Negotiation

Negotiation is a dialogue between two or more people or parties intended to reach a beneficial outcome over one or more issues where a conflict exists with respect to at least one of these issues. Negotiation is an interaction and process between entities who compromise to agree on matters of mutual interest, while optimizing their individual utilities.[1] This beneficial outcome can be for all of the parties involved, or just for one or some of them. Negotiators need to understand the negotiation process and other negotiators to increase their chances to close deals, avoid conflicts, establishing relationship with other parties and gain profit.[1]

Signing the Treaty of Trianon on 4 June 1920. Albert Apponyi standing in the middle.

The ministers of foreign affairs of the United States, the United Kingdom, Russia, Germany, France, China, the European Union and Iran negotiating in Lausanne for a Comprehensive agreement on the Iranian nuclear programme (30 March 2015).

It is aimed to resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests. It is often conducted by putting forward a position and making concessions to achieve an agreement. The degree to which the negotiating parties trust each other to implement the negotiated solution is a major factor in determining whether negotiations are successful.

People negotiate daily, often without considering it a negotiation.[2][3] Negotiation occurs in organizations, including businesses, non-profits, and within and between governments as well as in sales and legal proceedings, and in personal situations such as marriage, divorce, parenting, etc. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiator, or hostage negotiators. They may also work under other titles, such as diplomats, legislators, or brokers. There is also negotiation conducted by algorithms or machines known as autonomous negotiation.[4][1][5] For automation, the negotiation participants and process have to be modeled correctly.[6]

Types

Negotiation can take a wide variety of forms, from a multilateral conference of all United Nations members to establish a new international norm (such as the UN Convention on the Law of the Sea) to a meeting of parties to a conflict to end violence or resolve the underlying issue (such as constitutional negotiations in South Africa in 1990-1994 or in Colombia with the FARC in 2012-2015) to a business encounter to make a deal to a face-off between parents (or between parent and child) over the child's proper behavior.[7] Mediation is a form of negotiation with a third-party catalyst who helps the conflicting parties negotiate when they cannot do so by themselves. Negotiation can be contrasted with arbitration, where the decision lies with the third party, which the conflicting parties are committed to accept.

Negotiation theorists generally distinguish between two types of negotiation[8] The difference in the usage of the two type depends on the mindset of the negotiator but also on the situation: one-off encounters where lasting relationships do not obtain are more likely to produce distributive negotiations whereas lasting relationships are more likely to require integrative negotiating[9] Different theorists use different labels for the two general types and distinguish them in different ways.

Distributive negotiation

Distributive negotiation is also sometimes called positional or hard-bargaining negotiation and attempts to distribute a "fixed pie" of benefits. Distributive negotiation operates under zero-sum conditions and implies that any gain one party makes is at the expense of the other and vice versa. For this reason, distributive negotiation is also sometimes called win-lose because of the assumption that one person's gain is another person's loss. Distributive negotiation examples include haggling prices on an open market, including the negotiation of the price of a car or a home.

In a distributive negotiation, each side often adopts an extreme or fixed position, knowing it will not be accepted—and then seeks to cede as little as possible before reaching a deal. Distributive bargainers conceive of negotiation as a process of distributing a fixed amount of value. A distributive negotiation often involves people who have never had a previous interactive relationship, nor are they likely to do so again in the near future, although all negotiations usually have a distributive element.

In the distributive approach each negotiator fights for the largest possible piece of the pie, so parties tend to regard each other more as an adversary than a partner and to take a harder line.[10] Since Prospect Theory indicates that people value losses more than gains and are more risk-averse about losses, concession-convergence bargaining is likely to be more acrimonious and less productive of an agreement[11]

Integrative negotiation

Integrative negotiation is also called interest-based, merit-based, or principled negotiation. It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreement by taking advantage of the fact that different parties often value various outcomes differently.[12] While distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided between the parties, integrative negotiation attempts to create value in the course of the negotiation ("expand the pie") by either "compensating" loss of one item with gains from another ("trade-offs" or logrolling), or by constructing or reframing the issues of the conflict in such a way that both parties benefit ("win-win" negotiation).[13]

However, even integrative negotiation is likely to have some distributive elements, especially when the different parties both value different items to the same degree or when details are left to be allocated at the end of the negotiation. While concession is mandatory for negotiations, research shows that people who concede more quickly, are less likely to explore all integrative and mutually beneficial solutions. Therefore, early conceding reduces the chance of an integrative negotiation.[14]

Integrative negotiation often involves a higher degree of trust and the formation of a relationship. It can also involve creative problem-solving that aims to achieve mutual gains. It sees a good agreement as not one with maximum individual gain, but one that provides optimum gain for all parties. Gains in this scenario are not at the expense of the Other, but with it. Each seeks to accord the Other enough benefit that it will hold to the agreement that gives the first party an agreeable outcome, and vice versa.

Productive negotiation focuses on the underlying interests of the parties rather than their starting positions, approaches negotiation as a shared problem-solving rather than a personalized battle, and insists upon adherence to objective, principled criteria as the basis for agreement.[15]

Stages in the negotiation process

However, negotiators need not sacrifice effective negotiation in favor of a positive relationship between parties. Rather than conceding, each side can appreciate that the other has emotions and motivations of their own and use this to their advantage in discussing the issue. In fact, perspective-taking can help move parties toward a more integrative solution. Fisher et al. illustrate a few techniques that effectively improve perspective-taking in their book Getting to Yes, and through the following, negotiators can separate people from the problem itself.

Put yourself in their shoes – People tend to search for information that confirms his or her own beliefs and often ignore information that contradicts prior beliefs. In order to negotiate effectively, it is important to empathize with the other party's point of view. One should be open to other views and attempt to approach an issue from the perspective of the other.
Discuss each other's perceptions – A more direct approach to understanding the other party is to explicitly discuss each other's perceptions. Each individual should openly and honestly share his or her perceptions without assigning blame or judgement to the other.
Find opportunities to act inconsistently with his or her views – It is possible that the other party has prior perceptions and expectations about the other side. The other side can act in a way that directly contradicts those preconceptions, which can effectively send a message that the party is interested in an integrative negotiation.
Face-saving – This approach refers to justifying a stance based on one's previously expressed principles and values in a negotiation. This approach to an issue is less arbitrary, and thus, it is more understandable from the opposing party's perspective.[16]

Additionally, negotiators can use certain communication techniques to build a stronger relationship and develop more meaningful negotiation solution.

Active listening – Listening is more than just hearing what the other side is saying. Active listening involves paying close attention to what is being said verbally and nonverbally. It involves periodically seeking further clarification from the person. By asking the person exactly what they mean, they may realize you are not simply walking through a routine, but rather take them seriously.
Speak for a purpose – Too much information can be as harmful as too little. Before stating an important point, determine exactly what you wish you communicate to the other party. Determine the exact purpose that this shared information will serve.[16]

Integrated negotiation

Integrated negotiation is a strategic approach to influence that maximizes value in any single negotiation through the astute linking and sequencing of other negotiations and decisions related to one's operating activities.

This approach in complex settings is best executed by mapping out all potentially relevant negotiations, conflicts and operating decisions in order to integrate helpful connections among them, while minimizing any potentially harmful connections (see examples below).

Integrated negotiation is not to be confused with integrative negotiation, a different concept (as outlined above) related to a non-zero-sum approach to creating value in negotiations.

Integrated negotiation was first identified and labeled by international negotiator and author Peter Johnston in his book Negotiating with Giants.[17]

One of the examples cited in Johnston's book is that of J. D. Rockefeller deciding where to build his first major oil refinery. Instead of taking the easier, cheaper route from the oil fields to refine his petroleum in Pittsburgh, Rockefeller chose to build his refinery in Cleveland. Why? Because rail companies would be transporting his refined oil to market. Pittsburgh had just one major railroad, meaning it could dictate prices in negotiations, while Cleveland had three railroads that Rockefeller knew would compete for his business, potentially reducing his costs significantly. The leverage gained in these rail negotiations more than offset the additional operating costs of sending his oil to Cleveland for refining, helping establish Rockefeller's empire, while undermining his competitors who failed to integrate their core operating decisions with their negotiation strategies.[18]

Other examples of integrated negotiation include the following:

In sports, athletes in the final year of their contracts will ideally hit peak performance so they can negotiate robust, long-term contracts in their favor.[19]
A union needs to negotiate and resolve any significant internal conflicts to maximize its collective clout before going to the table to negotiate a new contract with management.
If purchases for similar goods or services are occurring independent of one another across different government departments, recognizing this and consolidating orders into one large volume purchase can help create buying leverage and cost-savings in negotiations with suppliers.
A tech start-up looking to negotiate being bought out by a larger industry player in the future can improve its odds of that happening by ensuring, wherever possible, that its systems, technology, competencies and culture are as compatible as possible with those of its most likely buyer.[20]
A politician negotiating support for a presidential run may want to avoid bringing onboard any high-profile supporters who risk alienating other important potential supporters, while avoiding any unexpected new policies that could also limit the size of their growing coalition.[21]

Bad faith

When a party pretends to negotiate, but secretly has no intention of compromising, the party is considered negotiating in bad faith. Bad faith is a concept in negotiation theory whereby parties pretend to reason to reach settlement, but have no intention to do so, for example, one political party may pretend to negotiate, with no intention to compromise, for political effect.[22][23]

Bad faith negotiations are often used in political science and political psychology to refer to negotiating strategies in which there is no real intention to reach compromise, or a model of information processing.[24] The "inherent bad faith model" of information processing is a theory in political psychology that was first put forth by Ole Holsti to explain the relationship between John Foster Dulles' beliefs and his model of information processing.[25] It is the most widely studied model of one's opponent.[26] A state is presumed implacably hostile, and contra-indicators of this are ignored. They are dismissed as propaganda ploys or signs of weakness. Examples are John Foster Dulles' position regarding the Soviet Union, or Hamas's position on the state of Israel.[26]

Negotiation Pie

The total of advantages and disadvantages to be distributed in a negotiation is illustrated with the term negotiation pie.[27] The course of the negotiation can either lead to an increase, shrinking, or stagnation of these values. If the negotiation parties are able to expand the total pie a win-win situation is possible assuming that both parties profit from the expansion of the pie. In practice, however, this maximisation approach is oftentimes impeded by the so-called small pie bias, i.e. the psychological underestimation of the negotiation pie's size. Likewise, the possibility to increase the pie may be underestimated due to the so-called incompatibility bias.[28] Contrary to enlarging the pie, the pie may also shrink during negotiations e.g. due to (excessive) negotiation costs.[28]

Strategies

There are many different ways to categorize the essential elements of negotiation.

One view of negotiation involves three basic elements: process, behavior and substance. The process refers to how the parties negotiate: the context of the negotiations, the parties to the negotiations, the tactics used by the parties, and the sequence and stages in which all of these play out. Behavior refers to the relationships among these parties, the communication between them and the styles they adopt. The substance refers to what the parties negotiate over: the agenda, the issues (positions and – more helpfully – interests), the options, and the agreement(s) reached at the end.

Another view of negotiation comprises four elements: strategy, process, tools, and tactics. Strategy comprises the top level goals – typically including relationship and the final outcome. Processes and tools include the steps to follow and roles to take in preparing for and negotiating with the other parties. Tactics include more detailed statements and actions and responses to others' statements and actions. Some add to this persuasion and influence, asserting that these have become integral to modern day negotiation success, and so should not be omitted.

Employing an advocate

A skilled negotiator may serve as an advocate for one party to the negotiation. The advocate attempts to obtain the most favorable outcomes possible for that party. In this process the negotiator attempts to determine the minimum outcome(s) the other party is (or parties are) willing to accept, then adjusts their demands accordingly. A "successful" negotiation in the advocacy approach is when the negotiator is able to obtain all or most of the outcomes their party desires, but without driving the other party to permanently break off negotiations.

Skilled negotiators may use a variety of tactics ranging from negotiation hypnosis, to a straightforward presentation of demands or setting of preconditions, to more deceptive approaches such as cherry picking. Intimidation and salami tactics may also play a part in swaying the outcome of negotiations.

Another negotiation tactic is bad guy/good guy. Bad guy/good guy is when one negotiator acts as a bad guy by using anger and threats. The other negotiator acts as a good guy by being considerate and understanding. The good guy blames the bad guy for all the difficulties while trying to get concessions and agreement from the opponent.[29]

BATNA

The best alternative to a negotiated agreement, or BATNA, is the most advantageous alternative course of action a negotiator can take should the current negotiation end without reaching agreement. The quality of a BATNA has the potential to improve a party's negotiation outcome. Understanding one's BATNA can empower an individual and allow him or her to set higher goals when moving forward.[30] Alternatives need to be actual and actionable to be of value.[31] Negotiators may also consider the other party's BATNA and how it compares to what they are offering during the negotiation.[32]

Conflict styles

Kenneth W. Thomas identified five styles or responses to negotiation.[33][34] These five strategies have been frequently described in the literature and are based on the dual-concern model.[35] The dual concern model of conflict resolution is a perspective that assumes individuals' preferred method of dealing with conflict is based on two themes or dimensions:[36]

A concern for self (i.e., assertiveness), and
A concern for others (i.e., empathy).

Based on this model, individuals balance the concern for personal needs and interests with the needs and interests of others. The following five styles can be used based on individuals' preferences depending on their pro-self or pro-social goals. These styles can change over time, and individuals can have strong dispositions towards numerous styles.

Accommodating: Individuals who enjoy solving the other party's problems and preserving personal relationships. Accommodators are sensitive to the emotional states, body language, and verbal signals of the other parties. They can, however, feel taken advantage of in situations when the other party places little emphasis on the relationship. Accommodation is a passive but prosocial approach to conflict. People solve both large and small conflicts by giving in to the demands of others. Sometimes, they yield because they realize that their position is in error, so they agree with the viewpoint adopted by others. In other cases, however, they may withdraw their demands without really being convinced that the other side is correct, but for the sake of group unity or in the interest of time--they withdraw all complaints. Thus, yielding can reflect either genuine conversion or superficial compliance.
Avoiding: Individuals who do not like to negotiate and don't do it unless warranted. When negotiating, avoiders tend to defer and dodge the confrontational aspects of negotiating; however, they may be perceived as tactful and diplomatic. Inaction is a passive means of dealing with disputes. Those who avoid conflicts adopt a "wait and see" attitude, hoping that problems will solve themselves. Avoiders often tolerate conflicts, allowing them to simmer without doing anything to minimize them. Rather than openly discussing disagreements, people who rely on avoidance change the subject, skip meetings, or even leave the group altogether (Bayazit & Mannix, 2003). Sometimes they simply agree to disagree (a modus vivendi).
Collaborating: Individuals who enjoy negotiations that involve solving tough problems in creative ways. Collaborators are good at using negotiations to understand the concerns and interests of the other parties. Collaborating is an active, pro-social, and pro-self approach to conflict resolution. Collaborating people identify the issues underlying the dispute and then work together to identify a solution that is satisfying to both sides. This orientation, which is also described as collaboration, problem solving, or a win-win orientation, entreats both sides in the dispute to consider their opponent's outcomes as well as their own[37]
Competing: Individuals who enjoy negotiations because they present an opportunity to win something. Competitive negotiators have strong instincts for all aspects of negotiating and are often strategic. Because their style can dominate the bargaining process, competitive negotiators often neglect the importance of relationships. Competing is an active, pro-self means of dealing with conflict that involves forcing others to accept one's view. Those who use this strategy tend to see conflict as a win-lose situation and so use competitive, powerful tactics to intimidate others. Fighting (forcing, dominating, or contending) can take many forms, including authoritative mandate, challenges, arguing, insults, accusations, complaining, vengeance, and even physical violence (Morrill, 1995). These conflict resolution methods are all contentious ones because they involve imposing one's solution on the other party.
Compromising: Individuals who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation. Compromisers can be useful when there is limited time to complete the deal; however, compromisers often unnecessarily rush the negotiation process and make concessions too quickly.

Types of negotiators

Three basic kinds of negotiators have been identified by researchers involved in The Harvard Negotiation Project. These types of negotiators are: soft bargainers, hard bargainers, and principled bargainers.

Soft: These people see negotiation as too close to competition, so they choose a gentle style of bargaining. The offers they make are not in their best interests, they yield to others' demands, avoid confrontation, and they maintain good relations with fellow negotiators. Their perception of others is one of friendship, and their goal is agreement. They do not separate the people from the problem, but are soft on both. They avoid contests of wills and insist on agreement, offering solutions and easily trusting others and changing their opinions.
Hard: These people use contentious strategies to influence, utilizing phrases such as "this is my final offer" and "take it or leave it." They make threats, are distrustful of others, insist on their position, and apply pressure to negotiate. They see others as adversaries and their ultimate goal is victory. Additionally, they search for one single answer, and insist you agree on it. They do not separate the people from the problem (as with soft bargainers), but they are hard on both the people involved and the problem.
Principled: Individuals who bargain this way seek integrative solutions, and do so by sidestepping commitment to specific positions. They focus on the problem rather than the intentions, motives, and needs of the people involved. They separate the people from the problem, explore interests, avoid bottom lines, and reach results based on standards independent of personal will. They base their choices on objective criteria rather than power, pressure, self-interest, or an arbitrary decisional procedure. These criteria may be drawn from moral standards, principles of fairness, professional standards, and tradition.

Researchers from The Harvard Negotiation Project recommend that negotiators explore a number of alternatives to the problems they face in order to reach the best solution, but this is often not the case (as when you may be dealing with an individual using soft or hard bargaining tactics) (Forsyth, 2010).

Tactics

Tactics are always an important part of the negotiating process. More often than not they are subtle, difficult to identify and used for multiple purposes. Tactics are more frequently used in distributive negotiations and when the focus in on taking as much value off the table as possible.[38] Many negotiation tactics exist. Below are a few commonly used tactics.

Auction: The bidding process is designed to create competition.[39] When multiple parties want the same thing, pit them against one another. When people know that they may lose out on something, they want it even more. Not only do they want the thing that is being bid on, they also want to win, just to win. Taking advantage of someone's competitive nature can drive up the price.

Brinksmanship: One party aggressively pursues a set of terms to the point where the other negotiating party must either agree or walk away. Brinkmanship is a type of "hard nut" approach to bargaining in which one party pushes the other party to the "brink" or edge of what that party is willing to accommodate. Successful brinksmanship convinces the other party they have no choice but to accept the offer and there is no acceptable alternative to the proposed agreement.[40]

Bogey: Negotiators use the bogey tactic to pretend that an issue of little or no importance is very important.[41] Then, later in the negotiation, the issue can be traded for a major concession of actual importance.

Calling a higher authority: To mitigate too far reaching concessions, deescalate, or overcome a deadlock situation, one party makes the further negotiation process dependent on the decision of a decision maker, not present at the negotiation table.[42]

Chicken: Negotiators propose extreme measures, often bluffs, to force the other party to chicken out and give them what they want. This tactic can be dangerous when parties are unwilling to back down and go through with the extreme measure.

Defence in Depth: Several layers of decision-making authority is used to allow further concessions each time the agreement goes through a different level of authority.[43] In other words, each time the offer goes to a decision maker, that decision maker asks to add another concession to close the deal.

Deadlines: Give the other party a deadline forcing them to make a decision. This method uses time to apply pressure to the other party. Deadlines given can be actual or artificial.

Flinch: Flinching is showing a strong negative physical reaction to a proposal. Common examples of flinching are gasping for air, or a visible expression of surprise or shock. The flinch can be done consciously or unconsciously.[44] The flinch signals to the opposite party that you think the offer or proposal is absurd in hopes the other party will lower their aspirations.[45] Seeing a physical reaction is more believable than hearing someone saying, "I'm shocked."

Good Guy/Bad Guy: Within the tactic of good guy/bad guy (synonyms are good cop/bad cop or black hat/white hat) oftentimes positive and unpleasant tasks are divided between two negotiators on the same negotiation side or unpleasant tasks or decisions are allocated to an (real or fictitious) outsider. The good guy supports the conclusion of the contract and emphasises positive aspects of the negotiation (mutual interests). The bad guy criticises negative aspects (opposing interests). The division of the two roles allows more consistent behaviour and credibility of the individual negotiators. As the good guy promotes the contract, he/she can build trust with the other side.[46]

Highball/Lowball or Ambit claim: Depending on whether selling or buying, sellers or buyers use a ridiculously high, or ridiculously low opening offer that is not achievable. The theory is that the extreme offer makes the other party reevaluate their own opening offer and move close to the resistance point (as far as you are willing to go to reach an agreement).[47] Another advantage is that the party giving the extreme demand appears more flexible when they make concessions toward a more reasonable outcome. A danger of this tactic is that the opposite party may think negotiating is a waste of time.

The Nibble: Also known under salami tactic or quivering quill, nibbling is the demand of proportionally small concessions that haven't been discussed previously just before closing the deal.[41] This method takes advantage of the other party's desire to close by adding "just one more thing."

Snow Job: Negotiators overwhelm the other party with so much information that they have difficulty determining what information is important, and what is a diversion.[48] Negotiators may also use technical language or jargon to mask a simple answer to a question asked by a non-expert.

Mirroring: When people get on well, the outcome of a negotiation is likely to be more positive. To create trust and a rapport, a negotiator may mimic or mirror the opponent's behavior and repeat what they say. Mirroring refers to a person repeating the core content of what another person just said, or repeating a certain expression. It indicates attention to the subject of negotiation and acknowledges the other party's point or statement.[49] Mirroring can help create trust and establish a relationship.

Nonverbal communication

Communication is a key element of negotiation. Effective negotiation requires that participants effectively convey and interpret information. Participants in a negotiation communicate information not only verbally but non-verbally through body language and gestures. By understanding how nonverbal communication works, a negotiator is better equipped to interpret the information other participants are leaking non-verbally while keeping secret those things that would inhibit his/her ability to negotiate.[50]

Examples

Non-verbal "anchoring" In a negotiation, a person can gain the advantage by verbally expressing a position first. By anchoring one's position, one establishes the position from which the negotiation proceeds. In a like manner, one can "anchor" and gain advantage with nonverbal (body language) cues.

Personal space: The person at the head of the table is the apparent symbol of power. Negotiators can negate this strategic advantage by positioning allies in the room to surround that individual.
First impression: Begin the negotiation with positive gestures and enthusiasm. Look the person in the eye with sincerity. If you cannot maintain eye contact, the other person might think you are hiding something or that you are insincere. Give a solid handshake.[51]

Reading non-verbal communication Being able to read the non-verbal communication of another person can significantly aid in the communication process. By being aware of inconsistencies between a person's verbal and non-verbal communication and reconciling them, negotiators can to come to better resolutions. Examples of incongruity in body language include:

Nervous Laugh: A laugh not matching the situation. This could be a sign of nervousness or discomfort. When this happens, it may be good to probe with questions to discover the person's true feelings.
Positive words but negative body language: If someone asks their negotiation partner if they are annoyed and the person pounds their fist and responds sharply, "what makes you think anything is bothering me?"[52]
Hands raised in a clenched position: The person raising his/her hands in this position reveals frustration even when he/she is smiling. This is a signal that the person doing it may be holding back a negative attitude.[53]
If possible, it may be helpful for negotiation partners to spend time together in a comfortable setting outside of the negotiation room. Knowing how each partner non-verbally communicates outside of the negotiation setting helps negotiation partners sense incongruity between verbal and non-verbal communication.

Conveying receptivity The way negotiation partners position their bodies relative to each other may influence how receptive each is to the other person's message and ideas.

Face and eyes: Receptive negotiators smile, make plenty of eye contact. This conveys the idea that there is more interest in the person than in what is being said. On the other hand, non-receptive negotiators make little to no eye contact. Their eyes may be squinted, jaw muscles clenched and head turned slightly away from the speaker
Arms and hands: To show receptivity, negotiators should spread arms and open hands on table or relaxed on their lap. Negotiators show poor receptivity when their hands are clenched, crossed, positioned in front of their mouth, or rubbing the back of their neck.
Legs and Feet: Receptive negotiators sit with legs together or one leg slightly in front of the other. When standing, they distribute weight evenly and place hands on their hips with their body tilted toward the speaker. Non-receptive negotiators stand with legs crossed, pointing away from the speaker.
Torso: Receptive negotiators sit on the edge of their chair, unbutton their suit coat with their body tilted toward the speaker. Non-receptive negotiators may lean back in their chair and keep their suit coat buttoned.

Receptive negotiators tend to appear relaxed with their hands open and palms visibly displayed.[54]

Barriers

Die-hard bargainers
Lack of trust
Informational vacuums and negotiator's dilemma
Structural impediments
Spoilers
Cultural and gender differences
Communication problems
The power of dialogue[55]

Emotion

Emotions play an important part in the negotiation process, although it is only in recent years that their effect is being studied. Emotions have the potential to play either a positive or negative role in negotiation. During negotiations, the decision as to whether or not to settle rests in part on emotional factors. Negative emotions can cause intense and even irrational behavior, and can cause conflicts to escalate and negotiations to break down, but may be instrumental in attaining concessions. On the other hand, positive emotions often facilitate reaching an agreement and help to maximize joint gains, but can also be instrumental in attaining concessions. Positive and negative discrete emotions can be strategically displayed to influence task and relational outcomes[56] and may play out differently across cultural boundaries.[57]

Affect effect

Dispositions for affects affect various stages of negotiation: which strategies to use, which strategies are actually chosen,[58] the way the other party and their intentions are perceived,[59] their willingness to reach an agreement and the final negotiated outcomes.[60] Positive affectivity (PA) and negative affectivity (NA) of one or more of the negotiating sides can lead to very different outcomes.

Positive affect

Even before the negotiation process starts, people in a positive mood have more confidence,[61] and higher tendencies to plan to use a cooperative strategy.[58] During the negotiation, negotiators who are in a positive mood tend to enjoy the interaction more, show less contentious behavior, use less aggressive tactics[62] and more cooperative strategies.[58] This in turn increases the likelihood that parties will reach their instrumental goals, and enhance the ability to find integrative gains.[63] Indeed, compared with negotiators with negative or natural affectivity, negotiators with positive affectivity reached more agreements and tended to honor those agreements more.[58] Those favorable outcomes are due to better decision making processes, such as flexible thinking, creative problem solving, respect for others' perspectives, willingness to take risks and higher confidence.[64] Post-negotiation positive affect has beneficial consequences as well. It increases satisfaction with achieved outcome and influences one's desire for future interactions.[64] The PA aroused by reaching an agreement facilitates the dyadic relationship, which brings commitment that sets the stage for subsequent interactions.[64]
PA also has its drawbacks: it distorts perception of self performance, such that performance is judged to be relatively better than it actually is.[61] Thus, studies involving self reports on achieved outcomes might be biased.

"Don't fear to negotiate don't negotiate out of fear" JFK. [65]

Negative affect

Negative affect has detrimental effects on various stages in the negotiation process. Although various negative emotions affect negotiation outcomes, by far the most researched is anger. Angry negotiators plan to use more competitive strategies and to cooperate less, even before the negotiation starts.[58] These competitive strategies are related to reduced joint outcomes. During negotiations, anger disrupts the process by reducing the level of trust, clouding parties' judgment, narrowing parties' focus of attention and changing their central goal from reaching agreement to retaliating against the other side.[62] Angry negotiators pay less attention to opponent's interests and are less accurate in judging their interests, thus achieve lower joint gains.[66] Moreover, because anger makes negotiators more self-centered in their preferences, it increases the likelihood that they will reject profitable offers.[62] Opponents who get really angry (or cry, or otherwise lose control) are more likely to make errors: make sure they are in your favor.[29] Anger does not help achieve negotiation goals either: it reduces joint gains[58] and does not boost personal gains, as angry negotiators do not succeed.[66] Moreover, negative emotions lead to acceptance of settlements that are not in the positive utility function but rather have a negative utility.[67] However, expression of negative emotions during negotiation can sometimes be beneficial: legitimately expressed anger can be an effective way to show one's commitment, sincerity, and needs.[62] Moreover, although NA reduces gains in integrative tasks, it is a better strategy than PA in distributive tasks (such as zero-sum).[64] In his work on negative affect arousal and white noise, Seidner found support for the existence of a negative affect arousal mechanism through observations regarding the devaluation of speakers from other ethnic origins. Negotiation may be negatively affected, in turn, by submerged hostility toward an ethnic or gender group.[68]

Conditions for emotion affect

Research indicates that negotiator's emotions do not necessarily affect the negotiation process. Albarracın et al. (2003) suggested that there are two conditions for emotional affect, both related to the ability (presence of environmental or cognitive disturbances) and the motivation:

Identification of the affect: requires high motivation, high ability or both.
Determination that the affect is relevant and important for the judgment: requires that either the motivation, the ability or both are low.

According to this model, emotions affect negotiations only when one is high and the other is low. When both ability and motivation are low, the affect is identified, and when both are high the affect is identified but discounted as irrelevant to judgment.[69] A possible implication of this model is, for example, that the positive effects PA has on negotiations (as described above) is seen only when either motivation or ability are low.

Effect of partner's emotions

Most studies on emotion in negotiations focus on the effect of the negotiator's own emotions on the process. However, what the other party feels might be just as important, as group emotions are known to affect processes both at the group and the personal levels. When it comes to negotiations, trust in the other party is a necessary condition for its emotion to affect,[59] and visibility enhances the effect.[63] Emotions contribute to negotiation processes by signaling what one feels and thinks and can thus prevent the other party from engaging in destructive behaviors and to indicate what steps should be taken next: PA signals to keep in the same way, while NA points that mental or behavioral adjustments are needed.[64]
Partner's emotions can have two basic effects on negotiator's emotions and behavior: mimetic/ reciprocal or complementary.[60] For example, disappointment or sadness might lead to compassion and more cooperation.[64] In a study by Butt et al. (2005) that simulated real multi-phase negotiation, most people reacted to the partner's emotions in reciprocal, rather than complementary, manner. Specific emotions were found to have different effects on the opponent's feelings and strategies chosen:

Anger caused the opponents to place lower demands and to concede more in a zero-sum negotiation, but also to evaluate the negotiation less favorably.[70] It provoked both dominating and yielding behaviors of the opponent.[60]
Pride led to more integrative and compromise strategies by the partner.[60]
Guilt or regret expressed by the negotiator led to better impression of him by the opponent, however it also led the opponent to place higher demands.[59] On the other hand, personal guilt was related to more satisfaction with what one achieved.[64]
Worry or disappointment left bad impression on the opponent, but led to relatively lower demands by the opponent.[59]

Dealing with emotions

Make emotions explicit and validate - Taking a more proactive approach in discussing one's emotions can allow for a negotiation to focus on the problem itself, rather than any unexpressed feelings. It is important to allow both parties to share any emotions he or she may have.
Allow time to let off steam - It is possible that one party may feel angry or frustrated at some point during the negotiation. Rather than try to avoid discussing those feelings, allow the individual to talk it out. Sitting and listening, without providing too much feedback to the substance itself, can offer enough support for the person to feel better. Once the grievances are released, it may become easier to negotiate.
Symbolic gestures - Consider that an apology, or any other simple act, may be one of the most effective and low cost means to reduce any negative emotions between parties.[16]

Problems with laboratory studies

Negotiation is a rather complex interaction. Capturing all its complexity is a very difficult task, let alone isolating and controlling only certain aspects of it. For this reason most negotiation studies are done under laboratory conditions, and focus only on some aspects. Although lab studies have their advantages, they do have major drawbacks when studying emotions:

Emotions in lab studies are usually manipulated and are therefore relatively 'cold' (not intense). Although those 'cold' emotions might be enough to show effects, they are qualitatively different from the 'hot' emotions often experienced during negotiations.[71]
In real life, people select which negotiations to enter, which affects emotional commitment, motivation and interests —but this is not the case in lab studies.[64]
Lab studies tend to focus on relatively few well-defined emotions. Real-life scenarios provoke a much wider scale of emotions.[64]
Coding the emotions has a double catch: if done by a third side, some emotions might not be detected as the negotiator sublimates them for strategic reasons. Self-report measures might overcome this, but they are usually filled only before or after the process, and if filled during the process might interfere with it.[64]

Group composition

Multi-party

While negotiations involving more than two parties is less often researched, some results from two-party negotiations still apply with more than two parties. One such result is that in negotiations it is common to see language similarity arise between the two negotiating parties. In three-party negotiations, language similarity still arose, and results were particularly efficient when the party with the most to gain from the negotiation adopted language similarities from the other parties.[72]

Team

Students from University of Tromsø and University of Toronto during 5th International Negotiation Tournament – Warsaw Negotiation Round in the Polish Senate (2014).

Due to globalization and growing business trends, negotiation in the form of teams is becoming widely adopted. Teams can effectively collaborate to break down a complex negotiation. There is more knowledge and wisdom dispersed in a team than in a single mind. Writing, listening, and talking, are specific roles team members must satisfy. The capacity base of a team reduces the amount of blunder, and increases familiarity in a negotiation.[73]

However, unless a team can appropriately utilize the full capacity of its potential, effectiveness can suffer. One factor in the effectiveness of team negotiation is a problem that occurs through solidarity behavior. Solidarity behavior occurs when one team member reduces his or her own utility (benefit) in order to increase the benefits of other team members. This behavior is likely to occur when interest conflicts rise. When the utility/needs of the negotiation opponent does not align with every team member's interests, team members begin to make concessions and balance the benefits gained among the team.[74]

Intuitively, this may feel like a cooperative approach. However, though a team may aim to negotiate in a cooperative or collaborative nature, the outcome may be less successful than is possible, especially when integration is possible. Integrative potential is possible when different negotiation issues are of different importance to each team member. Integrative potential is often missed due to the lack of awareness of each member's interests and preferences. Ultimately, this leads to a poorer negotiation result.

Thus, a team can perform more effectively if each member discloses his or her preferences prior to the negotiation. This step will allow the team to recognize and organize the team's joint priorities, which they can take into consideration when engaging with the opposing negotiation party. Because a team is more likely to discuss shared information and common interests, teams must make an active effort to foster and incorporate unique viewpoints from experts from different fields. Research by Daniel Thiemann, which largely focused on computer-supported collaborative tasks, found that the Preference Awareness method is an effective tool for fostering the knowledge about joint priorities and further helps the team judge which negotiation issues were of highest importance.[75]

Women

Many of the strategies in negotiation vary across genders, and this leads to variations in outcomes for different genders, often with women experiencing less success in negotiations as a consequence. This is due to a number of factors, including that it has been shown that it is more difficult for women to be self-advocating when they are negotiating. Many of the implications of these findings have strong financial impacts in addition to the social backlash faced by self-advocating women in negotiations, as compared to other advocating women, self-advocating men, and other advocating men. Research in this area has been studied across platforms, in addition to more specific areas like women as physician assistants.[76] The backlash associated with this type of behavior is attributed to the fact that to be self-advocated is considered masculine, whereas the alternative, being accommodating, is considered more feminine.[77] Males, however, do not appear to face any type of backlash for not being self-advocating.[78]

This research has been supported by multiple studies, including one which evaluated candidates participating in a negotiation regarding compensation. This study showed that women who initiated negotiations were evaluated more poorly than men who initiated negotiations. In another variation of this particular setup, men and women evaluated videos of men and women either accepting a compensation package or initiating negotiations. Men evaluated women more poorly for initiating negotiations, while women evaluated both men and women more poorly for initiating negotiations. In this particular experiment, women were less likely to initiate a negotiation with a male, citing nervousness, but there was no variation with the negotiation was initiated with another female.[79]

Research also supports the notion that the way individuals respond in a negotiation varies depending on the gender of the opposite party. In all-male groups, the use of deception showed no variation upon the level of trust between negotiating parties, however in mixed-sex groups there was an increase in deceptive tactics when it was perceived that the opposite party was using an accommodating strategy. In all-female groups, there were many shifts in when individuals did and did not employ deception in their negotiation tactics.[77]

Academic negotiation

The academic world contains a unique management system, wherein faculty members, some of which have tenure, reside in academic units (e.g. departments) and are overseen by chairs, or heads. These chairs/heads are in turn supervised by deans of the college where their academic unit resides. Negotiation is an area where faculty, chairs/heads and their deans have little preparation; their doctoral degrees are typically in a highly specialized area according to their academic expertise. However, the academic environment frequently presents with situations where negotiation takes place. For example, many faculty are hired with an expectation that they will conduct research and publish scholarly works. For these faculty, where their research requires equipment, space, and/or funding, negotiation of a "start-up" package is critical for their success and future promotion.[80][81] Also, department chairs often find themselves in situations, typically involving resource redistribution where they must negotiate with their dean, on behalf of their unit. And deans oversee colleges where they must optimize limited resources, such as research space or operating funds while at the same time creating an environment that fosters student success, research accomplishments and more.[80][81][82]

Integrative negotiation is the type predominately found in academic negotiation – where trust and long-term relationships between personnel are valued. Techniques found to be particularly useful in academic settings include:[80][81] (1) doing your homework – grounding your request in facts; (2) knowing your value; (3) listening actively and acknowledging what is being said,[83] (4) putting yourself in their shoes, (5) asking – negotiation begins with an ask, (6) not committing immediately, (7) managing emotion and (8) keeping in mind the principle of a "wise agreement",[83] with its associated emphasis on meeting the interests of both parties to the extent possible as a key working point. The articles by Callahan, et al.[80] and Amekudzi-Kennedy, et al.[81] contain several case studies of academic negotiations.

Etymology

The word "negotiation" originated in the early 15th century from the Old French negociacion from Latin negotiatio from neg- "no" and otium "leisure".[84] These terms mean "business, trade, traffic". By the late 1570s negotiation had the definition, "to communicate in search of mutual agreement." With this new introduction and this meaning, it showed a shift in "doing business" to "bargaining about" business.[84]

gollark: Worrying.

gollark: Also, lol no implicit return.

gollark: That's not very paradoxical, surely? Wouldn't it just return 1?

gollark: Macron cannot be constructed without first having a Macron.

gollark: Macron is in fact provably impossible.

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