Overview
Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.
Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.
Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Those who work in negotiation professionally are called negotiators. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers.
Etymology
The word "negotiation" is from the Latin, "negotium".
Approaches to Negotiation
Negotiation typically manifests itself with a trained negotiator acting on behalf of a particular organization or position. It can be compared to mediation where a disinterested third party listens to each sides' arguments and attempts to help craft an agreement between the parties. It is also related to arbitration which, as with a legal proceeding, both sides make an argument as to the merits of their "case" and then the arbitrator decides the outcome for both parties.
Negotiation involves three basic elements: process, behavior and substance. The process refers to how the parties negotiate: the context of the negotiations, the parties to the negotiations, the tactics used by the parties, and the sequence and stages in which all of these play out. Behavior refers to the relationships among these parties, the communication between them and the styles they adopt. The substance refers to what the parties negotiate over: the agenda, the issues (positions and - more helpfully - interests), the options, and the agreement(s) reached at the end.
Skilled negotiators may use a variety of tactics ranging from negotiation hypnosis, to a straight forward presentation of demands or setting of preconditions to more deceptive approaches such as cherry picking. Intimidation and salami tactics may also play a part in swaying the outcome of negotiations.
The Advocate's Approach
In the advocacy approach, a skilled negotiator usually serves as advocate for one party to the negotiation and attempts to obtain the most favorable outcomes possible for that party. In this process the negotiator attempts to determine the minimum outcome(s) the other party is (or parties are) willing to accept, then adjusts their demands accordingly. A "successful" negotiation in the advocacy approach is when the negotiator is able to obtain all or most of the outcomes their party desires, but without driving the other party to permanently break off negotiations, unless the best alternative to a negotiated agreement (BATNA) is acceptable.
Traditional negotiating is sometimes called win-lose because of the assumption of a fixed "pie", that one person's gain results in another person's loss. This is only true, however, if only a single issue needs to be resolved, such as a price in a simple sales negotiation.
The "Win/Win" Negotiator's Approach
During the early part of the twentieth century, academics such as Mary Parker Follett developed ideas suggesting that agreement often can be reached if parties look not at their stated positions but rather at their underlying interests and requirements to reach a decision that benefits both parties.
During the 1960s, Gerard I. Nierenberg recognized the role of negotiation in resolving disputes in personal, business and international relations. He published The Art of Negotiating, where he states that the philosophies of the negotiators determine the direction a negotiation takes. His Everybody Wins philosophy assures that all parties benefit from the negotiation process which also produces more successful outcomes than the adversarial “winner takes all” approach.
In the 1970s, practitioners and researchers began to develop win-win approaches to negotiation. Win-win is taken from Economic Game Theory, and has been adopted by North American negotiation academics loosely to mean Principled Negotiation. Getting to YES was published by Roger Fisher and William Ury as part of the Harvard negotiation project. The book's approach, referred to as Principled Negotiation, is also sometimes called mutual gains bargaining. The mutual gains approach has been effectively applied in environmental situations (see Lawrence Susskind and Adil Najam) as well as labor relations where the parties (e.g. management and a labor union) frame the negotiation as "problem solving". If multiple issues are discussed, differences in the parties' preferences make win-win negotiation possible. For example, in a labor negotiation, the union might prefer job security over wage gains. If the employers have opposite preferences, a trade is possible that is beneficial to both parties. Such a negotiation is therefore not an adversarial zero-sum game.
There are a tremendous number of other scholars who have contributed to the field of negotiation, including Gerard E. Watzke at Tulane University, Sara Cobb at George Mason University, Len Riskin at the University of Missouri, Howard Raiffa at Harvard, Robert McKersie and Lawrence Susskind at MIT, and Adil Najam and Jeswald Salacuse at The Fletcher School of Law and Diplomacy.
The New Creative Approach
Perhaps the most famous negotiation parable involves an argument over an orange. The most obvious approach was to simply cut it in half, each person getting a fair share. But, when the negotiators began talking to each other, exchanging information about their interests, a better solution to the problem became obvious. The person wanting the orange for juice for breakfast took that part and the person wanting the rind for making marmalade took that part. Both sides ended up with more. Neither agreement is particularly creative.
The parable of the orange becomes a story about creativity when both parties decide to cooperate in planting more an orange tree or even an orchard. In a similar way, Boeing buys composite plastic wings for its new 787 Dreamliner designed and manufactured by Japanese suppliers, and then sells the completed 787s back to Japanese airlines, all with a nice subsidy from the Japanese government. This is what is meant by creativity in negotiations.
At business schools these days much is being learned about creative processes. Courses are being offered and dissertations being proffered with “innovation” being the key buzz word at academic conferences and in corporate boardrooms. And, the more heard about innovation and creative processes the greater is the appreciation that the Japanese approach to negotiations, by nature, uses many of the techniques commonly emphasized in any discussion of creative processes. Indeed, there appears to be a deeply fundamental explanation why the Japanese have been able to build such a successful society despite their lack of natural resources and relative isolation. While Japanese society does have its own obstacles to creativity – hierarchy and collectivism are two – they have developed a negotiation style that in many ways obviates such disadvantages. Indeed, the ten new rules for global negotiations advocated by Hernandez and Graham nicely coincide with an approach that comes natural to Japanese.
Accept only creative outcomes
Understand cultures, especially your own.
Don’t just adjust to cultural differences, exploit them.
Gather intelligence and reconnoiter the terrain.
Design the information flow and process of meetings.
Invest in personal relationships. Persuade with questions.
Seek information and understanding.
Make no concessions until the end.
Use techniques of creativity
Continue creativity after negotiations.
Beyond the practices of the Japanese, credit must also be given to the luminaries in field that have long advocated creativity in negotiations. Howard Raiffa and his colleagues recommend:
…the teams should think and plan together informally and do some joint brainstorming, which can be thought of as “dialoguing” or “prenegotiating.” The two sides make no tradeoffs, commitments, or arguments about how to divide the pie at this early stage.
Roger Fisher and William Ury title their Chapter 4 in Getting to Yes,“Invent[ing] Options for Mutual Gain.” David Lax and James Sebenius, in their important new book, 3D-Negotiations, go past getting to yes, and talk about “creative agreements” and “great agreements.” Lawrence Susskind and his associates recommend “parallel informal negotiations” toward building creative negotiation outcomes.
These ideas must be pushed to the forefront in thinking about negotiations. The field generally is still stuck in the past, talking about “making deals” and “solving problems” as above. Even the use of terms like “win-win” expose the vestiges of the old competitive thinking. The point is that a negotiation is not something that can be won or lost, and the competitive metaphor limits creativity. The problem-solving metaphor does as well. Thus, the first rule of negotiations is: Accept only creative outcomes!
Lynda Lawrence at IdeaWorks, a Newport Beach consulting firm (http://www.ideaworksconsulting.com/) has developed a most useful list of ways to generate more ideas during negotiations:
10 Ways to Generate More Ideas:
1. Establish common goals of what this "collaboration" would create. A more workable deal? Some common long term goals? A closer partnership?
2. Establish the rules of engagement. The purpose of the exercise is to resolve differences in creative ways that work better for both parties. All ideas are possibilities, and research shows that combining ideas from different cultures can result in better outcomes than those from a single culture.
3. Trust is key, and difficult to establish in many cultures. Certain techniques might speed that process a little. Being offsite, for example. Establishing physical proximity that unconsciously signals intimacy.
4. Add diversity (gender, culture, extroverts, different work specialties, experts, outsiders) to the group. Indeed, the diversity associated with international teams and alliances is the real goldmine of creativity in negotiations.
5. Use storytelling. This both helps establish who you are and what point of view you are bringing to this collaboration.
6. Work in small groups. Add physical movement. Tell the participants to relax, play, sing, have fun, and silence is ok.
7. Work holistically and using visuals. If, for example, there are three sticking points where neither side is happy, agree to work on those points by spending a short time – 10 minutes – on each point where both sides offer "crazy" suggestions. Use techniques of improvisation. Neither side should be offended by the crazy ideas. No one should criticize. Explain that by exploring crazy ideas that better ideas are often generated.
8. Sleep on it. This enables the unconscious to work on the problems, and gives negotiators time to collect opinions before meeting again the next day. Other kinds of breaks, coffee, etc. are also helpful. The overnight part is particularly important. Anthropologist and consumer expert Clotaire Rapaille suggests that the transitions between wakefulness and sleep allows new kinds of thinking “…calming their brainwaves, getting them to that tranquil point just before sleep” (page 8).
9. Doing this process over several sessions allows both sides to feel that progress is being made, and actually generates better and more polished ideas that both sides can invest in.
10. It is the process of creating something together, rather than the specific proposals, which creates bonding around a shared task and establishes new ways of working together. Each side feels honored and all can feel that something is being accomplished.
For the Japanese reader, some of these will be quite familiar. It’s easy to get Japanese in close physical proximity (#3), they’ve been living that way for millennia. In Japanese companies there are not so much marketing specialists as different from engineers as different from finance analysts. Each executive may have worked in several functional areas, limiting the “chimney effect” often associated disparagingly with American firms (#4). Physical movement (#6) – picture the start of the day at the typical Japanese factory. The Japanese also seem to work best in small groups (#6). Silence is definitely ok (part of #6). The Japanese invented karaoke (#6 and singing). The Japanese have difficulty criticizing others, especially foreigners (#7). The use of visuals and holistic thinking are natural for Japanese (#7). Breaks are also a common procedure for Japanese (#8). Japanese will work better with people with whom they are familiar (#9).
It should also be noted that some of these techniques will seem foreign to Japanese negotiators. For example, diversity is not a strong suit for Japanese – purposefully adding women and other elements of diversity (#4) to their groups would seem odd. However, the two key things the Japanese do in negotiation that others can and should learn are: First, the Japanese are the absolute champion information vacuums on the planet. They keep their mouths shut and let everyone else do the talking. Thus, they use the diversity of their international colleagues (customers, suppliers, competitors, scientists, etc.) to a greater extent than any other society. Often this is denigrated as copying and borrowing, but in fact being open to everyone’s ideas has always been the key to creativity and human progress. While the Japanese, like everyone else around the world, are ethnocentric, they still very much respect foreign ideas. Second, the Japanese will only work with dolphins (cooperative negotiators), that is, when they have a choice. Trust and creativity go hand-in-hand. And, they will work to train their foreign counterparts to behave more like dolphins for the latter’s own good. Witness the 25-year joint venture between Toyota and General Motors for manufacturing small cars in Fremont, CA as a prominent example.
Application of principles of creativity will be appropriate in at least three points during negotiations. Above noted was Howard Raiffa’s suggestion that they be used in pre-negotiation meetings. Second, others advocate their use when impasses are reached. For example, in the negotiations regarding the Rio Urubamba natural gas project in Peru, the involved firms and environmentalist groups reached what at the time seemed to be an irreconcilable difference -- roads and a huge pipeline through the pristine forest would be an ecological disaster. The creative solution? Think of the remote gas field as an offshore platform, run the pipeline underground, and fly in personnel and equipment as needed.
Finally, even when negotiators have arrived at “yes,” a scheduled review of the agreement may actually move the relationship past “yes” to truly creative outcomes. Perhaps such a review might be scheduled six months after implementation of the agreement has begun. But, the point is time must be set aside for a creative discussion of how to improve on the agreed to relationship? The emphasis of such a session should always be putting new ideas on the table – the answers to the question “what haven’t we thought of?”
Other Negotiation Styles
Shell identified five styles/responses to negotiation. Individuals can often have strong dispositions towards numerous styles; the style used during a negotiation depends on the context and the interests of the other party, among other factors. In addition, styles can change over time.
Etymology
The word "negotiation" is from the Latin, "negotium".
Approaches to Negotiation
Negotiation typically manifests itself with a trained negotiator acting on behalf of a particular organization or position. It can be compared to mediation where a disinterested third party listens to each sides' arguments and attempts to help craft an agreement between the parties. It is also related to arbitration which, as with a legal proceeding, both sides make an argument as to the merits of their "case" and then the arbitrator decides the outcome for both parties.
Negotiation involves three basic elements: process, behavior and substance. The process refers to how the parties negotiate: the context of the negotiations, the parties to the negotiations, the tactics used by the parties, and the sequence and stages in which all of these play out. Behavior refers to the relationships among these parties, the communication between them and the styles they adopt. The substance refers to what the parties negotiate over: the agenda, the issues (positions and - more helpfully - interests), the options, and the agreement(s) reached at the end.
Skilled negotiators may use a variety of tactics ranging from negotiation hypnosis, to a straight forward presentation of demands or setting of preconditions to more deceptive approaches such as cherry picking. Intimidation and salami tactics may also play a part in swaying the outcome of negotiations.
The Advocate's Approach
In the advocacy approach, a skilled negotiator usually serves as advocate for one party to the negotiation and attempts to obtain the most favorable outcomes possible for that party. In this process the negotiator attempts to determine the minimum outcome(s) the other party is (or parties are) willing to accept, then adjusts their demands accordingly. A "successful" negotiation in the advocacy approach is when the negotiator is able to obtain all or most of the outcomes their party desires, but without driving the other party to permanently break off negotiations, unless the best alternative to a negotiated agreement (BATNA) is acceptable.
Traditional negotiating is sometimes called win-lose because of the assumption of a fixed "pie", that one person's gain results in another person's loss. This is only true, however, if only a single issue needs to be resolved, such as a price in a simple sales negotiation.
The "Win/Win" Negotiator's Approach
During the early part of the twentieth century, academics such as Mary Parker Follett developed ideas suggesting that agreement often can be reached if parties look not at their stated positions but rather at their underlying interests and requirements to reach a decision that benefits both parties.
During the 1960s, Gerard I. Nierenberg recognized the role of negotiation in resolving disputes in personal, business and international relations. He published The Art of Negotiating, where he states that the philosophies of the negotiators determine the direction a negotiation takes. His Everybody Wins philosophy assures that all parties benefit from the negotiation process which also produces more successful outcomes than the adversarial “winner takes all” approach.
In the 1970s, practitioners and researchers began to develop win-win approaches to negotiation. Win-win is taken from Economic Game Theory, and has been adopted by North American negotiation academics loosely to mean Principled Negotiation. Getting to YES was published by Roger Fisher and William Ury as part of the Harvard negotiation project. The book's approach, referred to as Principled Negotiation, is also sometimes called mutual gains bargaining. The mutual gains approach has been effectively applied in environmental situations (see Lawrence Susskind and Adil Najam) as well as labor relations where the parties (e.g. management and a labor union) frame the negotiation as "problem solving". If multiple issues are discussed, differences in the parties' preferences make win-win negotiation possible. For example, in a labor negotiation, the union might prefer job security over wage gains. If the employers have opposite preferences, a trade is possible that is beneficial to both parties. Such a negotiation is therefore not an adversarial zero-sum game.
There are a tremendous number of other scholars who have contributed to the field of negotiation, including Gerard E. Watzke at Tulane University, Sara Cobb at George Mason University, Len Riskin at the University of Missouri, Howard Raiffa at Harvard, Robert McKersie and Lawrence Susskind at MIT, and Adil Najam and Jeswald Salacuse at The Fletcher School of Law and Diplomacy.
The New Creative Approach
Perhaps the most famous negotiation parable involves an argument over an orange. The most obvious approach was to simply cut it in half, each person getting a fair share. But, when the negotiators began talking to each other, exchanging information about their interests, a better solution to the problem became obvious. The person wanting the orange for juice for breakfast took that part and the person wanting the rind for making marmalade took that part. Both sides ended up with more. Neither agreement is particularly creative.
The parable of the orange becomes a story about creativity when both parties decide to cooperate in planting more an orange tree or even an orchard. In a similar way, Boeing buys composite plastic wings for its new 787 Dreamliner designed and manufactured by Japanese suppliers, and then sells the completed 787s back to Japanese airlines, all with a nice subsidy from the Japanese government. This is what is meant by creativity in negotiations.
At business schools these days much is being learned about creative processes. Courses are being offered and dissertations being proffered with “innovation” being the key buzz word at academic conferences and in corporate boardrooms. And, the more heard about innovation and creative processes the greater is the appreciation that the Japanese approach to negotiations, by nature, uses many of the techniques commonly emphasized in any discussion of creative processes. Indeed, there appears to be a deeply fundamental explanation why the Japanese have been able to build such a successful society despite their lack of natural resources and relative isolation. While Japanese society does have its own obstacles to creativity – hierarchy and collectivism are two – they have developed a negotiation style that in many ways obviates such disadvantages. Indeed, the ten new rules for global negotiations advocated by Hernandez and Graham nicely coincide with an approach that comes natural to Japanese.
Accept only creative outcomes
Understand cultures, especially your own.
Don’t just adjust to cultural differences, exploit them.
Gather intelligence and reconnoiter the terrain.
Design the information flow and process of meetings.
Invest in personal relationships. Persuade with questions.
Seek information and understanding.
Make no concessions until the end.
Use techniques of creativity
Continue creativity after negotiations.
Beyond the practices of the Japanese, credit must also be given to the luminaries in field that have long advocated creativity in negotiations. Howard Raiffa and his colleagues recommend:
…the teams should think and plan together informally and do some joint brainstorming, which can be thought of as “dialoguing” or “prenegotiating.” The two sides make no tradeoffs, commitments, or arguments about how to divide the pie at this early stage.
Roger Fisher and William Ury title their Chapter 4 in Getting to Yes,“Invent[ing] Options for Mutual Gain.” David Lax and James Sebenius, in their important new book, 3D-Negotiations, go past getting to yes, and talk about “creative agreements” and “great agreements.” Lawrence Susskind and his associates recommend “parallel informal negotiations” toward building creative negotiation outcomes.
These ideas must be pushed to the forefront in thinking about negotiations. The field generally is still stuck in the past, talking about “making deals” and “solving problems” as above. Even the use of terms like “win-win” expose the vestiges of the old competitive thinking. The point is that a negotiation is not something that can be won or lost, and the competitive metaphor limits creativity. The problem-solving metaphor does as well. Thus, the first rule of negotiations is: Accept only creative outcomes!
Lynda Lawrence at IdeaWorks, a Newport Beach consulting firm (http://www.ideaworksconsulting.com/) has developed a most useful list of ways to generate more ideas during negotiations:
10 Ways to Generate More Ideas:
1. Establish common goals of what this "collaboration" would create. A more workable deal? Some common long term goals? A closer partnership?
2. Establish the rules of engagement. The purpose of the exercise is to resolve differences in creative ways that work better for both parties. All ideas are possibilities, and research shows that combining ideas from different cultures can result in better outcomes than those from a single culture.
3. Trust is key, and difficult to establish in many cultures. Certain techniques might speed that process a little. Being offsite, for example. Establishing physical proximity that unconsciously signals intimacy.
4. Add diversity (gender, culture, extroverts, different work specialties, experts, outsiders) to the group. Indeed, the diversity associated with international teams and alliances is the real goldmine of creativity in negotiations.
5. Use storytelling. This both helps establish who you are and what point of view you are bringing to this collaboration.
6. Work in small groups. Add physical movement. Tell the participants to relax, play, sing, have fun, and silence is ok.
7. Work holistically and using visuals. If, for example, there are three sticking points where neither side is happy, agree to work on those points by spending a short time – 10 minutes – on each point where both sides offer "crazy" suggestions. Use techniques of improvisation. Neither side should be offended by the crazy ideas. No one should criticize. Explain that by exploring crazy ideas that better ideas are often generated.
8. Sleep on it. This enables the unconscious to work on the problems, and gives negotiators time to collect opinions before meeting again the next day. Other kinds of breaks, coffee, etc. are also helpful. The overnight part is particularly important. Anthropologist and consumer expert Clotaire Rapaille suggests that the transitions between wakefulness and sleep allows new kinds of thinking “…calming their brainwaves, getting them to that tranquil point just before sleep” (page 8).
9. Doing this process over several sessions allows both sides to feel that progress is being made, and actually generates better and more polished ideas that both sides can invest in.
10. It is the process of creating something together, rather than the specific proposals, which creates bonding around a shared task and establishes new ways of working together. Each side feels honored and all can feel that something is being accomplished.
For the Japanese reader, some of these will be quite familiar. It’s easy to get Japanese in close physical proximity (#3), they’ve been living that way for millennia. In Japanese companies there are not so much marketing specialists as different from engineers as different from finance analysts. Each executive may have worked in several functional areas, limiting the “chimney effect” often associated disparagingly with American firms (#4). Physical movement (#6) – picture the start of the day at the typical Japanese factory. The Japanese also seem to work best in small groups (#6). Silence is definitely ok (part of #6). The Japanese invented karaoke (#6 and singing). The Japanese have difficulty criticizing others, especially foreigners (#7). The use of visuals and holistic thinking are natural for Japanese (#7). Breaks are also a common procedure for Japanese (#8). Japanese will work better with people with whom they are familiar (#9).
It should also be noted that some of these techniques will seem foreign to Japanese negotiators. For example, diversity is not a strong suit for Japanese – purposefully adding women and other elements of diversity (#4) to their groups would seem odd. However, the two key things the Japanese do in negotiation that others can and should learn are: First, the Japanese are the absolute champion information vacuums on the planet. They keep their mouths shut and let everyone else do the talking. Thus, they use the diversity of their international colleagues (customers, suppliers, competitors, scientists, etc.) to a greater extent than any other society. Often this is denigrated as copying and borrowing, but in fact being open to everyone’s ideas has always been the key to creativity and human progress. While the Japanese, like everyone else around the world, are ethnocentric, they still very much respect foreign ideas. Second, the Japanese will only work with dolphins (cooperative negotiators), that is, when they have a choice. Trust and creativity go hand-in-hand. And, they will work to train their foreign counterparts to behave more like dolphins for the latter’s own good. Witness the 25-year joint venture between Toyota and General Motors for manufacturing small cars in Fremont, CA as a prominent example.
Application of principles of creativity will be appropriate in at least three points during negotiations. Above noted was Howard Raiffa’s suggestion that they be used in pre-negotiation meetings. Second, others advocate their use when impasses are reached. For example, in the negotiations regarding the Rio Urubamba natural gas project in Peru, the involved firms and environmentalist groups reached what at the time seemed to be an irreconcilable difference -- roads and a huge pipeline through the pristine forest would be an ecological disaster. The creative solution? Think of the remote gas field as an offshore platform, run the pipeline underground, and fly in personnel and equipment as needed.
Finally, even when negotiators have arrived at “yes,” a scheduled review of the agreement may actually move the relationship past “yes” to truly creative outcomes. Perhaps such a review might be scheduled six months after implementation of the agreement has begun. But, the point is time must be set aside for a creative discussion of how to improve on the agreed to relationship? The emphasis of such a session should always be putting new ideas on the table – the answers to the question “what haven’t we thought of?”
Other Negotiation Styles
Shell identified five styles/responses to negotiation. Individuals can often have strong dispositions towards numerous styles; the style used during a negotiation depends on the context and the interests of the other party, among other factors. In addition, styles can change over time.
- Accommodating: Individuals who enjoy solving the other party’s problems and preserving personal relationships. Accommodators are sensitive to the emotional states, body language, and verbal signals of the other parties. They can, however, feel taken advantage of in situations when the other party places little emphasis on the relationship.
- Avoiding: Individuals who do not like to negotiate and don’t do it unless warranted. When negotiating, avoiders tend to defer and dodge the confrontational aspects of negotiating; however, they may be perceived as tactful and diplomatic.
- Collaborating: Individuals who enjoy negotiations that involve solving tough problems in creative ways. Collaborators are good at using negotiations to understand the concerns and interests of the other parties. They can, however, create problems by transforming simple situations into more complex ones.
- Competing: Individuals who enjoy negotiations because they present an opportunity to win something. Competitive negotiators have strong instincts for all aspects of negotiating and are often strategic. Because their style can dominate the bargaining process, competitive negotiators often neglect the importance of relationships.
- Compromising: Individuals who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation. Compromisers can be useful when there is limited time to complete the deal; however, compromisers often unnecessarily rush the negotiation process and make concessions too quickly.
Emotion in Negotiation
Emotions play an important part in the negotiation process, although it is only in recent years that their effect is being studied. Emotions have the potential to play either a positive or negative role in negotiation. During negotiations, the decision as to whether or not to settle, rests in part on emotional factors. Negative emotions can cause intense and even irrational behavior, and can cause conflicts to escalate and negotiations to break down, while positive emotions facilitate reaching an agreement and help to maximize joint gains.
Affect effect: Dispositional affects affect the various stages of the negotiation process: which strategies are planned to be used, which strategies are actually chosen, the way the other party and its intentions are perceived, the willingness to reach an agreement and the final outcomes. Positive affectivity (PA) and negative affectivity (NA) of one or more of the negotiating sides can lead to very different outcomes.
Positive affect in negotiation
Even before the negotiation process starts, people in a positive mood have more confidence, and higher tendencies to plan to use a cooperative strategy. During the negotiation, negotiators who are in a positive mood tend to enjoy the interaction more, show less contentious behavior, use less aggressive tactics and more cooperative strategies.This in turn increases the likelihood that parties will reach their instrumental goals, and enhance the ability to find integrative gains.] Indeed, compared with negotiators with negative or natural affectivity, negotiators with positive affectivity reached more agreements and tended to honor those agreements more. Those favorable outcomes are due to better decision making processes, such as flexible thinking, creative problem solving, respect for others' perspectives, willingness to take risks and higher confidence. Post negotiation positive affect has beneficial consequences as well. It increases satisfaction with achieved outcome and influences one’s desire for future interactions. The PA aroused by reaching an agreement facilitates the dyadic relationship, which result in affective commitment that sets the stage for subsequent interactions.PA also has its drawbacks: it distorts perception of self performance, such that performance is judged to be relatively better than it actually is. Thus, studies involving self reports on achieved outcomes might be biased.
Negative affect in negotiation
Negative affect has detrimental effects on various stages in the negotiation process. Although various negative emotions affect negotiation outcomes, by far the most researched is anger. Angry negotiators plan to use more competitive strategies and to cooperate less, even before the negotiation starts. These competitive strategies are related to reduced joint outcomes. During negotiations, anger disrupts the process by reducing the level of trust, clouding parties' judgment, narrowing parties' focus of attention and changing their central goal from reaching agreement to retaliating against the other side. Angry negotiators pay less attention to opponent’s interests and are less accurate in judging their interests, thus achieve lower joint gains. Moreover, because anger makes negotiators more self-centered in their preferences, it increases the likelihood that they will reject profitable offers. Anger doesn’t help in achieving negotiation goals either: it reduces joint gains and does not help to boost personal gains, as angry negotiators don’t succeed in claiming more for themselves. Moreover, negative emotions lead to acceptance of settlements that are not in the positive utility function but rather have a negative utility. However, expression of negative emotions during negotiation can sometimes be beneficial: legitimately expressed anger can be an effective way to show one's commitment, sincerity, and needs.] Moreover, although NA reduces gains in integrative tasks, it is a better strategy than PA in distributive tasks (such as zero-sum).
Conditions for emotion effect in negotiation
Research indicates that negotiator’s emotions do not necessarily affect the negotiation process. Albarracın et al. (2003) suggested that there are two conditions for emotional effect, both related to the ability (presence of environmental or cognitive disturbances) and the motivation:
- Identification of the affect: requires high motivation, high ability or both.
- Determination that the affect is relevant and important for the judgment: requires that either the motivation, the ability or both are low.
According to this model, emotions are expected to affect negotiations only when one is high and the other is low. When both ability and motivation are low the affect will not be identified, and when both are high the affect will be identify but discounted as irrelevant for judgment.A possible implication of this model is, for example, that the positive effects PA has on negotiations (as described above) will be seen only when either motivation or ability are low.
The effect of the partner’s emotions
Most studies on emotion in negotiations focus on the effect of the negotiator’s own emotions on the process. However, what the other party feels might be just as important, as group emotions are known to affect processes both at the group and the personal levels. When it comes to negotiations, trust in the other party is a necessary condition for its emotion to affect, and visibility enhances the effect. Emotions contribute to negotiation processes by signaling what one feels and thinks and can thus prevent the other party from engaging in destructive behaviors and to indicate what steps should be taken next: PA signals to keep in the same way, while NA points that mental or behavioral adjustments are needed.
Partner’s emotions can have two basic effects on negotiator’s emotions and behavior: mimetic/ reciprocal or complementary. For example, disappointment or sadness might lead to compassion and more cooperation.In a study by Butt et al. (2005) which simulated real multi-phase negotiation, most people reacted to the partner’s emotions in reciprocal, rather than complementary, manner. Specific emotions were found to have different effects on the opponent’s feelings and strategies chosen:
- Anger caused the opponents to place lower demands and to concede more in a zero-sum negotiation, but also to evaluate the negotiation less favorably. It provoked both dominating and yielding behaviors of the opponent..
- Pride led to more integrative and compromise strategies by the partner.
- Guilt or Regret expressed by the negotiator led to better impression of him by the opponent, however it also led the opponent to place higher demands. On the other hand, personal guilt was related to more satisfaction with what one achieved.
- Worry or disappointment left bad impression on the opponent, but led to relatively lower demands by the opponent.
Problems with Lab Negotiation Studies
Negotiation is a rather complex interaction. Capturing all its complexity is a very difficult task, let alone isolating and controlling only certain aspects of it. For this reason most negotiation studies are done under laboratory conditions, and focus only on some aspects. Although lab studies have their advantages, they do have major drawbacks when studying emotions:
- Emotions in lab studies are usually manipulated and are therefore relatively ‘cold’ (not intense). Although those ‘cold’ emotions might be enough to show effects, they are qualitatively different from the ‘hot’ emotions often experienced during negotiations.
- In real life there is self-selection to which negotiation one gets into, which effects the emotional commitment, motivation and interests. However this is not the case in lab studies.
- Lab studies tend to focus on relatively few well defined emotions. Real life scenarios provoke a much wider scale of emotions.
- Coding the emotions has a double catch: if done by a third side, some emotions might not be detected as the negotiator sublimates them for strategic reasons. Self report measures might overcome this, but they are usually filled only before or after the process, and if filled during the process might interfere with it.
Useful Links
- http://en.wikipedia.org/wiki/Negotiation_theory
- http://en.wikipedia.org/wiki/Negotiation
- http://www.mindtools.com/CommSkll/NegotiationSkills.htm
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