Negotiation and Dispute Resolution

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CHAPTER ONE
The Nature of Negotiation

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Introduction

Negotiation is something
that everyone does, almost
daily

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Negotiations
Negotiations occur for several reasons:
• To agree on how to share or divide a limited
resource
• To create something new that neither party
could attain on his or her own
• To resolve a problem or dispute between the
parties

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Approach to the Subject
Most people think bargaining and negotiation mean the
same thing; however, we will be distinctive about the
way we use these two words:
• Bargaining: describes the competitive, win-lose
situation
• Negotiation: refers to win-win situations such as
those that occur when parties try to find a mutually
acceptable solution to a complex conflict

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Three Important Themes
1. The definition of negotiation and the basic
characteristics of negotiation situations
2. Interdependence, the relationship between people
and groups that most often leads them to negotiate
3. Understanding the dynamics of conflict and conflict
management processes which serve as a backdrop
for different ways that people approach and manage
negotiations

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Characteristics of a
Negotiation Situation
• There are two or more parties
• There is a conflict of needs and desires between two
or more parties
• Parties negotiate because they think they can get a
better deal than by simply accepting what the other
side offers them
• Parties expect a “give-and-take” process

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Characteristics of a
Negotiation Situation
• Parties search for agreement rather than:





Fight openly
Capitulate
Break off contact permanently
Take their dispute to a third party

• Successful negotiation involves:
– Management of tangibles (e.g., the price or the terms of agreement)
– Resolution of intangibles (the underlying psychological
motivations) such as winning, losing, saving face

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Interdependence
In negotiation, parties need each other to achieve
their preferred outcomes or objectives
• This mutual dependency is called interdependence
• Interdependent goals are an important aspect of
negotiation
• Win-lose: I win, you lose
• Win-win: Opportunities for both parties to gain

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Interdependence
• Interdependent parties are characterized by
interlocking goals
• Having interdependent goals does not mean that
everyone wants or needs exactly the same thing
• A mix of convergent and conflicting goals
characterizes many interdependent relationships

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Types of Interdependence
Affect Outcomes
• Interdependence and the structure of the situation
shape processes and outcomes
– Zero-sum or distributive – one winner
– Non-zero-sum or integrative – a mutual gains situation

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Alternatives Shape Interdependence
• Evaluating interdependence depends heavily on the
alternatives to working together
• The desirability to work together is better for
outcomes
• Best available alternative: BATNA (acronym for
Best Alternative to a Negotiated Agreement)

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Mutual Adjustment
• Continues throughout the negotiation as both parties
act to influence the other
• One of the key causes of the changes that occur
during a negotiation
• The effective negotiator needs to understand how
people will adjust and readjust and how the
negotiations might twist and turn, based on one’s own
moves and the other’s responses

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Mutual Adjustment and
Concession Making
• When one party agrees to make a change in his/her
position, a concession has been made
• Concessions restrict the range of options
• When a concession is made, the bargaining range is
further constrained

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Two Dilemmas in
Mutual Adjustment
• Dilemma of honesty
– Concern about how much of the truth to tell the other
party

• Dilemma of trust
– Concern about how much should negotiators believe
what the other party tells them

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Value Claiming and Value Creation
• Opportunities to...
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