,trusting behavior.We are more likely to trust negotiators who make concessions3.5 Factors Facilitating Successful Integrative NegotiationvClear and accurate communicationWilling to share information about themselvesUnderstand the communication3.5 Factors Facilitating Successful Integrative Negotiation3.6 Strategies of Integrative NegotiationvAsk smart questionsDoesnt leave gold on the table Utilizes more resources to the advantage of both parties Save you from stripping away value by making needless concessions vPlay fairTip:Its a bad idea to reveal your BATNA at the outset.vPresent multiple offerMultiple offers tend to stimulate communication vA neutral third party assistanceAn outsider will often suggest options and proposals that neither party thought of.Trust is fostered under the experienced third independent partys direction.Mistakes are mitigated against,with a third party looking out for both sides interests.3.6 Strategies of Integrative Negotiation3.6 Strategies of Integrative NegotiationCase:1978 Camp David Accord