Advanced Integrative Negotiation - Session 3

Vocabulary and key concepts from Professor Nicholas Pearce's lecture on Advanced Integrative Negotiation, covering team dynamics, contingency contracts, and post-settlement settlements.

3 Lessons from the office clip

• Showed up with 3 people vs 2

  • Social proof

• Knowledge of counterpart Batna

The clip demonstrated negotiation tactics such as the power of bringing more people to create social pressure, leveraging social proof through group dynamics, and understanding the Best Alternative to a Negotiated Agreement (BATNA) of the counterpart to strengthen one's position.

Negotiating as a team benefits

• Create Additional Value

• Claim more value

Risks of team-based negotiating

• False consensus effect

• Potential for groupthink

• Social loafing

• No unified front

• Challenging to develop and execute a strategy

False consensus effect

When people think their own opinions or behaviors are more common or widely shared than they actually are.

Social loafing

When people put in less effort in a group because they feel less personally responsible.

5 Steps to optimize team performance

Step 1: Individual preparation (mitigates groupthink)

Step 2: Fully share the individual info with the group

Step 3: During the meeting, clarify facts & information (mitigate false consensus)

Step 4: Develop your collective strategy explicitly

• What role to play

• Where to concede

• Batna

• Reservation point

• Scoring system

Step 5: Simulate the negotiation

Pareto Efficient Frontier

The set of possible agreements where no party can gain more without another party losing something.

MESO

Multiple Equivalent Simultaneous Offers (MESOs) — A negotiation strategy where you give the other side several different offers at the same time that are all equally good for you.

Contingency Contracts

Agreements that make the final terms depend on future events or performance, often used when parties disagree about what will happen.

Contingency Contracts help by

• getting around a negative ZOPA

• Diagnosing honesty

• Allows for flexibility

• Motivating

• Hedge Risk

ZOPA

The Zone of Possible Agreement; the range in a negotiation where both parties’ minimum acceptable terms overlap, making a deal possible.

Limitations of Contingency Contracts

Make sure the contingency is enforceable

• Future events have to be observable, objective, and measurable – must be impervious to covert manipulation

• avoid contingency contracts when: • You can’t afford to lose • Other side has more information than you • No future relationship with the other party

Do contingency contracts create value?

No, they increase the subjective expected value, which can help close the deal

PSSs. What they are and Why

• Post-settlement settlements (PSSs) are settlements that are reached after the initial agreement is signed

• The goal is to seek out Pareto Improvement

Why do people really do PSSs

Post-settlement settlements (PSSs) are useful because the initial agreement proves the parties can cooperate, lowers anxiety by giving both sides a guaranteed fallback, and creates room for more honest interest-sharing and creative impro vements.

Dispute resolution vs Deal making

Dispute Resolution

• Backward looking

• Position-based

• Adversarial

Deal Making

• forward-looking

• interest-based

• Collaborative

Dispute

When a claim has been made by one party and rejected by the other party

• Goal is to minimize loss

• Batnas are often linked

• Anger

• Misunderstandings

4 Obstacles during Dispute Resolution

• They are wrong

• Don’t lose or loss framing

• Anger

• If I’m going down, you’re going down with me

Obstacle 1: They are wrong

• Naive realism

  • the belief that we see the reality as it really is – objectively & bias-free

  • If others deviate from my views despite having those facts, they are biased, lazy, stupid, or just wrong

Obstacle 2: Don’t lose

Loss aversion or framing can lead to:

• anxiety

• avoidance

• irrational intensity

Obstacle #3: Anger

People come in with angry tones in dispute resolutions

Obstacle #4: I am taking you down with me

People are willing to lose out of anger

PRI

Power Right Interests

Interests

• Maximize joint gains and/or minimize joint losses

• Minimize costs

• Increase relations

• Negotiation and mediation

• Advantages of interests (vs. rights or power)

  • Minimizes costs, such as time, energy, and legal expenses

  • Produces integrative agreements and maximizes joint gain

  • Increases satisfaction with the agreement and relationship

  • Resolves the underlying problem

    • Leads to less recurrence and increased likelihood of adherence

    • Is easiest to enforce

• The pursuit of rights and power often ends up looking like a game of chicken

Rights

• Focus on independent standards of legality

• Backward-looking focus, emphasis on blame

• Hard to expand the pie!

• Litigation or arbitration (Binding)

Power

• Fueled by force/coercion

• Impose costs on the other party to gain compliance

• Hard to expand pie

• use threats or coercion

• When to resort to rights or power

• When the other party won’t negotiate

  • But quickly transition back to a focus on interests

• When at an impasse and all interest-based options have been exhausted

• When sending a broader message

  • If someone seriously violates company norms, policies, or procedures

  • If letting it slide would undermine your authority or potentially poison the culture

During the conflict make sure to:

1. resist the urge to open with denial

2. Acknowledge understanding, not fault

3. Start from right/power to interests

Last resort in conflict resolution

Make a threat

• willing to follow through

• Target interests

• Save face

• Be exact and clear

What are agents?

• Agents negotiate as designated representatives of principals

Using agents adds ____

Complexity

Advantages of agents

• Saves time

• Provides expert or specialized knowledge

  • Substance, such as tax law or local real-estate market conditions

  • Process, such as levers for creating and claiming value

• Offers special influence

  • Networks, connections, and clout

• Provides emotional detachment

  • Helpful in emotionally charged situations, such as a contentious divorce

• Gives tactical flexibility

  • Agent can be obnoxious, use ratification, or get permission from third parties

• Allows face saving

  • If the deal goes sour, you can fire the agent and start fresh

Disadvantages of agents

• Competing interests

  • Compensation

  • Information leakage

• Financial Exposure

  • Smaller ZOPA

• Complexity

  • Takes time

When is no deal a good deal

1. When Batna is better

2. When theres a negative zopa

3. When there a trust concerns

When can’t you lie

• Knowing misrepresentation of a material fact that leads to action

Alternative strategies to lying

• Delay

• Transparent redirection to interests

When suspecting lying

• Be prepared for the topic

• Use tools from course like contingency

• Dont lie back!

What is a coalition?

• A partnership of two or more diverse, originally independent parties to achieve a common purpose within the context of a larger group.

Coalition allows:

• Brings more expertise and resources

• Can lead to solidarity

3 types of power in coaltions

1. Structural

2. Situational

3. Relational power

What type of competence is important

Perceived

Credibility based on:

1. Trustworthiness

2. Likability

3. Competence

Competence Matrix

Cold + incompetent = Disgust

Cold + competent = Distrust/Envy

Warm + incompetent = Pity

Warm + Competent = Respect

Alice Eagly created the

Double bind

• According to Alice Eagly’s role congruity theory, women leaders can face a double bind because they are expected to be both warm and communal as women, but also assertive and dominant as leaders; acting too “leader-like” can make them seem unlikeable, while acting too “woman-like” can make them seem less competent.

The Teddy Bear Effect

Teddy Bear Effect The finding that Black male leaders with more baby-faced features are often evaluated more positively and associated with better career outcomes because their appearance is seen as less threatening and more warm.

Livingston & Pearce Teddy Bear Effect Study A 2009 study showing that baby-facedness was positively correlated with compensation, salary, ranking, and revenue for Black CEOs, but negatively correlated with those outcomes for White CEOs.

Negotiation Strategies

1. Competing

2. Collaborating

3. Compromising

4. Avoiding

5. Accomodating

Avoiding

Avoiding strategy A negotiation style where someone avoids conflict or delays direct confrontation instead of actively engaging in the dispute.

• Strengths

  • Can show tact and diplomacy

  • Can reduce tension in emotional situations

  • Can prevent unnecessary conflict

• Weaknesses

  • Can miss chances to negotiate

  • Can delay solving the problem

  • Can seem like you do not care about reaching a resolution

Competing

Competing strategy A negotiation style where someone focuses strongly on achieving their own goals, often while limiting or ignoring the other party’s goals.

• Strengths

  • Comfortable and assertive at the negotiating table

  • Useful in high-stakes or time-sensitive situations where winning is necessary

• Weaknesses

  • Can make negotiations feel zero-sum

  • May miss creative trade-offs that could create more value

  • Often undervalues non-quantitative issues

  • Can damage relationships with aggressive tactics

Accomodating

Accommodating strategy A negotiation style where someone focuses strongly on the other party’s goals while placing less emphasis on their own goals.

• Strengths

  • Sensitive to others’ emotions and nonverbal cues

  • Builds goodwill by caring about other people’s problems

  • Good at managing negotiation teams with different interests

• Weaknesses

  • May focus too much on the relationship side of negotiation

  • Can be vulnerable to competitive negotiators

  • May create resentment over time if others take advantage of their flexibility

Compromising

Compromising strategy A negotiation style where someone has a balanced, moderate concern for both their own goals and the other party’s goals.

• Strengths

  • Eager to reach agreement based on fairness

  • Helpful when time is short or the stakes are small

  • Comes across as reasonable and relationship-oriented

• Weaknesses

  • May rush the process or concede too quickly

  • Can weaken value creation by missing integrative trade-offs

  • Can weaken value claiming when the stakes are high

Collaborating

Collaborative strategy A negotiation style where someone has a high concern for both their own goals and the other party’s goals.

• Strengths

  • Enjoys problem-solving in negotiation settings

  • Looks beneath the surface to discover interests

  • Encourages everyone to be involved

• Weaknesses

  • Can make simple negotiations unnecessarily complex

  • May give up too much value when facing a competitive counterpart

Coalitions can be _____, ______, _______

1. Relational

2. Procedural

3. Political

5 keys for effective coalition management

5 keys for effective coalition management

• Cultivate your reputation

  • Build trust and credibility so others want to work with you

• Map parties within the ecology

  • Understand all the players, their interests, and how they relate to each other

• Find your partners

  • Identify the people or groups whose goals align with yours

• Strengthen your coalition

  • Keep your allies coordinated, committed, and unified

• Block your counterpart’s coalitions

  • Prevent the other side from building alliances that weaken your position

Reputations form from _____

1st and 2nd hand info

Reputations are normally accurate or no?

Often more extreme

Friends —> Fringe —> Foes

Friends —> Fringe —> Foes

• 10 procedural influence tactics

• Agenda control

  • Place your issues early when you need time to influence the outcome

• Invitation control

  • Never let an important meeting happen without you and your people present

• The meeting before the meeting

  • Cultivate allies, gather data about others’ interests, and build a game plan

• Speaker order

  • Speak early to anchor the conversation and have allies show agreement

• Seating position

  • Where you sit can affect perceptions of leadership

• Vote timing

  • Suggest preliminary votes once you believe you have gained support

• Vote format

  • Private votes reduce conformity pressure; public votes build momentum

• Decision rule

  • Majority, supermajority, and unanimity rules change how hard it is to pass a decision

• Information framing

  • Whoever controls the past can shape how people think about the future

• Calling for breaks

  • Use breaks to secure commitment or disrupt opponents’ momentum