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PART SEVEN
MODELS OF PRACTICE
CHAPTER THIRTY-THREE
NEGOTIATION
Roy J. Lewicki
Edward C. Tomlinson
Negotiation is “a form of decision making in which two or more parties talk with one another in an effort to resolve their opposing interests” (Pruitt, 1981, p. xi). In other words, the parties to a dispute attempt to jointly create an agreement that resolves a conflict between them (as opposed to, for example, resorting to force or appealing to a third party’s judgment). Because conflicts can arise in every facet of life, negotiation can be a relevant and viable conflict resolution technique in contexts far beyond purchasing a car or settling the terms of a new job.
The potential that negotiation offers in terms of resolving conflicts more efficiently and creating more satisfaction with and commitment to resulting agreements can be hindered when it is not done well. For some, negotiation is an intimidating activity akin to visiting the dentist and agreeing to a root canal. For others, it is a competitive sport embraced with the aggression typical in professional hockey. Our perspective, however, is that negotiation is fundamentally an interpersonal skill, and the success of negotiated endeavors rests on skillfully applying basic principles. Here we supplant some of the more negative, emotional metaphors (dental patient, hockey player) and the schemas they evoke with those principles and replace dysfunctional dispositions (aversion, hypercompetitiveness) with confidence.
To accomplish this, we rely on an approach referred to as integrative negotiation. In integrative negotiation, the negotiators attempt to settle a dispute in a way that maximizes both of their respective interests (as opposed to having one winner and one loser, or “splitting the difference”). Maximizing joint gain is possible insofar as the parties focus on creating rather than claiming value; the goals of the parties are not mutually exclusive (although they sometimes appear that way initially). We adopt this lens for three reasons. First, while this technique is popularly referred to as “win-win” negotiation, our experience has shown that few people truly understand what this means or how to achieve it. Second, research has shown that many individuals display a natural tendency to view conflicts such that one person’s gain automatically entails the other person’s loss, even when this is not the case (Thompson, 1990). Third, integrative techniques are especially appropriate when dealing with very difficult conflicts. In short, we focus broadly on how to negotiate well using integrative techniques, even in conflicts that are difficult to resolve. First, we discuss the theoretical and empirical roots of integrative negotiation.
THEORETICAL AND EMPIRICAL ROOTS OF INTEGRATIVE NEGOTIATION
The intellectual roots of the formal study of negotiation as a process for conflict resolution can be traced back almost a century ago to specific contexts in which early social scientists began to study how negotiation strategy and tactics were being applied. The two dominant contexts available for investigation were labor relations and international relations. In the labor relations area, the Great Railroad Strike of 1877 and its aftermath brought national focus to a number of abusive labor practices in the railroad industry. The Railway Labor Act of 1926 (as amended in 1934) began to control these abusive practices by introducing mandatory negotiation into labor relations, and over the longer term, they helped to modernize the contemporary collective bargaining process (for reviews, see Kochan and Verma, 1983; Walton, McKersie, and Cutcher-Gershenfeld, 2000). In the international relations area, political scientists began to observe the ways that international and cross-border disputes were being resolved and to make sense of these cases by employing early analytical tools and frameworks to deepen the understanding of how dispute resolution was being handled and to be more prescriptive about how negotiation and dispute resolution processes should be handled (for a number of retrospective reviews and essays on these early initiatives, see Zartman, 1977; Kremenyuk, 1991).
The early work in labor relations and international relations, both of which were largely assessments of specific cases, gained significant traction from the creative, seminal work of a collection of applied economists, political scientists, and behavioral scientists in the 1950s and 1960s. Some of this work was speculative and largely based on case analysis and observation, while other parts were drawn from empirical studies built on economics-based game theory models and empirical social psychological laboratory experiments. While a complete analysis and reconstruction of these intellectual roots and their cross-fertilization is far beyond the scope of this chapter, a number of these contributing roots include
Observational studies of the ways that disputes were being resolved in real conflict settings. These include reports prepared by Stevens (1963) in labor relations or Ikle (1964), and Schelling (1960, 1966) in international relations.
The introduction of simple economic games to model complex behavior, initiated by economists John von Neumann and Oskar Morgenstern (1947) and significantly elaborated over the next two decades by intellectual pioneers including Thomas Schelling, Howard Raiffa, Duncan Luce, Martin Shubik, and Anatol Rapoport, particularly to create economic games that could simulate and induce competitive behavior, cooperative behavior and mixed-motive behavior (Luce and Raiffa, 1957; Schelling, 1960; Rapoport and Chammah, 1965, Raiffa, 1982).
The field of social psychology, which began to explore the psychologically based behavioral dynamics that were associated with the game-theoretic predictions of the previously cited works. Early studies in this field include the seminal work of Morton Deutsch on the fundamentally different nature of cooperation and competition (1949), the nature of bargaining communication to resolve a mutual problem (Deutsch and Krauss, 1962; Kelley, 1966), the importance of a negotiator’s motivational orientation in solving a bargaining problem (Deutsch 1960), and the important role of trust in conflict management processes (Deutsch, 1958, 1962).
Walton and McKersie’s (1965) effort to deconstruct the fundamental collective bargaining process into four subprocesses: distributive bargaining, integrative bargaining,
attitudinal structuring, and intraorganizational bargaining. Identifying the structural and procedural dynamics associated with these first two subprocesses—distributive versus integrative—served to crystallize the distinctive differences between these processes and fuel streams of work that elaborated on the key strategic and tactical dynamics associated with each subprocess.
After approximately twenty years of cross-fertilizing research and conversation between the game theoreticians, social psychologists, and ethnographic researchers in labor relations, international relations, game theory, sociology, and psychology, several integrative works emerged that tied many of the threads together into a strong conceptual grounding for the process of integrative negotiation:
Jeffrey Rubin and Bert Brown’s The Social Psychology of Bargaining and Negotiation (1975), which summarized the broad structural, personality-based, and contextual drives of negotiating behavior
Dean Pruitt’s Negotiation Behavior (1981), whose case studies, theoretical contributions, and empirical studies have generally provided the broadest research-based rationale for understanding how parties with opposing interests can achieve effective integrative agreements
Roger Fisher and William Ury’s (1981) popular Getting to Yes, which recast much of the earlier Walton, McKersie, and Pruitt research (unfortunately, without explicitly acknowledging it) into a popular, widely accessible framework and parlance
These works form the fundamental superstructure of the integrative bargaining process that has been enhanced, elaborated, and extended over the last three decades.
WHY OUR EMPHASIS ON INTEGRATIVE NEGOTIATION?
Readers who are familiar with the historical and conceptual roots of integrative negotiation are also aware that most of these same roots served as the foundation for the extensive study of distributive, or more win-lose, fixed-pie, claiming value negotiations (Walton and McKersie, 1965; Rubin and Brown, 1975; Raiffa, 1982). Indeed, most full treatments of negotiation research provide an extensive review of the strategy and tactics of both the distributive and integrative approaches (Lewicki, Barry, and Saunders, in press; Thompson, 2011). Moreover, many negotiations are neither purely distributive or integrative, but a combination or hybrid of the two processes.
Many purely distributive negotiations may resolve conflict only over the substantive issues at stake (and not the relationship concerns), while other distributive negotiations resolve neither the substantive nor relationship concerns. We have chosen here to focus on the integrative negotiation process, one that is more likely to resolve both substantive differences in conflict as well as to minimally do no harm, or, we hope, to preserve or strengthen the relationship between the disputing parties. This is particularly crucial when the parties have an important or long-term relationship with each other. Thus, the more traditional form of negotiation is referred to as distributive negotiation. More commonly known as haggling or bargaining, this approach assumes that the resources to be negotiated over are fixed, such that one negotiator’s gain comes at the other’s loss. We acknowledge that there is a time and a place for distributive negotiation, such as when there are indeed fixed rather than expandable resources or when the relationship with the other negotiator is short term or relatively unimportant, and we explain the strategy and tactics of this approach more fully elsewhere (Lewicki et al., in press).
HOW TO DO INTEGRATIVE NEGOTIATION WELL IN TYPICAL CONFLICTS
Integrative negotiation has five major stages: preparation, building the relationship with the other negotiator, exchanging information, inventing and exploring options, and reaching a settlement.
Stage 1: Preparation
We begin with the premise that the objective of negotiation is not merely to secure a mutual agreement; rather, it is to create a good agreement—one that, to the fullest extent possible, satisfies the underlying needs that motivated the negotiation. It is essential to articulate these needs carefully in advance, so our discussion on preparation begins here.
Defining Interests.
Interests are the underlying desires and concerns that negotiators seek to resolve (Fisher et al., 1991). While it may appear unnecessary to articulate interests because they may seem obvious, this is indeed a critical step. Many negotiators understand when there is a conflict that needs to be resolved yet remain unclear on exactly what would satisfy their concerns. Furthermore, interests can be confused with positions—what negotiators say they want—while interests explain why they want those things. Positions tend to be singular and rigid (e.g., “I will not accept less than $30,000 for this car”); interests are flexible insofar as there are multiple ways to achieve the same objective. Consider a dispute between a manager and his employee. The manager strongly desires to promote the employee to a higher position, but the employee is not willing to accept the position without more money than the position is paid. What may seem on the surface to be a conflict over how much money the employee is to be paid (a fixed-pie issue), it might really be a conflict over what work tasks are involved. The new position may require a task that the employee finds especially noxious, giving rise to an otherwise unnecessary demand for compensation to offset this undesirable feature. Viewed in this manner, the conflict might become more tractable because there are multiple routes to this end.
Questions that may be especially useful for articulating one’s interests include, “What do I want from this negotiation?” followed up with, “Why do I want that?” “Why is that important to me?” “What will achieving that help me do?” and “What will happen if I don’t achieve my objectives?” (Lewicki et al., in press).
Defining the BATNA.
While a negotiator strives to satisfy his or her interests in a negotiation, this is not always possible. However, there may be other alternative ways to satisfy those interests if the negotiation fails. The best of these other ways is referred to as the best alternative to a negotiated agreement (BATNA; Fisher et al., 1991). When a job seeker receives two employment offers, the second one is available to be pursued if satisfactory terms for the first are not reached. Negotiators must always be prepared for the possibility of not reaching an agreement, as this gives them the power and confidence to walk away (knowing they can still satisfy their objectives elsewhere). In addition, having a BATNA established in advance may be useful in encouraging the other negotiator to cooperate in reaching agreement (Pinkley, 1995).
Defining Issues.
Issues are specific topics to be negotiated; when an agreement is reached, the parties will have achieved a settlement on each issue. Relevant issues can become more apparent after clarifying one’s interests. The identification of multiple issues can be very helpful in integrative negotiation, since parties often have different priorities among the issues. As an example, in a two-issue negotiation, one negotiator might place very high value on issue A and much less value on issue B; the other negotiator may have the opposite preferences. In this manner, expanding the number of issues and exploring relative preferences among the negotiators may allow them to find an agreement that allows both to achieve their most valued outcome. This type of agreement is called logrolling.
Defining Targets and Walkaways.
Targets and walkaways are positions negotiators take on the set of negotiated issues. After all of the issues are identified, a common metric can be used to scale them (such as points), recognizing that some issues will be very important to the negotiator (and the highest plausible settlement would be worth a very high number of points), while others will be less critical (so the highest plausible settlement would be worth a fairly small number of points). (For an excellent example of this process, see Simons and Tripp, 1997.) Negotiators can then establish a reasonable target number of points for the entire negotiation. This target represents what the negotiator realistically strives to obtain from the agreement. It is also necessary to establish the walkaway point—that point at which a mutual agreement would fail to satisfy a minimally acceptable threshold. In such an instance, it w
ould make more sense to abandon the negotiation in favor of your BATNA.
Understanding the Other Party.
Up to this point, preparation has focused on only one’s own point of view. Now attention shifts to analyzing the other negotiator’s (likely) perspective. This calls for careful analysis to discern the other negotiator’s interests, the issues she wishes to discuss, and where her preferred settlement lies.
Exchanging an agenda in advance of the negotiation might be one useful tool to facilitate this type of analysis. This preliminary effort provides insights to test and refine when meeting with the other party in the negotiation. Systematically considering the conflict from the other’s perspective might provide insight that can be used to create an integrative agreement. Indeed, research has shown that such perspective-taking ability is associated with enhanced joint problem solving in negotiation (Richardson, Hammock, Smith, Gardner, and Signo, 1994); those with higher perspective-taking ability are more likely to identify and capitalize on integrative potential (Galinsky, Maddux, Gilin, and White, 2008). For example, the other party might have different priorities among issues that allow a logrolling solution. Or both negotiators might have commonalities that can be exploited. For example, a father and son might share a highly valued superordinate goal of spending more time together (even though the father dislikes playing video games and the son dislikes watching football on television). This facilitates the search for an activity that both of them can enjoy, or at least tolerate, because it is outweighed by the pleasure of time spent together.