CHAPTER 3CHAPTER 3

Strategy and Tactics of Integrative NegotiatiStrategy and Tactics of Integrative Negotiation on

整合型谈判整合型谈判(expanding the pie (expanding the pie 增大蛋糕增大蛋糕 ))

Approach: a comparative view

Negotiations As Joint Problem Solving

In an integrative bargaining situation, “it may be

possible for the negotiators to enlarge the pie before

cutting it. In order to squeeze out potential joint

gains, the negotiators must do some joint problem

solving” (Raiffa, 1982)

Pareto Efficient Frontier

“An agreement is defined as Pareto efficient when

there is no other agreement that would make any

party better off without decreasing the outcomes to

any other party.”

“With any Pareto inefficient agreement, there exists an

alternative that would benefit at least one party without injuring any party.” (Neale & Bazerman, 1991)

Your goal as a negotiator to reach Pareto optimality

in a negotiated agreement.

Q: why don’t most outcomes end up on the frontier?

Pareto Efficient Frontier

The Negotiator’s (Prisoner’s dilemma)

The non-separability of integrative and distributive negotiations“Value that has been created must be claimed” (Lax & Sebenius, 1

986)

But tactics that claim value can impede its creation

Pareto Efficient Frontier

Scoring Systems

• Develop one. Use it!

• Why?

–“Quantitative information helps the recipient of that information”

(Raiffa, 1982)–Consider and quantify all issues

–Aids in determining overall reservation price

–Allows you to compare package deals, multiple offers, etc.

–Quick assessment of trade-offs, concessions, and the like

Distributive vs. Integrative NegotiationsDistributive•Involve only one issue•Simply dividing the pie•“Almost strictly opposing interests” – each party is attempting to maximize his/her share of the fixed-pie payoff•Involves fixed-sum games – one person’s gain is another person’s loss (win-lose situation)

Integrative•Involve multiple issues•Opportunity for enlarging the pie•Can increase the benefits available to each side by “capitalizing on differences in parties’ preferences”•Always involves distributive component

Tools and Strategies

• Scoring Systems• Interests vs. Positions

• Package Deals

• Sharing Information

Scoring Systems

• Develop one.Use it!• Why?

– “Quantitative information helps the recipient of that information”

(Raiffa, 1982)

– Consider and quantify all issues– Aids in determining overall reservation price

– Allows you to compare package deals, multiple offers, etc.– Quick assessment of trade-offs, concessions, and the like

Sample Scoring System

WeightedIssue Option Values Weights (W) Options Values (V) (W*V)50% $200,000 100 50$190,000 80 40$180,000 50 25$170,000 30 15

30% London 100 30New York 60 18Tokyo 60 18S ingapore 30 9Siberia 0 0

20% 4 weeks100 203 weeks90 182 weeks35 7

100%

Issue1 Compensation

2 L ocation

3 Vacation

Sample Scoring System

WeightedOption Values Options Values (V) (W*V)$200,000 100 50$190,000 80 40$180,000 50 25$170,000 30 15

London 100 30New York 60 18Tokyo 60 18S ingapore 30 9Siberia 0 0

4 weeks100 203 weeks90 182 weeks35 7

2 L ocation 30%

3 Vacation 20%

100%

Issue Issue

1Compensation Weights (W)50%

Sample Scoring System

Issue Weights (W)

50%

WeightedOption

Values Values (V)

(W*V)100

5080

4050

2530

15

100

3060

1860

1830

90

0

100

2090

1835

7

Issue1 Compensation

Opti ons$200,000$190,000$180,000$170,000

2 L ocation 30% London New York TokyoSingapore Siberia

3 Vacation 20% 4 weeks3 weeks2 weeks

100%

Sample Scoring System

Weighted Values (W*V) 50

402515

30181890

20187

2 weeks 35

100%

Issue Issue Weights (W)

Options Option Values (V)

1 Compensation 50% $200,000 100

$190,000 80

$180,000 50

$170,000 30

2 Location 30% London 100

New York 60

Tokyo 60

Singapore 30

Siberi a 0

3 Vacation 20% 4 weeks 100

3 weeks 90

Sample Scoring System

2 eeks 35 7

100%

Issue Option Weighted Values

Issue Weights (W)

Options Values (V)

(W*V)

1 Compensation

50% $200,000

100 50

$190,000

80 40

$180,000

50 25

$170,000

30 15

2 L ocation 30% L ondon 100 30New York

60 18

Tokyo 60 18S ingapore

30 9

S iberia 0 03 Vacation 20% 4 weeks 100 20

3 weeks 90 18

Good scoring systems are…• Complete

– All important issues are identified and quantified

• Measurable

– Provides a common metric for comparing qualitatively different issues

• Operational

– Can be used to sort out specifics re what sets of alternatives are prefera

ble to others

– Allow for someone else to negotiate on your behalf

• Useful

– Easily allows to translate qualitative issues to quantitative ones

– Keep your scoring system flexible and dynamics, you may want to add

issues or outcomes during the negotiation.

Computers and Spreadsheets

• Advantages

– Quickly and efficiently track the effect of changes in information (if you have a clearly thought-out scoring system)

– Save time and mental resources (think while the other side punches the calculator…)

• Disadvantages

– Can get drawn into interacting with your computer instead of your counterpart

– You can lose flexibility – letting your tool drive, rather than facilitate, the process

Don’t let your scoring system control you

Interests vs. Positions

• “Your position is something you have decided upon.Your interests are what caused you to so decide.”

• “Interests define the problem.”

• “For every possible interest there usually exist several possible positions that could satisfy it.”

• “When you look behind opposed positions for the motivating interests, you can often find an alternative position which meets not only your interests but theirs as well.”

(Fisher, Ury, & Patton, 1991)

So….

• Separate Positions from Interests

- Positions are prone to ego-involvement

- Positions endanger ongoing relationship

• Focus on Interests, not Positions

- Interests may differ

- Risk and time preferences may differ- Expectations may differ

Issue by Issue vs. Package Deals?

• Issue by issue

– Becomes a sequential distributive negotiation

– More contentious–impasse more frequent

– Takes longer

• Package deals understanding interests and priorities

– Finding issues to trade off – give them what they want and get what you want in return

– Flexibility (real and perceived)

– Improves outcomes and efficiency

– Exception

Getting Information for Integrative Agreements

• Build trust and share information• Ask diagnostic questions to understand priorities and in

terests

–Listen to the answers

–Don’t be afraid to rephrase questions and to seek clarifications (ask why and why not)

–Ask about preferences for different scenarios (generate more options)

• Give away some information about preferences and priorities

• Make package (multi-issue) offers

What information should I share?

• Give away some information --Priorities among issues(i.e., rank ordering)

–DO NOT reveal your preferences for specific alternatives on particular issues (or your reservation price)

–Honest on priorities–Negotiator’s individual gain not hindered by revealing priori

ties among issues (i.e., rank ordering)– If both sides strategically misrepresent their value tradeoffs,

then inefficient contracts will often result

How flexible should I be?

• “Firm with respect to one’s ends (i.e., one’s interests)

… flexible with respect to the means to these ends, continually seeking new alternatives until a mutually acceptable one can be found.”

(Pruitt, 1983)• Think creatively about possible alternatives–do not s

earch for a single answer

Negotiator Toolbox: Integrative Negotiation Strategies

• Prepare a scoring system

--Analyze issues, BATNAs, and reservation prices---think about interests underlying positions

• Use the negotiations to collect information about integrative possibilities

– Make a proposal incorporating all issues

– Ask what is wrong with your proposal

– Ask diagnostic questions and listen; don’t argue– Build trust and be cooperative---share integrative informatio

n (do not disclose your reservation price)– Trade off when there are differences in preferences

– Be firm on interests, but open to options