Chapter 4: Negotiation Strategy and Planning

Overview

• In this chapter, we discuss what negotiators should do before opening negotiations.

• Effective strategy and planning are the most critical precursors for achieving negotiation objectives.

• With effective planning and target setting, most negotiators can achieve their objectives; without them, results occur more by chance than by negotiator effort.

There are some consequences of failed planning:

• Negotiators fail to set clear objectives or targets that serve as benchmarks for evaluating offers and packages. As a result, negotiators may agree to deals that they later regret.

• Negotiators may not be able to formulate convincing arguments to support their own position or rebut the other party’s arguments.

• Negotiators need to consider their alternatives to doing this deal, as it gives them more confidence and power to walk away from a bad deal.

In the planning process, skilled negotiators:

• Explored a wider range of options for action

• Worked harder to find common ground with the other party.

• Spent more time considering the long-term implications of the issues.

• Were significantly more likely to set upper and lower limits, or the boundaries of a range of acceptable settlements.

Goals, Strategy and Planning

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I. Goals – The Focus That Drives Negotiation Strategy

• Determining goals is the first step in the negotiation process (substantive goals, intangible goals, and procedural goals)

• Negotiators should specify goals and objectives clearly

• The goals set have direct and indirect effects on the negotiator’s strategy

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The Direct and Indirect Effects of Goals on Strategy

• Direct effects

• Wishes are not goals

• Wishes may be related to interests or needs that motivate goals.

• Goals may be linked to the other party’s goals

• i.e. in buying a car, buyer’s and seller’s goals

• There are limits to what ‘realistic’ goals can be

• Goals must be attainable

• Effective goals must be concrete/specific and measurable

• i.e. “to get a car cheaply” is not a very clear goal.

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The Direct and Indirect Effects of Goals on Strategy

• Indirect effects

• Forging an ongoing relationship

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II-Strategy – The Overall Plan to Achieve One’s Goals

Strategy versus Tactics

• Strategy: The overall plan to achieve one’s goals in a negotiation

• Tactics: Short-term, adaptive moves designed to enact or pursue broad strategies

• Tactics are subordinate to strategy

• Tactics are driven by strategy • i.e. strategy: integrative; tactics: describing your interests, using open-ended questions and active

listening.

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Approaches to Strategy

Unilateral versus bilateral approaches to strategy

• Unilateral: One that is made without active involvement of the other party (one-sided and intentionally ignorant of any information about the other negotiator)

• Bilateral: One that considers the impact of the other’s strategy on one’s own (gaining information about the other party)

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Strategic Options The Dual Concerns Model as a vehicle for describing negotiation strategies

• Per the Dual Concerns Model, choice of strategy is reflected in the answers to two questions:

• How much concern do I have in achieving my desired outcomes at stake in the negotiation?

• How much concern do I have for the current and future quality of the relationship with the other party?

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The Dual Concerns Model

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Strategic Options Non-engagement and active-engagement strategies

• Non-engagement strategy: Avoidance

• Active-engagement strategies: Competition, Collaboration, and Accommodation

• Accommodation: “I lose, you win” • It is used when the primary goal of the exchange is to build or strengthen the relationship

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Key Steps to an Ideal Negotiation Process

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III-Getting Ready to Implement the Strategy: The Planning Process

• Following things are important

• We assume that Single planning process can be followed for a distributive and an integrative process

• We assume that negotiations will be conducted primarily one to one, that is you and another individual negotiator

• The first iteration through the planning process should be tentative, and the negotiator should be flexible enough to modify and adjust previous steps as new information becomes available.

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III-Getting Ready to Implement the Strategy: The Planning Process

1. Define the negotiating goal

2. Define the major issues related to achieving the goal (Single issue - multiple-issue negotiations)

3. Assemble the issues, ranking their importance, and define the bargaining mix - The bargaining mix is the combined list of issues

4. Define your interests • Why you want what you want

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Getting Ready to Implement the Strategy: The Planning Process

5. Know your alternatives (BATNAs)

6. Know your limits, including a resistance point

7. Analyzing and understanding the other party’s goals, issues, and resistance

points

8. Set your own target and opening bids

• Target is the outcome realistically expected

• Asking price is the best deal one can hope to achieve

9. Assess the social context of the negotiation

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The Social Context of Negotiation: “Field” Analysis

A and B --(negotiating parties)

C --Indirect actors

D--Indirect observers

E--Environmental factors

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

• Who is on the other side of the field?

• Who is on the sidelines and can affect the play of the game? Who are the negotiation equivalents of owners, managers and strategists?

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

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

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

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

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Getting Ready to Implement the Strategy: The Planning Process

10. Presenting the issues to the other party: substance and process

• Why do they want what they want?

• How can I present my case clearly and refute the other party’s arguments?

• What facts support my case

• What is the other party’s point of view

• Etc.

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What protocol needs to be followed in this negotiation?

• The agenda • The location of negotiation • The time period of negotiation • Other parties who might be involved in the negotiation • What might be done if negotiation fails? • How will we keep track of what is agreed to? • How did we create a mechanism for modifying the deal if necessary?

Chapter Twelve

Equality and Inequality in American Health Care

ASSIGNMENT 2 (INDIVIDUAL) (15%); Fall 2020, DUE DATE 15.12.2020 HRM 470 Negotiations and Conflict Management Chapter 4: Negotiation Strategy and Planning

Student Name Surname: Student ID Number:

Description of the case: Assume that you are writing a project with your fellow students. Some students suggest that you should divide the job, write separately and then combine everything together. Some others suggest that you should meet online and work together. According to this scenario answer the following questions: Q1. Please choose your side and define and explain a bilateral strategy. Please justify why you choose this strategy with explaining the advantages and possible risks. (50p.) Q2 According to the strategy you choose in the 1st question please define and explain your goals, major issues, rank them according to importance level and defend your interests (you may also consider group interests). (50 p.) Please answer the questions not less than 2 paragraphs each. Please add the question number for each question. You may use additional resources with proper citation (APA style). Answer the questions on a word document. Don’t forget to add your ID number and Name please. Submit the document to the related turn-it-in link.