Multiple Issue, Two-party

Negotiations
Session 3: New Recruit
What is different about this negotiation?
 How did you do?

Straw poll

What criteria are you using to know?

Candidate Results
Average = 6178
Recruiter Results
Average = 4910
 Who had more power?

What were your reserva;on prices?

Joint Results
Average = 11089
 Were the issues all the same kind?

Were there dierent kinds of issues?

 Distributive Issues

Fixed-pie issues more for you is less for

me and we value gains and losses similarly

Which issues were distribu;ve?

Did you assume that everything was

distribu;ve?
 Compatible Issues

Issues wherein interests are shared

Which issues were compa;ble?

How many of you discovered these?

Did you use this informa;on strategically?

(Did this backre?)
 Integrative Issues

Issues wherein interests are dierent (like

distribu;ve issues), but with dierent degrees
of importance for each party

Which issues were integra;ve?

How many of you discovered these?

Did you use this informa;on strategically?

Nego;ator Mindsets: Fixed Pie
Whats the Result of This Mindset?
Can we Expand the Pie? How?
What Do We Need in Order to Expand the Pie?

What issues/preferences do we need?

What informa;on do we need?

How can we make it work?

 Interests vs. Posi;ons

Your posi;on is something you decide on. Your

interests caused you to decide For every possible
interest there usually exist several possible posi;ons
that could sa;sfy it When you look behind opposed
posi;ons for the mo;va;ng interests, you can oXen
nd an alterna;ve posi;on which meets not only
your interests but theirs as well. Fisher et al., 1991
Interest: Wan;ng a job that is rewarding
Posi;on: $88,000 salary, working in Division A
There are oXen surprisingly compa;ble
posi;ons for even wildly diering interests.
 How Can We Create Value?

How can you plan for a nego;a;on with interests in

mind?

How can you nego;ate with interests in mind?

How might this be dierent than focusing on

posi;ons?
 Issue by Issue vs. Package Deals?

Did you nego;ate issue-by-issue, and what

happened?

Did you nego;ate with package deals?

 Negotiations As Joint Problem
Solving
In an integrative bargaining situation, it
may be possible for the negotiators to
enlarge the pie before cutting it. In order to
squeeze out potential joint gains, the
negotiators must do some joint problem
solving.
- Raiffa, 1982
Fixed-pie bias
 The Pareto Efficient Frontier

An agreement is defined as pareto efficient

when there is no other agreement that would
make any party better off without decreasing the
outcomes to any other party.

With any pareto inefficient agreement, there

exists an alternative that would benefit at least
one party without injuring any party.
- Neale and Bazerman
 Advanced Methods for Uncovering Interests/Positions

Scoring systems

MESO Multiple Equivalent Simultaneous

Offers
 Scoring Systems
Develop one. Use it!

Why?
Quantitative information helps the recipient of
that information, Raiffa
Consider and quantify all issues
Aids in determining overall reservation price
Can compare package deals, multiple offers
Quick assessment of trade-offs & concessions
 Benefits of MESOs

Anchor and re-anchor the negotiation

Gather information from the other side about relative
priorities
Help unskilled negotiators
Be aggressive and while signaling cooperation
Test what the other side is telling you
Make concessions that are cheap for you
Highlight your own value added
Control the process of the negotiation
 MESO Example

Recruiter oers a choice between

Deal A
6% Bonus
100% Moving Expenses
Plan B Insurance Coverage

OR

Deal B
6% Bonus
60% Moving Expenses
Plan A Insurance Coverage
 MESO Example

Recruiter oers a choice between

Deal A = 1,600
6% Bonus
100% Moving Expenses
Plan B Insurance Coverage

OR

Deal B = 1,600
6% Bonus
60% Moving Expenses
Plan A Insurance Coverage
 MESO Example

What about Candidate??

Deal A = 5,800

Deal B = 2,800

Candidate says: DEAL A !!

 What does this tell you?

Preferences Candidate really wants moving

expenses covered

Priori;es Moving expenses are more

important than insurance when compared to
your preferences
 Gelng Info for Integra;ve Agreements?

How can you build trust and share informa;on?

What kinds of ques;ons should you ask?

How can you give and get info about preferences?

How can you exploit dierent preferences?

How can you nego;ate mul;ple issues simultaneously?

 What Informa;on to Share?

Should you reveal priori;es among issues (rank

ordering issues)?
For example, can you say something like, For me, job
assignment is more important than moving expenses?

Is this the same as revealing preferences for

specic alterna;ves?
For example, saying, I want to work in Division A!

What can you do to get and give the

informa;on you want?
 Post-Seolement Seolements

Is there any way to improve a deal aXer its done?

Can this be helpful at the start of a nego;a;on?

 Metha (2012) Five Essential
Strategies for creating value
Do your homework
Listen Carefully
Incorporate what you have learned into
your offer
Overcome resistance by finding common
ground
Bundle your objectives
Listening in the Communication Process
Listening is the process of taking informa2on from the channels of
communica2on and making sense of it.

Passive listening absorbing informa2on

without any a=empt to given meaning to it
or interpret the messages being sent by the
communicator.
A=en2ve listening making sense of the
messages using own informa2on processing,
assump2ons and lling in the gaps.
Ac2ve listening involves making the
communica2on a two-way process. The
listener is an ac2ve part of the
communica2on process.
Listen Up! Your Talks May Depend on It
Ac;ve listening is a dynamic process that can be
broken down into three dierent behaviours:

Paraphrasing: resta;ng what you heard your counterpart

say without expressing agreement;

Inquire: ac;ve listeners test their understanding of the

other sides point of view by asking open ques;ons ones
that require elabora;on rather than a simple yes or no;

Acknowledge your counterparts message. Beyond

paraphrasing what someone has said, you must
acknowledge what s/he is not saying.
 Nego;ator Toolbox: Summary

Prepare a scoring system

Analyze issues, BATNAs, and RP - think about interests versus
underlying posi*ons
Nego;ate to collect info about integra;ve possibili;es
Make a proposal incorpora;ng all issues
Ask what is wrong with your proposal
Ask diagnos;c ques;ons and listen; dont argue
Build trust and be coopera;ve share integra;ve informa;on
(do not disclose your RP or specic desired alterna;ves)
Trade o when there are dierences in preferences
Be rm on interests, but open to op;ons on posi;ons
Try post-seolement seolements