Negotiating: An Introduction to the Basics Presented by Deborah J. Barrett, Ph.D., Professor of the Practice of Professional Communication Postdoctoral

Negotiating: An Introduction to the Basics

Presented by Deborah J. Barrett, Ph.D., Professor of the Practice of Professional Communication

Postdoctoral Lunch ProgramRice UniversityMarch 12, 2009

Copyright Deborah J. Barrett, 2009


Today’s Discussion

Common mistakes negotiators make Negotiation terminology The negotiation process

PlanningEstablishing goals and strategyUnderstanding the opponentCreating a positive ethos and building trust Discovering interests and optionsReaching agreement and closing

Negotiations across cultures

Summary of the best practices


Common Mistakes Negotiators Make

1. Planning too little or too late

2. Not understanding negotiation styles (their own or the other party)

3. Ignoring context or differences in culture or negotiation expectations

4. Leaving value on the table

5. Settling for too little

6. Settling for terms worse than the alternative

7. Walking away when agreement was possible


Basic Negotiation Terms

BATNA – Best Alternative To a Negotiated Agreement – your best option should negotiation fail, answer to “What I will do if current negotiation ends without a deal?”

Reservation Price – lowest price you will accept, your walk-away price

ZOPA – Zone of Possible Agreement – the range in which a deal can happen, overlap of the most the buyer is willing to pay and the least the seller is willing to accept

Aspiration – Strongly desired outcome, target price

Wish – Blue sky desire

Distributive (win-lose) or Integrative (win-win) - Types of negotiations


Distributive Vs. Integrative Negotiation

Distributive – Gain by one side means loss to the Distributive – Gain by one side means loss to the otherother

Integrative – parties cooperate to achieve maximum Integrative – parties cooperate to achieve maximum benefits of integrating interestsbenefits of integrating interestsCharacteristic Distributive Integrative

Outcome Win-Lose Win-win

Motivation Individual gain Joint and individual gain

Interests Opposed Different, not always opposite

Relationship Short-term Long- or short-term

Issues Single Multiple

Tradeoffs Not flexible Flexible

Solution Not creative Creative

Source:Source: Negotiating Outcomes (Harvard, 2007). Negotiating Outcomes (Harvard, 2007).


Overview of the Negotiation Process

• Influence Influence outcomeoutcome

• Generate Generate agreementagreement

• Discover Discover optionsoptions

• Review Review alternativesalternatives

• Research Research interestsinterests

• Explore Explore interestsinterests

• Develop Develop strategystrategy

• Determine Determine goalsgoals

Source: Adapted from Jim Rosborough’s planning tool, used by Source: Adapted from Jim Rosborough’s planning tool, used by Jim and Deborah Barrett in Executive Education at Rice University.Jim and Deborah Barrett in Executive Education at Rice University.


Planning: How Skilled Negotiators Achieve the Outcome they Seek

Skilled negotiators . . .

Spend a significant amount of time planning

Know the possible areas of shared or complementary interests (4 times as much as less skilled negotiators)

Anticipate the other party’s interests and possible settlement options

Take time to know themselves and know the other party, including their BATNA


Clarifying Your Negotiation GoalsClarifying Your Negotiation Goals

What is the BATNA for both of you? What is the BATNA for both of you? What do you desire (wants vs. needs)?What do you desire (wants vs. needs)? What must you or your organization have What must you or your organization have

(the deal breaker)?(the deal breaker)? What is most important to you and/or your What is most important to you and/or your

group or organization—group or organization— Money?Money? Terms?Terms? Alliances?Alliances? Reputation?Reputation? Relationship?Relationship?


Determining Communication Strategy and Approach

Understand your audience, including Understand your audience, including negotiation expectations negotiation expectations

Identify interferences to effective Identify interferences to effective communication in a negotiation contextcommunication in a negotiation context

Develop a communication strategy, including Develop a communication strategy, including analyzing your audienceanalyzing your audience

Realize the importance of relationships and trustRealize the importance of relationships and trust

When negotiating across cultures, learn about When negotiating across cultures, learn about the cultural differencesthe cultural differences


Developing a Communication Strategy

AudienceAudience

MessagesMessages Media/ Media/ forumforum

SpokespersonSpokesperson

Strategic Strategic ObjectivesObjectives

What are your What are your primary and primary and secondary goals?secondary goals?

Who is the best Who is the best person to lead the person to lead the negotiations?negotiations?

What information What information do you need to do you need to have and to share?have and to share?

What is the best What is the best time and how time and how long should you long should you allow?allow?

Who will be across Who will be across the table?the table?

What is the best What is the best medium or medium or forum for this forum for this negotiations?negotiations?

Source: Strategy Framework from Deborah J. Barrett, Source: Strategy Framework from Deborah J. Barrett, Leadership CommunicationLeadership Communication. . New York: McGraw-Hill. Copyright 2006.New York: McGraw-Hill. Copyright 2006.

TimingTiming


Knowing the Other Party in a Negotiations

Determine who the decision makers are and determine how they make decisions

Know how they approach negotiations (attitudes and expectations)

Anticipate and establish their interests

Learn as much as possible about cultural differences

Understand their personality and style


Recognizing Negotiation Styles

Are you a

Dodger,

Dreamer,

Haggler,

Competitor, or

Problem Solver?

How about the other party?


How Negotiation Style Affects Results

HighHigh

Concerned with satisfying Concerned with satisfying own interestsown interests

HighHighLowLow

Concerned Concerned with other with other party’s party’s interestsinterests

Problem SolverProblem Solver

Source: Claude Cellich and Subhash C. Jain. Source: Claude Cellich and Subhash C. Jain. Global Business Negotiations: Global Business Negotiations: A Practical Guide.A Practical Guide. Thomson South-western, 2004. Thomson South-western, 2004.

DreamerDreamer

CompetitorCompetitor

HagglerHaggler

Win-WinWin-Win

Win-LoseWin-LoseZone of Zone of Inferior Inferior Results Results

Zone of Zone of Superior Superior ResultsResults

DodgerDodger


Suggesting a Positive Ethos and Building Trust

The inner The inner character:character:

HonestHonest

HonorableHonorable

TruthfulTruthful

FairFair

EthicalEthical

The outward The outward manifestations:manifestations:

Appropriate Appropriate dress and dress and behaviorbehavior

Charisma, Charisma, connectionconnection

Preparation Preparation and knowledgeand knowledge

CredentialsCredentials

Negotiation Negotiation actions:actions: ListenListen Validate Validate Use emotional Use emotional

intelligenceintelligence Watch verbals Watch verbals

& non-verbals& non-verbals Be sensitive to Be sensitive to

cultureculture


Avoid Common Verbals that Hurt Ethos

Presenting statements as questions or using up-speak Over-qualifying or providing too much context (Not

getting to the point fast enough) Explaining too much or apologizing too often Speaking too softly or too fast Framing in such a way you create doubt Hesitating or using fillers

Know what you want to say and say it crisply and with confidenceBottom lineBottom line

Copyright Deborah J. Barrett, 2009 1616

Remember Body Language Affects Trust

Communication is 60 to 80% body language, including 35% voice

Your words and your body language need to be consistent to build trust and relationships

For some cultures, body language is more important than in others, but in all, it can help or hurt you in achieving negotiation goals


Which Non-Verbal Signals to WatchWhich Non-Verbal Signals to Watch

1.1. Smiling too often, not enough, or when not Smiling too often, not enough, or when not appropriateappropriate

2.2. Using gestures not consistent with messageUsing gestures not consistent with message

3.3. Standing or sitting small, crouching, sitting Standing or sitting small, crouching, sitting back from the tableback from the table

4.4. Tilting your head or raising your eyebrowsTilting your head or raising your eyebrows

5.5. Not maintaining the appropriate eye contact Not maintaining the appropriate eye contact (be aware of what is culturally appropriate)(be aware of what is culturally appropriate)

6.6. Placing your purse, briefcase, computer on the Placing your purse, briefcase, computer on the table between you and the othertable between you and the other


Framing the Negotiations to Your Benefit

Establish the context for the negotiation in positive terms.

If you want them to choose the low-risk option, couch proposal in terms of gains (appeals to human nature’s risk aversion).

If you want them to choose the high-risk option, present the proposal in terms of potential losses (appeals to risk-taking behavior).

Don’t give concessions you might want credit for later (Endowment Effect).


Using Skillful Questioning to Discover Hidden Interests

Use reflective statements and open-ended questions (not yes or no)

Ask What and How questions rather than Why

Indicate your interest to soften the question

Address their representational system

How does my proposal look to you? (visual)

What sounds like a good option? (auditory)

How do you feel about this? (kinesthetic)

Paraphrase and summarize often


Creating Options Strategically

Clarify which issues are most important

Identify linkages

Shared interests - Options build an atmosphere of interdependency and trust

Interests with possible synergy - Creativity may provide new joint gains

Interests we value differently - Brainstorm multiple options without evaluation


Reaching Agreement

Propose packages that include all of the important interests

Propose several alternative packages, allowing choice

Discuss tradeoffs as alternatives Make proposal attractive by addressing all

interests Make it hard to say “no” by asking reality

testing questions Shift to a more competitive style if necessary


Preparing for Cross-Cultural Negotiations

Cultural basics

Definition

Variables

Different cultural strategies and behaviors

Different cultural approaches


Attitudes, behavior, basic assumptions, Attitudes, behavior, basic assumptions, beliefs, and values shared by a group of beliefs, and values shared by a group of people and influencing their interpretation of people and influencing their interpretation of other people’s behavior.other people’s behavior.

Culture – A DefinitionCulture – A Definition

Culture includes –Culture includes –Geographical, national, Geographical, national,

and social characteristics, and social characteristics, but it also includesbut it also includes

Gender, age, physical Gender, age, physical characteristics, characteristics, profession, organizational profession, organizational function, and company function, and company structure and style.structure and style.


Major Cultural Variables

EqualityEqualityOr PowerOr Power

Context Context High/LowHigh/Low

Information Information Flow Flow

O’Hara-Devereau, M. & Johansen, R. (1994). Globalwork: Bridging Distance, Culture, O’Hara-Devereau, M. & Johansen, R. (1994). Globalwork: Bridging Distance, Culture, and Time. Jossey-Bass Publishers. Also, see Barrett, Hofstede, and Hall.and Time. Jossey-Bass Publishers. Also, see Barrett, Hofstede, and Hall.

TimeTime

LanguageLanguage

Individualist (I)Individualist (I)Or Collectivist (We)Or Collectivist (We)

Doing, Doing, Being, Being, BecomingBecoming

Copyright Deborah J. Barrett, 2009 2525

Major Cultural Variables Defined

Variable

High/low context

Doing, being, becoming

Time

Source: Deborah J. Barrett, “Successfully Communicating Change Across Cultures,” Source: Deborah J. Barrett, “Successfully Communicating Change Across Cultures,” Journal of Knowledge, Culture, and Change Management.Journal of Knowledge, Culture, and Change Management.

DescriptionDescription Meaning primarily in the Meaning primarily in the

words or in the context and words or in the context and relationshipsrelationships

Emphasis on action, Emphasis on action, accomplishments or self accomplishments or self expression and living life to expression and living life to the fullest or on growth and the fullest or on growth and development development

Focused on the past, the Focused on the past, the present, or the future; time is present, or the future; time is planned, measured, and planned, measured, and valued or fluid and valued or fluid and unimportantunimportant


Major Cultural Variables - continued

VariableVariable

Individual/collectiveIndividual/collective

Power & equalityPower & equality

Information flowInformation flow

LanguageLanguage

DescriptionDescription Emphasis on “I” or “we,” Emphasis on “I” or “we,”

on individual or on the on individual or on the group or the communitygroup or the community

Respectful of authority and Respectful of authority and rituals, belief in hierarchies rituals, belief in hierarchies and titles or little respect and titles or little respect for authority, view that for authority, view that everyone is equaleveryone is equal

Shared openly or Shared openly or controlled; top down, controlled; top down, multidirectionalmultidirectional

““Language is culture; Language is culture; culture is language” (Hall)culture is language” (Hall)


Different Cultural Expectations in Negotiation

Cooperative or Competitive

Specifics to overall

or Overall to specific

General principles or Detailed rules

Final, unalterable or The beginning, open to adjustments

Source: James K. Sebenius, “The Hidden Challenge of Source: James K. Sebenius, “The Hidden Challenge of Cross-BorderCross-Border Negotiations,” Negotiations,” Harvard Business ReviewHarvard Business Review, March 2002., March 2002.

Underlying view of the process

Typical approach

Form of agreement

Implementation of agreement


Percentage CountryPercentage Country7474707067675555545454544747474746464545424233 33

Different Cultural Attitudes toward Negotiations

Win-Win Versus Win-Lose Contract Versus RelationshipContract Versus Relationship

Spain Spain FranceFranceBrazilBrazilJapanJapanU.S.U.S.Germany Germany U.K.U.K.NigeriaNigeriaArgentinaArgentinaChina China Mexico Mexico IndiaIndia

Percentage CountryPercentage Country100 100 82 82 81 81 80 80 787871 71 59 59 55 55 50 50 47 47 44 44 3737

JapanJapanChinaChinaArgentinaArgentinaFranceFranceIndiaIndiaU.S.U.S.U.K.U.K.MexicoMexicoGermany Germany NigeriaNigeriaBrazilBrazilSpain Spain

Source: Jeswald W. Salacuse, Source: Jeswald W. Salacuse, The Global NegotiatorThe Global Negotiator. Macmillan, 2003.. Macmillan, 2003.


Some Gender Differences

Women feel 2.5 times more apprehension about negotiating than men.1

When asked to describe negotiating, men say it is like “winning a ballgame,” and women say, it is like “going to the dentist.” 1

As much as 20 percent of adult women say they never negotiate at all, even when they know they should. 1

Men initiate negotiations about four times as often as women. 1

Men negotiate nine times more frequently than women.2

11www.womendontask.com

2 2 “First you Have to Ask,” “First you Have to Ask,” Harvard Business ReviewHarvard Business Review, January 2004., January 2004.


To Summarize the Negotiation Best Practices

1. Plan and prepare: Establish and write out your goals Know the BATNA Know your audience: what’s in it for them Anticipate cultural differences and

understand expectations2. Frame the opening to your goal3. Adopt an appropriate tone; be persuasive but not

abrasive or threatening4. Stay focused, avoiding being sidetracked by

minor or less important issues5. Keep emotions under control and watch your

body language and other non-verbals

Documents

Negotiating: An Introduction to the Basics Presented by Deborah J. Barrett, Ph.D., Professor of the Practice of Professional Communication Postdoctoral