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Old 08-24-2004, 11:17 AM   #1 (permalink)
Morning Glory
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Negotiations and Resolving Conflicts

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<H3><CENTER>Negotiations and Resolving Conflicts: An Overview</CENTER></H3>

<P ALIGN=RIGHT><I><FONT SIZE=-1>prepared by Professor E. Wertheim, College
of Business Administration, Northeastern University</FONT></I></P>

<P><HR ALIGN=LEFT><BR>
<I>&quot;In a successful negotiation, everyone wins. The objective should
be agreement, not victory.&quot;</I></P>

<P><I>&quot;Every desire that demands satisfaction and every need to be
met-is at least potentially an occasion for negotiation; whenever people
exchange ideas with the intention of changing relationships, whenever they
confer for agreement, they are negotiating.&quot; </I></P>

<P><BR>
<I>&quot;Every day the Boston Globe reports hundreds of negotiations.&quot;<BR>
</I><HR ALIGN=LEFT></P>

<H3>Introduction</H3>

<P><I>(Suggestion: This guide will be easier to follow if you think about
a specific negotiation or conflict situation you have recently been involved
in.)</I></P>

<P><BR>
In the course of a week, we are all involved in numerous situations that
need to be dealt with through negotiation; this occurs at work, at home,
and at recreation. A conflict or negotiation situation is one in which there
is a conflict of interests or what one wants isn't necessarily what the
other wants and where both sides prefer to search for solutions, rather
than giving in or breaking-off contact.</P>

<P>Few of us enjoy dealing with with conflicts-either with bosses, peers,
subordinates, friends, or strangers. This is particularly true when the
conflict becomes hostile and when strong feelings become involved. Resolving
conflict can be mentally exhausting and emotionally draining.</P>

<P>But it is important to realize that conflict that requires resolution
is neither good nor bad. There can be positive and negative outcomes. It
can be destructive but can also play a productive role for you personally
and for your relationships-both personal and professional. The important
point is to manage the conflict, not to suppress conflict and not to let
conflict escalate out of control. Many of us seek to avoid conflict when
it arises but there are many times when we should use conflict as a critical
aspect of creativity and motivation.</P>

<P>You will be constantly negotiating and resolving conflict throughout
all of your professional and personal life. Given that organizations are
becoming less hierarchical, less based on positional authority, less based
on clear boundaries of responsibility and authority, it is likely that conflict
will be an even greater component of organizations in the future. Studies
have shown that negotiation skills are among the most significant determinants
of career success. While negotiation is an art form to some degree, there
are specific techniques that anyone can learn. Understanding these techniques
and developing your skills will be a critical component of your career success
and personal success.</P>

<P><HR ALIGN=LEFT><B>The Five Modes of Responding to Conflict</B> It is
useful to categorize the various responses we have to conflict in terms
of two dimensions: <BR>
1. how important or unimportant it is to satisfy our needs and <BR>
2. how important or unimportant it is to satisfy the other person's needs.</P>

<P>Answering this questions results in the following five modes of conflict
resolution. None is these is &quot;right&quot; or &quot;wrong&quot;. There
are situations where any would be appropriate. For example, if we are cut
off driving to work, we may decide &quot;avoidance&quot; is the best option.
Other times &quot;avoidance&quot; may be a poor alternative. Similarly,
collaboration may be appropriate sometimes but not at other times.</P>

<P>&nbsp;</P>

<P><TABLE WIDTH="583" HEIGHT="109" BORDER="1" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD ROWSPAN="3"><P ALIGN=RIGHT><B>High</B></P>

<P><B>Satisfying the Other's Needs.....................Low</B></TD>
<TD WIDTH="20%"><P ALIGN=RIGHT>&nbsp;Yield</TD>
<TD WIDTH="21%">&nbsp;</TD>
<TD WIDTH="34%">&nbsp;Collaborating</TD></TR>
<TR>
<TD HEIGHT="24">&nbsp;</TD>
<TD>&nbsp;Compromising</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD HEIGHT="24"><P ALIGN=RIGHT>&nbsp;Avoiding</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;Competing</TD></TR>
<TR>
<TD WIDTH="25%" HEIGHT="24">&nbsp;</TD>
<TD COLSPAN="3"><P><CENTER><B>Low..................... ......Satisfying our needs.........................
High</B></CENTER></TD></TR>
</TABLE>
</P>

<P>In general, most successful negotiators start off assuming collaborative
(integrative) or win-win negotiation. Most good negotiators will try for
a win-win or aim at a situation where both sides feel they won. Negotiations
tend to go much better if both sides perceive they are in a win-win situation
or both sides approach the negotiation wanting to &quot;create value&quot;
or satisfy both their own needs and the other's needs.</P>

<P>We will focus on the two most problematic types: <B>Collaborative</B>
(integrative) and <B>Competitive</B> (Distributive).</P>

<P>Of the two the more important is Collaborative since most of your negotiation
and conflict resolution in your personal and professional life will (or
should) be of this nature. This is because most negotiation involves situations
where we want or need an on-going relationship with the other person. While
it is important to develop skills in &quot;competitive&quot; bargaining
(eg. when buying a car), or skills that allow us to satisfy our concerns
while ignoring the other's goals, this approach has many negative consequences
for both our personal lives and for our professional careers especially
if we are to have an on-going relationship with the other person..</P>

<P><BR>
<I>The key to successful negotiation is to shift the situation to a &quot;win-win&quot;
even if it looks like a &quot;win-lose&quot; situation. Almost all negotiation
have at least some elements of win-win. Successful negotiations often depend
on finding the win-win aspects in any situation. Only shift to a win-lose
mode if all else fails.</I> <HR ALIGN=LEFT><B>Rational vs. the Emotional
Components of Negotiation </B></P>

<P>All negotiations involve two levels: a <B>rational decision making</B>
(substantive) process and a <B>psychological</B> (emotional) process. The
outcome of a negotiation is as likely to be a result of both. Most of us
understand the need to grasp the substantive or rational aspects of negotiation.
For many of us it is the psychological aspects that are more difficult.</P>

<P><TABLE WIDTH="658" HEIGHT="29" BORDER="1" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD WIDTH="50%"><UL>
<LI>&nbsp;how comfortable each feels about conflict
<LI>how each perceives the other
<LI>assumptions each makes about hte other
<LI>trust
<LI>how important winning is
</UL>
</TD>
<TD WIDTH="50%"><UL>
<LI>&nbsp;how important is it to avoid conflict
<LI>how much one likes or dislikes the other
<LI>how important is it to not look foolish
</UL>
</TD></TR>
</TABLE>
</P>

<P><HR ALIGN=LEFT></P>

<P><B>The Two Most Important Kinds of Bargaining: Distributive (win-lose)
vs. Integrative (win-win)</B></P>

<P><TABLE WIDTH="686" HEIGHT="242" BORDER="1" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD WIDTH="50%" HEIGHT="235"><P><CENTER>&nbsp;<B><FONT SIZE=+1>Distributive</FONT></B> (also called competitive,
zero sum, win-lose or claiming value).</CENTER></P>

<UL>
<LI>one side &quot;wins&quot; and one side &quot;loses.&quot;
<LI>there are fixed resources to be divided so that the more one gets,
the less the other gets.
<LI>one person's interests oppose the others.
<LI>the dominant concern in this type of bargaining is usually maximizing
one's own interests.
<LI>dominant strategies in this mode include manipulation, forcing, and
withholding information.
</UL>
</TD>
<TD WIDTH="50%"><P><CENTER><B><FONT SIZE=+1>Integrative</FONT></B> (collaborative, win-win
or creating value).</CENTER></P>

<UL>
<LI>there is a variable amount of resources to be divided and both sides
can &quot;win.&quot;
<LI>dominant concern here is to maximize joint outcomes.
<LI>dominant strategies include cooperation, sharing information, and mutual
problem solving. This type is also called &quot;creating value&quot; since
the goal here is to have both sides leave the negotiating feeling they
had greater value than before.
</UL>
</TD></TR>
</TABLE>
</P>

<P>It needs to be emphasized that many situations contain elements of both
distributive and integrative bargaining.. For example, in negotiating a
price with a customer, to some degree your interests oppose the customer
(you want a higher price; he wants a lower one) but to some degree you want
your interests to coincide (you want both your customer and you to satisfy
both of your interests-you want to be happy; you want your customer to be
happy). The options can be seen in the table below: <HR ALIGN=LEFT></P>

<P><B>Integrative or Win-Win Bargaining:</B></P>

<P><TABLE WIDTH="632" HEIGHT="29" BORDER="1" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD WIDTH="100%"><P><CENTER>&nbsp;<B>Keys to Integrative Bargaining</B></CENTER></P>

<UL>
<LI>Orient yourself towards a win-win approach: your attitude going into
negotiation plays a huge role in the outcome
<LI>Plan and have a concrete strategy...be clear on what is important to
you and why it is important
<LI>Know your BATNA (Best Alternative to a Negotiated Alternative)
<LI>Separate people from the problem
<LI>Focus on interests, not positions; consider the other party's situation:
<LI>Create Options for Mutual Gain:
<LI>Generate a variety of possibilities before deciding what to do
<LI>Aim for an outcome based on some objective standard
<LI>Pay a lot of attention to the flow of negotiation;
<LI>Take the Intangibles into account; communicate carefully
<LI>Use Active Listening Skills; rephrase, ask questions and then ask some
more
</UL>
</TD></TR>
</TABLE>
Some of these areas are explored below.<HR ALIGN=LEFT></P>

<P><B>Orient Yourself towards a win-win approach:</B> many studies support
the view that how you approach a negotiation will play a key role in how
the negotiation proceeds. You have a much better chance of coming to an
outcome involving mutual gains if you approach the negotiation wanting to
reach this kind of outcome. It is critical to constantly reinforce your
interest in the other side's concerns and your determination to find a mutually
satisfactory resolution.</P>

<P>Even in what appears to be win-lose situations, there are often win-win
solutions; look for an integrative solution. This includes trying to create
additional alternatives such as low cost concessions that might have high
value to the other person; frame options in terms of the other person's
interests; look for alternatives that allow your opponent to declare victory
</P>

<P><B>Plan:</B> <B>Do some thinking ahead of time-</B></P>

<P>Before the negotiation, it is helpful to plan. Know whether you are in
a win-win or win-lose situation. Be sure of your goals, positions, and underlying
interests. Try to figure out the best resolution you can expect, what is
a fair and reasonable deal and what is a minimally acceptable deal. What
information do you have and what do you need. What are your competitive
advantages and disadvantages. What is the other's advantages and disadvantages.
Give some thought to your strategy.</P>

<P>It is very important to be clear on what is important to you. Be clear
about your real goals and real issues and try to figure out the other person's
real goals and issues. Too many negotiations fail because people are so
worried about being taken advantage of that they forget their needs. People
who lose track of their own goals will break off negotiations even if they
have achieved their needs because they become more concerned with whether
the other side &quot;won.&quot;</P>

<P>Equally important is to be clear and communicate <B>why</B> your goals,
issues, and objectives are important to you. The other side needs to know
why issues are important to you, not just that they are important.</P>

<P>It is important to be clear about your walkaway (also called reservation
position or BATNA).</P>

<P>It is important to know your competitive advantage-your strongest points.
Also you need to know the advantages to the other's argument. Similarly,
know your weaknesses and the other's weaknesses.</P>

<P>In most conflict resolution or negotiation situations you will have a
continuing relationship with the other person so it is important to leave
the situation with both sides feeling they have &quot;won.&quot; It is very
important that the other person doesn't feel that he or she &quot;lost.&quot;
When the other person loses, the results are often lack of commitment to
the agreement or even worse, retaliation. <I>The most common failure is
the failure of negotiating parties to recognize (or search for) the integrative
potential in a negotiating problem ; beneath hardened positions are often
common or shared interests.</I></P>

<P><HR ALIGN=LEFT><B>Know Your BATNA (Best Alternative to a Negotiated Agreement)
(also called reservation price or walkaway price)</B></P>

<P>Going into any negotiation it is important to be very clear on your BATNA
or the course of action you would take if you do not reach an agreement.
If you are negotiating over salary, your alternatives might include a specific
job elsewhere, a longer job search, or remaining at your current job. This
is important because the negotiation needs to aim to match or do better
than your BATNA. The BATNA establishes a threshold for the settlement.</P>

<P>Determining your BATNA or walkaway is not always easy. You have to establish
a concrete value for various alternatives. For example, what is the value
of keeping a current job or taking a new one at $5,000 higher salary that
involves a move.</P>

<P>In simple negotiations, there may be just one issue but often negotiations
involve multiple issues making the determination of BATNA's even more difficult.</P>

<P>In the planning process it is also important (and difficult) to estimate
the other side's BATNA. A goal of negotiation is to come as close to the
other person's BATNA as you can and you need to estimate the BATNA to do
this. Skilled negotiators also often try to influence the other person's
BATNA. This happens when you convince the other person that his alternatives
are not as good as the other perceives them to be.<HR ALIGN=LEFT></P>

<P><B>Separate People from the Problem</B></P>

<P>It is critical to address problems, not personalities and avoid the tendency
to attack your opponent personally; if the other person feels threatened,
he defends his self-esteem and makes attacking the real problem more difficult.
Try to maintain a rational, goal oriented frame of mind: if your opponent
attacks you personally, don't let him hook you into an emotional reaction;
let the other blow off steam without taking it personally; try to understand
the problem behind the aggression.</P>

<P>Make sure you send signals that you know the conflict is about the issues
at hand and not personal. This will help to prevent the other side from
getting defensive.<HR ALIGN=LEFT></P>

<P><B>Find Underlying Interests</B></P>

<P>A key to success is finding the &quot;integrative&quot; issues--often
they can be found in underlying interests. We need to be very clear about
our interests and this may not be as easy as it would appear. Equally important
is the need to find out the other person's key interests.</P>

<P>We are used to identifying our own interests, but a critical element
in negotiation is to come to understanding the other person's underlying
interests and underlying needs. With probing and exchanging information
we can find the commonalities between us and minimize the differences that
seem to be evident. Understanding these interests is the key to &quot;integrative
bargaining.&quot; The biggest source of failure in negotiation is the failure
to see the &quot;integrative&quot; element of most negotiation. Too often
we think a situation is win-lose when it is actually a win-win situation.
This mistaken view causes us to often use the wrong strategy. Consider a
situation where your boss rates you lower on a performance appraisal than
you think you deserve. We often tend to see this as win-lose-either he/she
gives in or I give in. There is probably a much higher chance of a successful
negotiation if you can turn this to a win-win negotiation.</P>

<P>A key part in finding common interests is the <B>problem identification</B>.
It is important to define the problem in a way that is mutually acceptable
to both sides. This involves depersonalizing the problem so as not to raise
the defensiveness of the other person. Thus the student negotiating a problem
with a professor is likely to be more effective by defining the problem
as &quot;I need to understand this material better&quot; or &quot;I don't
understand this&quot; rather than &quot;You're not teaching the material
very well.&quot; <HR ALIGN=LEFT></P>

<P><B>Use an Objective Standard if possible</B></P>

<P>Try to have the result be based on some objective standard. Make your
negotiated decision based on principles and results, not emotions or pressure;
try to find objective criteria that both parties can use to evaluate alternatives;
don't succumb to emotional please, assertiveness, or stubborness <HR ALIGN=LEFT></P>

<P><B>Pay Attention to the Flow of Negotiation: Negotiation is a sequence
of events, not an incident</B></P>

<P>There is a tendency to think about conflict or the negotiating situation
as an isolated incident. It is probably more useful to think about conflict
as a process, or a complex series of events over time involving both external
factors and internal social and psychological factors. Conflict episodes
typically are affected by preceding and in turn produce results and outcomes
that affect the conflict dynamics.</P>

<P>A negotiation usually involves a number of steps including the exchange
of proposals and counter proposals. In good-faith negotiation, both sides
are expected to make offers and concessions. Your goal here is not only
to try to solve the problem, but to gain information that will enable you
to get a clearer notion of what the true issues might be and how your &quot;opponent&quot;
sees reality. Through offers and counter offers there should be a goal of
a lot of information exchange that might yield a common definition of the
problem.</P>

<P>Such an approach suggests the importance of perception-conflict is in
the eye of the beholder. Thus, situations which to an outside observer should
produce conflict may not if the parties either ignore or choose to ignore
the conflict situation. Conversely, people can perceive a conflict situation
when in reality there is none.</P>

<P>Next, once aware of the conflict, both parties experience emotional reactions
to it and think about it in various ways. These emotions and thoughts are
crucial to the course of the developing conflict. For example, a negotiation
can be greately affected if people react in anger perhaps resulting from
past conflict.</P>

<P>Then based on the thoughts and emotions that arise in the process of
conflict resolution, we formulate specific intentions about the strategies
we will use in the negotiation. These may be quite general (eg. plan to
use a cooperative approach) or quite specific (eg. use a specific negotiating
tactic).</P>

<P>Finally, these intentions are translated into behavior. These behaviors
in turn elicit some response from the other person and the process recycles.</P>

<P>This approach suggests we pay particular attention to these generalizations:</P>

<UL>
<LI>conflict is an ongoing process that occurs against a backdrop of continuing
relationships and events;
<LI>such conflict involves the thoughts, perceptions, memories, and emotions
of the people involved; these must be considered.
<LI>negotiations are like a chess match; have a strategy; anticipate how
the other will respond; how strong is your position, and situation; how
important is the issue; how important will it be to stick to a hardened
position
<LI>begin with a positive approach:Try to establish rapport and mutual
trust before starting; try for a small concession early
<LI>pay little attention to initial offers: these are points of departure;
they tend to be extreme and idealistic; focus on the other person's interests
and your own goals and principles, while you generate other possibilities
</UL>

<P><HR ALIGN=LEFT></P>

<P><B>The Intangibles: Other Elements that affect negotiation</B></P>

<P>It is important to communicate very carefully. Subtle verbal and body
language can make a difference in how your negotiation progresses. Spend
more time listening than talking and make direct eye contact. Use the word
&quot;and&quot; instead of &quot;but.&quot; This helps to send the signal
that you are interested in the other party and are seeking common ground.</P>

<P>Intangibles are often the key factors in many negotiations. Some of these
intangibles are:</P>

<P><B>Communications: </B>be careful about using the phone, e-mail, and
other nonvisual communication vehicles. A lack of facial expressions, vocal
intonation, and other cues can result in a negotiation breakdown. Constantly
reiterate your interest in the other side's concerns and your determination
to find a mutually satisfactory resolution.</P>

<P><B>Personalities:</B> be conscious of aspects of your personality such
of your own needs and interpersonal style as well as the other person's
personality; these factors will play a key role and understanding yourself
will be an important factor</P>

<P><B>Your own personality and style</B>: how much you trust the person;
how free with your emotions; how much you want to conceal or reveal;</P>

<P><B>Physical space:</B> sometimes where the negotiation takes place can
be important; are we negotiating in a space we are uncomfortable and other
is comfortable?</P>

<P><B>Past interaction: </B>if there is a history of conflict resolution
with this person, think about how this history might affect the upcoming
negotiation</P>

<P><B>Time pressure: </B>Think about whether time pressure will affect the
negotiation and whether you need to try to change this variable?</P>

<P><B>Subjective utilities</B>: be aware that people place very different
values on elements of a negotiation. For example, in negotiating for a job,
you may place a high value on location and relatively lower on salary; it
is important to be aware of your subjective utilities and try to ascertain
the other person's subjective utilities; it is difficult to know in advance
or even during the negotiation what a particular outcome will mean to the
other party. Finding out what is &quot;valued&quot; is one of the key parts
of negotiation.</P>

<P><HR ALIGN=LEFT></P>

<P><B>Be an active Listener, ask a lot of questions, and test for accuracy</B></P>

<P>Good communication skills are critical although it is easy to forget
them in the &quot;heat of battle.&quot;</P>

<P><B>Try to avoid: </B>Talking at the other side, focusing on the past,
or blaming the other person.</P>

<P><B>Be an &quot;active listener and test for accuracy: </B>This involves
continuously checking to see if you are understanding the other person.
. Focus on the future; talk about what is to be done; tackle the problem
jointly. Constantly ask questions about whether you understand the other
side; restate the other's position to make sure you are hearing him or her
correctly</P>

<P><HR ALIGN=LEFT></P>

<P><B>How can I change what seems like a &quot;win-lose&quot; situation
to a &quot;win-win&quot; (or what if the other person doesn't play by these
rules?)</B></P>

<P>There are many advantages to trying to shift a win/lose situation to
a win/win. Yet we will be in situations where the other person either doesn't
wish to reach a &quot;win-win&quot; or doesn't realize it is in his or her
best interest to achieve a collaborative solution. In these situations it
is necessary for us to open lines of communication, and try to increase
trust and cooperativeness.</P>

<P>Sometimes conflicts escalate, the atmosphere becomes charged with anger,
frustration, resentment, mistrust, hostility, and a sense of futility. Communication
channels close down or are used to criticize and blame the other. We focus
on our next assault. The original issues become blurred and ill-defined
and new issues are added as the conflict becomes personalized. Even if one
side is willing to make concessions often hostility prevents agreements.
In such a conflict, perceived differences become magnified, each side gets
locked into their initial positions and each side resorts to lies, threats,
distortions, and other attempts to force the other party to comply with
demands.</P>

<P>It is not easy to shift this situation to a win-win but the following
lists some techniques that you might use:</P>

<UL>
<LI>reduce tension through humor, let the other &quot;vent,&quot; acknowledge
the other's views, listen actively, make a small concession as a signal
of good faith
<LI>increase the accuracy of communication; listen hard in the middle of
conflict; rephrase the other's comments to make sure you hear them; mirror
the other's views
<LI>control issues: search for ways to slice the large issue into smaller
pieces; depersonalize the conflict--separate the issues from the people
<LI>establish commonalities: since conflict tends to magnify perceived
differences and minimize similarities, look for greater common goals (we
are in this together); find a common enemy; focus on what you have in common
<LI>focus less on your position and more on a clear understanding of the
other's needs and figure out ways to move toward them
<LI>make a &quot;yesable&quot; proposal; refine their demand; reformulate;
repackage; sweeten the offer; emphasize the positives
<LI>find a legitimate or objective criteria to evaluate the solution (eg.
the blue book value of a car)
</UL>

<P><HR ALIGN=LEFT></P>

<P><B>Some Tricks that Skilled Negotiators Use</B></P>

<P>We constantly trade-off in negotiations. An examples is when a union
negotiation trades wage gains for job security. An important ingredient
of negotiation is assessing the trade-offs. In general, we start by identifying
the best and worst possible outcomes, and then specify possible increments
that trade-offs can reflect, and finally, consider how the increments relate
to the key issues.</P>

<P>If we pursue &quot;integrative bargaining,&quot; we try to create gains
for both parties. An example is offering something less valuable to us but
more valuable to the other person (eg., the other person may highly value
payment in cash rather than through financing whereas we may be indifferent
to this). The following are ways of creating joint gains.</P>

<P>Negotiators look for <B>differences</B>. For example, if you buy a car
price may be of most importance and timing may be of lesser importance.
To the dealer, closing the deal today (the last day of the month) may be
more crucial than making a profit on the sale. Negotiators look for items
to trade off, items that may be more important to one side than the other
and that can be traded for items in reverse preference to the other side.</P>

<P><B>When to reveal your position:</B> This depends on the other person.
It is not a good idea to reveal your minimum position if the other person
needs to feel he has worked hard to reach it; the other person may need
to feel he or she has worked very hard to move you to your position.</P>

<P><TABLE WIDTH="684" HEIGHT="29" BORDER="1" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD WIDTH="100%"><P>&nbsp;<B><I>Case from a workshop on negotiation</I></B><I>:<BR>
We had to sell a training program to Sue, a former member of our law firm.
We knew she needed to purchase a program and she also held a grudge against
our firm. Mary heaped abuse on us. I wanted to punch her, but Chuck (my
partner) just smiled and began applying some standard negotiating principles.</I></P>

<P><I>First, he identified our interests as the selling of a program at
a decent price and the maintenance of a good relationship with Mary and
her law firm (focus on interests, not positions). Next, he completely ignored
Mary's obnoxious personality (separate people from problems). And he offered
to sell Mary only the latest program, with a price break for a quick sale
(options for mutual gain).</I></P>

<P><I>But his most effective technique was the &quot;jujitsu.&quot; When
the other side pushes, don't push back. When they attack, don't counterattack;
rethink their attack as an attack on mutual problems. Two tools are used--ask
questions instead of making statements, and respond with prolonged silence
in the face of unreason. Chuck used them both, and we completed the sale
and got a better price than we had hoped for.</I></TD></TR>
</TABLE>
</P>

<P><HR ALIGN=LEFT><B>Other Techniques you can use</B></P>

<UL>
<LI><B>Broadening the Pie: </B>Create additional resources so that both
sides can obtain their major goals
<LI><B>Nonspecific Compensation</B>: One side gets what it wants and the
other is compensated on another issue
<LI><B>Logrolling</B> Each party makes concessions on low-priority issues
in exchange for concessions on issues that it values more highly
<LI><B>Cost Cutting:</B> one party gets what it wants; the costs to the
other are reduced or eliminated
<LI><B>Bridging :</B> Neither party gets its initial demands but a new
option that satisfies the major interests of both sides are developed.
</UL>

<P><HR ALIGN=LEFT></P>

<P><B>What if I want &quot;to win&quot; and I don't care about the other
person's interests (Distributive or win-lose Bargaining)</B></P>

<P>In this situation, strategy is different than in integrative bargaining.
In this mode, one seeks to gain advantage through concealing information,
misleading, or using manipulative actions. Of course, these methods have
serious potential for negative consequences. Yet even in this type of negotiation,
both sides must feel that at the end the outcome was the best that they
could achieve and that it is worth accepting and supporting.</P>

<P>Most critical in this mode is to set one's own opening target and resistance
points and to learn what the other's starting points, target points, and
resistance points are. Typically, the resistance point (the point beyond
which a party will not go) is usually unknown until late in negotiation
and is often jealously concealed by the other party. This is what you need
to find out.</P>

<P>The range between resistance points is typically the bargaining range;
if this number is negative, successful negotiation is usually impossible.
For example, if you are willing to pay up to $3,000 and the seller is willing
to go as low as $2800, there is a $200 positive spread or bargaining range
if the negotiators are skillful enough to figure it out. The goal of a competitive
bargaining situation is to get the final settlement to be as close to the
other party's resistance point as possible. The basic techniques open to
the negotiator to accomplish this include:</P>

<UL>
<LI>influence the other person's belief in what is possible (eg. a car
dealer telling you what your used car is worth)
<LI>learn as much as possible about the other person's position especially
with regard to resistance points
<LI>try to convince the other to change his/her mind about their ability
to achieve their own goals
<LI>promote your own objectives as desirable, necessary, ethical, or even
inevitable.
</UL>

<P><HR ALIGN=LEFT></P>

<P><B>Is it ethical to &quot;lie or bluff&quot; in negotiations?</B></P>

<P>The answer to this question depends on one's values, one's culture, and
the situation. What might be acceptable in poker would probably not be acceptable
in most business situations. What might be acceptable in Cairo might not
be acceptable in Boston. Different cultures and different situations contain
inherent &quot;rules&quot; about the degree to which bluffing or misrepresentation
is deemed acceptable.</P>

<P>In poker and in general negotiations one is not expected to reveal strength
or intentions prematurely. But discretion in making claims and statements
syhould not be confused with misrepresentation. In general, in our culture,
our &quot;rules&quot; forbid and should penalize outright lying, false claims,
bribing an opponent, stealing secrets, or threatening an opponent. While
there may be a fine line between legitimate and illegitimate withholding
of facts, there is a line and again we are distinguishing between the careful
planning of when and how to reveal facts vs. outright lying.</P>

<P>Bluffing, while it may be ethical, does entail risk. The bluffer who
is called loses credibility and it can get out of hand. Also remember, that
most negotiations are carried out with people with whom you will have a
continuing relationship. Again, while our culture supports and encourages
those who are careful about how and when to disclose facts, out culture
does not condone outright lying.</P>

<P>An old British Diplomat Service manual stated the following and it still
might be useful</P>

<P>Nothing may be said which is not true, but it is as unnecessary as it
is sometimes undesirable to say everything relevant which is true; and the
facts given may bve arrange din any convenient order. The perfect reply
to an embarassing question is one that is brief, appears to answer the question
completely (if challenged it can be proved to be accurate in every word),
gives no opening for awkward follow-up questions, and discloses really nothing.</P>

<P>Skilled negotiators develop techniques to do this. A favorite one is
to answer a question with a question to deflect the first question. <HR ALIGN=LEFT></P>

<P><B>Final Advice</B></P>

<P><I>&quot;Be unconditionally constructive. Approach a negotiation with
this-- ‘I accept you as an equal negotiating partner; I respect your
right to differ; I will be receptive.' Some criticize my approach as being
too soft. But negotiating by these principles is a sign of strength.&quot;
</I>R. Fisher,<u> Getting to Yes</u></P>

<P>All of us engage in many negotiations during a week but that doesn't
mean we become better at it. To become better we need to become aware of
the structure and dynamics of negotiation and we need to think systematically,
objectively, and critically about our own negotiations. After engaging in
a negotiation, reflect on what happened and figure out what you did effectively
and what you need to do better.</P>

<P>There is no one &quot;best&quot; style; each of us has to find a style
that is comfortable for us. Yet, everyone can negotiate successfully; everyone
can reach agreements where all sides feel at least some of their needs have
been satisfied. This involves a lot of alertness, active listening, good
communication skills, great flexibility, good preparation, and above all
it involves a sharing of responsibility for solving the problem, not a view
that this is &quot;their&quot; problem.</P>

<P>To summarize the most important keys to successful conflict resolution:</P>

<UL>
<LI>bargain over interests, not predetermined positions
<LI>de-personalize the problem (separate the person from the problem)
<LI>separate the problem definition from the search for solutions
<LI>try to generate alternative solutions; try to use objective criteria
as much as possible
<LI>reflect on your negotiations; learn from your successes and mistakes
</UL>

<P><TABLE ALIGN="CENTER" WIDTH="90%"CELLSPACING="0" CELLPADDING="5" BORDER="5">
<TR>
<TD VALIGN="TOP"><I><FONT SIZE=-1>&quot;Have unlimited patience. Never corner an opponent
and always assist the other person to save his face. Put yourself in his
shoes-so as to see things through his eyes. Avoid self-righteousness like
the devil-nothing is so self-blinding. B. H. Liddell Hart, historian</FONT></I></TD></TR>
</TABLE>
</P>

<P><TABLE ALIGN="CENTER" WIDTH="90%"CELLSPACING="0" CELLPADDING="5" BORDER="5">
<TR>
<TD><P>&nbsp;</P>

<P><CENTER><B>Appendix 1: Some Types of Negotiators</B></CENTER></P>

<DL>
<DT><B><FONT SIZE=-1>the aggressive- </FONT></B>
<DD><FONT SIZE=-1>opener negotiator unsettle the other side by making cutting remarks about their previous performance, unreasonabless, or anything that can imply the opponent is worth little</FONT>
<DT><B><FONT SIZE=-1>the long pauser</FONT></B>
<DD><FONT SIZE=-1>list to the other side but don't answer immediately; appear to give it considerable thought with long silences; hope the silence will get the other side to reveal information you need</FONT>
<DT><B><FONT SIZE=-1>the mocking negotiator</FONT></B>
<DD><FONT SIZE=-1>mock and sneer your opposition's proposals to get the other side so upset that they will say something they may regret later</FONT>
<DT><B><FONT SIZE=-1>the interrogator</FONT></B>
<DD><FONT SIZE=-1>meet all proposals with searching questions that will imply the opponents haven't done their homework; challenge any answers in a confronting manner and ask the opposition to explain further what they mean</FONT>
<DT><B><FONT SIZE=-1>the cloak of reasonableness</FONT></B>
<DD><FONT SIZE=-1>appear to be reasonable while makng impossible demands for the purpose of winning the friendship and confidence of the others</FONT>
<DT><B><FONT SIZE=-1>divide and conquer</FONT></B>
<DD><FONT SIZE=-1>produce dissension among opposition so they have to pay more attention to their own internal disagreements rather than the disagreements with the opposition; ally with one member of the team and try to play him or her off against the other members of the team.</FONT>
<DT><B><FONT SIZE=-1>the &quot;act dumb&quot; negotiator</FONT></B>
<DD><FONT SIZE=-1>pretend to be particularly dense and by doing so exasperate the opposition in hopes that at least one member of the opposing team will reveal information as he tries to find increasingly simple ways to describe proposals with each proposal being elaborated and amplified so anyone can understand it</FONT>
</DL>
</TD></TR>
</TABLE>
<HR ALIGN=LEFT></P>

<P><CENTER><B>Appendix 2: Three Styles: Soft, Hard, and Principles Negotiation</B></CENTER></P>

<P><TABLE BORDER="0" CELLSPACING="2" CELLPADDING="0">
<TR>
<TD><B>Soft<BR>
</B><FONT SIZE=-1>friends<BR>
goals: agreement<BR>
make concessions<BR>
be soft on people and problems<BR>
trust others<BR>
change positione asily<BR>
make offers<BR>
disclose bottom line<BR>
accept one sided loss<BR>
search for acceptable answer<BR>
insist on agreement<BR>
try to avoid contest of wills<BR>
yield to pressure</FONT></TD>
<TD><B>Hard<BR>
</B><FONT SIZE=-1>adversaries<BR>
victory<BR>
demand concessions<BR>
be hard on problem and people<BR>
distrust others<BR>
dig in<BR>
make threats<BR>
mislead<BR>
demand one sided gain<BR>
search for one answer you will accept<BR>
insist on your position<BR>
try to win context of wills<BR>
apply pressure</FONT></TD>
<TD><B>Principled<BR>
</B><FONT SIZE=-1>problem solvers<BR>
wise outcome<BR>
separate people from problem<BR>
be soft on people, hard on problems<BR>
proceed independent of trust<BR>
focus on interests not positions<BR>
explore interests<BR>
avoid having bottom line<BR>
invent options for mutual gain<BR>
develop multiple options <BR>
insist on objective criteria<BR>
try to reach result based on standards<BR>
yield to principle not pressure</FONT></TD></TR>
</TABLE>
<HR ALIGN=LEFT><HR ALIGN=LEFT><A NAME="difficult"></A> <TABLE BORDER="0"
CELLSPACING="2" CELLPADDING="0">
<TR>
<TD><P><CENTER><B>Dealing with Difficult People</B></CENTER></P>

<P><BR>
<B><FONT SIZE=-1>Hostile Aggressive</FONT></B><FONT SIZE=-1><BR>
<li>Stand up for yourself; use self-assertive language <li>give them time
to run down......avoid a direct confrontation </FONT></ul></P>

<P><B>Complainers</B><BR>
<li>Listen attentively; acknowledge their feelings; avoid complaining with
them <li>state the facts without apology.......use a problem solving mode
</ul></P>

<P><B>Clams:</B><BR>
<li>keep asking open ended questions; be patient in waiting for a response
<li>if no response occurs, tell them what you plan to do, because no discussion
has taken place </ul></P>

<P><B>Superaggreables:</B><BR>
<li>In a non-threatening manner, work hard to find out why they will not
take action <li>Let them know you value them as people <li>Be ready to compromise
and negotiate, and don't allow them to make unrealistic commitments <li>Try
to discern the hidden meaning in their humor </ul></P>

<P><B>Negativists:</B><BR>
<li>Do not be dragged into their despair.........Do not try to cajole them
out of their negativism <li>Discuss the problems thoroughly, without offering
solutions <li>When alternatives are discussed, bring up the negatives yourself
<li>Be ready to take action alone, without their agreement</P>

<P><B>Know-it-Alls</B><BR>
<li>Bulldozers: Prepare yourself; listen and paraphrase their main points;
question to raise problems <li>Balloons: state facts or opinions as your
own perception of reality; find a way for balloons to safe face; confront
in private </ul></P>

<P><B>Indecisive Stallers</B><BR>
<li>Raise the issue of why they are hesitant...Possibly remove the staller
from the situation <li>If you are the problem, ask for help.....Keep the
action steps in your own hands </ul><I>(from Coping with Difficult People,
R. M. Bramson, Doubleday, 1981)</I></TD></TR>
</TABLE>
</P>

<P><HR ALIGN=LEFT><A NAME="example"></A> <TABLE ALIGN="CENTER" WIDTH="100%"CELLSPACING="0" CELLPADDING="5" BORDER="5">
<TR>
<TD VALIGN="TOP"><P><CENTER><B>Example of a negotiation</B></CENTER></P>

<P><B><FONT SIZE=-1>Adjuster</FONT></B><FONT SIZE=-1>: We have studied your
case and with our policy you are entitled to $3,300 <BR>
<B>Tom:</B> I see. How did you reach that figure <BR>
<B>A</B>: That was how much we decided the car was worth. <BR>
<B>T:</B> I see; what standard did you use to determine the amount. Do you
know where I can buy a comparable car for that? <BR>
<B>A</B>: How much are you asking? <BR>
<B>T</B>: Whatever I am entitled to under the policy. I found a second hand
car like mine for $3,850. <dd>Adding sales and excise tax it would come
to about $4,000. <BR>
<B>A</B>: $4,000! That's too much! <BR>
<B>T</B>: I'm not asking for $4,000, or 3 or 5; just fair compensation.
Do you think it's fair I get enough to replace the car? <BR>
<B>A</B>: OK, I'll offer you $3,500. That's the highest I can go. <BR>
<B>T</B>: How does the company figure that? <BR>
<B>A</B>: Look, $3,500 is all you get. Take it or leave it. <BR>
<B>T</B>: $3,500 may be fair. I don't know. I certainly understand your
position if you're bound to company policy, but unless you can state objectively
why that amount is what I'm entitle to, I think I'll do better in court.
Why don't we study the matter and talk again. <BR>
<B>A</B>: OK, I've got an ad here for a 1985 Fiesta for $3,400. <BR>
<B>T</B>: I see. What does it say about the mileage? <BR>
<B>A</B>: It says 49,000, why? <BR>
<B>T</B>: Because mine had only 25,000 miles. How much does that increase
the value in your book? <BR>
<B>A</B>: Let me see, $150. <BR>
<B>T</B>: Assuming the 3,400 as possible base, that brings the figure to
$3550. Does that ad say anything about a rado. <BR>
<B>A</B>: No <BR>
<B>T</B>: How much extra in your book? <BR>
<B>A</B>: That's $125. <BR>
<B>T</B>: What about air conditioning?<BR>
30 minutes later, Tom took home a check for $4,100 ..................from
Fisher and Ury, <B>Getting to Yes</B></FONT></TD></TR>
</TABLE>
</P>

<P><HR ALIGN=LEFT></P>

<P><CENTER><B>Pareto Efficiency</B></CENTER></P>

<P>A goal of negotiations is to be as &quot;Pareto Efficient&quot; as possible.
A Pareto efficient outcome is one in which there is no other agreement that
would result in both parties being better off. If there is an outcome that
would have made both better off, the decision reached is not Pareto efficient.
Stated differently, an agreement is &quot;Pareto Efficient&quot; if one
party cannot do better without some other party doing worse.</P>

<P>Consider the example. Barry and Nancy are going out to dinner. Barry
likes Indian food the best and cannot eat Chinese food. Nancy greatly prefers
Chinese food but finds the Indian dishes too hot. There are a range of possible
solutions. They could go to a Chinese or Indian restaurant or have a number
of other choices. They both find Italian food OK. Actually both would prefer
Thai food to Italian.</P>

<P>It is possible to plot out all of these choices on a graph. On one axis
is Barry's preference values. On the other axis are the values Nancy attaches
to each preference. For Barry Indian food has the highest value, Thai is
next, then Italian, and Chinese is last. For Nancy, Chinese is highest followed
by Thai, Italian, and Indian is the last.</P>

<P>Both Barry and Nancy prefer Thai to Italian. In this case we say that
Thai Pareto dominates Italian. A decision to go to a Thai restaurant results
in both Barry and Nancy being better off than if they had gone to an Italian
restaurant. The Thai choice is also Pareto efficient because the only choice
that is better for Barry (Indian) leaves Nancy worse off. Similarly, the
only decision better for Nancy (Chinese) leaves Barry worse off.</P>

<P>Collectively, negotiators leave &quot;money on the table&quot; when they
settle for a Pareto inefficient agreement. Negotiators should aim at gaining
Pareto efficient agreements, finding all joint gains, and not leaving money
on the table.</P>

<P><HR ALIGN=LEFT></P>

<P><B>REFERENCES</B></P>

<UL>
<LI>Nierenberg, Gerard, <B>Fundamentals of Negotiation</B> James Ware and
Louis B. Barnes, &quot;Managing Interpersonal Conflict,&quot; HBR, 1978.
<LI>Fisher, Roger and William Ury, <B>Getting to Yes</B>
<LI>Lax, D. A. and J. K. Sebenius, <B>The Manager as Negotiator</B>, (New
York: Free Press, 1986).
</UL>
 
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