Leadership negotiation. Summary chapter 1

Summary Chapter 1
The nature of negotiation

In this chapter, the authors examine the negotiation process. Various examples show how negotiation permeates our daily lives. The four key elements of the negotiation process are:

 Managing interdependence
o Parties understanding the ways they are dependent on each other to attain their goals

 Engaging in mutual adjustments
o Goal adjustment in order to craft agreement satisfactory to both parties

 Creating value
o Win-win outcome

 Managing conflict
o Involving strategies to maximize benefits of conflict and limit its costs

Leadership negotiation. Summary chapter 2

Summary Chapter 2
Strategy and Tactics of Distributive Bargaining

In this chapter, the authors describe the strategy and tactics of distributive bargaining. Distributive bargaining begins with setting opening, target, and resistance points. A set of items to be negotiated is called a bargaining mix. Each item can have opening, target, and resistance points.

Two broad efforts describe the options for a negotiator to achieve a successful resolution; to influence the other party’s belief about what is possible, and to learn as much as possible about the other party’s position, particular ly about their resistance points. The negotiator’s goal is to reach a final settlement as close as possible to the other party’s resistance point.

Distributive bargaining is basically a conflict situation wherein parties seek their own advantage. Effective distributive bargaining is a process that requires careful planning, strong execution, and constant monitoring of the other party’s reactions.

Leadership negotiation. Summary chapter 3

Summary Chapter 3
Strategy and Tactics of Integrative Negotiation

In this chapter, the authors describe the strategy and tactics of integrative negotiation. Integrative negotiation is the process of defining negotiation goals and engaging in a process that allows both parties to maximize their objectives. Successful integrative negotiation requires several processes;
‐ Parties must understand each other’s true needs and objectives
‐ They must create a free flow of information and open exchange of ideas
‐ Focus on similarities
‐ Search for solutions meeting the goals of both sides

The four key steps in the integrative negotiation process are;
‐ Identifying and defining the problem
‐ Identifying interests and needs
‐ Generating alternative solutions
‐ Evaluating and selecting alternatives

Factors that facilitate successful integrative negotiation are;
‐ Common goals and objectives
‐ Confidence in their problem-solving ability
‐ Belief that the other party’s needs are real
‐ Commitment to make their relationship productive
‐ Trust each other
‐ Clear communication to understand the other party’s needs
‐ Understand the dynamics of integrative negotiations
Integrative negotiation is not easy. It takes a lot of hard work to create the right conditions for the process to end successfully.

From my personal experience in business, clear communications about common goals and objectives as well as trust in the other party are two essential components of successful integrative negotiation.

Leadership negotiation. Summary Chapter 4

Summary Chapter 4
Negotiation: Strategy and Planning

In this chapter, the authors discuss what negotiators should do before opening negotiations. They suggest that effective planning and target setting are essential to achieving objectives.

Consequences of insufficient planning include:
• Negotiators fail to set clear objectives that serve as benchmarks for evaluating offers
• Negotiators may not understand their strengths and weaknesses
• Negotiators cannot depend only on being clever and articulate

The discussion of strategy and planning starts by exploring the process of strategy development, starting with the negotiators goals and objectives. The resulting planning roadmap is described as follows;
1. Understand the key issues to be resolved in the upcoming negotiations
From analysis, research, experience, and consultation with experts
2. Assemble all the issues together and understand the complexity of the bargaining mix
Prioritize the issues and determine which issues are linked or separate
3. Understand the key interests at stake that underlie the issues
Interests may be substantive, process-based, and relationship-based
4. Define the limits and alternatives (When do we away, when do we present other deals)
Establish two clear points: Resistance and alternative points
5. Clarify the targets and the opening points (Where do we begin the discussion)
Define a specific target point and the asking price, understand trade-offs
6. Understand my constituents and what do they expect of me
Assess all the key parties by completing a "field analysis"
7. Understand the other party ("Know your enemy as well as you know yourself", Sun Tsu)
Understand the other party’s resources, interests, resistance points, strategy, etc
8. Plan the process by which I will sell my ideas to the other party
Present a clear and compelling case and counter arguments effectively
9. Define the protocol (Agenda, who will be present, where and when do we negotiate)
10.Design a process to track and document negotiations and to understand whether a good agreement has been reached

The plan presented above may need to be modified as discussions proceed but the absence of such a plan will increase the chances of failure. From my own experience in project management, effective planning is indeed an element of success.

Leadership negotiation. Summary chapter 5

Summary Chapter 5
Perception, Cognition, and Emotion

In this chapter, the authors describe how perception, cognition, and emotion are the basic building blocks of all social encounters, including negotiation. Perceptual distortions include four types; stereotyping, halo effect, selective perception, and projection. Framing also influences perceptions in negotiation. Framing is defined as "the subjective mechanism through which people evaluate and make sense of situations, leading them to pursue or avoid subsequent actions".

Cognitive biases tend to impede negotiator performance and include;
‐ Irrational escalation
‐ Mythical fixed-pie
‐ Anchoring & Adjust
‐ Issue framing
‐ Info availability
‐ Winner’s curse
‐ Overconfidence
‐ Law of small numbers
‐ Self-serving biases
‐ Endowment effect
‐ Ignoring other’s cognitions
‐ Reactive devaluation

The role of mood and emotion has been researched extensively during the last decade, according to the author. The difference between mood and emotion is based on three characteristics, specificity, intensity, and duration. Negotiations create both positive and negative emotions which. in turn, influence outcomes.

From my personal experience in negotiating contracts, for example, it is helpful when:
‐ both sides have similar frames that can adjust as negotiations evolve
‐ irrational escalation of commitments is avoided, no matter how much a positive outcome is desired
‐ keeping a realistic view of the endowment effect
‐ positive feelings are maintained throughout the negotiation

If these points are kept in mind, a successful outcome, or "win-win" for both parties is more likely.

Leadership negotiation. Summary chapter 6

Summary Chapter 6
Communication

Negotiation is another form of interpersonal communication. Verbal and non-verbal processes are critical to achieving negotiation goals and to resolving conflicts.

In this chapter, the authors examine the process by which negotiators communicate their respective interests, positions, and goals. The chapter describes what is communicated and how people communicate during negotiations. One section in the chapter offers ways to improve communication in negotiation; some of these are;

‐ The use of questions
‐ Passive and active listening
‐ Acknowledgement
‐ Role reversal

If these points are kept in mind, a successful outcome, or "win-win" for both parties is more likely. From my own experience, the ability to communicate, that is, engage the other party is essential to a good outcome. The careful use of humor, or better said, displaying a sense of humor often "breaks the ice" and facilitates the on-going discussion.

Leadership negotiation. Summary Chapter 7

Summary Chapter 7
Negotiation – Finding and using negotiation power

This chapter explains the nature of power in negotiation. "Power over’ suggests domination and coercion. "Power with" suggests collaboration and joint development of goals and objectives and is a critical to successful integrative negotiation.

There are four sources of power;
• Informational (information and expertise)
• Personal (psychological orientation, cognitive, motivational, moral, and dispositions)
• Position-based (legitimate power and resource and control)
• Relationship-based (goal interdependence and referent power)
• Contextual (availability of BATNAs, agents, culture)

Power can be elusive and fleeting in negotiation and is only the capacity to influence.

From my personal experience I believe power should be used wisely, that is, it is better to take a long-term view of a business relationship. Exercising power to gain a short-term advantage may become costly in terms of future cooperation and influence. A cost-effective negotiation outcome is usually a win-win outcome.