Negotiation Strategies and Theories

8 August 2016

Most of us envision negotiations as a form of conflict where the outcome is typically one winner and one loser (or winning and losing party/group). Because both parties engaging in negotiations have something to achieve, people tend to enter negotiations emphasizing outcome and/or process goals (Katz-Navon and Goldschmidt, 2009). Differences in status, power, and gender all play highly significant roles (often times subconsciously or inadvertently) and will be discussed further analyzed in this paper.

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As somewhat of a disclaimer, the terms “individuals”, “groups”, or “parties” are often used interchangeably with no regard to the circumstances on how many people or entities are involved in the negotiation theories to be discussed. Negotiation theory is an interdisciplinary field that has been developed by economists, sociologists, and psychologists, and offers prescriptions for effective negotiating (Arvanitis and Karampatzos, 2011). Introspectively I would theorize that like individual’s negotiation strategy or style is much like any other personality trait in that it is inherent, and little subject to change over the long-term.

However, most importantly, I have no mental reservations to conclude that negotiation skills and theories can be learned and practiced to broaden ones abilities and inherent traits. Individuals whose primary focus is centered on outcome-based goals, based on their limited willingness or ability to broaden the perception of their negotiation strategy, would mainly concentrate on the final results of the negotiation (Katz-Navon and Goldschmidt, 2009). I believe this strategy has a tremendous amount of utility when you want to subconsciously lead the opposing party to believe this is your primary negotiation strategy.

However, I believe this covert strategy to be effective only if one enters the negotiation with the most power. When individuals have more power than the opposed, they are less dependent on their opposition and more easily and likely to be able to satisfy their own needs and desires (Malhotra and Gino, 2011). This self-interest based strategy can often raise moral conflict if one party’s objective opposes the other, particularly along the grounds of gender or culturally based beliefs or tendencies.

There are several strategies in which parties entering negotiations at a disadvantage can use in attempt to shift the power and direction of a negotiation which will be discussed further in this paper. Counter to the outcome-based strategy previously discussed, parties who are more strongly process-oriented will have the ability to formulate and deploy more comparatively malleable strategies that lead to a successful resolution of the negotiation (Katz-Navon and Goldschmidt, 2009). I believe that a majority of people would find this strategy far more constructive than the outcome-based approach.

In the field of psychology, the majority of research has been focused on this decision-making perspective constituting a structured process between rational parties (Arvanitis and Karampatzos, 2011). Regardless of the negotiation strategy used, its mechanics can be analyzed based on conscious and subconscious exchanges of information (and attempts to validate claims). OBSTACLES ENCOUNTERED Negotiating individuals rely on cognitions during the negotiation process. Many times, these cognitions are erroneous ones (i. e.heuristics, stereotypes, and other biases) and significantly affect negotiation outcomes. Stereotypes commutate a fixed attitude toward a social group which are brought to the forefront of engagement during negotiation sessions. Obstacles encountered often lead to a fixed-pie bias (Dweck and Leggett, 1988), limiting the scope of what each party will be able to gain or achieve from the negotiation. Unfortunately, many of these cognitions are deeply rooted in cultural conflicts, resulting in cognitions reflecting as character traits and personal beliefs.

For instance, in Afghanistan we are working towards the unification and strengthening of the Afghan government, yet the majority of its population are identify with one of numerous tribal entities who have no sense of nationality or unity with other tribal entities. The less parties understand about the limits of bargaining range and appropriate standards for agreement, the more ambiguity there is in the negotiation situation (Bowles, Babcock, and McGinn, 2009). Lacking information by not conducting proper research on the other parties(as well as their own) limits and constraints generates uncertainties about what is attainable in the negotiation. Also, perceived inequalities in status and power between negotiating parties are brought into the thick of things when cultures collide (more-so perhaps than gender-based issues to be discussed later). WAYS TO EXPAND THE PIE Both parties must enter negotiations believing that a win-win scenario is possible. One of the first road-blocks to expanding the pie is entering the negotiation insistent that there is only one issue or problem that is up for discussion.

A similar scenario limiting pie-expanding capabilities is the rationale that the focus is on dividing the pie up front rather than enlarging the pie before dividing it. These scenarios almost always result in a win-lose type scenario. A natural counter to this scenario is to bring additional issues into the negotiation. Beneath the surface, it is always fairly likely additional issues do exist which can be strategically and carefully brought to the table. Bringing other people or parties into negotiations may also expand the size of the bargaining pie by adding additional insight or bargaining power.

Additionally, this helps to avoid one reason negotiations fail by unbundling issues, or avoiding argument over a single issue. Parties should prepare themselves for negotiations by harnessing and strategizing ways to utilize their power, therefore increasing their optimism and perception of control during the negotiation (Malhotra and Gino, 2011). Those who enter negotiations focused on their lack of power (perceived or real) will be more focused on increasing their power during the course of the negotiation as opposed to being focused on more beneficial, holistic strategies that are more likely to result in a win-win scenario.

Negotiators should engage in interactions by expressing interest and concern with the viewpoints of the opposing party. This helps to ensure that opposing parties are more likely and willing to engage in future negotiations and will be more receptive. Meanwhile, parties should signal their willingness to share information about their own interests as well. This creates an obvious paradox due to expectations that both parties be forth-coming and receptive, yet as in many if life’s delicate situations, revealing too much too soon can put a party at a disadvantage.

Roadblocks to expanding the pie may unintentionally be set in place when people or parties believe that their interests are non-negotiable or too separate or distant from that of the opposing party, when in reality, they are not. This is known as “false conflict” or “illusory conflict. ” In order to circumvent this inevitable failure, parties must avoid making premature concessions regarding the other party. Similar to the criteria contained in false conflict, “fixed-pie perception” is a view where the other party’s interests are inversely related to one’s own.

In other words, not only are they too distant or separate, but they are viewed as being directly in contrast with the current parties views. CREATIVE METHODS TO CREATE ALTERNATIVES One of the most powerful ways to steer negotiations towards a more positive direction (primarily when the other party is being uncooperative) is via a strategy of making multiple offers of equivalent value simultaneously. This generates alternatives by diversifying the offer to avoid sequential declination of offers, often resulting in a “lose-lose” scenario.

Rhetoric, as defined by Aristotle, is the faculty of discovering the possible means of persuasion in reference to any subject whatever (Arvanitis and Karampatzos, 2011). This can serve as a powerful tool for altering the structure and progess of negotiations and help to uncover some of the underlying principles in the opposing parties’ negotiation structure. Aristotle goes on to argue that: “That which is persuasive is persuasive in reference to someone, and is persuasive and convincing either at once and in and by itself, or because it appears to be proved by propositions that are convincing….

Rhetoric will not consider what seems probable in each individual case, for instance to Socrates or Hippias, but that which seems probable to this or that class of persons” (Arvanitis and Karampatzos, 2011). Negotiators may even resort to the use of bluffing (or flat-out lying) in order to accomplish their mission. In a situation where one party has an actual (real, not perceived) disadvantage, they can render a strong emotional effect by bluffing.

For instance, they may attempt to “throw-off” their stronger opposition by surprising them with a false statement that they have received a better offer or have recently found more ideal means to accomplish their own ends. When well executed, bluffing can turn the tables on the perception of power during the course of a negotiation. However, the bluffing negotiators need to have strong alternatives available, as well as heed the necessity to not over-bluff or bluff too early so they do not radiate a sense of desperation due to their lacking in status and power. DIFFERENCES IN STATUS AND POWER

Power is commonly defined as the capacity to control one’s own resources and outcomes, as well as those of others (Malhotra and Gino, 2011). One of the most common way that parties seek to increase their power is to invest in and pursue outside exchange relationships to which they are the primary beneficiary towards opposing parties. For instance, in the mid-1900s, American car manufacturers spent more time and money partnering with industries that brought those cheaper materials than Japan did, giving the United States the edge in automobile manufacturing for decades until Japan’s marketed quality improvements overhauled their industry.

Social role theory can be defined as the expectations which people develop for others based on their demographic attributes, coupled with beliefs on what behaviors are suitable for that role. Historically, because of economic, ecological, social, and technological pressures, women and men were assigned to labor tasks that were consistent with their physical attributes (Harrison and Lynch, 2009). In today’s workplace, as well as at home, far more women are crossing into powerful business roles traditionally held by men.

In group and organizational settings, power shapes the nature of social and strategic interactions. Those who lack power will often heavily invest in the pursuit of gaining power in relationships which have the potential to shape the intrapersonal dynamics of these exchange relationships. When parties enter negotiations in which they have an advantage (perceived or real) they must err on the side of caution to ensure the opposing party is not corruptly trying to take advantage of them.

Parties who enter negotiations at a disadvantage (perceived or real) are more likely to use emotional routes of persuasion, which put the opposition into a frame of mind to better facilitate the acceptance of an argument; or logical persuasion where real (or apparent) truth is readily demonstrated (Arvanitis and Karampatzos, 2011). If entering a negotiation scenario, I prefer to open my argument on a logical basis to establish validation for myself and make it more unlikely that future claims and arguments can or will be refuted. GENDER DIFFERENCES

Gender differences play some of the most substantial, yet subtle roles in the negotiation playing field. A wide array of research has shown that gender-based stereotypes play a substantial role in our subconscious mind and heavily influence our strategies and performance, even without us actively thinking about it. Also, women in negotiation often reach less favorable agreements than men. In a study of MBA graduates, research found that women negotiated smaller salaries than men while both genders received comparable initial offers and engaged in negotiations at approximately the same rate (Stuhlmacher, 2007).

Gender does not always matter in negotiation. Its effects are inherently bound to the particular situation (Bowles, Babcock, and McGinn, 2009). One of the hallmarks of professional organization is a culture of acceptance and professionalism without gender-bias. I am proud to have been in an Army unit that was selected to serve as one of ten pilot units for the Women in the Army program: where women would be assigned to non-combat duty positions inside of traditionally male-only combat units. While by no means perfect, the military as a whole has taken great strides to stamp out sexism, gender-bias, and sexual harassment.

An array of research conducted found that women’s communication patters in negotiations differ from those of men. Women (significantly more often than men) were found to partake in more submissive communications patterns when faced with disclaimers and interruptions during bargaining sessions. Women also exhibited more cooperative behaviors than male negotiators (Walters et al. , 1998). Research also suggests that a significant amount of women (on average) actually experience the negotiation different than men (Stuhlmacher, 2007).

Gender-based stereotypes play an even greater role when parties ambiguously enter a negotiation scenario or situation. Research shows that the more ambiguity there is in the negotiation situation, the more potential there is for the individual difference to affect performance (Bowles, Babcock, and McGinn, 2009). Modern technology brings us many ways to enter negotiations outside of the traditional face to face fashion. Alternative methods such as phone or email based negotiations can help to reduce or even eliminate gender-based stereotypes.

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