Strategies of Negotiation: Prerequisites & Major Strategies

No matter what type, negotiation is an art that can be perfected through various negotiation strategies. The book ‘Art and Science of Negotiation’ mentions that negotiation is both an art and a science. The Science part of negotiation consists of the ‘systematic analysis’ of the problem, and the art part consists of interpersonal skills and charismatic argumentation.

Prerequisites

1. The voluntary consent of both parties to negotiate on the dispute.
2. The dispute concerns both parties in such a way that the parties are dependent on each other.
3. The parties should have the willingness to settle the dispute.
4. The dispute at hand should be negotiable.
5. In certain cases, there is a sense of urgency and deadline in the dispute leading to negotiation.

Strategies Of Negotiation

There are several strategies that one can adopt to effectively continue the negotiation process, but here we will be discussing four major strategic techniques:-

1. Bargaining

Bargaining is a hard negotiation strategy where the parties seek to establish a win-lose situation. It establishes a situation of competition among the parties. It is an over-ambitious stance that often results in a deadlock.

The bargaining strategy requires one party to be fixated or anchored in one’s offer and allow the other party to soften. The bargaining strategy is also characterized by setting the boundaries beyond which no negotiation would occur or the ‘walk away’ situation.

The Process

The breakdown of the process of bargaining can be expressed in the following points:-

1. Starting offers are made by both parties to each other
2. Firm commitments are made by both parties and the walk-away position is established
3. Grant of rewards and imposition of sanctions are issued to force the other parties to loosen their stance and thus give concessions
4. Mutual concessions are made
5. The over-ambitious bids by one party force the other party to retract. The parties provide further concessions.
6. Lastly, when both parties are in a position of retraction, the parties tend to agree over a middle ground from the position they first established.

In the concluding position, both parties have a mutually beneficial, joint solution to representation in the bargain. The bargaining system, however, encourages the parties to play competitively. The main reason behind this is the fear that the parties will take advantage of the situation and force upon their opponents to come to an unstable position.

This system of bargaining became an important approach in international negotiations in the decades of the late 60s and early 70s.

This system of bargaining is mainly adopted from Anatol Rapoport’s book Fights, Games and Debates in 1960. This relates closely to the ‘Game Theory’.

Anatol Rapoport, mentioned the following lines about the game theory, thus hinting at the negative side of bargaining and the game theory.

“At present game theory has, in my opinion, two important uses, neither of them related to games nor to conflict directly. First, game theory stimulates us to think about conflict in a novel way. Second, game theory leads to some genuine impasses, that is, to situations where its axiomatic base is shown to be insufficient for dealing even theoretically with certain types of conflict situations. These impasses set up tensions in the minds of people who care. They must, therefore, look around for other frameworks into which conflict situations can be”[1]

Bargaining has a number of types one of them are positional bargaining. Positional bargaining is where the parties are fixated on their position and do not want to compromise with the other party. Haggling is an example of positional bargaining.

2. Getting to Yes: Roger Fisher and William L. Ury

Getting to yes is the name of the 1981 non-fiction written by Roger Fisher and William L. Ury. This process of negotiation enshrined in this book is often called the Fisher/Ury negotiation method. It was the international bestselling book on negotiation in the 80s.

The method of negotiation mentioned is ‘principled negotiation’. This type of negotiation deals with the core ethical standards of conducting a negotiation process. Fisher / Ury mentioned that the chances of arriving at a successful negotiation increase once the parties are morally coordinated and principled.

Genesis

The origin of this book revolves around the flagship project at Harvard University, known as the Harvard Negotiation Project. Both Fisher and Ury were associated with Harvard. Both of them singularly were negotiation activists. Fisher was an audience to the devastating 2^nd world war, so in Harvard later on, he became inclined to the art of negotiation as a method of settlement of disputes.

The Process

The title of the book says – Getting to yes: Negotiating without giving in. The title itself mentions how to negotiate and thus come at a middle ground and avoiding the impasse.

The book is divided into the following strategies that one should follow towards successful negotiations:

1. That the problem should be separately treated from the people
2. The focus should be on the interest and not the position.
3. The parties should generate a number of options before settling on the final argument, and
4. The parties should ensure that the agreement is finally based on objective considerations.

Three impediments to negotiation and consecutive ways to overcome these obstacles are also mentioned.

Thus the process of ‘GETTING to YES’ begins with analysis, where a careful breakdown of the problem and the situation is done. The other parties interests are considered and the various options are exploited. Finally, the agreement should be achieved in a win-win situation.

1. Separation of people and issues

People should avoid combining people and their issues. Here Fisher/Ury talks about the three common problems encountered during the process of negotiation:

• Different interpretation – the factor that brings in subjectivity to the process of negotiation is the difference in interpretation. The best way to avoid this problem is to put themselves in the shoes of the other person and try to understand the other’s point of view.
• Emotions- human beings are characterized by the presence of feelings and emotions. This can even lead to the outburst of emotions. Each party should be considerate enough to understand the other party. They should try their utmost to express symbols of apathy.
• Communication- during the conversation sessions, the parties might get absent-minded in planning for their stand and thus lose out on the communication. The practice of active listening should be practised to ensure that there does not remain any communication gap between the parties and that the parties understand each other.

2. Focus on the interests

The parties to a negotiation can have several underlying interests. It would do well, therefore, to focus on a particular interest at a time and simultaneously consider other persons. If one party shows an inclination toward the other party’s interest, then there will be an atmosphere of amity.

3. Generation of options

Fisher /Ury mentions a brilliant way to come to generate options. They ask the parties to meet in an informal setting and conduct a session on ‘brainstorming’. The brainstorming sessions have four stages: stating the problem, analyzing the problem, approaching the problem in a general manner and finally approaching the problem in a specific manner. The key to reconciliation of differences is finding out the matter which is of low cost but is of high benefit to the parties.

4. Using the objective criteria

The meaning of objective criteria includes the scientific approach, dividing the article, determining the legal position, etc. This is a more pragmatic, sensible approach to the dispute at hand.

The three positions that can arise out –

1. When one of the parties is more powerful:

Power differences can never be bridged up. Fisher and Ury have suggested certain processes to protect the weaker party and to help the weaker party make the most of their assets, where the party is asked to focus more on the BATNA (Best Alternative To A Negotiated Agreement).

2. When one of the parties will not use Principled Negotiation

Fisher and Ury have devised a method to control this kind of situation. The party should continue following the principled approach. Later the principled party should use the process called negotiation jujitsu to bring to control the action of the other party and in the end, if nothing works, to bring in a third party.

3. When one of the party uses dirty tricks

When one of the parties resorts to using cheap tricks, the best way to handle it is to explicitly mention that to the negotiation process.

3. BATNA

The weaker party should concentrate on analyzing its best alternative to a negotiated agreement (BATNA). The weaker party is generally not considered the agreement that would leave them worse off than their BATNA. Therefore the party should be aware of the BATNA. BATNA is used to gain the greatest out of the assets.

The parties in a negotiation are considered powerful because they have the scope to walk away. The party with the best BATNA is considered to be in a better stance. All the parties in a negotiation should try to estimate and analyze their BATNA and the other parties' BATNA because, ultimately, the winning edge depends on the person with the best BATNA. The parties should try to increase the winning chance of their BATNA throughout the negotiation process.

4. ZOPA

ZOPA is the abbreviated form of a “Zone of Possible Agreement“. It is also called the bargaining range. ZOPA is the zone that would benefit both parties to the maximum apart from the other agreements between the parties.

The ZOPA range, once invented, becomes critical to the outcome of a negotiation. But it generally takes some time to determine where the ZOPA exists; it is evident known once the parties explore their various interests and options. The major impediment leading to the prevention of the parties from attaining the ZOPA is that the parties are not ready to fully reveal their confidential information. However, once the ZOPA is successfully found out, the parties can easily come to an agreement.

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[1]. Rapoport, Fights, Games and Debates, p. 242.

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Alternative Dispute Resolution – Notes, Case Laws and Study Material