BCO 313: Negotiation at Work Anne Dwyer: a.dwyer@euruni.edu Negotiation at Work \"Managers and executives negotiate constantly over issues as varied as hiring decisions and purchases, corporate resource allocations, and labor contracts\" Simons and Tripp (2003) Conflict at work: What do you think? \"Managers who try to eliminate conflict will not last long\" .... \"those who manage it well will typically experience both organizational benefits and personal satisfaction\" (Darling and Walker (2001) Negotiation requires Positions need to be incompatible Good faith Interdependence Shared interests Ethics Trust Agreement that negotiation is a road to finding a solution Work Negotiations: The first (phone) interview Do They Have What it Takes? Why would a potential (sales person) need/be judged on the following? Articulation: How well does the applicant speak? Do they say \"um,\" \"uh\" or \"like\" frequently? Energy: How naturally energetic does the applicant sound? Is it genuine? Ability to take control: Can the applicant take control of the call and drive it where it needs to be? Can they naturally move the call from point to point without gaps of silence or unrelated conversation in between? Ability to think on their feet: Can the applicant handle unexpected questions without fumbling? Coachability: How well can the applicant understand the scenario and apply it? The phone interview ... how long do they take? LISTEN! \"we're hiring more for talent than for experience, and it can be hard to identify raw talent in people without an objective test for it. We're looking for street smarts more than book smarts\" \"I use the 'coffee scenario\" and score candidates from 1 to 10 You can coach someone whose natural energy level is a seven to become an eight or a nine - but you can't really coach a five to become a ten.\" Do they speak with a confident tone? Did they demonstrate their abilities and their problem-solving skills? Did they listen to the input from the \"customer\" and react well? Did they listen to feedback from the recruiter after the scenario was completed? It's often about priorities... the Thomas-Kilmann conflict styles model Goal is ... Relationship is ... Strategy 0_x___________5 Not important 0__x__________5 Not important Withdraw \"no way\" 0_____x_______5 0______x______5 Compromise 0____________x5 Very important 0____________x5 Very important Problem-solve: \"our\" 0_x___________5 0___________x_5 Smooth: \"Your way\" 0___________x_5 0_x___________5 Force: \"My way\" How does Due Diligence fit in the following cases? http://www.publicspeakinghowto.com/negotiationskills/cbs-sunda y-morning-russian-negotiation-case http://www.publicspeakinghowto.com/negotiationskills/assignment4-negotiation-analysis-pirates-of-the-caribbean http://www.publicspeakinghowto.com/negotiationskills/ari-gold-v s-terrance-lessons-in-negotiation-2009-entourage-season-6 http://www.publicspeakinghowto.com/negotiationskills/example-o f-badgood-negotiation-between-italian-and-german Have a look at: http://www.kent.ac.uk/careers/applic n.htm Any Qs? BCO 313: Negotiation _ETHICS Anne Dwyer: a.dwyer@euruni.edu Due diligence... Tactics WATCH : https://www.youtube.com/watch?v=qlviAeUAPcY What 'due diligence' did Ari Gold do? What tactics did Ari Gold use? How ethical were they? Write a couple of thoughts in the worksheet The Ethics of Negotiation Is it ethical to use 'tactics'? Does everyone use tactics? How important is it to trust the other party? You have seen tactics posted by others ... What do you think? Is there a right and wrong on this? Does culture make a difference here? Does it depend on the 'other party'? Write your views in the Worksheet. Tactics in the competitive phase ... ethical or not? \"Principled\" offers and concessions Argument Threats and promises Silence and patience Limited authority/Higher authority Aggressive behaviour Uproar Record your views in the worksheet 3 Questionable Tactics Lies (limits, alternatives, intentions, time, authority, commitments, acceptability of offer, resources) Puffery (exaggerating values - of payoffs, alternatives, cost, importance of issue...) Deception (deliberate misleading: promises, threats, excessive initial demands, getting unnecessary concessions, misstatements) More Questionable Tactics Weakening the opponent (blame, personally abrasive statements, undermining alliances) Strengthening one's own position (by deliberately using third parties eg media) Nondisclosure (holding back information that would benefit the other party) Information exploitation (using information provided by the other party to weaken them) 3 more Questionable Tactics Change of Mind (accepting offers rejected earlier, withdrawl of promised offers) Distraction (adding in extra information to purposefully lure the other party to ignore something important) Maximization (single-minded pursuit of payoffs at the cost of the opponent's payoffs) 3 schools \"It's a game\" Poker School: Q: Does everyone have/play by the same rules? \"Do the Right Thing Even if it Hurts\" Idealist School: Q Is this realistic? Doesn't it open you to exploitation? \"What Goes Around Comes Around\" Pragmatist School: Q How can you stall and avoid lies at the same time? Trust can make a significant difference in the long term! REMEMBER BCO 313: Negotiation _ETHICS Anne Dwyer: a.dwyer@euruni.edu What are the phases in negotiation? How many are there? Are they always key? What happens if you skip one? The 5 phases 1. 2. 3. 4. 5. Identification of issues and objectives Due diligence Proposal of issues Negotiated agreement or resolution Debriefing Steps 1 + 2 = Preparation. KNOW: Yourself and the other parties Each party's BATNA. Can either party walk away? What will be the outcome? Your settlement range Your options and the pros and cons of each The other party's reputation and negotiation models Step 3 ... set the stage Create an appropriate environment for the meeting: Physical: neutral, non-threatening, calm and supportive location, venue and seating Verbal: clear, understandable language (interpreter?) Time frame: be flexible Step 3: establish the ground rules Behavioural: interruptions, turn-taking, respect, tone of verbal and nonverbal communication Procedural: clarify roles, check the negotiating clout/authority of the participants Substantive: What can be discussed and decided? Confidentiality, privacy, media Step 3: Identify the issues Identify the non-negotiables Identify and agree on the issues to be negotiated Divide the issues into parts Clarify the areas of disagreement Address less difficult aspects when stuck; make sure you refocus on the issues Step 4: Principled bargaining PIOC= People, Interests, Options, Criteria: Negotiators need to 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. State their case well Organise their facts well Use fair procedures Beware of the timing and speed of the talks Avoid abusing power Assess the others' needs properly Be sensitive to those needs Have patience Not be unduly worried by conflict Be committed to an integrative ('win-win') philosophy Step 5 Debriefing checklist 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Were the other party's needs identified/met? Were your needs being met? Was your negotiation style appropriate? Was the environment appropriate/adequate? Was your body language accepting and cooperative? Did you both check achievements and aim to build on these? Did you negotiate the issue? Or the people? Did comon ground exist between the parties? Were your goals realistic? Were clear agreements made and recorded? Due diligence...preparing the brief Case Case Case Case Case 1: 2: 3: 4: 5: prenuptial agreement business start-up with several partners sponsorship agreement investment in a start-up contracting a VIP/star for an advertisement Case 1: pre nuptials What are you going to negotiate? What are your BATNAs and WATNAs? Cross border divorce:Couples in 14 EU countries can choose which country's law applies to their divorce, helping them avoid potentially long and expensive proceedings. The countries are Austria, Belgium, Bulgaria, France, Germany, Hungary, Italy, Latvia, Luxembourg, Malta, Portugal, Romania, Slovenia and Spain. Case 2: business start-up with several partners (pm class) Share of profits and losses Responsibilities Parameters of debt and guarantees Power: individual leeway - how much can one decide without consultation % and amount of investment Sale of shares Quit the business Disputes Vision, mission, ethical code HR policies Case 2: business start-up with several partners (am class) % ownership Mission and goal/s Responsibilities Resources Profit sharing Business plan Flexibility: contingency plan Where? Case 3: sponsorship agreement (pm) Money minimum (in return for what? Visibility - on the t-shirts? On the www? On the court/pitch? etc) Length of agreement, renewal clause Cancellation clause Crisis Rights to use the players Mutuality Which legal system do you apply? Case 3: sponsorship agreement Visibility: where is the logo going to appear? Recession of deal Where do we sign the contract? Role of the stars! Press conferences Crisis management Case 4: investment in a start-up Case 5: contracting a VIP/star for an advertisement Roleplay: Robi/yn Robi/yn is one of five employees in a fashion design business located in the CBD. S/he is responsible for reception duties, word processing and other clerical work. As well as working, Robi/yn attends a desktop publishing course two nights a week from 1821h. Two months ago Robi/yn injured his/her back and now requires physiotherapy twice a week min. Role play: France/is France/is is Robi/yn's boss and wants him/her to have a regular working day. The company depends on his/her work. To make it possible for Roby/in to go to the physiotherapist, France/is has agreed to allow him/her to start work two days a week at 9.30. For the past two weeks, Roby/in has been arriving late. When France/is raises the issue, s/he says \"My physio is from 8 to 9. It's harder to find a park at that time, so I arrive late.\" Negotiate! Roby/in France/is Observer Homework Prepare your due diligence for one of the following cases: 1. Investment in a start-up 2. Contracting a VIP/star for an advertisement 3. Prenuptial Entrepreneurship 101. Michael Erdle NEGOTIATION FOR FUN AND PROFIT . A PRACTICAL GUIDE. INDEX Negotiation problems Negotiation skills Dispute resolution NEGOTIATION GOALS Distribute Value VS Create Value Identify issues Consider interests Mutual Complementary Conflicting EFFECTIVE NEGOTIATION Interests VS Position (Needs VS Wants) Separate people from the problem Consider other options Preparation BATNA WATNA Based on trust MULTIPLE NEGOTIATIONS SERIES PAY-OFF MATRIX PLAYER 2 COOPERATES PLAYER 2 RETALIATES PLAYER 1 COOPERATES 3:3 O:5 PLAYER 1 RETALIATES 5:0 -1:-1 WINNING STRATEGY Nice Retaliate Forgiving Generous NEGOTIATION STYLES ASSERTIVNESS & EMPATHY Competitive Accommodating Avoidance Effective negotiator: Assertive & Empathic NEGOTIATION SKILLS Communication skills Not words, but body language and tone Understanding and recognition do not mean compromise and concession (I understand VS I agree) NEGOTIATIONS SKILLS Emotions and subconscious brain Ability to listen (active listening) Understanding Flexibility Pragmatism NEGOTIATION TRAPS Extreme claims \"Take it or leave it\" Threats and warnings Attacking alternatives Good cop/bad cop DISPUTE RESOLUTION Arbitration Mediation Negotiation MEDIATION Interests-based Facilitating Options for creative solution Based on legal rights ARBITRATION Effective alternative for a law duit Quicker Less expensive Private Good for international disputes Avoid uncertain court system www.therecorder.com | week of SEPTEMBER 10, 2012 | Vol. 136, No. 37 RECORDER Ethics Ethical Negotiations Establishing a relationship of trust with opposing counsel will be a greater benefit to the case than a game of 'hide the ball' Hon. Jamie Jacobs-May (Ret.) Ethics Some believe that success at the negotiating table is heightened by the skillful use of deception. As J.J. White remarked, \"The critical difference between those who are successful negotiators, and those who are not lies in this capacity both to mislead and not to be misled.\" Others believe that not only is complete honesty in negotiation an ethical imperative, negotiators have a further ethical duty to make sure the deal is fair to both sides. This article will summarize ethical guidelines, California law, and insights for successful negotiation strategies drawn from economics, psychology and neuroscience. Ethical Guidelines ABA Model Rule 4 addresses an attorney's obligation to be truthful in negotiations. A lawyer \"shall not knowingly make a false statement of material fact or law to a third person.\" What negotiation strategies are ethical under this Model Rule? Exaggerating one's strengths, minimizing or de-emphasizing weaknesses of your factual or legal position, indicating that a party will not agree to settle for less than a certain amount when in fact it will, and insisting on a certain term for strategic reasons when there is no interest in that term, are all considered acceptable \"posturing\" or \"puffing.\" ABA Formal Opinion 06-439. Examples of unacceptable false statements of material fact include a lawyer representing to the other side that a benefit will cost the company $100 when it actually costs $20, or declaring as a fact that your authority to settle is limited to a certain amount when it is not. While there is no affirmative duty to inform an opposing party of relevant facts, a misrepresentation can occur if the lawyer incorporates a statement of another that the lawyer knows is false, or makes partially true but misleading statements or omissions. Interestingly, the State Bar of California has rejected adoption of a counterpart to Model Rule 4.1 in its Professional Rules of Conduct. California Case Law Hon. Jamie Jacobs-May (Ret.) has more than 20 years of ADR experience and joined JAMS after serving as the presiding judge of the Santa Clara County Superior Court. She can be reached at jjacobs-may@ jamsadr.com. When it comes to negotiating business transactions, California case law applies classic tort law to misrepresentations made by attorneys, consistent with Model Rule 4.1. Even if attorneys are dealing with one another at arm's length, one will be liable for fraud if the elements are met. By contrast, attorneys who make misrepresentations in the litigation context, which include settlement discussions, are generally immune from tort liability (except for claims of malicious prosecution) based on the litigation privilege. For example, an attorney who knows that insurance limits are $500,000 but induces a settlement through a misrepresentation that the limits are only $15,000 cannot be sued for fraud for this material misrepresentation. Home Ins. v. Zurich Ins. Co., 96 Cal.App.4th 17 (2002). Effective and Ethical Negotiations Effective negotiation and ethical behavior go hand in hand. Take a moment and think about the qualities you admire in attorneys with whom you have negotiated. Now think about the qualities of attorneys who are ineffective negotiators. If you are like the attorneys surveyed by Professor Andrea Schneider, you would agree that the myth of the effective negotiator should be shattered. \"[A]dversarial behavior was perceived as increasingly ineffective... Seventy-five percent of the unethical adversarial bargainers ... were considered ineffective. As these negotiators become more irritating, more stubborn, and more unethical, their effectiveness ratings drop... On the other hand, it is no surprise that lawyers who are pleasant, courteous, astute, and well prepared do well in negotiations. When lawyers are able to maximize their problem-solving skills balancing assertiveness and empathy, they RECORDER are more effective on behalf of their clients...\" \"Shattering Negotiation Myths: Empirical Evidence on the Effectiveness of Negotiation Style,\" Andrea Kupfer Schneider, 7 Harv. L. Rev. 143, 196-97 (2002). The efficiency of a negotiation, the maximization of value, and the likelihood of a mutually beneficial agreement are all products of positive working relationships that in turn rest on trust earned through behavior. Trust produces cooperation, sharing information, and seeking mutually satisfying solutions to problems. Trust has been called \"social capital,\" facilitating positive interactions, collaboration and a sense of satisfaction. Trust is hard to earn and easy to destroy. During the course of a negotiation, one can witness levels of trust increase or decrease depending upon the behavior of the other side. When positive overtures are reciprocated with cooperative behavior, mutual trust escalates. When reciprocity is lacking, trust evaporates. In the face of unfair and unethical conduct, we do not cooperate. We are prone to be punitive, and will even sacrifice personal gain to prevent another person from receiving an unfair outcome. Studies by economists, psychologists and neuroscientists provide further evidence that fairness and cooperation are experienced as rewarding and that emotions play a significant role in decisionmaking, thereby challenging economic models based on rational choice theory. A concrete example comes from the Trust Game. The Trust Game is a widely used experiment where two players are given $10. Player 1 can either keep the $10 or give some or all of it to Player 2 in which case the trusted money multiplies by a factor of 3 to $30. If all the money is given to Player 2, Player 2 will have $40, the original $10 and $30 more. At this point Player 2 can either keep it all, or return some to Player 1. Player 1's behavior is a measure of trust and cooperation, while Player 2's behavior is a measure of trustworthiness, reciprocity and fairness. september 10, 2012 The economic model predicts no trust by Player 1 because a certain $10 is better than the very real risk that Player 2 will keep all of the money given. It also predicts no trustworthiness by Player 2 because of the obvious self-interest in keeping all the money. Yet, the data shows that typically three-quarters of Player 1s will send some money to Player 2s, and almost all Player 2s return some money. Neuroscientists marvel at these findings. Unlike other species, humans are trustful and cooperate with genetically unrelated strangers. They hypothesize that forming secure social bonds is a fundamental human need, and trust helps us to cooperate with others, a behavior necessary for survival. Paul Zak, Director of Claremont Graduate University's Center for Neuroeconomic Studies, sought to understand the physiologic underpinnings of trust. He discovered that when Player 2s are entrusted with money, their oxytocin levels spike. The more money given to Player 2, the greater the spike in oxytocin and the more money that is sent back to Player 1. Oxytocin is a neurotransmitter produced by the brain that evokes feelings of contentment, reductions in anxiety, and feelings of calmness and security. Similarly, functional magnetic resonance imaging (fMRI), allowing us to peer into the brain, confirms that fair treatment activates regions of the brain associated with reward. To conclude, ethical behavior is rewarding. It supports cooperation, collaboration and potentially better negotiation outcomes. How can you increase trust with an adversary? What do you do if your adversary is untrustworthy? Here are some practical tips: 1. Establish a relationship with your adversary. All of us tend to see ourselves in the best possible light and can demonize opposing counsel and the other party. As we become better acquainted, we stop objectifying the other, find things we have in common, open up and start feeling comfortable and connected, and the seeds of trust are sown. 2. Obey the rules of the game. The quickest way to lose trust is to violate a set of rules, whether it is returning phone calls, being on time, or delivering on a promise. Generally, the rules of arms' length negotiations do involve a back and forth, nondisclosure of bottom lines, and some degree of bluffing and puffing. The rules may be different when parties have different expectations for cultural, business or social reasons. Know the rules that govern your negotiation and obey them. 3. Make low risk/high return concessions. A concession can work wonders for trust. By legitimately appreciating the other party's situation and making a move to meet its needs, you signal a desire to have a positive relationship, and establish a reputation as someone who is competent and easy to get along with, and who understands what the other side values. 4. Negotiating with the ethically challenged. Deception is the use of information to create a false belief. The more prepared and knowledgeable you are, the less likely you will be misled. Do not take information you receive at face value. Ask questions and ask for documentation. Know your bottom line. Be prepared to walk away. Information you share can be exploited. Caveat lawyer. But, do not engage in unethical behavior yourself. \"A lie always leaves a drop of poison behind.\" 5. Impasse. If you are unsuccessful in negotiating with your counterpart, consider using a third-party neutral. A mediator can build trust and rapport, communicate concessions without making a party vulnerable, receive candid information without subjecting the party to exploitation, and filter information in a way that can lead to a successful outcome. Reprinted with permission from the September 10, 2012 edition of THE RECORDER 2012 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-2573382 or reprints@alm.com. # 501-09-12-06 1 Anton Popiy Lesson One There is a saying that you should not wrestle a pig because both of you will get dirty and the pig likes it. It is a lesson in the introduction to negotiation that I had forgotten. In essence, it means that one should not go into a negotiation with someone with a malicious intent. I learned that the hard way. I was put in a situation where I had to negotiate with my neighbor concerning how much parking space each would have. The problem was that the spaces were not evenly distributed; there was space for approximately three cars and it was not marked. My proposal was to each take up enough space for one car and then to share the rest of space for smaller things like bicycles. I had been informed that the neighbor liked to play dirty, but I trusted in my negotiating skills. When I put the proposal to him, he seemed to take it well. However, when I came home the next day, I found two cars in space, and they were poorly packed. My friend and I had nowhere to park, and we ended up parking on the street. I believed it was an anomaly, so I let it go. The same thing happened every day. Finally, I got angry and confronted the person. It seemed like that was what he had been waiting for. He yelled at me and even threatened to get physically abusive. He continued the behavior every time he saw me. When I investigated a little, I found out that that is what he does. He likes to draw in people he believes weak and then harass them. My proposal for a negotiated settlement had apparently communicated to him that I was a weakling who needed to be crushed. Negotiation is a joint decision where two parties reach to a consensus by overcoming their conflicts. The main objectives of Negotiation are to analyze negotiator role and behavior of both the parties. At times people have to deal with personal, fundamental, pointless and never mind negotiation. People negotiate to create something new by a process of agreement. Negotiation should be done in when win- win situation is being required by both the parties, when both parties have choices and defensible point is there. Negotiation can be held when two parties are competing with each other, or one party wants' to win by any means if party lack authority. Negotiation can conducted by understanding motives, conditions and objectives of both parties, when both parties are trying to achieve a win -win situation and by building strong relationship. At times negotiation will fail if one party tries to defeat other party by any means. A negotiator can be a seller, customer, employer, employee, agent and beneficiary. For an example at times we see in shopping malls that customers and sellers face lot of problems in negotiation and coming to a consensus by creating a win-win situation. There are certain factors which must be 2 taken care while negotiating such as resources, values, beliefs, relationship, identity and preferences. One of the negotiation theory which has been explained by Fishery & Ury(1991) explains that people must be separated from problems, one should focus upon interest neither positions, create options for mutual benefits and meet out objectives. If a lawyer has to deal with conflict then to negotiate with his clients he has to deal by compromise, domination and Integration. At times negotiation can fail because of poor handling, poor closure, poor timing, greed, wrong decisions and lack of motivation. Negotiation process can also be best achieved with a fruitful result when there is two way process of transparent communication. Lesson Two In doing business, there are always points in life when things go awry, and partners have to part ways. Many times, the disputes will be about who will buy who out, and at what expense. In the role play, I was one of the partners who wanted to leave. My one demand was that I am the one to continue using the brand. It was a tough part of the deal for me. They offered me a generous settlement and even offered to settle the legal fees; I indignantly refused, and we went for a mock trial. What I had failed to do was establish my BATNA right at the beginning. The acronym means 'best alternative to a negotiated agreement.' I was the one who had designed the logo, come up with the name and promoted the brand. I considered it my baby. Therefore, my arguments were not based on any economic value; I was just sentimental. I did not feel that the brand had been damaged because news of our disagreement had leaked. I also could not see that I could not leave a company and leave them coming up with another brand name ((PON: Harvard Law School, 2012). I realized that I had created bad blood, and that poisoned any chance of a negotiation. In the course of the discussion, we circled on a set of options that I had. I could, of course, have taken the money and gone and started another company. I had done it before, and I had the skills to do it again. The other option would be to try a last ditch effort to reconcile. That course of action would not have been advisable. In the end, my BATNA was to take the fair and healthy compensation I was given. If I had that in mind; we would not have had to go to trial. BATNA is defined as Best Alternative To Negotiable Agreement. It is a term which is being defined by Roger Fisher and William Ury. It is a best method to negotiate when one party refuses to the other party. At time in BATNA it becomes difficult to negotiate unless the 3 alternatives are being made available. In negotiation hard deals need to be fought so that good outcome can come out. BATNA negotiation takes place in four steps which are explained one by one. The first step is listing the alternatives which explain that one needs to think about alternatives which are made available if negotiation fails by identifying no deal options. The second step is evaluating our alternatives where each option is being identified and value of pursuing one alternative is being calculated. The third step is Establishing our BATNA where one can choose out option which is of higher value which is an ultimate BATNA where course should be pursued when negotiation gets failed. The fourth step is calculating our reservation value where the lowest value deal can be accepted. In fourth step the higher value is greater than the reservation value. BATNA is being defined as the concept of Best Practice. There is a practical example of a farmer who had land near Mississippi river which could be used for business. One buyer approached to the farmer and before he can give his reply to buyer the farmer hired a professor to find out exact value of land which valued$3 million. The buyer again approached to Farmer and offered him $7 million but the farmer asked value of $9.5 million. So latter by using BATNA the land was being sold to farmer in $8.5 million. There are certain disadvantages of BATNA such as it takes more energy and time to achieve an outcome. Lesson Three I was in a thrift shop negotiating for a nifty, old school lampstand that I just knew would be perfect for my front porch. As we went back and forth with the old man at the counter, he paused and looked at me thoughtfully. He told me that I was one of the best-mannered people he had met. He also bet that I came from a close-knit family. Upon inquiring the reason for making that assessment, he told me that I was more concerned with us both getting what we wanted and not just getting the best price for myself. It is something I do unconsciously, and it comes from both who I am and the upbringing I got. According to the book, this negotiation style is collaborative. Anytime I am in a position where I have to negotiate; I like to work together with the other party towards a settlement. To me, it is never a win if the other person walks away unhappy. In this case, I genuinely wanted to know from the shop keeper what it had cost and what it would cost to continue to keep the lamp stand. I wanted him to work with me so he could get rid of it and I would have something I wanted. I do accept that sometimes the style puts me at a disadvantage when I am faced with an individual who is not interested in negotiating at all. People who come into a negotiation with 4 bad faith frustrate me, and it takes a while to recover. However, the style is an asset most of the time. The people on the other side of the table feel my genuine desire and accommodate me. There are four styles of Negotiation which can take place for coming to a consensus. The first style is known as competing which means creating win loose situation. This style is appropriate when one party thinks himself to be right valuing more than the relationships. Competing style is inappropriate when self respect of others is not considered and collaboration is being not achieved. It is also known as a style of Bullying. The second style of Negotiation is known as Avoiding creating a Lose Lose situation for both the parties. This style is often suitable when time is short and relationship is not being valued. Avoiding style of Negotiation is not suitable when there are too much negative issues and one can care about relationships. The third style of Negotiation is known as Accommodating or creating a lose win situation. This style is appropriate when one does not care about issue and realizes that he/she is wrong. It is often not suitable when one is habituated of gaining acceptance. The fourth style of Negotiation is known as Collaborating creating a win-win situation for both the parties. It is known as Negotiator. This style of Negotiation is when relations of both parties are being valued and cooperation exists between them. This style is not suitable where there is lack of time and goals of one party are entirely wrong. There are right based and power based negotiations. Right based negotiations are linked with laws and arbitration and power based negotiation is related to power and coercion. The strategy of Negotiation can be selected on the basis of experience, style, perception, situations and preferences. Lesson Four We role played about start-ups and what we would do to get investments. A friend of mine came up with a great idea, and I instantly recognized it. Playing the role of the angel investor, I offered to give him $10 million for 51% of the stake in the company. In my mind, my thinking was that I wanted him to get it off the ground first. Then I would use my majority shareholding to find a chief executive whom I believed would be better suited for the job. My friend was so excited about the offer that he took it immediately. When we sat down to discuss, he did realize that he had not used the Game Theory to understand just what I wanted. It is rare that a person demands a majority stake without having the intention of influencing decisions in future. In this case, the innovator would have asked questions and gotten commitments written in iron-clad contracts. Angel investors are not known 5 to be generous, and their primary motivation is to see their money grow. The entrepreneur is many times driven by passion. The divergence in motivation should drive each one to be suspicious of the other one's plans (PON: Harvard Law School, 2012). Game of Theory can be defined as set of concepts which are being used in decision making process during situations of conflicts. It has been divided into three stages known as explanatory, predictive and prescriptive. Explanatory is based upon past learned theories linked with conflicts and negotiations. Predictive stage is linked with many caveats. Perspective is a stage which helps to think strategically. The game of theory is also based upon body language of people. Body language of people helps to define about their personality, communication and behavior of people who wants to communicate. Body language is also linked with game of theory because many famous personalities like sports person; celebrities and Political people reflect their communication and negotiation styles with it. Game of Theory is also linked with Negotiation which brings transparency and trust between parties. Standards are being set in Game of Theory to compare with factors like rationality, common knowledge and Equilibrium. Therefore from this Journal it can be studied that what is Negotiation.. The concept of BATNA is being explained on detail basis. The styles of Negotiations are being explained. The Journal also highlights about GAME of theory. Practical Ethics: Four Paths to Greater Virtue by Frank Bucaro Negotiation Ethics It is no surprise to me that, in this time of comprised ethics and values, there are an ever increasing number of books and articles that stress the importance of ethics and values in everyday life. Ethics, ethical behaviour, and taking personal responsibility for choices carry even more importance in today's business world. It is with this in mind that I would like to share with you a few reflections on ethics to assist us maintain that high standard of thought, behaviour and negotiation styles. To help guide us along that route, here are four basic ideas for your consideration. 1. WHAT IS MEANT BY THE COMMON GOOD, AND WHAT ROLE DOES IT PLAY IN OUR DECISION MAKING? In all of our businesses, this question needs some deliberation. Generally, what is good for the "other", whether it be our customer, employees, spouse, family, etc., takes precedence over our own needs and desires. I think we all would agree that sometimes, in business, egos take precedence over good business practices and good relationship building. Ego can get in the way of truly providing service. We must ask ourselves if we are in business for ourselves, or to take our gift and talents to the workplace and in the spirit of service -strive to make a difference in the lives of those we serve. When our ego (i.e. needs) gets in the way of that service, the common good no longer is served. And as in any business, word spreads - and how do we combat a damaged reputation? Therefore, it is of the utmost importance to be truly "other focused" as a central factor in maintaining your ethical balance. Whether it is amongst ourselves, as business professionals, or in dealing with our customers, staff, etc., the question needs to be asked, "What can I do for you to get you to cooperate with me?" This simple question reflects the old adage that life is in the giving, not in the getting, and to the degree to give is to the degree you get. One can never go astray in putting other people's feelings, needs, and concerns ahead of our own. This concept of the common good needs some consideration before a decision is made. 2. THE CENTRAL IMPORTANCE OF COMMUNAL WISDOM It seems that in business today, we sometimes tend to be too narrowly focused to see a bigger picture. There is a tendency, on occasions, to see our way as the only way or our approach as the only approach. It seems necessary, if you're ever uncertain whether something you want to do is ethical, appropriate, or acceptable, to find colleagues, friends, etc. who you know are "for you" and bounce your choices off them. We need to have people around us who have no other agenda than to do what's right for us. Whether we agree or disagree, that type of advice is invaluable in helping to discern which path to follow. We need to be open to their perspectives, their honesty, and their genuine concern for us and our success. Any number of ethical issues, questions, and situations might easily be resolved by "tapping" the wisdom of those who have your best interest at heart. It certainly will cut the "learning curve" and keep you on better focused on your task. If you think about it, a few of us could have saved ourselves a lot of pain, agony, money, time, and effort, if we'd only asked for input of others and used it! 3. STAYING TRUE TO ONESELF AND YOUR VALUES Let it be stated up front that this statement is not to be interpreted as what I think and feel are always right or can be justified; but rather, we are the sum total of all that has gone before us in our lives. All the people, experiences, relationships, etc., that have been influential in the development of our value system, are part of us and must be taken into account in our decision making. Whether the influences were religious, ethnic, political, or cultural, they play a central role in the development of who we are as individuals, not to mention business people. That journey of life to this point has instilled into us our perceptions, attitudes, values and insights that have directed us as individuals and have been instrumental in the building of our businesses. If that journey has been on of positive influence, we must stay true to it. However, if our journey has had some negative influences, we will be challenged to determine whether that's the path we want to follow, or if we need an attitude check that may lead us to a more productive path. In general, we must stay true to the essence of those values, even though the variables may change. For example, the Constitution of the United States is the essence of law; how it is applied or amended is the variable. All businesses need a code of Ethics for the same reason. People need to know \"the essence" so they can apply it. Everyone speaks their own truth, but that doesn't make it "The Truth." We need to be in touch with our own values and yet be open to the fact that they are not absolute and need, at times, to be open to re-evaluation -and maybe even a new direction. 4. ALWAYS BEWARE OF THE ETHICS GAP What is the ethics gap? The gap is what I know about right from wrong and what I think it takes to be successful. Most people know right from wrong; however, when it comes to business, sometimes compromising those values can become a real "temptation." This gap is present in any situation, especially business. It's involved in how we work with customers, colleagues, staff, and even family. Everyone knows somebody who they prefer not to do business with, or refer business to on the basis of what's important to them. The real challenge is to diminish the size of the gap rather than hope to eradicate it altogether. How do we do that? We need to align our work values and principles with their personal values and principles and proceed accordingly. However, we can choose either a negative or a positive path to follow, based on whatever our values are and they effect those choices have on those around us. People must move slowly in analyzing their values and ethics, and then must choose which path to follow well. If we keep these four "paths" in mind for reflection when faced with an ethical and conflicting situation, they can't help but help us get pointed in the right direction, assisting us make the best possible decision. Frank C. Bucaro, is the author of two books, Taking the High Road: How to Succeed Ethically When Others Bend the Rules and What Happened to the Good Guys in the White Hats? Lessons in Ethical Leadership. http://www.negotiations.com/articles/ethical-negotiation/ Negotiation Conflict Styles by Calum Coburn Negotiation Styles Understanding the Five Negotiation Styles People often ask "which is the best negotiation style?" As with much management theory there is no single 'best' or 'right' approach. All five profiles of dealing with conflict are useful in different situations. Although we're capable of using all five, most of us tend to have one or two preferred negotiation conflict styles that we use unconsciously in most conflict situations. Why? Either because our preferred styles have worked for us in the past, or because of our temperament (nature) or because of our upbringing (nurture). So if you're involved in business negotiations, which negotiation styles are likely to reward you with the biggest profit prizes? This question will be answered later in this article. First lets visit each of these important conflict profile styles. The most popular way to divide the typical negotiation styles or approaches are: Competing (or Aggressive), Collaborating (or Cooperative), Avoiding, Compromise, Accommodating (Conceding). Most negotiators have one or two preferred negotiation styles. Ideal is to be able to choose to apply the most appropriate negotiation style to each type of negotiation, and to be able to switch negotiating style depending on who you are negotiating with and other important elements of your negotiation context. Compete (I win - You lose) Competitive style negotiators pursue their own needs - yes, even when this means others suffer. They usually don't want to cause others to suffer and lose, they are just so narrowly focused on their shorter term gains that they plunder obliviously through negotiations like a pirate. They often use whatever power and tactics they can muster, including their personality, position, economic threats, brand strength or size or market share. At its extreme negotiators call their behaviour aggressive or psychotic. When to use? When you need to act or get results quickly. Competition is critical when you are certain that something is not negotiable and immediate compliance is required. Competition can be an effective defense or counter balance to use against negotiators with a competitive conflict profile. We would recommend that you use a blended approach though, as both negotiation parties locking horns in a competitive battle can result in a spiraling deadlock. When you're buying or selling something as a once off (e.g. selling your own home or car to a stranger), then your negotiation will likely be more competitive than say if you were selling to a close friend or family member, or if you were in a business to business negotiation. If you're buying or selling a commodity product or service, and you have strong competition - look out, as you best get used to competing. What's the Danger? The difficulty with people who are high compete (which a large percentage of buyers are) is that competitive styles overuse competition. This means that the other party knows exactly what behaviour to expect and can prepare more easily. In a power imbalance negotiation, high compete behaviour is very likely to lead to deadlock - which will get you nowhere. They may also be more interested in "winning" rather than reaching an agreement. If you're recruiting a negotiator, a very low compete profile score would be something to be careful of. Some negotiators combine high compete with high avoid. These negotiators will compete first, and if they don't claim an easy scalp, they walk away from the negotiation table. Unchecked competition can leave business relationships in burning tatters. Those with accommodating profile styles tend to lose the most against competitive styles. So if a relationship is important to you, and if your market reputation is important, then be careful to curb your competition. When we feel victimized, we often plot our revenge. This often results in businesses living up to the letter, but not the spirit of a contract - claiming value wherever possible, and adding zero value. Self Defense The most important thing to remember is: Don't Cave In! Some people say that they make concessions in the face of a competitive negotiator demanding a concession - in order to create goodwill. Don't listen to these self deluders, they're bleeding profits. Appeasing competitive negotiators doesn't create goodwill - it just creates requests for more concessions. What's more, a competitive style negotiator will see you as weak, and come back for more. Restate your position firmly using strong language (not 'we'd like' or 'want', but rather: 'we require' or 'need') and never reward bullies. Accommodate (I Lose - You Win) The opposite of competing. For accommodating style negotiators, the relationship is everything. Accommodating profiles think that the route to winning people over is to give them what they want. They don't just give products and services, they are generous with information too. Accommodators are usually very well liked by their colleagues and opposite party negotiators When to use? When you or your company are at fault, repairing the relationship is critical, and if you have nothing else that would benefit the other side. i.e. an olive branch or gift to rebuild bridges. If you are in a very weak position then sometimes your best option is to give in gracefully. Think about it: if they can crush you, and they know it, what is likely to be the outcome if you resist? Yes, bring your own bandages. It may be worth (humbly) reminding them that you will both stand to lose if they put you out of business, and ask if they really want to push you out of that market. If you both intend to work together in the longer term, then refocus the negotiations on the longer term, thereby reminding the other side that their taking advantage of you now may hurt them in the future. What's the Danger? It is almost always a bad idea to accommodate when negotiating against high compete styles. With high compete negotiators your generosity will be seen as a sign of weakness to be taken advantage of. Giving away value early in the negotiation can leave you with a poor hand to play in the rest of the negotiation. With very little to offer, and relying upon the other side's generosity, you're gambling. Giving away value too easily too early can signal to your negotiation counterpart that you've very deep pockets, and your gift is just a taster of bigger and better gifts to come. To some negotiators, an accommodating style appears to promote harmonious relationships. What these accommodating profiles miss is the myriad of other options that create strong enduring relationships. Giving away the farm usually just creates one happy negotiator, and that's not you. Warning: The faulty thinking that puts accommodates into negotiation damage control is thinking that because the goal is unimportant to you, it must have little value to the other side. Remember to do your homework and by asking the value of your concession to the other party before making your concession. Self Defense When someone is offering you a gift at the negotiation table, do you humbly accept their generosity? Be careful, as theirs may be a proverbial 'Greek Gift' - i.e. they may be luring you into reciprocation, obliging you to give back something of greater value in return. So keep in mind the value of the item being given - the relative value to both sides. Make sure you don't give back something of disproportionately higher value in return. You also need to be careful that they are not an incompetent negotiator, making big concessions that jeopardizes the viability of their business, or agreeing a deal that their managers will later veto. If they go bust because they are giving away too much, you could both end up losing. Avoid (I Lose - You Lose) This is most often referred to as "passive aggressive". People who habitually use this style really dislike conflict. Rather than talk directly with you about the issue, avoid styles may instead try to take revenge without you knowing about it. The avoid style can be a typical reaction to high compete negotiators. Sellers will frequently call less often on high compete buyers (i.e. Avoiding Competitive buyers) - and may choose to invest marketing money and share their best ideas and prize promotions with non-avoid profiles. When to use? When the value of investing time to resolve the conflict outweighs the benefit; or if the issue under negotiation is trivial (trivial to both parties). Sometimes there is just not enough at stake to risk a difficult conflict situation. If there is a lot of emotion in a negotiation, it's pointless pushing through and hammering it out. Better to allow people to calm down first, let the testosterone hormone leave everyone's system first so that reason and rationality can reappear. At that point an avoid style is likely the most pragmatic alternative - suggest a timeout of 15-20 minutes. What to do when you're dragged into a negotiation unprepared? Under these circumstances, avoidance is probably the most sensible strategy. Either avoid the meeting, or avoid discussing the issues upon which you need to prepare. What's the Danger? Whoever has the greater urgency will usually end up with the short end of the avoidance stick. Stalling is a common sales tactics, when sales / the vendor knows that procurement needs their product or service yesterday. Conversely a buyer may hold out until the last day of the a quarter or month, knowing that the sales person needs to meet his or her target. So be careful about what information you reveal about the urgency of your need. When communication channels are cut off, you leave the other side to fill in the blanks. They may believe you need more time, or may think that you're no longer interested in a business relationship with them, resulting in their approaching your competition, or contemplating downsizing. Mutual resentment is likely to build up - leading to frosty impersonal relationships. Paradoxically, avoid profile negotiators are frequently seeking to avoid conflict - and their avoid style instead lands them in more conflict. When differences are eventually aired, emotions and negotiation positions are often more difficult and fixed than they need be. Self Defense Set clear expectations of timing early on in your negotiations. Best to be detailed in defining milestones with dates attached to each. If the other party is applying an avoid style, consider escalating the issue on one or both sides. Understand their decision making process and levels of responsibility. Having these insights can assist you in invalidating their reasons for avoiding, and will make your sharp questions more difficult to sidestep. Escalation options will also be clearer to you. If you have a good enough relationship, then agree a process on resolving differences. As John F. Kennedy was quoted as having said: "The time to repair the roof is when the sun is shining." Compromise (I Lose / Win Some - You Lose / Win Some) Compromising is the style that most people think of as negotiation, but in reality compromising is usually just haggling. Compromising often involves splitting the difference, usually resulting in an end position of about half way between both party's opening positions. In the absence of a good rationale or properly exchanged concessions, half way between the two positions seems "fair". What compromising ignores however, is that the people that take the most extreme positions tend to get more of what is on offer. When to use? When you are pushed for time and you are dealing with someone who you trust. They also need to be clear that it would not be in their best interest for them to "win" a cheap victory. Both parties win and lose - but make sure you win the right things and lose the right things. Meeting half way reduces strain on the relationship, but usually leaves precious gold on the table (and with the central banking cartel's gold suppression scheme losing its grip right now, every ounce of gold counts). When you have nothing left to offer, and this is the only way to seal the deal. i.e. a lousy situation. What's the Danger? When you use compromising as an excuse for not preparing properly. Without quality negotiation training, most negotiators wing it, and end up compromising. If the outcome of the negotiation is critical, then you should not compromise on things that you absolutely must have. One of the problems with compromising is: if you make concessions within your position with no strong rationale, the other party may assume that you are going to continue to make more concessions, and appeal to you using weak rationale. Whichever negotiator starts with the more ambitious opening position wins the compromise. So calculate early on who stands to gain if it comes down to compromises. If you get known for being a compromise styled negotiator, look out! Your trading partners will wise up to your negotiation style and they will start to make more and more extreme opening positions. Bigger opening positions result in greater chances of deadlocks. Compromises cheat both sides out of innovative solutions. Learn from collaborative styles by making it safe to explore options together. Invite the other side to join you in 'what if' frames to explore possibilities, without the danger of being tied to your idea. Self Defense Only retreat within your position when you have a solid rationale for doing so, and when you're being rewarded in another way. i.e. make a reasoned exchange. Trade across goals and interest. All too often negotiators try resolve 1 single goal at time, before moving on to the next tabled agenda item. Stay with the problem or opportunity for longer. Don't give in so easily to the temptation of splitting differences until you've explored other alternatives. If the other side starts with an extreme opening position, be sure to quickly bring them back to reality, or counter balance with your own extreme position. Caution: extreme positions can lead to drawn out dog fights that result in more deadlocks. Collaborate (I Win - You Win) Most people confuse "Win/Win" or the collaboration style with the compromising style. This is most definitely not the case. "Win/Win" is about making sure both parties have their needs met, and as much mutual value as can be created is created. "Win/Win" negotiators usually evolve through the other profiles, they grow into a collaborative negotiation style. This means collaborative profile negotiators can more easily revert to one or two of the other styles when pushed or when the situation calls for it. Collaborative profile negotiators are adamant that their needs must be met - and they acknowledge that the other party has needs that must be met too. Tragically, too many account managers are overly accommodating and compromising. Resulting in competitive style buyers claiming more than their fair share. When these same competitive style buyers come up against skilled collaborative style negotiators, the competitive styles blunt coercion methods don't get rewarded with concessions. Too many buyers are stretched and under tremendous time pressure, so temptation to compromise rather than invest time in collaborating wins out. Often referred to as 'expanding the pie', collaborative negotiators are willing to invest more time and energy in finding innovative solutions, feeling secure in the fact that there will be more value to share out later on. When to use? Under most circumstances collaboration is the primary style you should use for most goals in business to business negotiations. As mentioned briefly in the Compete section: if a relationship is important to you, and if your market reputation is important, if the other side needs to perform and not just exchange a standard product for cash, high risk (e.g. new market or new product or both), if there is a large amount of money at stake, then you are best advised to think about all the ways in which you can build a more trusting collaborative working relationship. If you need to understand the feelings and deeper interests or motivations of all negotiators, then collaboration is your best path. What's the Danger? Be careful not to collaborate with competitive style negotiators - unless they agree to and live up to your agreed (written or unwritten) rules of collaboration. Die hard competitive negotiators can be treated in transactional trading manner - e.g. "I'll only give you this if you give me that". When we share information we need to make sure that we share information at the same level of detail. Too much and we could be exploited - too little and the other side can lock up like a clam. Collaboration requires more time and needs to be at the right level. So if you're a vendor and your buyer doesn't have the authority or knowledge or won't invest the time, save your effort. Best to talk with them about your style of negotiation or build a relationship at another level of their organization. Same advice goes for buyers in reverse. Self Defense So when might you need to defend yourself against a Collaborative negotiator? If you have decided that it's not in your interest to use a collaborative style with a negotiator, then decide on your alternative style and flesh out what behaviour translates into. So a commodity supplier who suffers a great deal of competition in their market place will try to get their foot in your door. A wise procurement manager will be careful to not investing too much time, or give any time - unless there is value. Your time is short, so be careful who you collaborate with. Remember Before you negotiate, stop and ask yourself: What is my preferred style of negotiation? The Negotiation Experts will release our on-line graphical Negotiation Style Profile in 2010. In the interim. In the meantime, the generalist TKI profile is a reasonable conflict profile. Once you know your style, you've taken the first step to gaining flexibility in your negotiations. There is much you can do as a member of a negotiation team, if you know your fellow team members' profiles. Which of these 5 styles best describes your business client or vendor negotiation relationship? You may find it useful to allocate a percentage score to each style, and then ask yourself whether you're happy with the current styles balance. If not happy, then make a plan to migrate to your preferred styles. Don't blindly apply 1 negotiation style to your negotiation. Work through your list of goals in your concession strategy, and decide which issues are best to: collaborate, compete, compromise, avoid, accommodate. Finally - there's very seldom an escape from having to use a competitive style. At some point, you're going to need to do some claiming or sharing out the value you've created. So think carefully about which point in the negotiation you need to switch to competing. So if the other side compete too early, be prepared to pause the negotiation and have words ready to revert to another style. http://www.negotiations.com/articles/negotiation-conflict-profiles/ Full Disclosure of Assets If you are planning on entering into a prenuptial agreement before marriage, it's worth putting together a checklist of sorts. The first thing you have to look at is exactly what you are bringing to the marriage. All assets need to be included, as do the debts that you are carrying. Prenuptial agreements require full disclosure of all your assets. Anything hidden or not divulged, even by accident, can easily be challenged in court by your partner as an attempt to mislead about what your overall worth is. The two of you will make the final determination but typically everything you have brought into the relationship shall remain yours if the marriage ends. This is not a hard and fast rule, merely a recommendation. Many couples actually like to combine their savings accounts together upon marriage into one collective \"pot\". Important Inclusions You Must Have Make a list of the things that are important to you that you would like to see included in the agreement. Don't make the mistake of asking for items that may be regarded as ridiculous or frivolous. For example, don't request a certain amount of money if your partner is found to have cheated during the marriage. These are the types of things that the court is likely to strike out of the agreement before ever making it valid. Instead, focus on keeping family heirlooms, inheritances, special gifts, your retirement savings, assets targeted for your children from a previous relationship, spousal support, and life insurance benefits as just some of the high priority inclusions. These will make your quality of life much higher after experiencing a heavy mental and physical toll caused by your divorce. A Lawyer to Fit the Bill Find a lawyer who has experience in prenups and who can help steer you through the entire process. Both parties need to have their own legal representation, so make sure to choose well. One can choose from a reputable online resource for assistance or meet in person with a marital attorney in your city. The courts can also overturn an agreement if they feel that the representation used by either side was somehow lacking or inferior in one way or another. Keep in mind that it not wise to use the same lawyer as your spouse-to-be as that could create a conflict of interest down the road when things get a little messier and rationale discussions turned into heated arguments. The Nitty Gritty of the Contract While the lawyer is your choice, pick a time to sit down with your partner to discuss all the details of your intended agreement. This is something that you both have to be comfortable with and willingly enter the agreement on your accord, without outside pressure to form a contract. Once this is agreed upon, besides providing a full disclosure of your assets to come up with a fair division between the two parties, the agreement must be signed in the presence of notary public to make it official. http://www.createaprenup.com/prenuptial-agreement-checklist/