Chapter 1 The Nature of Negotiation

“If you want to play well, you need to know t

he rules of the game.”

What is your comment on the observation?

 Chapter 1 The Nature of Negotiation
Learning objectives (LO)
1. Understand the nature of negotiation and
characteristics of a negotiation situation
2. Appreciate elements essential to a negotiation
situation.
3. Extend and apply the fundamentals of negotiation
to the nature of business negotiation (Biz
Negotiation) and IB Negotiation.
4. Blueprint your course ends and means
Chapter 1 The Nature of Negotiation

1. Negotiation
2. Domestic Negotiation
3. Int’l Negotiation
4. Assignment
 1 Negotiation

1.1 Characteristics of a negotiation situation

Negotiation protocol in your mind?
cf. Some definitions
1.2 Elements Essential to negotiation
• Interdependence
• Mutual Adjustment
• Value Claiming and Value Creation
• Conflict
• Effective Conflict Management
 1.1 What Characterizes a negotiation situation
Exercise
Directions: Below write a list of the typical things that oc
cur when two people negotiate. We are interested in t
he common events that occur in a typical encounter w
here two people negotiate over several issues. Start w
ith the first time the two parties sit down to negotiate,
and end with the successful settlement. Include about
20 actions or events and put them in the order in whic
h they occur. Please complete your negotiation prot
ocols, i.e. the list of sequential actions or events appr
opriate to negotiation within 30 minutes. (TBC-ed)
 1.1 Some Definitions of Negotiation
Negotiation is a voluntary process of give and take wh
ere both parties modify their offers and expectations in
order to come closer to each other. (Ghauri & Usunier,
2003:3)
Negotiation is an interpersonal decision-making proces
s by which two or more people make mutual decisions c
oncerning the allocation of scarce resources (Pruitt & C
arnevale, 1993)
Negotiation is a process where individuals with shared
and opposed interests who wish to come to an agreemen
t attempt to work out a settlement (D.W. Johnson & F.P
. Johnson, 2002)
 1.2 Elements Essential to negotiation
Bear these key concepts in mind and manage them
properly
1. Interdependence: Game, Negotiation Dance,
Minuet
2. Mutual Adjustment: give and take, tradeoff,
concession
3. Value Claiming and Value Creation: pie-slicing
and pie-expanding
4. Conflict
5. Effective Conflict Management
1.2 ---Effective Conflict Management

1.2.1 A Self-Assessment

1.2.2 The Dual Concerns Model

 1.2.1 A Self-assessment

1. What are your attitudes towards conflict?

2. Your perspective towards dispute settlement/conflict
resolution?
3. How do you in dispute (disputants) respond?
4. How people in dispute respond?
1.2.2 Conflict Management: Two mental
models
1.2.2 Conflict Management: Two mental models
Distributive approach win-lose battles, aimed at
maximizing personal gain competitive environments that
encourage forcing, as disputants attempt to wrestle
concessions from each other toward an agreement most
favorable to oneself. (Other terms and labels?)
Integrative approach mutual problem solving, aimed at
maximizing joint outcomes cooperative environments
where disputants have a stake in maintaining ongoing
positive relationships with each other. These negotiations
consist of listening to each other’s perceived needs and
underlying interests, communicating understanding, and
generating creative solutions that attend to each other’s
concerns. (Other terms and labels?)
 1.2.2 Effective Conflict Management

• Figure 1.3 The dual concerns model

Concern about other’s outcomes

Problem solving
Yielding
(collaborating, integrating)
(accommodating,
Obliging)
(compromising)

Inaction Contending (competing, dominating)

(avoiding)

Concern about own outcomes (assertive)

 1.2.2 Effective Conflict Management

• Figure 1.4 Styles of Handling Interpersonal conflict

and Situations Where They are Appropriate or
inappropriate (p. 26)
 2 Domestic Negotiation

Generally, the parties to domestic negotiation in any

country have:
• Same culture
• Same language
• People trust each other easily
• Often done by individuals (esp. in Western countries)
 2 Domestic Negotiation: case

• It’s Tuesday afternoon, you just got back from lunch,

and you find you have a voice mail message from one
of your customers. You closed a deal with them about
six months ago---agreeing on price, terms, service,
volume, and length of contract---and the deal’s due to
be re-negotiated six months from now. But in his
message the customer says that he’s being pushed hard
by management to reduce costs and he wants additional
5 percent off the price.
What would you respond?
 3. Int’l Negotiation
Generally, int’l negotiation means:
• Btwn teams, not individuals
• TOS is from a different culture
• Interpreters & translators are usually used
• Btwn large corporations
• Take much time to know and trust one another
• High stakes
• A high rate of failures reported
• Professional skills highly needed
And ????
What are the individual skills you need in such team i
nt’l negotiations?
 Classroom Activity: Debate

Topic: Domestic negotiation is always easier t

han international negotiation.
Pros:
Cons:
 4 Assignments

1. Submit/Upload a sheet of chpt-1 questions: language-

and content-wise (Compulsory)
2. Preview Chapter 2 (pp.32-69)
Note: Submit/Upload a sheet of chpt-1 questions:
language- and content-wise (Optional)
3. Questions for you to consider:
• How do people’ expectations about an interaction
affect their behavior?
• How these kinds of efforts to frame a conflict
contribute to successful settlement?
 5 Supplementary Readings

• Ruth A. Wienclaw (2008), Negotiations. R

etrieved September 12, 2010, from EBSC
O Online Database Business Source Com
plete. http://search.ebscohost.
• Kathleen M. O’Connor and Ann A. Adams.
What novices think about negotiation: A co
ntent analysis of scripts. (Research Repor
t). Negotiation Journal, April 1999: 135-14
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