CHAPTER 3 Strategy and Tactics of Integrative Negotiation

一体化（整合型）谈判

(expanding the pie

增大蛋糕

)

Approach: a comparative view

Learning Objective

1.

2.

3.

Understand the relationship btwn Strategy & Tactics Remember and internalize the distinctive features of Integrative Negotiation, in comparison with those of Distributive Bargaining Develop the awareness of and capacity to applying the fundamentals of Integrative Negotiation for better outcomes of negotiation, including creating value, developing alternatives and applying objective criteria at the value-claiming stage.

Outline 1.

2.

3.

4.

5.

6.

Strategy & Tactics Integrative vs Distributive: Case illustrations Q&A exercise: Salary Negotiation Pair Work Case Studies Assignment: Discussion Questions

1 Strategy and Tactics

• Strategy (thought): overall guideline, indicating the direction we need to take from our wishes and needs to our objectives.

• Tactics (its formulation): a concrete line of action following after strategy. • The thought comes before the word.

1 Strategy and Tactics

2 Integrative vs Distributive

Warming-up Questions

1.

2.

3.

Do you believe in IN? Can you name some differences btwn IN & DN?

Why is the distinction in btwn so important?

Why is the distinction in btwn so important?

If you want to play well, you need to know the rules of the game

.

The Negotiators’ mental models are central to understanding how the negotiation game is defined. How parties understand the game is a critical determinant of how they play the game.

2 …Case illustrations

• Case illustrations

Customer Case 1 Storekeeper How much do you want for this brass dish?

Oh come on, it’s dented. I’ll give you $175.

Well, I could go to $200, but I would never pay anything like $500. Quote me a realistic price. This is a beautiful antique, isn’t it? I guess I could let it go for $500.

Really! I might consider a serious offer, but $175 certainly isn’t serious.

You drive a hard bargain, young lady. $425 cash, right now. $200.

It cost me a great deal more than that. Make me a serious offer.

Distributive negotiation

A’s goals and demands B’s goals and demands

Case 1 Graphically depicted

Remarks on case 1: Distributive  focus on one single issue (often, money).  Conflict dominated and relationship ignored or sacrificed.

 Myth: negotiation as a

fixed pie

perception.  Possible outcomes: win-lose, lose-lose (compromise), no agreement  Often common for one-off, low-value deals, e.g. buying items at a flea market where

haggling

is the accepted “game.”  Inefficient (a battle of will) AND ……?

Case 2 • Two men were

quarrel

ling in a library. One

want

s the window open and the other

want

s it closed. They

argue

back and forth about how much to leave it open

: a crack, halfway, three quarters of the way

. No satisfies them both.

solution

• The librarian enters. She

ask

s

why

he wants the window open: “ To get some fresh air .” She ask s the other

why

he wants it closed: “ To avoid the draft .” After thinking a minute, she opens wide a window in the next room, bringing in fresh air without a draft.

Integrative Negotiation

Negotiator A’s goals and strategies Negotiator B’s goals and strategies

Case 2 Integrative  win-win perception: both can win.  problem-solving, cooperative: focus on mutual

interests

(e.g. “care about”, “want”), and a potential

script

: What can I learn from this demand? (vs. How can I avoid accepting this demand?)  Multiple issues and multiple options: A position is just one possible option or a possible solution (e.g. a crack, halfway, three quarters of the way).

 positions not identical to interests  Asking questions of “why” and “why not” can help explore interests behind positions (e.g. “To get some fresh air.” “to avoid the draft.”)

Distributive Negotiation 1. little cooperation Integrative Negotiation 1. strong cooperation 2. mutual gain 2. what I gain is what you lose 3. win-lose 3. win-win

2 …Win-win revolution Popularized by the book

Getting to Yes. Negotiating Agreement Without Giving In

by Fisher, Ury, and Patton in the early 1980s. (1981, 1991, 1995) The focus shifted from battling over the division of the pie to the means of expanding it by

uncovering

and

reconciling

underlying interests.

Principled Negotiation

: Four key contributions (TBCed)

Principled Negotiation

people options interests criteria

Principled negotiation

：

4D

dig Options design Interests develop BATNA Criteria decide

2 …IN as a six-step procedure 1. State what you want.

2. Express how you feel.

3. Give the reasons that underlie your wants and feelings.

4. Communicate your understanding of the other person’s wants, feelings, and reasons.

5. Invent three or more possible solutions that enhance everyone’s outcomes.

6. Agree and shake hands on the solution that maximizes mutual benefits.

Classic Case-Scenario 1 • Two kids are squabbling over the last orange in the fridge. When Dad hears the ruckus, he goes into the kitchen and is sure he’s got the answer. He slices the fruit into equal halves and gives one to each kid. Surprising, no one is happy. Why? Because one kid just wanted the pulp, and the other just wanted the rind.

Classic case---Scenario 2 Recently two of my sons were squabbling over some apple pie, each insisting that he would have the larger slice. Neither would agree to an even split. So I suggested that one boy cut the pie any way he liked, and the other boy could choose the piece he wanted. This sounded fair to both of them, and they accepted. Each felt that he had gotten the square deal.

2. …Learning focus

Integrative negotiation is more appropriate for Business Negotiation and International Negotiation. YES! Then, What challenges? What are your concerns?....

Complexity & a myriad of Questions remain to be explored and answered (TBCed)

Questions to be explored • Is there a propensity for integrative tactics to be reciprocated?

• Is the reciprocation of integrative tactics related to the quality of the negotiated outcome? • Does the relationship btwn outcomes and the integrative tactics hold, irrespective of the social value orientation of the dyad, or do dyads of different kinds achieve high-quality outcomes in different ways?

• …..

3 Q&A exercise: Salary Negotiation • Question and answer?

Distributive or Integrative?

Salary Negotiation • •

Recruiter:

There are four aspects that actually go together. There is the number of years of contract and the vacation, the removal can be separated out from the package. So if, if we keep the package at six thousand for you and we have 60% removal costs, that would be additional.

Applicant:

No I'd need more than 60% I was thinking 80% actually.

•

Recruiter:

What if we kept it at 60% and upped it to $8000 for the package?

•

Applicant:

I just want to get clear in my head about the vacation. Like I said I'm not prepared to relocate to Canberra unless I get more than the two weeks.

•

Recruiter:

Well it depends how many years you're with us. The shorter the time that you were with us, I would expect the less time you would get in vacation. If you were going to be with us for six years say you'd get three weeks holiday.

•

Applicant:

I would be prepared to go to Canberra for six years only for six weeks vacation.

• •

Applicant:

I think it's a good starting point. It obviously needs some work. My contract can be longer than four years; I think that's negotiable. Canberra if it's really important to you.

Recruiter:

The thing with Canberra is that we' ve got three positions there. How open are you to challenge in new areas? Because we recognize that your strategic skills are applicable across any broad range and you have demonstrated very high levels of achievement in the strategic areas. We're not looking at the strategic abilities in HR, we're looking at your strategic abilities as a separate set of skills and you've already demonstrated those abilities in HR to a very high degree, which is why you are sitting here having this conversation with me. We'd like to take those skills and apply them to a new area.

• • •

Recruiter:

So if we were to do say three weeks vacation, how many years contract would you agree on?

Applicant:

Perhaps if we get back to the package. I'd be prepared to go to Canberra for 6 years, if that's important to you. . .

Recruiter:

Well that's related into vacation, and I know vacation's important to you because of family commitments. So we could even look at four years and three weeks vacation each year for that time and include the airfares in an $8000 package with 60% removal costs on top of that.

Answer

(

word file

)

4. Pair work: Problem-solving task

Direction

: Please jointly work out a solution and report to the class.

THE CASE Suppose that

you are the seller and your partner is the purchaser. The seller’s position is stated as selling a certain number of sewing machines at X dollars per unit whereas the purchaser’s position is expressed as receiving a certain number of sewing machines within a month’s time at X minus $30 dollars per unit.

5. Case Studies: IBM in India

6. Assignment

Case study: Geely&Volvo Merger

• • • • • e.g. China's lucky man bags Volvo.

Economist

, 00130613, 8/7/2010, 册 396, 发行 8694 数据库

:

Business Source Complete www.sdu.edu.cn

Ebscohost Geely may be ready to take a run at Volvo. Automotive News, 00051551, 9/28/2009, 册 6379 84, 发行 Geely's market share of passenger vehicles in China, 2005-2009

6. ---Discussion Questions

1. What are some conditions that may be conducive to achieving integrative agreements?

2. What can you do to bring about these conditions?

3. What kinds of processes (or communications) are most likely to produce integrative agreements? Are different processes called for under such different circumstances as relatively simple or complex negotiations?

4. How might you encourage an opponent to resist making concessions without risking the possibility of an impasse?

• NOW, the chapter content is coming.

The Titles 1. Introduction. 2. An Overview of the Integrative Negotiation (IN) Process.

3. Key Steps in the IN.

4. Factors that Facilitate Successful IN.

5. Why IN is Difficult to Achieve. 6. Chapter Summary.

1. Introduction (p.71) • The fundamental structure of an IN situation

allow

s

both sides

to achieve

their objectives

.

Then, questions to explore in this chapter: What is the fundamental structure of IN? How to go about it (What are the rules of the game)? What are our efforts directed towards? What tactics are amenable to successful IN? ……

What makes IN Different?

For a negotiation to be

characterize

d as integrative, negotiators must

also

: (p.71)  Focus on commonalities rather than differences  Attempt to address needs and interests, not positions.

 Commit to meeting the needs of

all

parties involved  Exchange information and ideas 

Invent

 options for mutual gain (creativity) Use objective criteria for standards of performance

2. An Overview of the Integrative Negotiation Process (p.72) • Creating a Free Flow of Information.

• Attempting to Understand the Other Negotiator’s Real Needs and Objectives.

• Emphasizing the Commonalities between the Parties and Minimizing the Differences.

• Searching for Solutions That Meet the Needs and Objectives of Both Sides.

3. Key Steps in the IN process There are major steps in the IN process (p.75): 1.

2.

3.

4.

Identify and Define the Problem.

Understand the Problem Fully—Identify Interests and Needs.

Generate Alternative Solutions.

Evaluate and Select Alternatives.

3. Key Steps in the IN process •

Figure 3.1

Creating and Claiming Value 主张价值 and the Pareto Efficient Frontier （ p.75) 帕累托

Increasing Value to Buyer Claiming Value Creating Value Pareto efficient frontier Increasing Value to Seller

3.1 Identify and Define the Problem （ pp.75-8) • Define the problem in a way That is Mutually Acceptable to both sides.

• State the Problem with an Eye toward Practicality and Comprehensiveness.

• State the Problem as a Goal and Identify the Obstacles to Attaining This Goal.

• Depersonalize the Problem.

• Separate the Problem Definition from the Search for Solutions.

Define the problem in a way That is Mutually Acceptable to both sides (p.76)

State the Problem with an Eye toward Practicality and Comprehensiveness

State the Problem as a Goal and Identify the Obstacles to Attaining This Goal

Depersonalize the Problem

Separate the Problem Definition from the Search for Solutions

3.2 Understand the Problem Fully—Identify Interests and Needs (pp.78-82) • Identifying interests is a critical step in the integrative negotiation process. Interests are the underlying concerns, needs, desires, or fears that motivate a negotiator to take particular position.

• Bringing their interests in principles to the surface will lead the parties to discuss explicitly the principles at stake and to invent solutions consistent with them.

3.2 Understand the Problem Fully—Identify Interests and Needs (pp.78-82) • Types of Interests • Some Observations 观察 on Interests

Types of Interests (p.79) • Substantive interests 实质性利益 • Process interests 与谈判过程相关的利益 • Relationship interests 双方关系方面的利益 • Interests in principle 原则方面的利益

Some Observations on Interests （ p.81)  There is almost always more than one type of interest underlying a negotiation  Parties can have different types of interest at stake  Interests often stem from deeply rooted human needs or values.

 Interests can change.

 Surfacing interests.

 Surfacing interests is not always easy or to one’s best advantage.

 Focusing interests can be harmful.

3.3 Generate Alternative Solutions Two techniques  Inventing Options: Generating Alternative Solutions by Redefining the Problem or Problem Set  Generate Alternative Solutions to the Problem as Given

3.3 Generate Alternative Solutions-1 Generating Alternative Solutions by Redefining the Problem or Problem Set (p.82)  Expand the Pie 增加资源法  Logroll “ 切割法”  Use Nonspecific Compensation “ 挂钩战术”  Cut the Costs for Compliance “ 奖（罚）战术”  Find a Bridge Solution 搭架桥

Expanding the Pie    How can both parties get what they are demanding?

Is there a resource shortage?

How can resources be expanded to meet the demands of both sides?

Logrolling  What issues are of higher and lower priority to me?

 What issues are of higher and lower priority to the other?

 Are issues of high priority to me low for the other, and vice versa?

 Can I “unbundled” an issue---i.e. make one larger issue into two or more smaller ones---that can then be logrolled?

 What are things that would be inexpensive for me to give and valuable for the other to get that might be used in logrolling?

Nonspecific Compensation  What are the other party’s goals and values?

 What could I do for the other side that would make them happy and have them allow me to get my way on the key issue?

 What are things that would be inexpensive for me to give and valuable for the other to get that might be used as nonspecific compensation?

Cost Cutting   What risks and costs does my proposal create for the other?

What can I do to minimize the other’s risks and costs so that they would be more willing to go along?

Bridging  What are the other’s real underlying interests and needs?

 What are my own real underlying interests and needs?

 What are the higher and lower priorities for each of us in our underlying interests and needs?

 Can we invent a solution that meets both sides’ relative priorities and their underlying interests and needs?

3.3 Generate Alternative Solutions-2     Generate Alternative Solutions to the Problem as Given Brainstorming Surveys Electronic Brainstorming Summary

Logrolling 协力使通过 • in US politics 美国政治 the practice of agreeing with somebody to vote to pass a law that they support so that they will later vote to pass a law that you support 互投赞成票（ 促使议案通过 ）

Brainstorming The success of brainstorming depends on the amount of intellectual stimulation that occurs as different ideas are generated. The following rules should be observed: 1. Avoiding judging or evaluating solutions.

2. Separate people from the problem.

3. Be exhaustive in the brainstorming process.

4. Ask outsiders.

Summary-1 立场陈述

Firm flexibility

recognizes one or two fundamental interests or principles, besides a wide variety of positions, possible solutions, or secondary issues therein. Thus, negotiators need to be able to signal to TOS the positions on which they are

firm

and the positions on which they are willing to be

flexible

. Several (Eight) tactics to communicate

firm flexibility

to the other negotiator (suggested by Pruitt 1983, Fisher et al 1991): TBCed

Summary-2     Use

competitive tactics

to establish and defend basic interests. State what you want clearly.

Send signals of flexibility and concern about your willingness to address TOS’ interests. Indicate a willingness to change your proposals if a way can be found to bridge both negotiators’ interests. Demonstrate problem solving capacity.

Summary-3  Maintain open communication channels.



Re

affirm what is most important to you thru the use of

clear strategies

.



Re

examine any aspects of your interests that are clearly unacceptable to TOS and determine if they are still essential to you.

 Separate and isolate

contentious tactics

from problem-solving behavior to manage the contentious behavior.

3.4 Evaluate and Select Alternatives-1 • Narrow the Range of Solution Options • Evaluate Solutions on the Basis of Quality, Standards, and Acceptability.

• Agree to the Criteria in Advance of Evaluating Options • Be Willing to Justify Personal Preferences.

• Be Alert to the Influence of Intangibles in Selecting Options.

3.4 Evaluate and Select Alternatives-2 （ p.89) • Use Subgroup to Evaluate Complex Options • Take Time Out to Cool Off • Explore Different Ways to Logroll • Keep Decisions Tentative and Conditional until All Aspects of the Final Process • Minimize Formality and Record Keeping until Agreement are Closed

4. Factors that Facilitate Successful Integrative Negotiation (p.92) • Some Common Objective or Goal • Faith in One’s Problem-Solving Ability (p.93) • A Belief in the Validity 效度 of One’s Own Position and the Other’s Perceptive (p.93) • The Motivation 动机 and Commitment 诚意 to Work Together • Trust • Clear and Accurate Communication • An Understanding of the Dynamics of IN

5. Why Integrative Negotiation is Difficult to Achieve ?

（ p.97) • The primary reason negotiators do not pursue integrative agreements is that they fail to perceive a situation as having integrative potential and are primarily motivated to achieve outcomes that satisfy their own needs. Three additional factors:  The history of relationship between the parties  A belief that an issue can only be resolved distributively  The mixed-motive nature of most negotiating situations

6. Chapter Summary • In this chapter, we have reviewed the strategy and tactics of integrative negotiation. The fundamental structure of integrative negotiation is one within which the parties are able to define goals that allow both sides to achieve their objectives.

• We began with an overview of the process, note that successful negotiation requires several processes. Then we discussed various factors that facilitated successful integrative negotiation.