Negotiating opportunities sometimes come from challenging sources: a family member who has been unreliable in the past but promises to make a change; a business competitor that approaches you about a joint venture; a difficult boss with whom you would like to work out a better relationship. How should you deal with potential negotiating partners whom you don’t entirely trust—or should you deal with them at all? The U.S. government faced this question in the hope of convincing North Korea to abandon its nuclear-weapons program. The aftermath of an agreement between the two nations suggests precautions for those of us looking to make headway with our own rogue counterparts.
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Courses and Training
For organizations, feedback is at the heart of good leadership, effective teamwork, efficient problem solving, developing talent, and the ability to understand and serve the needs of clients and customers. And yet, few organizations or leaders feel they have it “right.”
Honest feedback, more often than not, isn’t given or is resisted. Senior leaders get less and less candid feedback as those below them hesitate to offend, or jeopardize, a strategic relationship. And so problems fester, and personal growth stalls.
The usual approach in the business world is to teach managers and leaders how to give feedback with little attention given on how to receive feedback. Learning how to respond to the spoken or unspoken, solicited or unsolicited, feedback that comes your way enables you to take charge of and accelerate your learning. And in the process, others in your organization will learn how to turn even the most unfair, off-base feedback into learning and change.
Harborco is a consortium of development, industrial, and shipping concerns that are eager to proceed with the building of a new port, but face hurdles and potential opposition as they advance through the licensing process. The Federal Licensing Agency would like to see them work with other stakeholders to develop a project that is acceptable to all, or at least most parties. The project proponents must employ their negotiation skills to craft proposals that win the support of others in order to proceed.
Courses and Training
This highly interactive semester-length seminar explores the ways that people negotiate to create value and resolve disputes. Designed both to improve understanding of negotiation theory and to build negotiation skills, the curriculum integrates negotiation research from several academic fields with experiential learning exercises.
In this Special Report, we offer expert advice from the ‘Negotiation’ newsletter to help you close your most important sales negotiations.
When disputes flare up in business relationships, a failure to thoroughly anticipate and prepare for the future is often to blame. Consider a dispute that has arisen surrounding the estate of Maurice Sendak, the acclaimed children’s book author and illustrator of dozens of books, including the masterpiece Where the Wild Things Are. As Randy Kennedy describes in a New York Times article about the dispute, when Sendak passed away in 2012, his estate passed to three executors: Lynn Caponera, his housekeeper and caretaker of more than 30 years; his lawyer, Donald A. Hamburg; and John Vitale, a former production director of Sendak’s publisher, HarperCollins.
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The Mediating Disputes course is now full. Please click the register now button below to sign up for the course waitlist.
Discover how to build a winning team, find an effective negotiation “coach,” budget for negotiations training and boost your business negotiation results in this free special report from Harvard Law School.
To reach agreement, negotiators sometimes postpone the resolution of certain issues until a later date. We look at how this practice plays out in the real world. Remember the federal debt ceiling talks? In mid-2011, congressional Republicans insisted on significant spending reductions from their Democratic counterparts in exchange for voting to raise the nation’s debt limit by an August 2 deadline. Following a flurry of rejected proposals, the White House and congressional leaders finally reached a bipartisan agreement, which had an interesting two-stage structure. In addition to immediately making 10-year spending cuts, the parties established a bipartisan “supercommittee” charged with recommending at least $1.2 trillion in deficit reduction.
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The next offering of the Master Class will be April 8-10, 2015 and registration will open in early January. To receive an email announcing our registration launch, please add you name by clicking here.
In 2004, after Japanese regulators shut down Citigroup’s private bank in the country for breaking numerous laws, then-CEO Charles O. Prince made headlines by traveling to Japan, bowing deeply before television cameras, and apologizing for his firm’s mistakes. As unusual as it seemed in American eyes, the public apology was widely seen in Japan as a necessary first step in restarting Citigroup’s operations there.
An apology can be an effective means of restoring trust in negotiations and disputes, past research has found. In new experiments, William W. Maddux of INSEAD and his colleagues identify cultural differences in the way Japanese and American participants respond to apologies.
Courses and Training
It’s often said that great leaders are great negotiators. But how does one become an effective negotiator? On-the-job experience certainly plays a role, but for most executives, taking their negotiation skills to the next level requires outside training. Designed to accelerate your negotiation capabilities, Negotiation and Leadership examines core decision-making challenges, analyzes complex negotiation scenarios, and provides a range of competitive and cooperative negotiation strategies. Whether you’re an experienced executive or and up-and-coming manager – working in the private or public sector – this program will help you shape important deals, negotiate in uncertain environments, improve working relationships, claim (and create) more value, and resolve seemingly intractable disputes. In short, this three-day executive education program will prepare you to achieve better outcomes at the table, every single time.
From complicated land use debates to the regulation of pollutants, environmental negotiations are fraught with dynamic legal, scientific, and societal considerations. Because many of the natural resources in question are limited and fragile, disputes over them can be particularly difficult.
To help educate professionals about how to work through challenging environmental and sustainability negotiations, the Program on Negotiation’s Teaching Negotiation Resource Center offers a wide range of role-play exercises.
Courses and Training
We all experience emotionally challenging conflicts and negotiations. Whether you are negotiating with your board or with your family, over internal resources or with external partners, as the buyer or as the seller, emotions can turn an otherwise productive negotiation into an unprofitable disaster.It does not have to be that way. In this interactive workshop, you will discover a powerful framework to help you better understand and address the challenging, emotional dynamics that arise in your everyday negotiations and conflicts. This course will provide a framework that you can immediately put to use to help you deal more effectively with everything from office politics to external relations to customer loyalty.Read more
When it comes to conflict resolution, surprisingly useful nuggets of advice come from the realm of international conflict. Take the Camp David Accords of 1978, as described minute-by-minute by Lawrence Wright in his new book, Thirteen Days in September. U.S. President Jimmy Carter made history by negotiating a peaceful end to the conflict between Israel and Egypt that endures to this day. He did so doggedly cajoling and threatening two of the Middle East’s most bitter enemies, Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin. The talks earned Sadat and Begin the 1978 Nobel Peace Prize and prompted the 1979 Egypt-Israel Peace Treaty.
Courses and Training
This course is designed to raise your awareness of your own approach to conflict, introduce a range of theories about mediation and participatory processes, and improve your conflict management skills. While we will discuss a wide range of dispute resolution processes that involve third parties, we will focus on mediation. Each class moves back and forth between theory and skills practice, using theory to improve real world effectiveness, and using experience to improve understanding of theory.
What’s one of the best ways to teach the art and science of negotiation? Case studies and articles that spark lively discussion or facilitate self-reflection. Based on real-world examples, these teaching resources are designed to help students envision how to apply what they’ve learned in the classroom and beyond.
The Teaching Negotiation Resource Center (TNRC) at the Program on Negotiation offers negotiation case studies from renowned authors who’ve negotiated trade agreements, aided peace treaties, and handled many other high-stakes deals. By drawing on their own experiences, they’ve crafted negotiation case studies that are authentic, compelling, and enlightening.
Courses and Training
Going far beyond war and peace, international negotiation spans issues ranging from global warming to foreign debt to human rights. Offered for first time in conjunction with Negotiation and Leadership, this dynamic full-day program will explore contemporary issues in international negotiations and diplomacy. Utilizing a combination of theoretical analysis, case studies, and simulations, this program will focus on negotiating across and behind the table and provide strategies and tactics for practicing diplomacy and undertaking international negotiations.
This one-day course, which takes place June 23, 2011, is based on Professor Salacuse’s books The Global Negotiator—Making, Managing, and Mending Deals Around the World in the Twenty-First Century and the Seven Secrets for Negotiating with Government. Participants will be provided with both books at the workshop as part of the course.
It seemed to be a match made in Internet heaven. In late 2010, Google made a $6 billion bid for Groupon, the Chicagobased company that emails daily coupon deals for local goods and services to consumers around the world. (If enough people sign up, the daily deal “tips,” meaning the coupons are issued; otherwise, the deal is called off.) Google was looking for opportunities to branch into localsearch advertising, and Groupon appeared to be the perfect fit.
Courses and Training
The Devil can be defined as anyone perceived as a harmful adversary. In this one-day course, you will learn how to decide whether to negotiate or fight with the Devils you encounter in your everyday life or whether to just walk away. The program, which is based on Professor Mnookin’s book Bargaining with the Devil and takes place June 21, 2012, teaches you how to arrive at a “wise decision” about how to deal with the Devils and avoid emotional, strategic, and political traps.
Some negotiations end with a plan of action rather than a signed contract – for example, a plumber agrees to fix the tile damage caused by his work. Other negotiations wouldn’t be appropriate to commemorate in writing, such as how you and your spouse decide to discipline your young child. But in virtually all significant business negotiations, parties should put pen to paper after negotiating the terms of their deal. In fact, contract law requires certain types of deals to be in writing for them to be enforceable.
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How can you say “No” to customers – external or internal – who are pressing you to do something not in your organization’s interest? How can you say “No” to an overly demanding employee or a demanding boss without hurting a valuable relationship? How can you save the deal and the relationship and still say “No”?
Saying “No” the right way may be the single most valuable skill in negotiation—absolutely key to getting to “Yes”. As you will learn in this one-day course, the secret to saying “No” while protecting and advancing your core interests without compromising relationships lies in the art of a “Positive No.”
What to do when you’ve done everything right, but you still don’t have an agreement.
Courses and Training
In corporate dealmaking, much of the action happens away from the negotiating table. Successful dealmakers understand that deal set-up and design greatly influence negotiation outcomes.
In this program, you will examine the legal, tactical, and structural elements of dealmaking and acquire practical skills and techniques for navigating difficult tactics and pursuing interest-based negotiations.
Whether you are an experienced negotiator or new to the field, you will learn how to abandon behaviors that hinder negotiations and emerge with new conceptual frameworks, practical skills and a systematic approach to navigating complex business deals.
When financial disputes arise between longstanding partners, both insiders and outsiders often note, “It’s not about the money.” Simmering resentment, mutual blame for ongoing problems, poor communication, and other deep issues often underlie arguments over money and make conflict management all the more difficult. Parties may reach agreement on monetary issues, but if they fail to tackle their underlying differences, one or both sides is likely to leave the table feeling dissatisfied and the conflict will continue.
Courses and Training
Turn disputes into deals. Transform deals into better deals. Resolve intractable problems. Negotiating effectively requires the ability to change the game – moving away from conflict and toward collaboration. In this intensive, interactive program, you acquire a proven framework for maximizing the value of your negotiation, whether you are behind the bargaining table with a client or across the table with an opposing party.
Engaged with a professional group of peers, you will participate in discussions and simulations that cover a range of complex scenarios ranging from intellectual property, pricing, and licensing negotiations to international, domestic, public, and private disputes. You will refine your negotiation skills and leave with a set of strategies that you can use to deal with difficult negotiation behaviors and hard-bargaining tactics.
Employers sometimes ask potential employees to agree not to work for their competitors in the future. Don’t assume such requests are nonnegotiable. In the fall of 2010, journalist Christopher Flores was looking for a job in Chicago. As he recounts in a February article in the Chicago Reader, he came across listings for staff writer positions for local online coupon company Groupon. (We covered Google’s failed attempt to purchase Groupon in our March issue.) Intrigued by the witty style in which Groupon’s daily deals are described, Flores sent in a writing sample and was invited to attend a seminar called “Groupon Academy,” where he and about 30 other prospective employees would be educated about the company and given a chance to write a freelance Groupon ad.
Courses and Training
Whether you’re a vice president, litigator, manager, or transactional attorney, negotiation is central to nearly every professional activity. Systematic and thorough preparation, as well as an ability to manage shared, different, and conflicting interests, is critical to success.
Designed to address the core issues that you experience as you negotiate on behalf of your clients, organizations, or yourself, this intensive two-day program provides a theoretical framework for thinking about business and legal negotiations. You will address distinct challenges faced by lawyers and professionals – ranging from multi-party, complex negotiations to situations involving difficult people and behaviors – and acquire proven strategies for overcoming them.
A growing body of research suggests that status concerns vary depending on the gender of interested parties.
First, men tend to care more about status than women do. Using a university sponsored fundraising campaign, researchers Bruno S. Frey and Stephan Meier of the University of Zurich examined how social-comparison information affected contribution rates.
Male students who learned that a high percentage of students had contributed to the campaign were more likely to make a contribution than were female students who received the same information.
In the context of negotiation, professors John Rizzo of Stony Brook University and Richard Zeckhauser of Harvard University asked a group of young physicians about their reference groups and salary aspirations.
Courses and Training
Too many negotiators leave value on the table.
They painfully divide a small pie after a costly battle while failing to capture offsetting opportunities for joint gain, or win the battle, but at the cost to relationships and reputation that limit long-term value.
Reliably negotiating optimal outcomes requires a keen appreciation of the negotiation process, systematic preparation, and honed interpersonal skills.
In this intensive, interactive program, you will acquire a framework, tools, techniques, and skills for maximizing the value of your negotiated outcomes by effectively navigating the negotiation process from setup to commitment to implementation.
Imagine that you are the founder of a start-up that has not been as successful as you’d hoped. You are thinking about making one last push to get your product off the ground, but you would need some extra financing to do so. A series of deals has fallen through, and you are under great stress. Now you are negotiating what you believe to be the company’s last remaining option: a high-interest loan from a lender with a questionable reputation. Should you close down your company or finalize negotiations on the risky loan?
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When negotiations become difficult, emotions often escalate and talks break down.
To overcome barriers and turn negotiations from difficult to collaborative, from breakdown to breakthrough, you must learn to understand the inter- and intra-personal dynamics at play. In this program, you will examine how your own assumptions and behaviors can help create and perpetuate negotiation dynamics you desperately want to avoid, and learn how to modify even deeply held assumptions and enact new behaviors more likely to foster successful negotiations.
On October 30, the Walt Disney Company made a bold leap into the world of fantasy movies with its surprise announcement that it was acquiring Lucasfilm, home of the immensely successful Star Wars brands, from its founder, George Lucas, for $4.05 billion, split evenly between stock and cash. Lucas is the sole shareholder of his company.
Executives rarely view themselves as diplomats. Rightly or wrongly, diplomacy evokes images of frivolity – days spent wandering exotic capitals, nights spent cruising embassy cocktail parties. Sure, both diplomats and executives negotiate, but an ambassador doesn’t have to worry about protecting the company’s bottom line or losing a deal to a competitor.
Yet it would be a mistake for those in the corporate world to dismiss the diplomatic realm so quickly. After all, diplomacy is the art of creating and managing relationships among nations. As such, it offers valuable tools for all business negotiators, who themselves are in the business of creating and managing relationships among companies – whether they view this as their overall goal or not.
Imagine that you’re the CEO of a sports clothing manufacturer based in Chicago. You recently traveled to Amsterdam, the Netherlands, to meet with a distributor who has a rich and diverse network in the European sports market.
During the business trip, you both express enthusiasm about the possibility of a joint venture and agree to give the potential alliance more thought.
Back home, you learn that one of your competitors has discussed similar plans with the same distributor.
The following “Ask the Negotiation Coach” question was posed to Dwight Golann, Suffolk University Law School professor and negotiation expert: Question: I deal with legal disputes and would like to find reasonable solutions without wasting years in court. But my opponents seem to feel compelled to make extreme—actually, insulting—opening offers. How should I respond?
In negotiation, our success often hinges on our bargaining power—which in turn can depend on forces beyond our control. That truism was highlighted in two recent disputes arising from business negotiations over the pricing of copyrighted material in the digital era, one from the music world, the other from publishing. First, country-music star Taylor Swift injected new life into the stagnating music industry with the October release of her first pop album, “1989.” The album sold 1.287 million copies in the United States in its first week, instantly becoming 2014’s bestseller to date. Amid the win-win-win news for Swift, her fans, and the music industry, there was one clear loser, however: Spotify, the world’s most popular music-streaming service.
Suppose that in each case, the parties and their lawyers have exhausted their attempts to negotiate a resolution on their own. They’re ready for outside help in ending their dispute, yet they don’t know where to turn.
When it comes to dispute resolution, we now have many choices. Understandably, disputants are often confused about which process to use. This article offers some guidance, adapted from
Frank E. A. Sander and Lukasz Rozdeiczer’s chapter on the topic in The Handbook of Dispute Resolution [LINK] (Jossey-Bass, 2005).
Advice seeking inherently employs multiple self-presentation tactics (including ingratiation, self-promotion, and supplication), it allows us to improve both our competence and our likability. Think about the last time someone asked you for advice. How did you respond? You probably had at least one of these reactions:
Imagine that you and your family have moved to a new town. You’re living in a month-to-month rental and have finally found the perfect house to buy. Unfortunately, the seller is being unreasonable. The house is on the market for $600,000, but your research, backed up by your broker’s opinion, tells you it’s overpriced. By your estimate, a fair price would be $500,000, but when you offer that amount, the seller tells you that you are “not even close” and doesn’t counter. You think the seller is in denial about the slump in the housing market, which has affected prices in your town quite a bit.
A new research study confirms what many of us have suspected: anxiety about a negotiation is likely to work against you. Researchers Alison Wood Brooks and Maurice E. Schweitzer of the Wharton School at the University of Pennsylvania have taken a first look at whether anxiety affects negotiators’ outcomes. In three experiments, the researchers induced anxiety in some of their college student participants by having them listen to frenetic music (the theme from the movie Psycho ) or watch an anxiety-producing film clip about rock climbers. Participants in a neutral condition listened to a piece of classical music or watched a video clip of ocean fish.
International law and diplomacy is a rapidly evolving field that depends on the brokering of agreements between nations and other stakeholders. Whether there are language barriers, cultural differences, or both, some of the most challenging negotiations involve parties from different nations. Because of the relative lack of clear legal precedents and the difficulties of enforcement, most decisions are reached via global agreements rather than decided by courts.
If you manage people, disputes will show up at your door. The marketing VP protests that the budget cap you and your new finance VP proposed is hindering a research initiative you supported. Two young sales representatives are embroiled in a turf war. Your administrative assistant is upset because the HR director won’t approve the extra week of paid maternity leave you promised her. Fail to address such employee concerns and you’ve failed as a leader. But it can be difficult to know how to respond, especially when you have a stake in the problem.Sometimes third-party intervention can make matters worse.
Articles in Negotiation have highlighted many of the cognitive biases likely to confront negotiators. Work by researchers Russell B. Korobkin of UCLA and Chris P. Guthrie of Vanderbilt University suggests how to turn knowledge of four specific biases into tools of persuasion.
Microsoft CEO Satya Nadella found himself in the hot seat in October after telling women attending the Grace-Hopper Celebration of Women in Computing that the best way to effectively negotiate for a raise is not to ask for one at all. Asked by Harvey Mudd College President and Microsoft Board Member Maria Klawe for advice on negotiating for a higher salary, Nadella said, “It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along.” He suggested that women could expect to be financially rewarded thanks to “good karma.”
Although Elfenbein and her colleagues did find that negotiators performed at a similar level from one negotiation to the next, to their surprise, these scores were only minimally related to specific personality traits. And traits that are basically unchangeable, such as gender, ethnic background, and physical attractiveness, were not closely connected to people’s scores.
A small number of traits did affect negotiators’ performance,however. Let’s look at the qualities that stood out in this study, as well as some that other researchers have identified.
As you know, gender stereotypes often enter the negotiation process. Women and men are perceived to, and often do, act differently in negotiations. Furthermore, gender-based discrimination—such as less pay, unequal treatment, and sexual harassment—is often a source of conflict. With the resources available through the Teaching Negotiation Resource Center (TNRC), professionals can learn how to fairly and effectively negotiate gender discrimination issues.
Jim Sebenius, the Gordon Donaldson Professor of Business Administration at Harvard Business School, and Director of the Harvard Negotiation Project, addressed these questions in his presentation at the NP@PON Faculty Dinner Seminar on October 7, 2010. His article, “Developing Negotiation Case Studies,” began as a memo to a novice case writer about how to write an effective negotiation case. Now it is a full-length article that will appear in a forthcoming issue of Negotiation Journal.
If you’ve ever come away from a negotiation asking questions like this, poor communication may be to blame, write Roger Fisher, William Ury, and Bruce Patton in their landmark book, Getting to Yes: Negotiating Agreement Without Giving In (2nd Ed., Penguin Books, 1991).
Facebook’s $19.6 billion acquisition of text-messaging start-up WhatsApp seemed exorbitant when it was negotiated back in February. But as it turns out, the final price tag on the fifth-largest technology deal ever turned out to be even higher.
In many negotiations, both parties are aware of what their interests are, and are willing to engage in a give-and-take process with the other party to come to agreement. In conflicts related to personal identity, and deeply-held beliefs or values, however, negotiation dynamics can become more complex. Parties may not be willing to make any concession that helps the other side, even if it would bring about a reciprocal concession that would be in their own favor.
Suppose you want to hire a mediator to help you resolve a conflict that you’re having with an individual or a company, but for various reasons, meeting face-to-face would be difficult.
Perhaps you and the other party are located in different geographic areas. Maybe your dispute originated in an online transaction, and you’ve never even met. Or perhaps one of you feels threatened or intimidated by the other and is reluctant to meet in person.
“Indirect confrontation” may be a useful way of helping a counterpart save face, writes professor Jeanne Brett of Northwestern University’s Kellogg School of Management in an August 2010 article in the journal Negotiation and Conflict Management Research.
Whether to grade student role-play performance, process and outcomes is a tricky question. Jim Lawrence, a long-time PON contributor, simulation author, attorney and practicing mediator with Frost Brown Todd LLC, recently shared his thoughts on the value and purpose of grading students participating in negotiation simulations.
The fallout from Iceland’s financial crisis offers a case study in dealing with those who have suffered a significant blow to their self-esteem. In late 2008, Iceland teetered on the edge of bankruptcy following the collapse of its three largest banks. Since becoming independent of the government in 2002, the banks had pursued a strategy of borrowing money abroad and offering high-interest loans to online lenders—a strategy that failed spectacularly when the global credit crisis hit. Most notably, investors in the United Kingdom and the Netherlands lost 4 billion euros ($5.8 billion) in the Landsbanki’s “Icesave” Internet savings accounts.
Robert Kraft, owner of the New England Patriots, was by all accounts a major factor in getting the NFL collective bargaining agreement signed earlier this week. To do so, Kraft employed four key negotiation tactics to help the players and owners come to a “win-win” solution.
You probably can recall times when a negotiating opponent made what appeared to be a blatant misstatement. If you’re like most people, you assumed the person was lying to gain an advantage. But what if she genuinely believed in the false claim? It’s not easy to offer the benefit of the doubt, especially when the stakes are high. Reasonable, fair-minded negotiators often find themselves in such situations—accusing others of unethical behavior or facing such accusations themselves. Either way, the negotiation may head down a path that leads to impasse and destroys the relationship.
In business negotiations, threats can be fraught with risk. There is the risk that a threat will escalate conflict. There is the risk that a threat will motivate a desire for revenge. And then there is the risk that your threat will work perfectly, but you’ll be unprepared for the aftermath.
That last scenario may describe what happened recently when a number of executives and investment officers at Pimco Investment Management threatened to quit unless Bill Gross, the firm’s co-founder and manager of its flagship Total Return Fund, was fired.
Negotiators succumb to these forces for two main reasons:
They don’t realize that their behavior is unethical, and even when they do, they justify their behavior as ethical in this particular case.
This expectation of a “domino effect” may be especially likely in international negotiations, where cultural differences and territorial concerns perpetuate an “us versus them” approach. Take the international debate over Japan’s long tradition of hunting whales, a practice that many other nations condemn as barbaric and have tried to halt. In 1986, the United States threatened that it would limit Japanese ships’ access to U.S. fish stocks if Japan continued to allow whaling. Japan did agree to halt whaling, but the U.S. government followed through on its threat nonetheless. Japan resumed whaling the following year under its controversial scientific program.
For fans of AMC’s hit show Mad Men, the news was terrible. In late March 2011, the network publicly confirmed that the fifth season of the show, originally set to air summer of 2011, would not air until early 2012. A contract dispute with the show’s creator, producer, and head writer, Matthew Weiner, had held up the writing and production of the new season. The network reportedly offered Weiner a $30 million, three-season contract, which would make him one of the most highly paid producers on cable TV.
Business negotiators often complain that although they try to focus on creating value, they run into far too many people on the other side of the table who don’t believe in value creation. Often, they focus exclusively on trying to claim as much as possible for themselves. How should you handle these negotiations?
Most of us have had the experience of delivering an apology that fell on deaf ears. When apologies fail to achieve their aims, poor delivery is usually to blame. In particular, if the recipient thinks your apology is less than sincere, she is unlikely to forgive you.
Here are some concrete guidelines for fostering a strong relationship between negotiating partners drawn from The Global Negotiator: Making, Managing, and Mending Deals Around the World in the 21st Century.
When you expect an opponent to be competitive, your confidence in the outcomes you can achieve is likely to plummet. In research with Adam Galinsky of Northwestern’s Kellogg School of Management, negotiators were provided with some background about their opponent including background information on how competitive their opponent has been in previous negotiations. This information was bogus; it didn’t necessarily describe the opponent accurately but the information still impacted negotiators performance.
When a difficult negotiation such as a labor contract renegotiation looms, it can be tempting for each side to try to make unilateral decisions on certain issues because of the belief that negotiation with the other side will be a dead end. This strategy may pay off in the short term, but it’s important to factor in the long-term costs.
When preparing for your next business negotiation, you may want to strategize not only about what you’ll put on the bargaining table, but also how much food you’ll put in your belly beforehand. That’s the message of new research that Cornell University professor Emily Zitek and Dartmouth College professor Alexander Jordan presented at the annual meetings of the Academy of Management in August. In two experiments, the researchers found that undergraduate students felt a greater sense of entitlement when they were hungry than when they were not. The researchers define entitlement as the sense that one is more deserving of positive outcomes than other people are.
Every year, the Program on Negotiation (PON) honors distinguished scholars with a Graduate Research Fellowship that provides support for one year of dissertation research and writing in negotiation and related topics in alternative dispute resolution. These grants promote negotiation research and are awarded to candidates in the social sciences and professional disciplines who are currently pursuing theoretical, empirical, and/or applied research in the fields of negotiation and dispute resolution. Among our 2014-2015 graduate scholars is Vera Mironova, a PhD candidate in Political Science at the University of Maryland.
Few negotiators can imagine negotiation scenarios more stressful than the kinds of crisis negotiations the New York City Police Department’s Hostage Negotiation Team undertake.
The Program on Negotiation received an article from Jeff Thompson and Hugh McGowan, Ph.D., outlining the techniques and strategies that the New York City Police Department Hostage Negotiations Team employ while dealing with high-stakes, high-pressure crisis negotiation situations.
Jeff Thompson, a NYPD Detective, is a research scholar at Columbia University School of Law and a Ph.D. candidate at the Griffith University Law School in Queensland, Australia. Hugh McGowan is a former commanding officer of the NYPD’s Hostage Negotiation Team, having led the HNT for 13 years. The NYPD Hostage Negotiations team handles more crisis negotiations in one month than most departments do in a year and, in 2012 alone, the department handled 400 such negotiations, one of which was well over 50 hours long and included a team of 17 crisis negotiators.
Business negotiators sometimes face the difficult question of whether to negotiate with someone they believe to be immoral, untrustworthy, or otherwise undesirable as a negotiating partner. In his book Bargaining with the Devil: When to Negotiate, When to Fight (Simon & Schuster, 2011), Program on Negotiation chair Robert Mnookin offers advice on the complex question of whether to negotiate with an unsavory party. The question becomes all the more complex when we would be negotiating not on our own behalf, but representing someone else. Turning to the realm of international negotiations, that issue came to the forefront upon the killing of journalist James Foley by the terrorist group the Islamic State in Iraq and Syria (ISIS) on August 19. In interviews with the New York Times, members of Foley’s family described the confusion and stress they faced when they found themselves virtually alone in trying to negotiate his release. About a year after Foley’s capture in Syria in November 2012, ISIS sent an email to his brother, Michael Foley, that revealed the group wanted money for Foley’s release. A follow-up email demanded about $130 million in ransom and the release of Muslim prisoners from the United States.
Many of us advise others on the job yet fail to plan adequately for this responsibility. Set up a strong relationship by negotiating your role as advisor. Name-calling, backstabbing, and turf wars erupted among President Barack Obama’s civilian and military advisors in 2009, as he tried to devise a strategy for ending the war in Afghanistan, writes journalist Bob Woodward in his recent book, Obama’s Wars (Simon & Schuster, 2010). Granted extensive access to Obama and members of his administration, Woodward depicts a power struggle that caused the president to lash out at his advisors in frustration at times. As Woodward’s book suggests, advisors can be as much a headache as a help.
The dangers of ‘take-it-or-leave-it’ deal proposals and your BATNA – Negotiation Coach Ian Larkin, Harvard Business School professor, explains why.
In our politically charged era, most Americans—Republicans, Democrats, and Independents alike—seem to be able to agree on one thing: in recent years, Congress has been a poor model of negotiation behavior. Battles sometimes seem to be fought less on principle than on a vindictive desire to beat the other side. Mutual respect is in short supply, and grandstanding distracts from substantive debates.
What’s the difference between an effective bluff and an ineffective one? Last year’s financial meltdown offered an example of each. In last month’s issue, we described how a bluff by then–U.S. Treasury Secretary Henry Paulson scared off potential buyers for failing investment bank Lehman Brothers in September 2008. After Paulson told Wall Street CEOs that no government funds were available for a Lehman deal—a claim he later admitted was a bluff—the firm fell into bankruptcy.
All of us have a personal approach to negotiation. Here’s how to make the most of yours.
Your boss has asked you and a colleague to collaborate on a marketing campaign for your small company. At your first meeting, you and Jeff, your colleague, present several proposals to each other. You believe Jeff’s plans aren’t very good and that one of your proposals is the clear winner. But Jeff suggests you work together to “merge” your good ideas. Will you negotiate for your preferred proposal?
When employees leave an unsatisfying job, the feeling of relief they feel sometimes motivates them to explain their decision to whomever will listen. But that tendency can backfire and necessitate tense business negotiations, as a recent story from the world of high fashion illustrates. In November 2012, designer Nicolas Ghesquière startled the fashion world with his decision to leave his position as the creative director of design house Balenciaga, a job he had held for 15 years. The two sides negotiated a deal: the house would pay Ghesquière $8.8 million in return for his written promise not to make any comments that could damage the image of Balenciaga, its owners, and its shareholders and collaborators, The Australian reports.
Question: I’ve just finished reading the recent book No One Would Listen: A True Financial Thriller (Wiley, 2010) by Harry Markopolos, the whistle-blower in the Bernard Madoff scandal. Why do you think Markopolos was so ineffective at persuading the Securities and Exchange Commission (SEC) that Madoff was a fraud? What does this story tell us about how to be persuasive in negotiation more generally? Answer: I read Markopolos’s book, too, and I found it to be stunning. I’ve also read quite carefully the publicly available documentation of his investigation that he provided, and I agree with his core conclusions.
As he entered his second term in office, President Obama set a goal of taking concrete steps to address global climate change. A global agreement on the issue is in sight, but a key obstacle stands in the way: the U.S. Senate. According to the Constitution, a president needs approval from a two-thirds majority of the Senate to enter into any legally binding treaty. Obama is eager to avoid what happened in 1997, when the Senate refused to ratify the Kyoto Protocol, a legally binding U.N. climate change treaty. Indeed, the odds of the Senate passing a similar treaty 17 years later are nil, reports Coral Davenport in the New York Times. In 2012, Republican senators blocked ratification of a U.N. treaty on equal rights that had been modeled on an American law and negotiated by Republican president George W. Bush. With the Senate unable to reach agreement on that treaty, Obama is trying a new strategy on the much more controversial issue of climate change: a workaround.
In the aftermath of events ranging from the Catholic Church’s child sexual abuse scandal to the 1994 Rwandan genocide, victims have received apologies from those who caused or perpetuated their suffering. Yet those who have been harmed are not always willing or able to forgive. In the context of business negotiations, when a counterpart apologizes for harming or offending you, should you forgive and move forward? What if doing so seems impossible?
Here’s a prime example of negotiator innovation during difficult economic times. Eager to retain its top talent but low on cash, Zurich, Switzerland–based financial-services company Credit Suisse Group included millions of dollars of its own toxic assets in the 2008 bonus packages of its 2,000 top bankers. Typically, investment banks use cash and company stock to pay end-of-year bonuses.
The U.S. Senate’s struggle to pass truly bipartisan financial reform reveals ways negotiators can overcome suspicion and enhance cooperation.
Initially, the partnership seemed promising. Senator Christopher Dodd, a Connecticut Democratic, hoped to cap his 29-year congressional career with a bipartisan financial regulation bill. Senator Bob Corker, a freshman Republican from Tennessee and member of Dodd’s Senate Banking Committee, wanted to make a splash in his new job.
After Dodd reached an impasse with Republican senator Richard Shelby of Alabama, he and Corker teamed up in February 2010 with the goal of overcoming the us-versus-them mentality that was dominating the Senate, as reported by John Harwood in the New York Times.
Question: I’m aware of lots of unresolved personnel issues that seem to be festering in my department, such as complaints about someone who is not doing his share of the work, another person whose griping is causing a drop in morale, and two coworkers who can’t seem to get along. I’m comfortable negotiating with customers, but I don’t know if I ought to get involved in these difficult, more personal matters. They seem important to resolve, but shouldn’t I just mind my own business?
When someone issues a threat or an ultimatum, take a step back and diagnose the problem. Consider how you would respond to threats and ultimatums such as these during negotiation. In the face of such tough talk, should you strike back with a counterthreat? Probably not. Because counterthreats raise the emotional temperature of a negotiation, they will get you even further off track. Instead, immediately after hearing a threat (or just after you issue one yourself), call for a break.
A Negotiation reader asked if negotiation without a BATNA is possible. David Lax, Managing Partner at Lax Sebenius and Program on Negotiation faculty member responds in this January 2008 article of “Dear Negotiation Coach.” I am looking for tips on negotiating with sole suppliers who know I don’t have any real outside alternative and who take advantage of this. Without the power of a realistic BATNA, can you really negotiate?
Given the frequency with which companies air their private grievances, there must be an upside to going public, right?
In fact, there are several.
First, once you’ve threatened to take your dispute public, following through demonstrates your willingness to stand by your words.
In addition, being in the spotlight can motivate both sides to address their differences with a new sense of urgency.
The faster you resolve your differences, the sooner you can get back to business as usual.
Imagine yourself in each of these three negotiation scenarios. In each of these scenarios, negotiators are dealing with an issue related to trust. The travel writer discovers he put too much trust in the translator’s reliability. Most of us approach negotiations with the hope that we will share information, build a relationship, and be treated fairly by our counterparts. But once talks get started, most of us have also had the experience of holding back information, viewing the other side’s behavior with suspicion, and feeling distrusted by them.
In the business world, long-term loyalty to a CEO is supposed to be a good thing. For New England supermarket chain Market Basket, however, employees’ reverent appreciation for their former chief and co-owner, Arthur T. Demoulas, has proved to be destructive to the business in the short term, causing employee and customer protests as well as a state of decision paralysis among Market Basket’s board of directors.
In June, Demoulas was ousted in the culmination of a decades-long feud with his cousin, Arthur S. Demoulas, another co-owner of the family business. Arthur S. took control of the company, which is one of New England’s most successful retail chains, the New York Times reports.
The firing infuriated Market Basket employees, who had enjoyed good wages, regular bonuses and a generous profit-sharing plan. “You had Santa Claus in charge,” supermarket industry analyst Daivd Livingston of DJL Research in Milwaukee told the Boston Globe. “Every day it was Christmas.”
To turn up the heat on opponents, negotiators sometimes advertise their grievances.
Here’s negotiation skills advice on when it’s a good idea to be vocal—and when to keep talks private.
The decision seemed nonsensical.
Early on the morning of March 7, 2010, with the Academy Awards telecast just hours away, the Walt Disney Company pulled the signal on WABC, its New York–area station. Residents in the New York area awoke to learn they might have to scramble to watch the Oscars via satellite at bars or friends’ homes.
In 2006, representatives of wind-energy developers started knocking on the doors of Wyoming ranchers.
They were seeking to persuade the ranchers to sell the rights to build wind turbines on their land, reporter Addie Goss recounted on National Public Radio. Typically, the developers build wind farms by leasing large blocks of land from many different landowners in western states. In Wyoming, ranchers began signing leases without knowing the true value of the wind sweeping across their land.
U.S. Department of Agriculture program coordinator Grant Stumbough heard about the wind developers crisscrossing Wyoming and had a brainstorm: by working together, the ranchers might be able to get better deals.
Most business negotiators understand that by working collaboratively with their counterparts while also advocating strongly on their own behalf, they can build agreements and longterm
relationships that benefit both sides.
During times of economic hardship, however, many negotiators abandon their commitment to cooperation and mutual gains.
Instead, they fall back on competitive tactics, threatening the other side with “take it or leave it” offers and refusing to accept concessions of any kind.
When you’re more tightly bound to an agreement than your counterpart is, trouble could follow. Manage your escalation of commitment—and level the playing field.
Read the following three examples and notice the differing levels of commitment between the two negotiating parties.
Consider these three real-life negotiating scenarios.
Individual negotiators are sometimes overwhelmed by the idea of leading organization-wide changes to negotiation practices. In fact,
it doesn’t take much time or effort to set the wheels of reform in motion, write Hallam Movius and Lawrence Susskind in Built to Win. Here
are four simple steps to implement in your workplace.
During the past several years, one scandalous story of unethical behavior after another has made headlines: Countrywide’s and AIG’s risky business practices, trader Bernard Madoff’s Ponzi scheme, and former Illinois governor Rod Blagojevich’s alleged attempt to sell a U.S. Senate seat. As instances of people behaving badly proliferate, some commentators have wondered if we are experiencing an epidemic of immorality.
Madoff and Blagojevich seem to represent extreme cases on the fringes of human behavior—a couple of very bad apples. In fact, new psychological research suggests that most of us experience ethical lapses under certain conditions. But rather than knowingly causing harm, as Madoff did, we are more likely to unintentionally violate our own moral code.
In negotiation, even minor instances of immoral behavior could damage your reputation and your organization’s as well. Here we present three common ethical pitfalls and suggest ways to police yourself and your counterparts.
When transferring property, sellers sometimes insist on rights of first refusal – the chance to be first in line to repurchase the property if their buyer later decides to sell. Rights of first refusal can be obvious advantages if your financial circumstances later change. If you’re keeping adjoining land, you may wish to protect yourself against the risk of something unattractive being built next door.
In the workplace, misunderstandings, power struggles, and stress can cause conflict to fester and take a toll on productivity. The best organizations put in place conflict management processes and systems to confront conflict directly. Unfortunately, too many organizations fail to do so—and suffer the consequences of sweeping conflict under the rug.
Take the case of Paradigm Capital and its owner, Candace King Weir, which were fined $2.2 million by the Securities and Exchange Commission (SEC) for retaliating against James Nordgaard, an employee who blew the whistle on tax-avoidance strategies that Paradigm carried out for the hedge fund PCM Partners. PCM Partners was not notified that a conflict of interest existed between Weir and a company she owned, CL King & Associates, as reported in Operational Risk & Regulation.
In particular, the SEC faulted Paradigm for not having outsiders on its conflict-resolution committee, a structure that appeared to contribute to the retaliation against Nordgaard. Nordgaard was demoted from head trader to compliance assistant and otherwise marginalized after reporting the wrongdoing he observed to the SEC. It was the first penalty handed down by the SEC’s new whistleblower protection program.
Have you ever wondered if your negotiating style is too tough or too accommodating? Too cooperative or too selfish? You might strive for an ideal balance, but, chances are, your innate and learned tendencies will have a strong impact on how you negotiate. Wise negotiators seek to identify these tendencies and enhance them according to the situation.
Individual differences in “social motives,” or our preferences for certain kinds of outcomes when we interact with other people, strongly affect how we approach negotiation, according to Carnegie Mellon University professor Laurie R. Weingart. Drawing on the social motives that drive our behavior, Weingart and other psychologists have pinpointed four basic negotiating personalities.
On June 19, Republican Representative Thomas Massie of Kentucky, a libertarian, teamed up with two liberal Democrats, Zoe Lofgren of California and Rush D. Holt of New Jersey, to push through an amendment that places new prohibitions on the National Security Agency and the CIA’s surveillance operations, including barring the agencies from engaging in warrantless collection of Americans’ online activity, the Times reports.
Intercultural negotiations are common these days—and so are culture clashes. Here’s how to handle the added complexity such talks can bring.
Imagine that you’re the American representative of a U.S. food company, and you’re hoping to procure a new ingredient for several of your products from a German company. A representative from the company is flying in to meet with you. Do you expect your German counterpart to behave differently than the Americans you typically deal with, and if so, how? Will you adapt your negotiating style according to your expectations?
Now imagine instead that your counterpart represents a Chinese company or that your counterpart is from Mexico.
On June 18, the board of retailer American Apparel informed the company’s controversial founder, Dov Charney, that it was ousting him from his roles as chairman and CEO. For years, Charney had fended off sexual-harrassment lawsuits and rumors of inappropriate behavior. But only when the company’s creditors grew anxious about its long-term liability did the board decide to take action, citing new and damning revelations, as reported by Elizabeth A. Harris in the New York Times.
As the saga continues to unfold, it has highlighted several dimensions of negotiation that managers and executives would be wise to heed—including the importance of continually assessing your BATNA, or best alternative to a negotiated agreement.
Whether you’re purchasing a new home or car, or negotiating a discount on an inventory purchase for your firm, the art of haggling enables negotiators to make a strong claim for their share of the pie. Here are six tips from the Negotiation Briefings newsletter to help you start becoming a better at haggling in business negotiations.
One common misconception of haggling is that it must focus only on a single issue: price.
Although price might be the most important issue at stake, you could sweeten the deal for both sides by discussing other issues, such as delivery, financing, and the possibility of repeat business.
You can open up such opportunities through direct questioning or by making what Malhotra and Bazerman call contingent concessions—concessions that you link to specific actions by the other party.
The Harvard Negotiation Project was recently mentioned in the Wall Street Journal by David Feith in his interview with Benny Tai, “China’s New Freedom Fighters.”
Benny Tai, a 49 year old lawyer who has been branded an “enemy of the state,” founded Occupy Central with Love and Peace, a group that promotes civil disobedience in order to promote free elections in Hong Kong.
Among Tai’s inspirations include works from the Program on Negotiation’s Harvard Negotiation Project.
On June 30, compensation expert Kenneth R. Feinberg unveiled a plan to give restitution to victims of accidents related to the fatal ignition flaw in 2.6 million General Motors vehicles. The plan—designed to be as generous as other compensation plans Feinberg has overseen, including payouts to victims of the 2013 Boston Marathon bombings—is part of GM’s efforts to restore public trust and reduce the number of costly lawsuits it could face, Hilary Stout reports in the New York Times. GM had faced heavy criticism for failing to disclose the defect for more than a decade.
The plan guarantees at least $1 million for families of those who died in accidents caused by the ignition problem. A calculation of the deceased’s lifetime earnings plus $300,000 for a spouse and for each dependent will be added to the $1 million payout. People who received life-altering catastrophic injuries as a result of the ignition defect could earn more, and those who received minor injuries can also be compensated for medical fees.
“General Motors basically has said whatever it costs to pay all eligible claims, they will pay it,” said Feinberg.
Two stories emerged in the news this month that illustrate polar opposite attitudes toward negotiating salary and benefits in the workplace.
First, a New York Times profile revealed that Ira Glass, the creator and host of the popular radio show “This American Life,” is highly uncomfortable earning a high salary. In recent years, Glass earned about $170,000 in compensation and benefits. In 2013, the board of WBEZ public radio—his show’s producer—raised that figure to $278,000 to bring it in line with his stature and success.
Glass felt “weird about it,” he told Cara Buckley of the Times. In fact, he felt so weird about the
increase that he asked the board to lower his salary the following year to $146,000. “Then this year, I asked to lower it again,” he wrote in an email to Buckley, adding, “It’s still a lot of money.”
At this point, you have entered the realm of haggling: the dance of concessions that follows each party’s first offer. (In our TV negotiation, the $1,100 list price was the store’s first offer.)
For some, this is where the real fun begins; for others, it’s time of great anxiety. To manage your stress, keep your BATNA at the forefront of your mind. Knowing that you have a good alternative if the negotiation fails will help you stay calm and rational. Suppose the salesperson tells you there’s no way he can go as low as $900.
“I could come down $75 to $1,025, though.”
Note that this offers $50 above your $975 reservation price—the maximum you’re willing to pay to get a deal.
After you discuss the pros and cons of your desired item, the salesperson might offer to give you a discount without any prompting. If not, open the negotiation yourself: “I can buy this TV online this weekend at a much lower price. Can we work together toward a more competitive deal?”
If the salesperson is willing to negotiate, and if you have a strong sense of the ZOPA, you are positioned to make an offer: “Can you beat Amazon.com’s price? It’s $900. I can pay in cash, by the way.”
While the blueprint for achieving your negotiation goals may differ depending on the type of negotiation, the road to negotiation success looks much the same across most negotiation scenarios.
In discussing the art and science of negotiation, Great Negotiator 2014 Tommy Koh described five “fundamentals” that Program on Negotiation faculty member James K. Sebenius says, “have value in almost any negotiation.”
If you’re looking to get more leverage out of your next job negotiation, the noncompete agreement that may very well be tucked inside your employment contract could provide an opportunity to just that.
Previously limited to the domain of corporate trade secrets, noncompete agreements have cropped up in a wide array of fields in recent years, from hairstyling to sales to yoga instruction.
One summer camp even included a noncompete clause in its teenage counselors’ summer employment contract, reports Steven Greenhouse in a recent New York Times article on the growing prevalence of noncompete agreements. Counselors at the Linx-branded camp in Wellesley, Mass. who signed the contract were barred from working at a competing camp within 10 miles.
Dispute resolution is often a multistep process that can start with negotiation, move on to mediation, and, if necessary, end in arbitration or litigation.
This progression allows parties to start off, quite naturally, with less-expensive, less-formal procedures before making bigger commitments of money and time.
Still, there may be situations in which you wonder if it would be better to sue first and then aim for a settlement, rather than starting with a more collegial process.
We tend to view job negotiations as battles over a fixed pie of resources: A higher salary for the employee means lower profits for the employer. More vacation time equals lowered productivity, and so on.
But employment negotiations can lead to win-win agreements. If an entrepreneur can’t afford office space, she will benefit from hiring employees who prefer to work at home. In that case, the parties have compatible preferences. Even when their preferences aren’t compatible, the two sides can make tradeoffs across issues to reach satisfying agreements: an employee who wants more vacation time might volunteer for a responsibility that others have shunned, for example.
Two art museums have been at the center of disputes involving their host cities, Detroit, Michigan, and North Miami, Florida. In both cases, the question of who owns the museums’ collections and the museums themselves is at stake. Also in both cases, the interested parties have turned to mediation to break the impasse.
Beginning in Detroit, the city’s bankruptcy put the world-class collection of its art museum, the Detroit Institute of Arts (DIA), in jeopardy. Though the DIA is operated by a nonprofit organization, its valuable collection is owned by the city, a fact that puts it in jeopardy.
Some Detroit creditors have argued that part of the collection should be sold off to help address the city’s $18 billion in pension and other liabilities, writes the New York Times. But local leaders and museum officials have rejected this idea, arguing it would be short-sighted and demoralizing for a city that is attempting to rebuild itself after a devastating fall.
In today’s market, consumers are often the more powerful parties in negotiations with sellers.
To claim the most value in your next haggling experience, use the following six strategies.
As compared with other forms of dispute resolution, mediation can have an informal, improvisational feel.
Mediation can include some or all of the following six steps
Suppose that two businesses have similar sounding names. The similarity is confusing to customers, or could be down the line. One of the businesses decides to do something about it. How can they engage in a successful dispute-resolution process?
Two recent conflicts over business names went in different directions. First, a public dispute broke out last year between blogger and writer Bunmi Laditan, creator of the satiric blog and book franchise “The Honest Toddler,” and the Honest Company, an eco-friendly baby-products brand owned by actress Jessica Alba. Laditan started the Honest Toddler in 2012 as a Twitter feed, ostensibly run by an incorrigible youngster offering unsolicited parenting advice. Laditan filed a trademark application for the Honest Toddler name in September 2012. The Honest Company, which also launched in 2012, purchased the Internet domain name honesttoddler.com in March of that year.
This spring, the Metropolitan Opera opened labor talks with the 16 unions representing its workers, whose contracts all expire at the end of July, the New York Times reports. Labor and management agree on one fundamental point—that the opera is struggling financially amid falling ticket sales, a depleted endowment, and growing expenses. Perhaps not surprisingly, however, they disagree on where needed budget cuts should come from.
Met management has asked for 16-17% salary cuts from its workers. The unions have refused, saying the company should shrink its rapidly increasing budget by scaling back on new productions and trim administrative spending.
D. Joseph Hartnett, the assistant director of stagecraft from the opera’s stagehands’ union, struck a conciliatory note, saying “We can save the Met…but it means all of us working together to bring the budget in line.”
What at first seemed like a minor misunderstanding has spiraled out of control. A Chicago-based printing company hired your Chicago-based IT consulting firm to train its staff to use its new computer system.
But throughout the training, our consultants found the company’s staff to be inattentive and unmotivated, and you weren’t surprised when the company kept summoning your team back for individualized training and troubleshooting.
Now the printing company is refusing to pay the $35,000 you’ve billed it for these follow-up services.
The recent exchange between the United States and the Taliban of Sergeant Bowe Bergdahl for five Taliban leaders held at Guantanamo Bay, Cuba, represented the first public prisoner exchange of a US soldier in the thirteen year US involvement in Afghanistan. The background of the deal including how Private First Class Bergdahl (promoted twice to Sergeant while in captivity) entered Taliban control, how the deal was crafted and executed, and what it means for the future have rapidly come forward in bits and pieces through media channels.
What is currently missing in the existing commentary is a holistic negotiation analysis. A negotiation analysis applies negotiation frameworks and theory to better understand the events that have taken place and the unfolding debates, and can provide insight into future negotiations. It also enables understanding by using a template that includes stakeholders, core interests, deal set-up and components, execution, and post-deal debate and legacy to allow for a focused discussion.
Show me the money!” That refrain from the 1996 movie Jerry Maguire, shouted by a football player to his agent, continues to echo through U.S. professional sports negotiations today. A public arena, enormous piles of cash, and even bigger egos combine to make sports negotiations a unique context. Yet anyone who has negotiated through agents, faced a competitive atmosphere, or lacked strong deal alternatives can learn a lot from team athletics.
Why are sports talks tough? In his chapter “First, Let’s Kill All the Agents!” in Negotiating on Behalf of Others (Sage, 1999), Harvard Business School professor Michael Wheeler analyzes the key features that can make sports negotiations so contentious.
Choosing the right words for your contract is a negotiation in itself. Five guidelines will help you achieve greater precision.
When negotiators sign on the dotted line, they sometimes worry about the wrong concerns.
“Did I overpay?” wonders the buyer as he inks the sales agreement.
Across the table, the seller is thinking, “I bet if I’d pushed a little harder, I would have gotten more.”
Yet it’s the words that surround the numbers that often are more important—and harder to get right. Take a simple real-estate deal. Isn’t it better to sell your condo for $400,000than for $375,000? Not if the higher-priced deal is contingent on the purchaser’s sale of her current place. Likewise,the lowest price isn’t necessarily the best for the buyer if it doesn’t include exit provisions for a bad title or termites.
Even after the best negotiations, sometimes the other side will demand a renegotiation of the deal. Here are some guidelines on how to proceed.
Max Bazerman has had extensive experience teaching corporation’s executive negotiation courses. In addition to the faculty and students, some of his sessions have been attended by high level former diplomats who had worked on cases discussed in class. The diplomats were invited, where appropriate, to provide insight into local customs, changing politics, and business norms. They provided that knowledge – and much more. The diplomats taught the groups, faculty and executives alike, to think more broadly about information that is not obviously relevant to a given negotiation but is crucial nonetheless.
On May 13, Lakhdar Brahimi, U.N. special envoy to Syria, announced that he was quitting his position as lead mediator of the Syrian conflict due to frustration with a lack of progress. The same day, a French diplomat said the Syrian government had used chemical weapons more than 12 times after signing a treaty banning the weapons, according to the New York Times.
“It’s very sad that I leave this position and leave Syria behind in such a bad state,” Brahimi told reporters.
He was the second high-level mediator to abandon the conflict. In 2012, former United Nations Secretary-General Kofi Annan gave up his efforts to negotiate an end to the civil war after Syrian President Bashar al-Assad’s government failed to implement the six-point plan that Annan had negotiated between the government and opposition leaders.
Even with a common language and the best of intentions, negotiators from different cultures face special challenges. Try following these guidelines when preparing for talks with someone from a different culture:
When you expect people to be competitive, it’s not only your own behavior that changes.
You also set up a self-fulfilling prophecy, such that your expectations about the other side’s behavior lead him to behave in ways that confirm your expectations.
After recently losing an important deal in India, a business negotiator learned that her counterpart felt as if she had been rushing through the talks. The business negotiator thought she was being efﬁcient with their time. How can she improve her cross-cultural negotiation skills?
Research shows that dealmaking across cultures tends to lead to worse outcomes as compared with negotiations conducted within the same culture. This is primarily because cultures are characterized by different behaviors, communication styles, and norms. As a result, when negotiating across cultures, we bring different perspectives to the bargaining table, which in turn may result in potential misunderstandings and a lower likelihood of exploring and discovering integrative, or value-creating, solutions.
Don’t be caught unprepared by hard bargainers, warn Mnookin, Peppet, and Tulumello in Beyond Winning. Here is their Top 10 list of common tactics.
In their training, police and professional hostage negotiators are taught skills that will help them defuse tense situations over the course of long phone calls, such as engaging in active listening, determining the person’s emotions from his or her inflection, and trust building.
These crisis negotiators are being put to the test by young criminal suspects and others in crisis, whose first instinct increasingly seems to be texting rather than talking, according to an Associated Press article.
Red Bank, Tennessee, police chief Tim Christol tells the Associated Press that the usual negotiation skills he teaches don’t translate to texting, such as emotional labeling in the form of a statement such as “You sound angry.” Without verbal cues, Christol says, it becomes much more difficult to understand the emotional state of the person in crisis, and misunderstandings are common. “Words are only 7 percent of communication,” he says.
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time,” F. Scott Fitzgerald observed, “and still retain the ability to function.”
Most of us dread conflict and the need to engage in conflict resolution. Yet we may be reaping benefits from certain forms of conflict on the job, according to a new study published in the Journal of Applied Psychology.
Researchers Gergana Todorova (the University of Miami), Julia B. Bear (Stony Brook University), and Laurie R. Weingart (Carnegie Mellon University) examined “task conflict,” which arises when members of a group or team debate, disagree, and argue about the task at hand. Distinct from “relationship conflict,” which involves personal differences and disagreement, task conflict is common in organizations. Employees often must solve problems jointly with coworkers within and outside their department.
It’s not difficult for negotiators haggling over seemingly finite resources to become entrenched in their positions. Sometimes the only way to get unstuck is to think appreciatively and creatively about the other side. Rather than trying to determine why a person has taken a particular position, consider what she wants, appreciate it, and try to deliver it.
A few years ago, Stephen B. Goldberg was asked to serve as a facilitator for and adviser to a corporate team from a telecommunications firm that was preparing to negotiate with five other telecom companies on the division of radio spectrum for cellular telephone relay satellites.
The barriers women face when negotiating for jobs and career advancement are well known: Women who ask for more money or better opportunities can face a backlash for violating traditional gender norms. They may get what they want, but they risk being disliked by their coworkers.
Unfortunately, a new study finds that women, as well as racial minorities, are likely to face discrimination even before they have a chance to negotiate. Katherine L. Milkman of the Wharton School at the University of Pennsylvania, Modupe Akinola of Columbia Business School, and Dolly Chugh of New York University’s Stern School of Business sent email messages to 6,500 professors at top U.S. universities in a range of disciplines. The messages were purported to be from potential doctoral students who were writing to inquire about possible research opportunities with the professors. The (fictional) students asked to meet with the professor for 10 minutes during an upcoming visit to campus.
When it comes to planning and carrying out talks, negotiators are too often left to their own devices.
Here’s how to guide your employees toward better results.
How satisfied are you with the outcomes that negotiators in your organization achieve?
Most likely, you can think of a few successes worth crowing about, a few you’d like to sweep under the carpet, and many more that turned out just so-so. Maybe your department never manages to sign the most promising job candidates.
Most negotiation advice centers on the mistakes all of us make. But individual differences in personality, intelligence, and outlook could also affect your talks.
Negotiators tend to concentrate too closely on the here and now. By incorporating future concerns into your talks, you’ll make sounder decisions and guard against crises.
In the midst of the current U.S.financial crisis, accusations of greed on Wall Street have sounded across the globe. Greed may be a significant factor in the collapse of credit markets, but it’s not the only one. Overlooked in cries to punish the “bad apples” is the role of a mistake that virtually all negotiators make: ignoring how our short-term decisions will affect us and others in the future.In their book Predictable Surprises:The Disasters You Should HaveSeen Coming and How to PreventThem (Harvard Business SchoolPress, 2004), Max H. Bazerman and Michael D. Watkins describe the financial scandals of 2001 and 2002that led to the fall of Enron, Arthur Andersen, Tyco, and other companies.They label such crises “predictable surprises”—disasters that shock those involved even though they had the information needed to anticipate them.
On April 9, Israel said it was “deeply disappointed” by remarks by Secretary of State John Kerry that seemed to primarily blame Israel for the current breakdown in U.S.-mediated Middle East peace talks, as reported in the New York Times.
Last July, the United States brought Israel and the Palestinians back together for a series of talks set to span nine months. Each side set a condition to sitting down and staying at the table: Israel pledged to release 104 Palestinian prisoners in four groups over the course of the nine months, and the Palestinians vowed not to join any international bodies during this time.
But the talks eventually became bogged down over borders, security, the future of Jerusalem, the fate of Palestinian refugees, and other issues, the Times reports.
“A tough guy with a thin skin”: That’s how former secretary of state Hillary Rodham Clinton summed up Vladimir Putin during a speech in Portland, Oregon, in April.
“He is always looking for advantage,” she continued. “So he will try to put you ill at ease. He will even throw an insult your way. He will look bored and dismissive.” Saying she had a lot of experience dealing with people who acted like Putin, Clinton concluded, “Go back to elementary school. I’ve seen all of that.”
After the conclusion of a reconciliation agreement between Fatah and Hamas that Israeli Prime Minister Binyamin Netanyahu labeled collusion with a terrorist organization, the Middle East peace process has arrived at another, hopefully temporary, standstill.
Program on Negotiation and Harvard Kennedy School’s Future of Diplomacy Project Great Negotiator award winner for 2014, Singaporean diplomat Tommy Koh, wrote an article about his experience winning the Great Negotiator award from Harvard University and the insights into negotiation he offered while honored here in Cambridge, Massachusetts.
Does negotiation research promote the creation of joint gain at the expense of relationship building? Jared R. Curhan, Margaret A. Neale, and Lee D. Ross suggest the field is guilty as charged.
To illustrate, the researchers apply author O. Henry’s classic tale “The Gift of the Magi” to negotiation. The short story describes a poor but loving husband and wife who want to give each other the perfect Christmas gift. Della sells her beautiful long hair to buy Jim a platinum chain for his prize possession, a gold watch. Meanwhile, Jim sells his watch to buy a set of tortoise shell hair combs for his wife’s hair.
In negotiation, deception can run rampant: parties “stretch” the numbers, conceal key information, and make promises they know they can’t keep.
Unfortunately, most of us are very poor lie detectors. Even professions that encounter liars regularly, such as police officers and judges, do not perform better than chance at detecting deception, Professor Paul Ekman of the University of California at San Francisco has found. That’s in part because some common signs of deception, such as increased blinking and grammatical errors, tend to be quite subtle. In addition, there is often no way to determine with certainty whether a counterpart’s particular claim is true or not.
On April 15, Detroit city employees and retirees breathed a huge sigh of relief after the city’s emergency manager and its pension fund managers reached a deal that would significantly reduce proposed cuts to pension benefits, CNNMoney reports. Some civilian workers will face a 4.5% reduction in pensions and lose cost-of-living adjustments. Retired public-safety workers were spared from cuts and promised almost half of their expected annual pension increases.
To encourage the negotiators they supervise to do their best, managers routinely rely on performance benchmarks, the promise of bonuses, and other types of goals. But before you engage in further goal setting, consider the following real-life disasters: Under the leadership of turnaround expert Q.T. Wiles, quarterly earnings goals became a company wide obsession at disk drive manufacturer MiniScribe in the 1980s.
In just one example of the unethical behavior inspired by the race for higher earnings, employees shipped bricks disguised as hard drives. Rampant fraud was revealed, and MiniScribe went bankrupt. In the early 1990s, Sears, Roebuck and Co. gave its auto repair staff the goal of achieving$147 per hour in sales. To reach this challenging goal, staff overcharged for work and made unnecessary repairs. The scandal broke, and Sears’s reputation suffered for years. In the years leading up to its collapse, energy-trading company Enron promised its salespeople large bonuses for meeting challenging revenue goals.
You can’t control the U.S. financial markets, but you can take these three steps to make sure your deals don’t contribute to a predictable surprise in your own home or organization.
Sometimes in negotiation we are forced to deal not only with the issues on the table but also with concerns about status.
One famous instance took place in the late 1980s, when Robert Campeau, head of the Campeau Corporation and then one of Fortune magazine’s “50 Most Fascinating Business People,” tried to acquire Federated Department tores, the parent company of the prestigious department store Bloomingdale’s.
A bidding war over Bloomingdale’s escalated between Campeau and R.H. Macy. Campeau won with an irrationally high offer – but had to declare bankruptcy shortly thereafter.
A new conflict-management policy from General Mills, the food company behind products such as Cheerios, Bisquick, and Betty Crocker, may lead it to lose some friends on social media.
The manufacturer recently added language to its website alerting consumers that they relinquish their right to sue the company simply by downloading coupons, “liking” General Mills on Facebook, entering its sweepstakes, and interacting with it in other ways. In fact, GM later added terms suggesting that anyone who bought or used one of the company’s products would be required to resolve any dispute through informal email negotiation or binding arbitration, according to the New York Times.
Just one week after David Letterman revealed his decision to leave his long-running talk show, the Late Show with David Letterman, CBS announced that comedian Stephen Colbert would be his replacement. The negotiations surrounding the changing-of-the-guard were remarkably business-like and calm for the tumultuous world of late-night television.
Letterman debuted his show Late Night in 1982 and then switched to CBS in 1992 following a contentious battle with Jay Leno for Johnny Carson’s chair at the Tonight Show. Letterman’s voluntary decision to retire comes on the heels of Leno’s forced retirement from NBC, which replaced him with Jimmy Kimmel while his ratings were still healthy.
You set up the contract renegotiation with a key client months ago. You had every intention of gathering a range of information to establish realistic goals and assess the client’s needs, but short-term projects got in the way. Suddenly it’s the day before the first meeting. Aside from making a few phone calls and calculations, you’ll have to wing it—but that’s OK. You’ve always worked well under pressure. Right?
We all know we’re supposed to prepare to negotiate, yet we often fail to follow through on these best intentions. That’s a problem because research overwhelmingly shows that underprepared negotiators make unnecessary concessions, overlook sources of value, and walk away from beneficial agreements.
Negotiation experts typically advise us to meet with our counterparts in person whenever possible rather than relying on the telephone or Internet. As convenient as electronic media may be,they lack the visual cues that help convey valuable information and forge connections in face-to-face talks. Without access to gestures and facial expressions, those who negotiate at a distance have trouble accurately reading each other’s tone and building rapport.
But what, exactly, do negotiators learn from nonverbal behavior? Dowe read each other’s gestures and expressions accurately or not? Can we increase our negotiation success by deliberately modifying our own nonverbal behavior? Here we analyze three scenarios to help you understand how nonverbal behavior may be affecting your negotiations.
During a meeting with a potential customer, a new salesperson leaves the room several times to make phone calls. Each time when she returns, she tells the customer she can’t accept the terms they just negotiated. Exasperated by her apparent lack of authority, the customer ends the meeting abruptly.
As this scenario shows, your counterpart’s constituents are bound to play a role in negotiations, whether you realize it or not. When the other side negotiates on behalf of an organization, his superiors and coworkers have a stake in the outcome. In more personal negotiations, his friends or family members may attempt to sway his choices.
Most negotiators will never engage in the kinds of high-stakes bargaining we read about in publications such as The Wall Street Journal and The Financial Times, but almost every negotiator will encounter the dreaded salary negotiation during the course of her career, a scenario that is, in many ways, the definition of a “difficult conversation.”
We stress preparation for negotiations in our literature and in our Negotiation and Leadership executive education course but both research and experience recognize that even the most prepared and adept negotiator can have her planning and negotiation preparation scuttled by unforeseen circumstances and invisible barriers.
That is why women often encounter difficulty during salary negotiations, according to a recent article by Tara Siegel Bernard for the New York Times. Self-advocating for a pay raise in the workplace often places women in the unenviable role of attempting, “…to juggle when they are on a tight rope.”
On April 9, the Paycheck Fairness Act, legislation intended to close the pay gap between men and women, was defeated in the Senate due to a lack of Republican support. The bill would have made it illegal for employers to penalize employees for discussing their salaries and would have required the Equal Employment Opportunity Commission to collect pay information from employers.
Pay inequities and a lack of women in upper management remain enduring problems in the workplace. Absent government initiatives to mandate solutions, how can women themselves better advocate for higher pay, promotions, and plum assignments? Negotiation researchers advise women to avoid a backlash against asking for more by connecting their interests to those of the organization.
Negotiating the right process for your negotiation is well worth the time and effort, for two important reasons.
First, process drives substance.
Imagine what might have happened if the pharmaceutical company and the biotech firm had agreed up front to resolve the royalty issue rather than simply exchanging their best arguments before splitting the difference.
A large pharmaceutical company was engaged in licensing negotiation with a small biotech firm over the terms of a technology transfer.
When the talks reached a standstill over royalty rates, the two sides began an all-weekend marathon session.
Each side came armed with supporting arguments and data, but, by Sunday afternoon, they had failed to converge toward the center.
Sometimes the courts will be unwilling to get involved in the substantive terms of the deal but will impose procedural constraints on the more powerful party.
Consider the case of a controlling shareholder in a publicly traded company – someone who holds more than 51% – who wants to “cash out” the minority shareholders.
Under the corporate law of every state, the board of directors and majority shareholders must approve the terms of the offer.
Consider the following hypothetical negotiation scenarios, in which you seem to hold all the cards:
- One of your customers has just landed a lucrative new contract, and you’re the only supplier who can add a critical component to that customer’s production process.
- You own a controlling interest in a publicly traded company and are seeking to buy out the minority shareholders and take the company private [LINK to Michael Dell’s Negotiations with Shareholders article].
- You sell umbrellas, and a man in a well-tailored suit rushes into your shop at the start of a downpour.
What’s the problem, you might reasonably ask?
In a related maneuver aimed at protecting the weaker party to the deal, courts might infer additional terms within the contract or expand common-law notions of fiduciary duty.
Consider the famous case of the Page brothers – let’s call them “Big Page” and “Little Page” for simplicity – who started a linen supply company in Santa Maria, California, in the late 1940s.
Big Page was the brains of the operations; Little Page supplied equal capital but deferred to his older brother’s expertise.
Business was slow for several years, and the partnership lost money.
A recent ruling by a regional branch of the National Labor Relations Board (NLRB) raises the question of whether college football and basketball players will engage in the kind of collective dealmaking with university administrations that is found in business and government.
In March, the NLRB in Chicago sided in favor of a group called the College Athletes Players Association (CAPA), which had petitioned for Northwestern University’s scholarship football players to be allowed to unionize as employees. The regional NLRB director, Peter Ohr, ruled that Northwestern’s players should be considered employees rather than students because of the amount of time they devoted to team activities and the fact that coaches control their scholarships.
This three-step approach to managing process issues in negotiations will reap significant rewards at the bargaining table.
Join us for a conversation with Ambassador Tommy Koh of Singapore, the recipient of the 2014 Great Negotiator Award. This public program will feature panel discussions with Ambassador Koh and faculty from the Program on Negotiation and the Future of Diplomacy Project. The award recognizes Ambassador Koh for his work as chief negotiator for the United States-Singapore Free Trade Agreement, for chairing the negotiations that produced a charter for the Association of Southeast Asian Nations (ASEAN), for key actions that resolved territorial and humanitarian disputes in the Baltics and Asia, and for successfully leading two unprecedented global megaconferences: the Third U.N. Conference on the Law of the Sea and the U.N. Conference on the Environment and Development, also known as the Rio Earth Summit.
When most of us think about preparing for a negotiation, we consider the substance of the issues under discussion.
Depending on your industry, such issues might include price terms, warranties, liquidated damages clauses, benefits, or wage increases.
By contrast, the negotiation-process issues concern how parties go about resolving the various points that have brought them together in the first place.
In February, the news that Facebook would pay an astounding $19 billion to acquire text-messaging start-up WhatsApp caused jaws to drop across the tech world and beyond.
Jan Koum, a Ukrainian immigrant, and his friend Brian Acton launched WhatsApp in 2009 with the goal of creating a text-messaging application that would connect users with family and friends abroad at a low cost. Since its inception, WhatsApp has been ad-free. It now has 450 million global users who pay a 99-cent annual fee for this service.
Adapted from “You Are Too Powerful for Your Own Good?” by Ann E. Tenbrunsel for the September 2005 issue of Negotiation.
Given the pitfalls of having a position of relative power [LINK], what is a powerful negotiator to do?
By following these steps, you can keep your edge while encouraging cooperative, rather than competitive, behavior.
Most negotiations are “mixed motive” in structure, requiring us both to compete to claim value and to cooperate to create value.
The ability to move back and forth between these two goals is a critical – and difficult – skill to master.
How do emotions affect value creation and claiming?
Researchers Alice Isen and Peter Carnevale found that a positive mood leads to greater value creation.
The passage of the 1990 Native American Graves Protection and Repatriation Act (NAGPRA) fundamentally shifted relationships between museums and Native American tribes. Because it is federal legislation, NAGPRA defines the circumstances, and structure of the negotiation process in the repatriation of sacred objects and other cultural patrimony. Case studies will reveal how outcomes framed within, and beyond, NAGPRA can support restorative justice, educational collaboration, and best negotiation practices for museums and tribes.
The meeting of the P5+1 (the five permanent members of the United Nations Security Council plus Germany) and Iran last week to discuss Iran’s nuclear ambitions ended on a positive note but left many analysts skeptical of the possibility for substantive change.
Program on Negotiation faculty member James K. Sebenius, writing for Foreign Policy, analyzes the various positions of the P5+1 and Iran and offers an assessment of the various behind-the-table actors and their interests as well as the interests of external actors and groups not a party to the negotiations, but very much influential in the direction of their course.
Given the pitfalls of having a position of relative power, what is a powerful negotiator to do?
By following these steps, you can keep your edge while encouraging cooperative, rather than competitive, behavior.
Most negotiators understand the importance of preparation and will dedicate significant time and energy to analyzing important negotiations in advance.
Chances are, however, that powerful negotiators will undertake less informative and less accurate analyses than their weaker counterparts will.
For instance, in a hypothetical salary raise negotiation, a negotiator may be so confident of her contributions that she will fail to thoroughly investigate several other important factors; the extent to which her boss met his annual sales goals, the relative performance of her peers, or the company’s overall financial health. Clearly all these variables would be relevant to your salary negotiation.
Emotional flooding – when strong, specific, and often negative feelings overwhelm us – poses obvious hazards to negotiators, who need to be able to think clearly when faced with the complex, strategically demanding task of creating and claiming value.
For this reason, emotional regulation can be an essential component of negotiation.
But different types of regulation create different results.
Renegotiations generally are triggered for one of two reasons: an imperfect contract or changed circumstances.
The goal of any written contract is to express the parties’ full understanding of their deal.
Despite lawyers’ belief in their abilities to capture that agreement in writing, in practice they can only achieve that goal imperfectly, for three reasons.
The concept of emotional intelligence burst into the cultural imagination in 1995 with the publication of psychologist Daniel Goleman’s bestselling book of the same name. Experts have predicted that scoring high on this personality trait would boost one’s bargaining outcomes. After all, the qualities that characterize emotional intelligence—awareness of our emotions and how they affect others, the ability to regulate our moods and behavior, empathy, the motivation to meet meaningful personal goals, and strong social skills—seem as if they’d help us get what we want from others and find common ground.
Should emotional intelligence be included among the most essential negotiation skills? In a new study, researchers Kihwan Kim (Buena Vista University), Nicole L. A. Cundiff (the University of Alaska, Fairbanks), and Suk Bong Choi (the University of Ulsan, South Korea) sought to determine whether emotional intelligence correlates with beneficial negotiation outcomes, namely trust building, the desire to work together in the future, and joint gain.
Most of the existing research on affect in negotiation has focused on emotional experience rather than on emotional expression.
Yet studies have shown that emotional expression can occur independently from feelings, making expression worthy of investigation.
Marwan Sinaceur and Larissa Tiedens of Stanford University found that negotiators made more concessions when facing counterparts who expressed (but did not necessarily feel) anger.
Not only did those who expressed anger benefit by claiming more value, but they also did not lose their ability to create value.
While experienced emotions may direct the way in which you process information, emotional expressions seem to influence your counterpart’s social inferences and subsequent behavior.
Are you too eager to please? A desire to get along with others may be preventing you from addressing conflict in your workplace – and preventing you from advancing, writes Joann S. Lublin in a recent Wall Street Journal article.
Increasingly, employers are hiring and promoting leaders who are skilled at coping with conflict rather than avoiding it, according to Judith Glaser, the author of the new book Conversational Intelligence.
In an attempt to combat a culture of “artificial harmony,” for example, Southwest Airlines is now actively seeking to promote middle managers to executive positions based in part on their ability to bring conflict to the surface and work through it openly.
In a hypothetical raise negotiation [LINK], suppose you find out that your peers have told your boss disparaging and blatantly untrue stories about your interactions with customers.
You feel shocked and upset by their betrayal; you always believed that you had a good relationship with you coworkers. It never crossed your mind that they would attempt to sabotage you, particularly because of your high status in the department.
Whether out of jealousy or a sense of injustice, less powerful parties will do whatever it takes to see their more powerful counterparts fail. Unfortunately, powerful parties often are unaware of their counterparts’ animosity.
Many observers view Russian president Vladimir Putin’s decision to send Russian troops into Crimea in the wake of violence between protesters and police in Kiev and Ukrainian president Viktor Yanukovich’s abrupt departure as the first gambit in a carefully reasoned strategy.
“Putin is playing chess and I think we are playing marbles, and I don’t think it’s even close,” said Representative Mike Rogers, chairman of the House Intelligence Committee, in criticism of President Barack Obama and his administration. Arguing that Putin’s advance into Ukraine is part of a plan to strengthen Russia’s “buffer zones,” Rogers accused the Obama administration for making too many concessions to Russia and failing to respond decisively to the crisis.
National Geographic Traveller’s Ben Lerwill recently compiled a list of the best new walking trails from around the world, and the Program on Negotiation’s Abraham Path took the number 1 spot on his list of 10.
The Abraham Path is a long-distance walking trail that follows the path of the patriarch Abraham from Sanliurfa in southeastern Turkey through the countries of Syria, Jordan, Palestine and Israel.
Founded by Program on Negotiation co-founder William Ury, the Abraham Path is the result of complex long-term negotiations with various nations and groups along the route in order to establish a safe, continuous path for hikers. The project’s success may have an impact in helping foster regional economic development, engagement, and peace-building efforts. The Program on Negotiation is the intellectual and academic home of the Abraham Path.
Every year the Program on Negotiation sponsors fellows and visiting scholars while they research and write about topics important to the fields of negotiation and mediation. This lunch provides an opportunity for this year’s two Graduate Research Fellows, Alexandros Sarris and Sarah Woodside, and Visiting Scholar Stefanos Mouzas to share their findings with the negotiation community. Join us for a fascinating hour of informal lecture and discussion.
Dr. Mohamed M. Keshavjee will discuss his new book, Islam, Sharia and Alternative Dispute Resolution, which provides an informed and thorough discussion of the relevance of Sharia and its principles that affirm equity, justice and basic human rights, and its interface with the UK’s official judicial system.
A Q&A with Sheila Heen, co-author (with Douglas Stone) of the new book, Thanks for the Feedback: The Science and Art of Receiving Feedback Well.
We recently interviewed Sheila Heen, lecturer at Harvard Law School, PON Faculty member, and Partner at Triad Consulting Group, about her new book with Douglas Stone, Thanks for the Feedback: The Science and Art of Receiving Feedback Well (Even When It’s Off Base, Unfair, Poorly Delivered, and Frankly, You’re Not in the Mood). Heen and Stone are co-authors, along with Bruce Patton, of the New York Times Business Bestseller Difficult Conversations. They have teamed up again to share their insights about what helps people learn and what gets in their way.
While the business world spends billions of dollars and millions of hours each year teaching us how to give feedback, Stone and Heen argue that we’ve got it backwards. Their new book demonstrates why the smart money is on educating receivers— both in the workplace and in personal relationships.
On February 11, House of Representatives Speaker John A. Boehner reportedly rendered his Republican colleagues speechless. At a meeting of the Republican Capitol Hill Club, Boehner announced that he would bring to a vote a measure to raise the U.S. government’s borrowing limit without preconditions until March 2015, as reported in the New York Times.
The move was widely viewed as a surrender and a violation of the speaker’s own “Boehner Rule,” which requires that any increase in the debt ceiling be matched by equal spending cuts or changes to the budget. By holding the vote, Boehner ended a series of budget showdowns held over the past three years, each of which shook global confidence in the U.S. economy.
Aggressive tactics and hard-bargaining strategies may, at face value, provide a roadmap to success at the bargaining table but, as the Washington Post’s Kelly Johnson discovered in her interview with Program on Negotiation faculty member Michael Wheeler, adaptability to ever-changing circumstances is essential for the “dynamic” negotiations one encounters in everyday life.
In Western countries, women negotiators are faced with the challenge of advocating on their own behalf as forcefully as men in the workplace. Fear of a backlash often holds women back from negotiating assertively for higher pay, benefits, and responsibilities.
In many other parts of the world, women face the daunting challenge of winning a place at the negotiating table in the first place. In particular, UN Women, an agency of the United Nations, has noted that women are vastly underrepresented in formal peace negotiations worldwide.
Here’s a list of some of the most notable negotiation flops of the past year – from deals that were over before they started, to those that were botched at the table, to those that proved disastrous well after the ink had dried.
Here’s an overview of some of the most interesting and challenging international negotiations of 2013.
On November 24, the United States and five other world powers announced an interim agreement to temporarily freeze Iran’s nuclear program. The six-month accord is designed to give international negotiators time to negotiate a more comprehensive pact that would remove the threat of Iran producing nuclear weapons.
On September 15, U.S. secretary of state John Kerry and Sergey Lavrov, Russia’s foreign minister, announced a deal aimed at heading off a U.S. attack on Syria, threatened by President Obama, in exchange for Syrian President Bashar al-Assad’s promise to dismantle his country’s chemical weapons.
China’s establishment of an “air defense” zone over a disputed chain of islands in the East China Sea in November is the latest salvo in an escalating international dispute. Japan and China have both laid claim to the islands, known as the Senkaku by Japan and the Diaoyu by China, which are believed to be rich in oil and are also strategically important, according to CNN.
A European Union summit held in late October failed to make headway toward more coordination of economic policies. Facing resistance from Germany in particular, European officials are growing pessimistic regarding their odds of negotiating a deal over the next year to lay the foundation for a banking union for the 17 nations that use the euro, the Wall Street Journal reports. The proposed banking union would pool assets to allow the nations to engage in shared spending and borrowing, among other activities.
In China this April, Apple CEO Timothy D. Cook made the unusual move of apologizing to Chinese customers for his company’s warranty policy and promised to make amends, the New York Times reports.
On March 15, International Consumers’ Day in China, the nation’s largest state-run television network criticized Apple for giving iPhone customers in China a short warranty and for charging consumers to replace faulty back covers on iPhones. Apple products are immensely popular in China.
The agreement seemed well on its way to being passed. On November 20, U.S. secretary of state John Kerry announced that the United States and Afghanistan had finished negotiating a bilateral security agreement.
The terms included a continued American troop presence through 2024 and a promise of billions in international aid to the Afghan government. The United States negotiated concessions on two hotly contested issues: Afghanistan agreed that U.S. soldiers would be subject only to American military law, not Afghan laws; and U.S. Special Operations forces could continue to conduct antiterrorism raids on private Afghan homes, the New York Times reports. Most U.S. troops would have no combat role, aside from a small counterterrorism force.
2013 witnessed a series of colorful mergers, acquisitions, and other deals. Here are 10 negotiations and negotiation trends from which business dealmakers can learn.
It wasn’t a single mega-deal, but possibly thousands of small ones that sprang up following the publication of Facebook COO Sheryl Sandberg’s book Lean In: Women, Work, and the Will to Lead this year.
On October 30, the news came that Big 4 accounting firm PricewaterhouseCoopers had reached a deal to purchase the consulting firm Booz & Company with the goal of beefing up its management consulting business.
A number of noteworthy disputes among businesses, organizations, and individuals made headlines in 2013. We point out the negotiation angles behind stories first reported by the New York Times, the Wall Street Journal, and other media outlets. Keep an eye out for these common themes: hardball tactics that backfire, costly legal battles that could have been avoided, and disputes over poorly worded contracts.
In July 2013, U.S. Associate Attorney General Tony West met with JPMorgan Chase executives to outline an array of civil and criminal investigations of the bank, related primarily to its sales of troubled mortgage investments during the financial crisis.
A three-year dispute between Starbucks and Kraft Foods over distribution of Starbucks packaged coffee in grocery stores was resolved on November 12 when an arbitrator determined that Starbucks had breached its agreement with Kraft and ordered the coffeemaker to pay the food giant $2.75 billion.
On November 24, the United States and five other world powers announced an interim agreement to temporarily freeze Iran’s nuclear program. The six-month accord is meant to give international negotiators time to negotiate a more comprehensive pact that would remove the threat of Iran producing nuclear weapons.
When choosing a mediator, keep in mind that you need not accept the proposals that he makes. In other words, you have total power to prevent mediation from leading to an undesirable outcome.
As a result, the only risk of mediation is that you will expend time and money without reaching agreement.
According to experts, mediation success comes from a focus on three key areas
Whatever the root causes of faulty drafting, negotiators need to better understand and manage certain aspects of the deal drafting process. Here are three ways to ensure that breakdowns don’t occur on the way from handshake to contract.
A three-year dispute between Starbucks and Kraft Foods over distribution of Starbucks packaged coffee in grocery stores was resolved on November 12, when an arbitrator determined that Starbucks had breached its agreement with Kraft and ordered the coffeemaker to pay the food giant $2.75 billion, Stephanie Strom reported in The New York Times.
The dispute dates back to an agreement negotiated in 1998 when Kraft began selling Starbucks packaged coffee through grocery stores. In 2010, with sales of its ground whole bean coffee reaching $500 million annually, Starbucks offered Kraft $750 million to end their agreement.
Starbucks wanted greater flexibility to sell the single-serve coffee pods that were taking off in the market at the time. The company’s agreement with Kraft limited Starbucks to selling pods that worked in Kraft’s Tassimo machines. Starbucks was in danger of being left behind in a race for market share against Green Mountain Coffee’s Keurig system and K-Cup single serving packs.
Nelson Mandela was “the greatest negotiator of the twentieth century,” wrote Robert H. Mnookin in his seminal book, Bargaining with the Devil, When to Negotiate, When to Fight. In his chapter on Mandela, Mnookin cites Mandela’s patience, tenacity, pragmatism, and strategic thinking.
“He rejected the simple-minded notion that one must either negotiate with the Devil or forcibly resist. He did both. He was willing to make concessions, but not about what was most important to him. With respect to his key political principles, he was unmovable.”
Mnookin admired Mandela’s ability to persuade his adversaries.
“He ultimately achieved through negotiation an outcome that could never have been accomplished solely through violence or resistance. “
In his best-selling novel Blink, Malcolm Gladwell scans the psychological literature and uncovers fascinating nuggets of knowledge.
He describes people who can assess the integrity of a work of art within seconds, predict the likelihood that a couple will get divorced based on a short conversation, and assess their romantic interest in another on a “speed date.”
Documenting numerous stories in which split-second decisions, or “blinks,” led to successful outcomes, led to successful outcomes, Gladwell concludes that rapid cognitions can be as effective as more deliberate and thoughtfully made decisions.
Sometimes the goal in negotiation is to improve your fortunes. But sometimes, the best you can hope for is to lessen the fallout from past mistakes.
Take the case of JPMorgan Chase, which in September was threatened with a lawsuit from the U.S. Department of Justice (DOJ) for its sales of troubled mortgage investments during the financial crisis. JPMorgan CEO Jamie Dimon’s hands-on negotiations to settle the potential charges and avoid a lawsuit, as recounted by Ben Protess and Jessica Silver-Greenberg in the New York Times, serve as a reminder of the burdens we must sometimes assume to head off a disaster.
Consider the saga of a company that developed a hot new technology just as it was going public.
The device could detect underground leaks in gas storage tanks much more cheaply and accurately than any other products on the market.
The timing seemed perfect: The Environmental Protection Agency (EPA) was persuading Congress to mandate that gas storage tanks be continuously tested for leaks. Not surprisingly, the company’s board of directors pushed the CEO to get the device on the market, and fast.
A European Union summit held in late October failed to make much headway toward better coordination of economic policies, the Wall Street Journal reports. Facing resistance from Germany in particular, European officials are growing pessimistic regarding their odds of negotiating a deal over the next year to lay the foundation for a banking union for the 17 nations that use the euro. The proposed banking union would pool assets to allow the nations to engage in shared spending and borrowing, among other activities.
The plan for greater financial coordination was conceived at the height of the European financial crisis in 2012. As consensus grew that a shared currency with 17 different economic policies was unsustainable, the European Union began looking for ways to prevent future disasters.
No matter how many right moves you make at the table – however skillfully you read body language, frame arguments, make offers and counteroffers – doing so at the wrong table can undercut your results.
Not only should you negotiate right, you should do the right negotiation. Sometimes this means looking with new eyes for a more promising table.
For example, the owners of a niche packaging company that boasted an innovative technology and a novel product were deep in price negotiations to sell the company to one of three potential industry buyers, all larger packaging operations. The owners’ first instinct had been to persuade their bankers of the need for a higher valuation, refine their at-the-table negotiating tactics for dealing with each major player, and try to spark a bidding war.
It’s a familiar practice in negotiation training: Students are divided up and assigned to engage in role-play exercises known as simulations. Each person reads confidential information about her role, the two (or more) players get together and negotiate, and then the class reconvenes to debrief the experiences.
Simulation took root as a common method for teaching negotiation because it allows students to practice their skills in a low-risk setting and requires them to confront common negotiation problems directly, among other benefits.
Some might argue that confrontation is inevitable. But a wide range of collaborative efforts around the country have shown that it can be avoided.
How can negotiators find their way into the trading zone quickly and easily?
One proven method is joint fact finding.
Joint fact finding is a multistep, collaborative process for bringing together negotiating partners with different interests, values, and perspectives. Here are the five stages through which joint fact finding typically proceeds.
A Q&A with Michael Wheeler, author of The Art of Negotiation: How to Improvise Agreement in a Chaotic World.
We recently interviewed Michael Wheeler, HBS Professor and PON faculty member, about his critically acclaimed new book, The Art of Negotiation: How to Improvise Agreement in a Chaotic World. In his latest offering, Wheeler introduces his powerful, next-generation approach to negotiation that takes into account the dynamic, and often uncertain, nature of negotiations.
When choosing a mediator, keep in mind that you need not accept the proposals that he makes. In other words, you have total power to prevent mediation from leading to undesirable outcome. As a result, the only risk of mediation is that you will spend time and money without reaching agreement. Indeed, one Fortune 100 company that is so firmly convinced of the value of mediation that, as long as the other party seems to genuinely want a good-faith resolution, it will get a list of experienced mediators from a reputable and neutral mediation agency and let the other side select anyone on the list.
There is a better way to resolve your dispute: by hiring an expert mediator who focuses not on rights but on interests – the needs, desires, or concerns that underlie each side’s positions.
If asked why a dispute is important to you, your answer will likely reveal your interests.
Stefanos Mouzas is Professor of Marketing and Strategy at Lancaster University Management School in England, where he is also affiliated with the Center of Law and Society. He received his B.Sc. (Economics) from the University of Athens, LL.M. (Contract Law) from University of Bristol, and Ph.D. (Marketing) from Lancaster University. He was Visiting Professor at University of Bocconi (2009), Singapore Management University (2010), University of Duesseldorf (2010-13) and Vienna University of Economics and Business WU (2013).
When two groups are embroiled in a conflict, it is common for the party with less power to have difficulty convincing the more powerful party to sit down at the negotiating table. Think of a labor union that wants to convince company management to agree to pay increases. In such cases, the more powerful player is likely to resist the notion of shaking up the status quo—and thus avoid negotiating altogether.
This tendency can be a particular problem in international negotiations, particularly those involving a protracted conflict.
In a new study, Nour Kteily of Northwestern University and his colleagues found that low-power groups can influence powerful parties to engage with them through their framing of the proposed negotiating agenda. Specifically, across four experiments, participants in the high-power position were more willing to negotiate when a low-power group proposed negotiating less important issues before more significant areas of disagreement, rather than vice versa. This preference is the opposite of what low-power parties prefer, the researchers learned.
When a negotiation escalates into a dispute, most managers understand the value of seeking out a mediator for professional assistance with the matter. The question of whom to hire, however, is less clear-cut. What type of expetise should your mediator have, and where should you look for her? In this article, we will walk you through the processes of finding the right mediator – someone who will be satisfactory to both sides – to settle your disputes.
Not all matching rights are created equal.
As the prospective right holder, you should know precisely what a proposed matching right will give you. Many deals that seem to guarantee a matching right are, in fact, murky about the exact consequences that could arise.
For potential right holders, the most common mistake is to fail to specify what will happen if you choose to match a bid. Will your matching bid call off the contest with the third party or launch a bidding war?
Other details are equally important.
When the mergers-and-acquisitions boom began in 1993, many deals simply required the seller to let the buyer know if a “superior proposal” came along. By the late 1990s, buyers were demanding – and receiving – more than this: an exclusive negotiating period of several days, during which they could decide to match or improve upon another bidder’s offer. Guhan Subramanian’s investigation revealed that matching rights were included in approximately 20% of M&A deals before 1999 – and in 80% of deals since then. Today, matching rights are virtually ubiquitous in large M&A deals and are being rapidly incorporated into deals at all levels in many industries.
The MIT-Harvard Public Disputes Program, one of the Program on Negotiation at Harvard Law School’s many research programs, acts as a center for research committed to thinking about and resolving disputes in the public sector. Led by its Director and Program on Negotiation executive committee member Lawrence Susskind, the MIT-Harvard Public Disputes Program conducts research dealing with international environmental treaty negotiations, public sector consensus building, and advocating for the importance of the science behind any negotiations about resource management.
Social comparisons – the assessments we make about how we measure up to others – are key to understanding how status operates in negotiation. These comparisons, which signal concern about relative status, have a profound impact at the bargaining table.
To make social comparisons, first we choose a reference group against which we can measure ourselves. In his book Choosing the Right Pond: Human Behavior and the Quest for Status, Robert Frank, a professor of economics at Cornell University, argued that when it comes to social comparisons, people care most about local status. For this reason, colleagues, classmates, relatives, friends, and neighbors are most typical members of our reference group. We tend to make downward comparisons with those in our immediate sphere, preferring to measure ourselves against those who seem to have achieved less than we have because such comparisons enhance self-esteem. When we can rank ourselves above those who resemble us, we assume local status and prestige.
When two people share the same motive, they fall prey to the same flaws and reinforce each other’s failings. Consider a labor negotiation in which the chief management negotiator withholds information about revenue projections, while the labor leader holds back details about workforce sentiment. Impasse is the predictable result. When you’re negotiating with a fellow individualist or a fellow cooperator, your goal should be to overcome the inherent flaws of your orientation.
In an article, “Beyond Blame: Choosing a Mediator,” Stephen B. Goldberg advised negotiators involved in a dispute to seek out an interests-based mediator to assist both sides in reaching a resolution.
Program on Negotiation at Harvard Law School Chair and Samuel Williston Professor of Law Robert Mnookin wrote for CNN’s Opinion about the government shutdown negotiations between congressional Republicans and United States President Barack Obama. To read “How Obama and Boehner Can Get to ‘Yes’ ,” please click here.
People often wonder if they should constantly monitor their decisions to avoid bias. The answer is no. Social heuristics serve a useful function, allowing our social interactions to run more smoothly. When it comes to minor decisions, go ahead and compromise.
But when your organization is negotiating over important decisions and strategies, you must question the wisdom of compromising and strive to be more cautious, thoughtful, and insightful. The next time you face a serious negotiation, ask yourself the following questions:
What should the meeting agenda look like?
At last, the deal is done. After 18 months of negotiation, eight trips across the country, and countless meetings, you’ve finally signed a contract creating a joint venture with a Silicon Valley firm to manufacture imaging devices using your technology and their engineering.
The contract is clear and precise. It covers all the contingencies and has strong enforcement mechanisms. You’ve given your company a solid foundation for a profitable new business. As you file the contract, a question dawns on you: Now what?
Judges don’t make decisions based on a thorough accounting of all the relevant and available information. Instead, like all of us, they rely on heuristics – simple mental shortcuts – to make decisions.
As many past articles have noted, heuristics often lead to good decisions, but they can also create cognitive blinders that produce systematic errors.
One such heuristic is anchoring, or the common tendency to for people making numerical estimates to rely on the initial value available to them and to give it greater influence over the final estimate than it should have.
How does anchoring influence judges?
The Washington Post’s “On Leadership” column by Jenna McGregor asked renowned negotiation experts on how the government shutdown in Washington, DC could be ended at the bargaining table.
Among the experts interviewed were Robert Mnookin, Chair of the Program on Negotiation at Harvard Law School (PON) and author of Bargaining With The Devil: When To Negotiate, When To Fight, Robert Bordone, PON Executive Committee member and co-author with mediation pioneer Frank E.A. Sander of “Designing Systems and Processes for Managing Disputes,” and William Ury, co-founder of PON and co-author of “Getting to Yes,” a foundational work in the field of negotiation written in collaboration with PON co-founders Bruce Patton and Roger Fisher.
Scott Horsley, writer for National Public Radio’s “It’s All Politics,” recently interviewed Program on Negotiation faculty to discuss the negotiation strategies, and their pitfalls, currently being used by congressional Republicans and US President Barack Obama in the government shutdown negotiations.
Author of Bargaining With The Devil: When To Negotiate, When To Fight, Robert Mnookin advocates for Barack Obama to take a strong position at the bargaining table, but notes the risks: “Perhaps if he simply hangs tough, a week and a half from now, the Republicans will cave and he won’t have to do anything. But if it doesn’t happen, the consequences for all of us, for the American economy, are very, very serious.”
Program on Negotiation Chair Robert Mnookin sat down with National Public Radio’s Here & Now to discuss the government shutdown and the negotiating impasse between congressional Republicans and US President Barack Obama. Currently the clip is available on Here & Now’s website – click here to listen.
Program on Negotiation Chair and “Bargaining with the Devil” author Robert Mnookin was recently asked by CNN Fortune’s Claire Zillman about the strategies that Obama could employ in bringing congressional Republicans to the bargaining table in order to end the three-day old government shutdown.
Throughout the litigation process, judges gain new information at settlement conferences, motion hearings, discovery disputes, and the trial itself.
Inevitably, some of this information, though relevant to the case at hand, will be inadmissible under the rules of evidence.
Unfortunately, informational blinders can prevent judges from disregarding this information when making decisions.
Negotiation is often characterized as a physiologically arousing event marked by pounding heart, queasy stomachs, and flushed faces. We might assume that heightened physiological arousal would mar our negotiation performance, but this is only true for some, researchers Ashley D. Brown and Jared R. Curhan of the Massachusetts Institute of Technology found in a new study published in the journal Psychological Science.
Despite your best intentions, one or more of these four forces might lead you to behave unethically during a negotiation. Here are four ways in which you may be tempted to behave unethically while at the bargaining table.
As the U.S. government approaches a potentially catastrophic default on its debt in October, President Obama remains determined to avoid negotiations with Republican leaders on the issue, the New York Times reports, a situation that leaves House of Representatives Speaker John Boehner with an uncertain BATNA, or best alternative to a negotiated agreement.
They say it pays to keep your friends close and your enemies closer, but in negotiation, keeping your enemies—or competitors—close could end you up in court, as Apple’s recent encounter with the U.S. Department of Justice suggests.
The story begins back in 2007 when, unhappy with Amazon’s low, flat price of $9.99 for e-books, five major U.S. pub¬lishers negotiated a new business model for e-book pricing with Apple, which was getting ready to launch the iPad.
Under the prevailing wholesaling model, publishers sold their books and e-books to retailers like Amazon, which could then set whatever price they liked. Apple and the five publishers agreed to switch to a so-called agency model, which would allow the publishers to set their own prices for e-books in exchange for giv¬ing Apple a 30% sales commission. At least one of the publishers then upped the ante by threatening to delay the release of its digital editions to Amazon unless it switched to an agency model. Amazon reluctantly agreed, and e-book prices rose across the industry to about $14.99.
The publishers and Apple claimed that their goal was to increase competition in the e-book market by opening up alternatives to Amazon’s Kindle reader. But the U.S. Department of Justice didn’t see it that way and accused the parties of colluding to artificially raise e-book prices. The five publishers reached a settle¬ment with the government; Apple did not.
Ever win something you wanted, then realize too late you got a raw deal? Here’s how to recognize when backing away is your best bet in a negotiation.
Imagine that while exploring an outdoor bazaar in a foreign country, you see a beautiful rug that would look perfect in your home. While you’ve purchased a rug or two in your life, you’re far from an expert. Thinking on your feet, you guess the rug is worth about $5,000. You decide to make a bid, but a low one. You engage the merchant in some pleasantries and then make an offer of $1,000. She quickly accepts, and the transaction is complete.
How do you feel as you walk away? Pleased with your purchase – which was, after all, far cheaper than you expected – or uneasy about it?
The Program on Negotiation, an inter-university consortium of Harvard, MIT, and Tufts, and Harvard’s Future of Diplomacy Project have named Ambassador Tommy Koh of Singapore the recipient of the 2014 Great Negotiator Award. In public events at Harvard planned for the afternoon of Thursday, April 10, 2014 (details to be announced), participants will honor Koh’s distinguished career contributions to the fields of negotiation and dispute resolution, especially his leading roles in challenging settings, from the Law of the Sea and the “Rio” Earth Summit to the ASEAN Charter and the Singapore-U.S. Free Trade Agreement.
A five-year old American manufacturer of medical equipment has just secured a patent on its primary product, a new kind of heart monitor. The potential market is even stronger than the company imagined, yet its second round of venture capital funding is coming to an end. A few other manufacturers are about to go public with similar, though less well-tested, products. To shore up funding of the big launch, the CEO decides to explore joint-venture possibilities with several overseas partners.
There is a problem, though. She has never been involved in joint-venture negotiations before; what’s more, she has never done business with an overseas investor. Meanwhile, one of the European companies she approached knew all about her company’s internal strengths and weaknesses. The CEO feels she is in the best position to represent her small company’s interests in the upcoming negotiations, and yet she is extremely nervous. The company’s future is on the line. Does she have enough knowledge and experience to succeed?
Program on Negotiation faculty member and Director of the Harvard Negotiation and Mediation Clinical Program at Harvard Law School, Robert Bordone, and HNMCP clinical instructor Alonzo Emery recently published an article for NPR’s Cognoscenti titled “What Obama Should Say About Syria,” in which he discusses the opportunity the crisis in Syria presents for US President Barack Obama to communicate the values that inform American leadership.
On August 7, President Barack Obama canceled a summit with Russian President Valdimir Putin scheduled for September in Moscow, citing a lack of progress on a variety of issues. The announcement came on the heels of Russian’s decision to grant temporary asylum to former National Security Agency contractor and Edward Snowden, who made confidential data on American surveillance programs public. Obama still plans to attend the annual conference of the Group of 20 nations in Russia in early September.
“We weren’t going to have a summit for the sake of appearances,” U.S. Deputy National Security Advisor Benjamin Rhodes told the New York Times. Moscow and Washington have failed to make headway on a variety of issues, including arms control, missile defense, trade, human rights, and Syria.
Whether you’re negotiating for yourself or on behalf of someone else, each ethical case you come up against will have its own twists and nuances.
By asking yourself the following questions, you can illuminate the boundaries between right and wrong at the bargaining table and in the process discover your own ethical standards.
Program on Negotiation at Harvard Law School faculty member Erica Ariel Fox recently published an article for Forbes.com discussing the inner negotiations that she advises leaders to focus on when formulating theirnegotiation strategy and how this relates to US President Barack Obama’s deliberations with regard to the crisis in Syria.
Don’t settle for uninspired compromises.
Find ways to modify and expand resources to achieve more value.
Typically, when parties are negotiating over a resource they both desire – whether fees, budgets, salaries, schedules, or staff – the process results in an uninspired compromise somewhere between their positions. Is it possible to avoid a compromise when negotiating tough distributive issues.
In negotiation, a combination of several negotiation skills and tactics may be needed to break past a difficult impasse. A recent protracted negotiation between North Korea and South Korea provides a case study.
In April, North Korea abruptly removed its workforce from the Kaesong Industrial Complex, a joint venture it launched within its borders nine years ago with South Korea. The complex shut down, and the two nations engaged in seven rounds of negotiations over the course of 133 days to try to reach agreement to reopen it.
When you communicate in person, social norms – including body language, manners, and physical appearance – guide your behavior and ease the process. A common environment can facilitate understanding as well. Over the telephone, the speaker’s intensity, speed, and inflection provide useful social information.
As a consequence, face-to-face and telephone interactions generate greater social awareness and greater stability and cooperation than do online interactions.
On June 5, 2013, Shades Israeli and Palestinian fellows walked the Abraham Path in Israel’s Negev on a guided tour organized by PON Senior Fellow Shula Gilad, visiting Jewish and Arab villages on the route, learning about the Abrahamic tradition of the societies, their current challenges and success. As is the case for others who have walked the path, the fellows had a unique opportunity to walk and talk, learning about the history of the area from tour guide and archaeologist Avner Goren. Shades fellows have been learning with each other since April 2013.
With home sales heating up in some parts of the United States, homebuyers are facing competition they haven’t seen since before the real-estate bubble burst, and it’s showing up in the form of packed open houses, multiple bids above the asking price, and all-cash offers.
To take an extreme case, in New York City, low condominium inventory combined with low mortgage rates have driven prices up 12% over the past year, from $829,000 to $930,000, writes Michelle Higgins in the New York Times. Real-estate agents are capitalizing on the frenzy with tactics like one-day-only showings and tight deadlines for bidders to submit their best-and-final offers.
In such an environment, negotiation might seem futile. After all, if a seller has 20 offers, how could you possibly stand out – other than, perhaps, by overbidding? In fact, there are other ways to separate yourself from the pack, while also ensuring that you make smart financial decisions for yourself.
Lectures, like publications such as this one, are an excellent means of transmitting knowledge from an expert to a less knowledgeable audience.
I have attended many amazing lectures on a multitude of topics and have learned fascinating information about the ecosystem, politics in different nations, animal species, and so on. I even have enjoyed hearing negotiation experts talk about the keys to their success. However, I am not at all confident that any particular lecture has improved my negotiation skills.
In his article, “Full Engagement: Learning the Most from Negotiation Simulations,” Lawrence Susskind discussed the value of learning negotiation skills by participating in simulations. To explain why simulations are so effective, Susskind overview psychologist Kurt Lewin’s model of change.
Negotiators engaged in conflict management are commonly advised to focus on the big picture, but sometimes it’s the smaller signs that can derail an agreement.
That was literally the case in July when the U.S. government’s plans to engage in peace talks with the Taliban were scuttled over a simple sign and other symbols, as Dion Nissenbaum writes in the Wall Street Journal.
In June, the Taliban opened an office in Doha, Qatar, the results of years of negotiations. The ceremonial opening was supposed to have launched direct talks with the Taliban aimed at ending the war in Afghanistan.
But to the surprise of both U.S. and Afghan officials, the Taliban wasted no time in putting up signs, flags, and banners that identified the office as the “Political Office of the Islamic Emirate of Afghanistan” – the name that the Taliban used when it ruled Afghanistan. The signage was viewed as an attempt by the Taliban to represent itself as Afghanistan’s government in-exile.
Program on Negotiation and Harvard Law School faculty member Gabriella Blum’s essay “Invisible Threats,” co-authored with Benjamin Wittes of the Brookings Institution, was featured on the Harvard Law School website.
In a panel discussion about her research, Professor Blum explained her perspective on the growing threat of technology to peace and how the accessibility of this technology is changing the ways in which nations and people wage warfare.
Organizations, large and small, look to their leaders to establish an organizational vision. Popular commentary on corporate leadership presupposes that a company’s vision comes from its CEO and that, without a strong CEO, the company has no vision. But that’s not the case.
Members located throughout an organization have plenty of thoughts about what the organization is and should be.
Thus the challenge of setting a group’s course lies in forcing a single vision out of the multiplicity of visions held by the group’s members.
In the past we have encouraged you to ‘debias’ your own behavior by identifying the assumptions that may be clouding your judgment. We have introduced you to a number of judgment biases – common, systematic errors in thinking that are likely to affect your decisions and harm your outcomes in negotiation. Learn how to identify your biases and learn how to correct them.
In negotiation, your best source of power typically is your “best alternative to a negotiated agreement,” or BATNA. By cultivating appealing options away from the table, you free yourself up to walk away in the event of a disappointing deal.
In all likelihood, Dell Inc. founder Michael Dell found himself facing such a BATNA analysis in recent days. Back in February, Dell and private-equity firm Silver Lake Partners announced a deal to buy the company for $13.65 a share. Since then, the deal has faced one obstacle after another, including the threat of a Dell shareholder revolt, the threat of a higher offer from another private-equity firm, and efforts by billionaire activist Carl Icahn to convince Dell to pony up a higher bid. The overarching question: whether Dell would be getting a steal deal, and whether there was any way to stop him.
Why should the people you’re supposed to lead follow you?
If you believe that your charisma, your exalted office, or your vision is reason enough, you’re in trouble.
While these qualities may affect how others relate to you, the unvarnished truth is that other people will follow you when they judge it’s in their best interest to do so.
Although forecasting errors are extremely common, you can minimize their impact on your negotiations by following these three guidelines.
Test your knowledge. Sharpen your skills. Become a better negotiator.
Join fellow professionals, executives, graduate students, and community members for the Negotiation and Dispute Resolution Seminar to learn how to skillfully negotiate to create value and resolve disputes.
When the poet Walt Whitman wrote, “Surely, whoever speaks to me in the right voice, him or her shall I follow,” he conveyed the notion that persuasive communication is fundamental to effective leadership. Whitman’s words also underscore the importance of shaping leadership communications to meet individual concerns, interests, and styles.
When deciding how to communicate, recognize that the medium you choose reveals something about you and your relationship with the person you are trying to lead.
Relationships are as important to leadership as they are to negotiation.
A relationship is a perceived connection that can be psychological, economic, political, or personal; whatever its basis, wise leaders, like skilled negotiators, work to foster a strong connection because effective leadership depends on it. How you negotiate your relationships with your counterpart not only determines your success at the bargaining table but also your effectiveness as a leader.
Peace talks in the Middle East between Israel and Palestine have stalled for years and, with no ‘new beginnings’ on the horizon, many have come to expect stagnation and lack of progress in talks between the neighbors. That was until this week when Secretary of State John Kerry was successful in getting Palestinian and Israeli negotiators to sit down at the dinner table for a meal for the first time in years.
Executives are increasingly faced with the task of negotiating in a realm that many know little about: technology.
Whether you’re bargaining over the purchase of a companywide network, coping with the possible infringement of patented technology, or seeking better customer service from a software supplier, technology negotiations have become a fact of managerial life.
How do such negotiations differ from those that are less technologically complex?
In China this April, Apple CEO Timothy D. Cook made the unusual move of apologizing to Chinese customers for his company’s warranty policy and promised to make amends, the New York Times reports.
On March 15, International Consumers’ Day in China, the nation’s largest state-run television network criticized Apple for giving iPhone customers in China a one-year warranty, less than the two years required under Chinese law, and for charging consumers about $90 to replace faulty back covers on iPhones.
Social psychologists have described types of power that exist in society, and these types of power emerge in negotiation as well.
Two types of power spring from objective features of the bargaining process.
For more advice on leading an ADR process in your organization, consult these books.
Founded in 1983, the Program on Negotiation at Harvard Law School is a pioneer in the fields of negotiation, mediation, and alternative dispute resolution.
In commemoration of the program’s 30th anniversary this year, the Program on Negotiation is proud to present a video describing many of PON’s various educational and research activities.
According to Chair Robert Mnookin, at its core the Program on Negotiation is devoted to improving the theory and practice of negotiation and dispute resolution.
In the The Third Side, William Ury suggests several concrete steps that you can take to start mobilizing the third-side approach to tackle naggling conflicts.
The transfer of an agreement from negotiators to lawyers or other professional deal drafters can introduce three main types of mistakes. Read on to discover how you can avoid making these same mistakes at the bargaining table during your next dealmaking negotiation session.
Even with these precautions in place, there will be times when one side demands renegotiation of a deal. Here are some guidelines on how to proceed.
To your negotiation toolkit, consider adding a new skill: mind mapping.
In a recent article in the Wall Street Journal, Zack Anchors describes how financial advisor Rob O’Dell of Wheaton Wealth Partners of Wheaton, Illinois used the unconventional technique in an attempt to help a client negotiate the sale of his shares of the family business to his younger brother, who hoped to pass the business on to his children.
If your current negotiation reaches an impasse, what’s your best outside option?
Most seasoned negotiators understand the value of evaluating their BATNA, or best alternative to a negotiated agreement, a concept that Roger Fisher, William Ury, and Bruce Patton introduced in their seminal book Getting to Yes: Negotiating Agreement Without Giving In.
The clearest method for achieving exclusivity is an exclusive negotiating period, during which both sides agree not to talk to third parties, even if approached unexpectedly by others. In some arenas, these terms are called no-talk periods.
Our DEAL approach allows you to respond to threats without conveying weakness or escalating the conflict, redirecting talks toward a focus on each other’s interests.
The likelihood that a provision for final-offer arbitration in the event of impasse will actually result in arbitration is slim. However, as a precaution, you and your counterpart should agree on an arbitrator before you start negotiating. It’s easier to choose an arbitrator when both sides view arbitration as an unlikely event when arbitration is imminent and feelings are running high. You need not engage the arbitrator at this time since you probably won’t need her services.
Given the prevalence of corporate scandals in recent years, many have questioned whether ethics training for professionals has done much good.
One of the reasons that such training has achieved limited success is its focus on intentional, explicitly unethical behavior. Such training encourages students to do what is right rather than what is profitable. Yet, most professionals are not ethically challenged at an explicit level and those who are may be unreceptive to the messages of ethics training.
According to Dacher Keltner of the University of California at Berkeley and his colleagues , power affects two primary neurological regulators of behavior: the behavioral approach system and the behavioral inhibition system. Powerful individuals demonstrate “approach related” behaviors such as expressing positive moods and searching for rewards in their environment.
On Saturday, April 20, 2013, the Program on Negotiation co-hosted a conference on “Confronting Evil: Interdisciplinary Perspectives,” in partnership with the Mahindra Humanities Center at Harvard University and the Volkswagen Foundation.
Whenever one side fails to meet its contractual obligations, renegotiation is more likely to succeed if the parties have a strong relationship. Ideally, the aggrieved party will value long-term relations more than potential gains from a claim for breach of contract. For example, a bank will be more willing to renegotiate a loan with a delinquent debtor when the prospect of future business with the debtor is likely. Bondholders of the same debtor, on the other hand, will generally be more resistant to renegotiation, as they tend to lack opportunities for a profitable future business relationship.
Like other cognitive biases, competitive expectations can be insidious. Fortunately, there are several steps you can take to forestall their negative consequences.
What do people value when they negotiate?
Research by Professors Jared R. Curhan and Heng Xu of MIT’s Sloan School of Management and Hillary Anger Elfenbein of Berkeley’s Haas School of Business provides useful insights concerning this basica question.
Using survey data collected from everyday negotiators and filtering it through a sorting procedure conducted by negotiation professionals, the researchers developed a Subjective Value Inventory (SVI) that includes four factors.
Preparation. Practice. Persistence. Those qualities make for a good firefighter, and as Nantucket Firefighter Nate Barber learned from working with Harvard Negotiation and Mediation Clinical Program (HNMCP) students, they also make for a good negotiator.
As a member of Nantucket’s Local 2509 of the International Association of Firefighters and a former undergraduate negotiation student at Boston University, Mr. Barber knew relations between the Town of Nantucket’s management and his union could be better. Since the firefighters’ contracts only lasted two or three years and the negotiation process itself often took that long, the union and the management sat down for contract negotiations every year. And every year, the negotiations spilled over into the next year or, if it was the final year of the contract, went to arbitration. This impacted everyone: arbitration provoked more fighting, poorer relations, and less of what everyone wanted. They hadn’t had a mutual agreement for six years. As one of the interested parties, though, Mr. Barber knew he was not the person to fix a broken bargaining system.
Negotiation is often characterized as a physiologically arousing event marked by pounding hearts, queasy stomachs, and flushed faces. We might assume that heightened physiological arousal would mar our negotiation performance, but this is only true for some, researchers Ashley D. Brown and Jared R. Curhan of the Massachusetts Institute of Technology found in a new study soon to be published in the journal Psychological Science.
Planning to resolve a personal or business dispute in court? Before doing so, you should consider carefully what psychologists, political scientists, and legal scholars have learned about judges: their decisions are prone to error and bias.
Obviously making a fair judicial ruling can be difficult when the law is murky or the facts are contested. But even when the law is clear and the relevant facts have been fully developed, judges can still have trouble accurately applying the governing principles. Specifically, they face three types of “blinders” – attitudinal, information, and cognitive – that are largely unacknowledged by the legal system.
Because judges are susceptible to misjudging, your outcome in court may not be as fair or predictable as you might expect.
If Chinese culture favors insiders, it stands to reason that outsiders face an uphill battle.
In One Billion Customers: Lessons from the Front Lines of Doing Business in China (Free Press, 2005), business executive and Wall Street Journal bureau chief James McGregor writes of the 1996 attempt by Xinhua, the official Chinese news agency, to declare that only it had the right to publish financial data in China, thereby locking out Dow Jones and Reuters. It was a bold move based on brute power. Xinhua backed down only after Dow Jones and Reuters appealed to the U.S. government, which threatened to abandon a trade agreement with China.
Congratulations to the graduates of Harvard Law School’s Class of 2013 and appreciation to Harvard University President Drew Gilpin Faust at today’s graduation events for recognizing the Program on Negotiation’s Confronting Evil Conference, cosponsored by the Mahindra Humanities Center at Harvard and the Volkswagen Foundation, as one of the many ways HLS seeks to solve the world’s problems.
It can be difficult to keep future concerns at the forefront of your company’s most important decisions. Fortunatly, research on intergenerational conflict has uncovered best practices for ensuring that you and your employees take the long view.
Whether you have one of its ubiquitous products or even its rivals’ offerings, you most certainly have heard of Apple, the United States electronics giant whose phoenix-like rise to the top of the business world has inspired legions of fans and detractors alike.
Started in a garage in California, Apple has grown into a technological powerhouse of innovation that has changed the way the world works and lives. Along the way, the company has demonstrated unparalleled business acumen and leadership, both commercially and through leaders like Steve Jobs and current CEO Tim Cook.
Trust may develop naturally over time, but negotiators rarely have the luxury of letting nature take its course. Thus it sometimes seems easiest to play it safe with cautious deals involving few tradeoffs, few concessions, and little information sharing between parties. But avoiding risk can mean missing out on significant opportunities. For this reason, fostering trust on the fly is a critical skill for managers. As Kristen knew, the first step to inspiring trust is to demonstrate trustworthiness. All negotiators can apply the six strategies that follow to influence others’ perceptions of their trustworthiness at the bargaining table.
Like a contingency, a condition to a deal is a related though far less common deal-structuring technique. A condition is an ‘if’ statement like a contingency, but, whereas a contingency depends on unknown future events, a condition is entirely within the control of the parties involved.
As the following points will demonstrate, ensuring that your counterpart is satisfied with a particular deal requires you to manage several aspects of the negotiation process, including his outcome expectations, his perceptions of your outcome, the comparisons he makes with others, and his overall negotiation experience itself.
Once you’ve decided to use an agent, it’s important not to rush headlong into the process – picking the first one you speak to, for example, and sending him off to talks the next day.
You need to choose your agent carefully, then establish a clear, detailed understanding of each other’s responsibilities and expectations.
The following are critical steps in picking an agent and negotiating his contract.
Here the Program on Negotiation offers a checklist of negotiation design categories. Whether your overall negotiation design is decide-announce-defend (DAD) or full-consensus (FC), or a hybrid of both, raising these issues is usually preferable to falling into a set of important decisions by default.
In any negotiation, you’re likely to have information about the other party or about the deal (industry facts, economic health, new products, and so on) that the other party might not know you have.
When considering a potential mediator, ask the following questions of those who have worked with him in the past.
Do you ever feel ambushed by strong emotions?
To guard against acting irrationally or in ways that can harm you, authors of Beyond Reason: Using Emotions As You Negotiate Roger Fisher and Daniel Shapiro advise you to take your emotional temperature during a negotiation. Specifically, try to gauge whether your emotions are manageable, starting to heat up, or threatening to boil over.
By following these steps in your next negotiation, you’ll improve the chances of meeting everyone’s interests.
A recent article in Tufts Magazine by Program on Negotiation faculty member Jeswald Salacuse discusses an oft neglected aspect of negotiation: putting into action what negotiators agree to at the bargaining table.
Normally negotiators focus on the deal-at-hand as well as those present at the negotiation, neglecting other aspects of the negotiated agreement that would not only impact others outside of the room but also require their cooperation for its success.
Professor Salacuse calls this process of putting a negotiated agreement into action “the toughest challenge” in negotiation.
On November 1, 2012, Professor Kerri Johnson from the University of California, Los Angeles, delivered a talk at the Harvard Kennedy School. Her lecture, entitled “Social Perceptions at the Crossroads: Why Sex (Still) Impacts the Perception and Evaluation of Other Status-Linked Identities,” was part of a year-long research seminar co-sponsored by the Program on Negotiation at Harvard Law School and the Women and Public Policy Program at Harvard Kennedy School. Watch Professor Johnson’s entire presentation here:
Dozens of female CEOs and other high-level executives have told us about their experiences negotiating in traditionally masculine contexts where standards and expectations were ambiguous. Their experiences varied according to the gender triggers that were present in the negotiations.
To protect the future interests of their organization, negotiators sometimes must accept fewer benefits or absorb greater burdens in the short run to maximize the value to all relevant parties – including future employees and shareholders – over time.
Suppose that the operations VPs of two subsidiaries of an energy company are preparing to negotiate the location of a new energy source within the company. Beta, the energy source, is limited in supply, but it is inexpensive and efficient to use in the present and grows in potency over time.
Car salespeople truly understand how to use modest concessions to extract much larger ones.
First, they spend a long time legitimating the sticker price and suggesting that it’s not only fair, but nonnegotiable.
In Lessons in Life Diplomacy, the New York Times’ Bruce Feiler asks, how do we break out of negative patterns of conduct and proactively approach problems encountered in our everyday lives? His advice, gleaned from his own experiences as well as from the research of experts in the field of conflict management and dispute resolution, is actually quite simple on its face yet very complex in practice.
Imagine that your counterpart has placed a draft on the table. Here are three approaches to consider in response.
In the early days of his tenure, a chairman spends too much time reviewing the details of his proposed policy with his staff and not enough time sounding out council members to drum up support for his reforms.
The chairman’s missteps lead us to the first rule of coalition building: think carefully about how and when to meet one-on-one with other parties.
Negotiations become especially complex when agents are involved on two or more sides.
In the course, of their research, Robert Mnookin and Lawrence Susskind discovered that many negotiators often mistakenly assume that an agent representing the other side
Today’s Confronting Evil: Interdisciplinary Conference will be held from 9:00 a.m. to 6 p.m. in Emerson Hall on the Harvard University Campus. All four panels will be presented today.
Harvard University is closed due to an ongoing public safety situation in the area. This afternoon’s first session of the “Confronting Evil” conference is postponed until tomorrow morning, starting at 9:00. Please check here for further updates.
In past articles, we have highlighted a variety of psychological biases that affect negotiators, many of which spring from a reliance on intuition.
Of course, negotiators are not always affected by bias; we often think systematically and clearly at the bargaining table.
With thorough preparation, the help of a trained mediator, and useful reports from subgroups, participants in a multiparty negotiation should be able to find their way to the trading zone. Once they’ve arrived, the next step is to work together to ensure that everyone’s interests are met.
When multiple parties gather to discuss issues, someone has to oversee the group’s efforts, or the process will descend into chaos or stalemate.
A negotiation manager should prepare the group’s agenda, establish ground rules, assign research tasks, summarize conclusions, and represent the process to the outside world.
Francesca Gino’s newest book, Sidetracked: Why Our Decisions Get Derailed and How We Can Stick to the Plan discusses a common shortcoming that we have all faced at some point in our lives – the inability to set a goal and stick to it.
Often when we set goals for ourselves we seek to rectify some perceived shortcoming or change ourselves in order to have a brighter future or more fulfilled life. Change, in and of itself, is a powerful force for helping individuals realize their dreams and potential, but like all things worthwhile, it is incredibly difficult.
On February 1, the Obama administration proposed a compromise to a federal policy requiring health insurance plans to provide free contraceptives to women.
The proposal would expand the number of groups that need not pay directly for birth control coverage, the New York Times reports. Some religiously affiliated hospitals, universities, and social service agencies would join churches and other religious organizations as exempted groups.
When you’re thinking about resolving a dispute in court, it’s crucial to remember that the decision that will be imposed on you is binding.
If blinders lead a judge to grant a motion that should be denied, deny a motion that should be granted, assign responsibility to the wrong party, or award too much or too little in damages, there can be no going back.
Concerns about status will arise in any negotiation. How can you deal with them, both in yourself and in others? The following six guidelines can help in virtually any context
When a negotiation reaches an impasse (or, preferably, sooner), it’s important to consider that you may be at the wrong table.
What other individuals or groups might be able to break the deadlock? Perhaps you should be talking to them instead.
These suggestions from Dina Pradel, Hannah Riley Bowles, and Kathleen L. McGinn can help prevent gender from becoming a significant fact in negotiations.
An American company and a Japanese company formed a joint-venture to manufacture gauges and measurement equipment for sale in Asia.
When you’re making important decisions during a negotiation and have the luxury of time, what’s the alternative to Blink?
Should you completely ignore your rapid cognitions?
In the article “Strategies for Negotiating More Rationally,” we described University of Toronto professor Keith Stanovich and James Madison University professor Richard F. West’s distinction between System 1 and System 2 thinking.
System 1 roughly corresponds to Gladwell’s notion of rapid cognitions and System 2 refers to more deliberative thought.
The work of University of Iowa neuroscientists Antoine Bechara, Daniel Tranel, and Hanna Damasio demonstrates the effects of emotion on decision making.
In March 2005, German powerhouse SAP agreed to buy Retek, a small company that offered information management software, for $8.50 a share. The deal included a matching right in which Retek committed to negotiate exclusively with SAP for five days if it received a “superior offer.” The matching right didn’t scare away Oracle, SAP’s archrival, which was convinced that it could integrate Retek’s application software better than SAP could. Oracle offered $9 a share, triggering SAP’s matching right. SAP countered with $11 per share, and Oracle responded with $11.25 per share. SAP declined to match Oracle’s last offer, and Oracle closed its deal in mid-2005.
To set the stage for a productive discussion, open a difficult conversation with the Third Story, advise the authors of Difficult Conversations. The Third Story is one an impartial observer, such as a mediator, would tell; it’s a version of events both sides can agree on. “The key is learning to describe the gap – or difference – between your story and the other person’s story. Whatever else you may think and feel, you can at least agree that you and the other person see things differently,” Douglas Stone, Bruce Patton, and Sheila Heen write.
The Program on Negotiation at Harvard Law School and the Middle East Initiative at the Harvard Kennedy School held a panel discussion following a screening of My Neighborhood, a Just Vision documentary. The podcast is now available.
A passive approach to learning rarely leads to future negotiation success. To maximize your training experience, follow these guidelines.
There are two main reasons the winner’s curse is a common and dangerous trap in negotiations.
While you might choose many processes for conducting your negotiations, we recommend the following three steps of a mutual-gains approach.
In 1992 as part of efforts to privatize its energy sector, the Indian government chose energy-trading firm Enron, in conjunction with General Electric and the Bechtel Corporation, to build the world’s largest electricity-generating plant in Maharashtra, one of the poorest states in India. Possessing significant financial, intellectual, and reputational capital, Enron had to have been a formidable opponent in those initial negotiations. Enron was then on top of the business world, with sky-high stock prices and a reputation for innovation and growth.
Based on current research, the following is a summary of the information you need to set up an optimal accountability system for negotiators in your organization.
The Program on Negotiation will present an episode of The Advocates, an award winning television show created in 1969 by the late Roger Fisher.
In the early hours of January 6, the National Hockey League (NHL) and the NHL Players’ Association (NHLPA) concluded a 16-hour mediation session by announcing they had reached agreement to end a 113-day lockout. The deal was finalized a week later, and the players returned to the ice for a shortened 2012-2013 season on January 19.
If you’ve ever been part of an organization team preparing to negotiate an agreement with another organization, you probably have faced this frustrating task: Aligning your individual interests , other team members’ interests, and those of your company as a whole.
This presentation by Karen Lee Bar-Sinai and Prof. Robert Mnookin is the fourth seminar exploring the role of urban planning in negotiation, co-sponsored by the Middle East Negotiation Initiative (MENI) at the Program on Negotiation and the Harvard Graduate School of Design.
On December 28, Russian President Vladimir Putin signed into law a ban on adoptions of Russian children by American citizens. The ban was part of a broader law tailored to retaliate against the United States for passing a recent law intended to punish Russian human rights violators, the New York Times reports. Yet it may have spawned a need for crisis negotiations between the two countries.
“Separate the people from the problem,” advises the best-selling negotiation text Getting to Yes. That’s certainly good counsel when tempers flare and bargaining descends into ego battles, but it’s a mistake to ignore the psychological crosscurrents in negotiation. Unless they are addressed, a deal may never be reached.
After attending intensive executive education courses, managers typically return to the office with a sense of excitement about applying their new knowledge – only to find 200 emails and 2 voicemail messages waiting for them. Amid the chaos, the lessons of the past few days are forgotten. The unmet challenge of executive education is the transfer of knowledge from the classroom to the real world.
Katrin Bennhold, staff writer for the International Herald Tribune, and Paula Gutlove, Professor of Negotiation and Conflict Management Practice at the Simmons College School of Management, will present a talk on Women and Negotiation.
Stewart recently interviewed negotiation expert and Program on Negotiation co-founder William Ury to discuss the aftermath of avoiding the fiscal cliff and the rounds of tough negotiations between Democrats and Republicans still to come.
Not all contracts are created equal. Some maximize joint through creative trades, while others are barely satisfactory. Strategic wariness causes many people to leave untapped value on the bargaining table. Of course, agreements based on incomplete and distorted information aren’t likely to be efficient.
Managers often are surprised to learn that deals don’t need to be written down to be legally binding. As a matter of contract law, all that’s needed is an offer, acceptance, and consideration - legalese for a benefit gained by each side. For many deals, this means that a handshake is sufficient to “bind” the parties.
The Program on Negotiation at Harvard Law School and the Middle East Initiative at the Harvard Kennedy School are pleased to present a screening of “My Neighborhood,” a new Just Vision documentary. A panel discussion will be held after the screening with Julia Bacha, director/producer of My Neighbourhood.
Placing Trust in Others
When it comes to trusting others, negotiators often rely on their gut instincts.
Recent studies indicate, however, that extraneous factors can sway such judgments.
For example, Michael Kosfeld and other University of Zurich researchers introduced a twist in a classic trust game in which subjects must decide on how much money to invest when there’s no guarantee that the party playing the “trustee” will return the investment or share the gains.
This presentation by Karen Lee Bar-Sinai and Prof. Robert Mnookin is the third of four seminars exploring the role of urban planning in negotiation, co-sponsored by the Middle East Negotiation Initiative (MENI) at the Program on Negotiation and the Harvard Graduate School of Design.
In late 1999, with its stock in free fall, NCS HealthCare, a provider of pharmacy services to long-term care facilities, began “exploring strategic alternatives” – code in the mergers and acquisitions world that NCS’s board wanted to put the company up for sale.
In 2001, Omnicare, a larger provider in the same general industry, offered to buy NCS for $270 million, a number lower than the value of the company’s debt. The deal would have left the company’s stockholders with nothing, and talks broke down when NCS demanded a higher price. In June 2002, Omnicare’s fierce rival Genesis HealthCare came to the table with an offer for NCS. Fearful of having its deal stolen away by Omnicare, which had just beaten Genesis in a bidding contest for another company, Genesis proposed a condition on the deal. It would make an offer only if NCS’s chairman and president, who together held a majority of the voting shares, committed to the Genesis deal and rejected any competing offer from Omnicare. NCS accepted this condition, and the merger was announced on July 28, 2002.
In 1986, the investment bank Goldman Sachs was a $38 billion business owned by more than 100 active and retired partners.
While the partnership structure had insulated the company from the vicissitudes of the stock market and given the company a strong culture of teamwork, it had some significant disadvantages, particularly an unstable capital base and an inability to grow by making acquisitions with stock.
Consider the first-ever televised debates between the U.S. presidential candidates in 1960.
Studies of the audience after the first of four debates revealed that in the eyes of television viewers, charismatic and confident John F. Kennedy was clearly victorious over the sullen Richard Nixon, who had a five o’clock shadow and was also underweight and pallid because he had spent two weeks in the hospital because of a knee operation.
Program on Negotiation at Harvard Law School Chair Robert Mnookin was recently invited to a panel discussion on San Francisco radio station KQED’s ‘Forum’ to discuss the fiscal cliff negotiations.
On November 28, dozens of employees at several fast-food restaurants in New York City walked off their jobs and demanded better pay and unionization. In doing so, they launched what is believed to be the largest coordinated campaign in the United States to unionize fast-food workers from different restaurants, reports Steven Greenhouse in the New York Times.
Negotiating by email poses a set of challenges that one doesn’t often encounter in face-to-face negotiations.
Without the benefit of seeing your counterpart’s body language, what one person might intend to be a straightforward request the other might perceive to be rude.
A legitimate delay responding to an email offer by one party might be construed by the other as a dirty negotiating tactic. If the subject matter being negotiated has an emotional element, the lack of seeing the other party’s facial expression could lead to big misunderstandings.
How can you uncover additional value, make useful trades, and put together a package that exceeds your party’s expectations? Here are four value-creating moves that all negotiators should add to their toolkit.
Here’s a recap of some of the most interesting and challenging negotiations of 2012.
The law of attorney-client privilege protects certain communications on the assumption that clients will reveal critical information to their attorneys only if they know such disclosures will not harm them in court. Despite the inadmissibility of such evidence, judges can have difficulty disregarding privileged information that sheds light on a case.
In any negotiation, you’re likely to have information about the other party or about the deal (industry facts, economic health, new products, and so on) that the other party might not know you have.
When a conflict looms, it can be tempting for each side to try to make unilateral decisions on key issues because of the belief that negotiations with the other side will be a dead end. This strategy may pay off in the short term, but it’s important to factor in the long-term costs.
How can we avert a full-throttle drive over the fiscal cliff? Despite some promising signs of movement on both sides of the aisle, the current negotiation approach – positional bargaining – is bound to bring us dangerously close to the edge.
Program on Negotiation and Harvard Business School professor Deepak Malhotra recently sat down with CNBC to discuss the fiscal cliff and how Democrats and Republicans can not only complete their current negotiation successfully, but also their future negotiations.
In 1901, J.P. Morgan wanted to buy the Carnegie Steel Company from its founder, Andrew Carnegie.
Carnegie was 65 years old and considering retirement. As Harold C. Livesay recounts in his book Andrew Carnegie and the Rise of Big Business (Little, Brown, 1975), when Carnegie finally decided he was ready to sell, he jotted down his estimate of his company’s worth in pencil: $480 million. Carnegie had the sheet of paper delivered to Morgan, who took one look and said, “I accept this price.”
Over-precision doesn’t necessarily lead us to think we’re better negotiators than we actually are. Rather, it causes us to trust our initial instincts too much.
Sometimes we’re actually overconfident that we’ll perform worse than others. This tendency applies to competitive situations, including negotiation.
Those who underestimate their ability to be competitive usually will choose to stay out of a negotiation.
Here are four pieces of advice that current negotiation research offers to reduce your overconfidence.
Attempts to exercise power can backfire. As a negotiator, you must balance these three risks against the potential benefits of developing and exercising power.
The Program on Negotiation Film Series recently screened “The Island President,” the story of President Mohamed Nasheed’s efforts to garner world-wide attention on climate change, as rising sea levels threatened the survival of his country, the Maldives. In introducing the film, PON Managing Director Susan Hackley said, “This wonderful film shows how a skilled negotiator representing a small country could stand up to bigger powers and be heard. It’s a great lesson for students of negotiation, who wonder how someone seemingly powerless can negotiate effectively.”
In both improv and negotiation, confidence often comes from having fallback routines. Improv performers buy time by resorting to “physical business” – pouring an imaginary glass of beer, for example. Seasoned negotiators use similar gambits to slow down the clock and get their bearings:
In late October, the Detroit Tigers were preparing to face off against the San Francisco Giants in Major League Baseball’s World Series. In 2002 and 2003, the Tigers had two of the worst seasons in baseball history, losing a combined 225 games. But through years of calculated decision making and negotiations, team president Dave Dombrowski and his staff rebuilt the team from the ground up, writes Noah Trister of the Associated Press. The Tigers have reached the World Series for the second time in seven seasons and, at the time of this writing, are favored to beat the Giants.
For decades, General Electric and the Environmental Protection Agency (EPA) sparred over who would pay for the removal of PCBs, or polychlorinated biphenyls, that GE had discharged into New York’s Hudson River, a cleanup project that is expected to cost hundreds of millions of dollars. The two sides finally came to an agreement in October 2005.
When tensions rise between parties, the temptation to escalate commitment to a specified position can be overwhelming—and the likelihood that negotiations will resolve the dispute becomes increasingly slim.
Yaakov Katz, a correspondent for The Jerusalem Post and Jane’s Defence Weekly, and Prof. Robert Mnookin, the Samuel Williston Professor of Law at Harvard Law School, will discuss Unilateral Initiatives in the Israeli/Palestinian Conflict.
Richard Zeckhauser and Program on Negotiation faculty member Iris Bohnet have found that negotiators leave substantial amounts of money on the table due to betrayal aversion. They conducted experiments in which they compared people’s willingness to take risks in two decision situations. The first situation is a lottery whose outcome is based on chance. Participants must choose between:
Due to deeply ingrained gender stereotypes, women may find it easier to negotiate their time instead of their financial compensation.
Consider that men and women are likely to rely on gender-stereotypic arguments to support their demands in negotiation. For women, the gender-stereotypic notion of being caregivers is readily available and likely to be well received. By contrast, men, who generally are expected to be the primary family breadwinner, have less difficulty negotiating financial issues than women do.
The Program on Negotiation, the Environmental Law Program at Harvard Law School and the Harvard Law Documentary Studio are pleased to present a screening of The Island President with post-screening discussion led by Hardy Merriman, Senior Advisor at the International Center on Nonviolent Conflict.
The old saying goes, “there is no ‘I’ in team,” but recent research by Program on Negotiation faculty member and Harvard Business School Associate Professor Francesca Gino and others suggests that an organization should pay attention to the various individuals it recruits, and by doing so it can improve employee retention and productivity.
This presentation by Karen Lee Bar-Sinai and Prof. Robert Mnookin is the second of four seminars exploring the role of urban planning in negotiation, co-sponsored by the Middle East Negotiation Initiative (MENI) at the Program on Negotiation and the Harvard Graduate School of Design.
In this business world, it’s typically smart practice to keep disputes with key partners private, at least until doing so becomes unfeasible for financial or other reasons. That’s why the book publisher Penguin’s decision to file lawsuits against 12 of its authors for breach of contract is being widely judged as a public relations misstep.
The case of Jordan and Israel shows how even countries at war can negotiate a water agreement if it is framed in non-zero sum terms and trust continues to be built over time. And that is not the only case of a treaty that has succeeded against all odds to bridge conflicting water interests; the Indus Waters Treaty between India and Pakistan and the Ganges Water Treaty between Bangladesh and India are other examples.
Zero-sum thinking emerges when people conceive of water as a fixed resource – one provided by nature in a given quantity that is either static or diminishing. Based on these assumptions, diplomats often focus on what share of the existing water will be given to each entity. Negotiations of this type typically involve decision makers who are political leaders focused on preserving sovereignty and maintaining state security. They are often unprepared to think about improving the overall efficiency of water use, which, in effect, can “create” more water.
Scientific and technical knowledge is important in water negotiations, but not in the ways it has often been used. It is counterproductive to use scientific information to justify arbitrary (political) decisions. For example, scientific information about water has increased dramatically over the last several decades, but our ability to manage water resources has not improved proportionately.
When two parties are attempting to resolve a contentious dispute, the most effective peacemakers may be those at the highest levels. That’s the lesson from recent productive talks between President Obama and Afghan leader Hamid Karzai on the issue of rules for detaining terrorism suspects.
When countries face contending water claims, one of the biggest obstacles to reaching an agreement is uncertainty. Specifically, there are three types of uncertainty: uncertainty of information, uncertainty of action, and uncertainty of perception. In part 2 of this 5 part series, Program on Negotiation faculty member Lawrence Susskind explains the uncertainties facing negotiators trying to make agreements.
Most difficulties in water negotiations are due to rigid assumptions about how water must be allocated. When countries (or states) share boundary waters, the presumption is that there is a fixed amount of water to divide among them, often in the face of ever-increasing demand and uncertain variability. Such assumptions lead to a zero-sum mindset, with absolute winners and losers. However, when parties instead understand that water is a flexible resource and use processes and mechanisms to focus on building and enhancing trust, even countries in conflict can reach agreements that satisfy their citizens’ water needs and their national interests.
Reuters photographer Finbarr O’Reilly and Dr. Bessel A. van der Kolk, Medical Director of the Boston Trauma Center, will discuss the emotional toll of war, how trauma affects brain and body alike, and what it takes to witness and narrate violent struggle in the world.
How important is body language to how you are perceived?
How about when you are debating national policy in front of millions of television viewers?
Negotiators often choose to resolve their conflicts through mediation, arbitration, and other alternative dispute resolution methods because of the privacy these methods promise. Unlike the public nature of litigation, mediation and arbitration typically give parties the freedom to hash out sensitive issues without the fear that their discussions and agreement will become public knowledge. Two new cases in the news, however, show that privacy is a nuanced issue in some alternative dispute resolution contexts.
What happens in negotiations between two individuals who care little about each other’s outcomes? Suppose an engineer and an industrial designer are arguing over the design of a car bumper. The designer only cares about whether the bumper matches the style of the vehicle; the engineer is concerned only about how the bumper connects to the front. After describing the trouble he’s having with the existing design, the engineer presents a solution that the designer deems “ugly.” The designer threatens to involve her boss if the engineer doesn’t revert back to the prior design.
Before launching a workaround, run through this list of skills-based strategies adopted from Getting Past No: Negotiating Your Way from Confrontation to Cooperation by William Ury (Bantam, 1993). Only attempt a workaround if you’ve tried them all without success:
Program on Negotiation Chair Robert Mnookin was honored by the International Academy of Mediators with a lifetime achievement award during the organization’s fall 2012 conference in Cambridge, Massachusetts.
Imagine that you are in charge of renting a new location for a branch of your company in a nearby city. After researching the reputations of a number of local real estate agents, you meet with several and choose the one who seems most knowledgable and responsive.
Experiments conducted by Program on Negotiation faculty member Francesca Gino and her colleague Sreedhan Desai suggest that remembering childhood memories may cause a person to behave in a more ethical manner.
It is the spring of 1997 and I am sitting in Pound 107 while Roger Fisher ’48, Williston Professor of Law, Emeritus, is telling a story about his serving as a weather reconnaissance pilot in World War II. As a teaching assistant for the Negotiation Workshop, I have heard the story at least a dozen times by now and feel my mind wandering. And yet, against my will, as the story reaches its crescendo and the combination punch line/negotiation issue flows from Roger’s lips, I find myself involuntarily leaning forward and, a second later, helplessly bursting into laughter. The note I jot down to myself is: “All of life is about who tells better stories.”
Research suggests that email often poses more problems than solutions when it comes to relationships, information exchange, and outcomes.
Roger Fisher, co-founder of the Program on Negotiation and the Harvard Negotiation Project, died on August 25 at age 90. A true pioneer and leader, he helped launch a new way of thinking about negotiation, and he worked tirelessly to help people deal productively with conflict.
“Through his writing and teaching, Roger Fisher’s seminal contributions literally changed the way millions of people around the world approach negotiation and dispute resolution,” commented Professor Robert H. Mnookin, Chair of the Program on Negotiation at Harvard Law School. “He taught that conflict is not simply a ‘zero-sum’ game in which a fixed pie is divided through haggling or threats. Instead, he showed how by exploring underlying interests and being imaginative, parties could often expand the pie and create value. Here at the Program on Negotiation and the Harvard Negotiation Project, both of which Roger helped launch, we, his colleagues, are committed to carrying on his work of improving the theory and practice of negotiation and dispute resolution.”
Recent research published by Psychological Science from Program on Negotiation faculty member and assistant professor at Harvard University’s Department of Psychology Joshua Greene and his colleague Elinor Amit explores the impact vivid mental imagery has on decision-making processes.
Another option for dealing with difficult negotiations is to craft what Harvard Law School professor Robert C. Bordone calls a “workaround” – a strategy for meeting your current goals without the involvement or support of your adversary. You might be able to induce a yes with a tempting concession on a key issue, according to Bordone. Offering a concession can be a risky strategy, as it may only encourage someone to push for more. But if a concession would allow you to move beyond that person once and for all, it may be your best option.
How can you figure out the motives behind someone’s seemingly stubborn position? Begin by questioning her about the problem she is trying to solve. Deal blockers may be held back by financial, legal, personal, or other constraints you don’t know about, according to Harvard Business School professor Deepak Malhotra. A tough stance could also communicate a psychological need that isn’t being satisfied.
What can you do when a difficult person is the main obstacle to a promising deal? There are a number of strategies you can use to bring the deal back from the brink of failure. In a series of posts, the Program on Negotiation will offer ten suggestions.
On the day before the next European Council Meeting (Oct. 18-19), George Papandreou, former prime minister of Greece, will talk about the crisis in Europe, how Greece points to deeper problems within the European Union, and why a stronger integration of member states could be a way forward. He will be in conversation with economist, political consultant, and Harvard Kennedy School lecturer Richard Parker.
Some of the trickier aspects of designing the right contract with your agent include properly aligning her incentives and monitoring her work. Supervising your agent can be especially hard when she knows more than you do about the area of work. For example, hiring an agent who’s a lawyer and paying her on an hourly basis may induce her to spend more time than you think you necessary – at your expense. She might become a literary perfectionist, spending hours crafting and polishing an offer letter to the other side when, as far as you’re concerned, the second draft would have done just fine. To prevent her from running up needless hours, you might opt instead for a fixed-fee engagement. Then, however, she may cut corners, doing just enough to reach her fee.
The Harvard Negotiation & Mediation Clinical Program (HNMCP) is nominated for an Innovating Justice Award for its proposal, “Retooling Legal Education and Dispute Systems Designers.”
In negotiation, different types of reputations serve different purposes. When you’re haggling over just one issue, such as the price of a used car or a computer installation, one party’s win is typically the other’s party’s loss. In such distributive negotiations, where each party is trying to claim the biggest piece of a fixed pie, having a reputation as a tough bargainer can be an effective means of undermining a competitor’s confidence and power.
Even when not based in reality, the expectation that someone is “tough” or “cooperative” becomes a self-fulfilling prophecy at the bargaining table. When you approach an allegedly tough competitor with suspicion and guardedness, he is likely to absord these expectations and become more competitive.
Negotiations for a new collective bargaining agreement (CBA) between the National Hockey League Player’s Association (NHLPA) and the NHL’s team owners took a tumultuous turn in mid-August, a month before the current agreement’s looming expiration date of September 15.
Psychologists Bruce Darby and Barry Schlenker at the University of Florida have defined apologies as “admissions of blameworthiness and regret for an undesirable event.” In negotiation, such undesirable events might include betraying a counterpart’s trust, making a disparaging remark about him, or falling through on a promise.
Despite the bloody conflicts in the Middle East, people of goodwill from both Arab and Western nations earnestly seek to collaborate in diplomatic and business transactions.
Following a violation, negotiators become less cooperative, less trusting, more upset, and more likely to retaliate against the perceived perpetrator. An apology can reverse the damage.
Some researchers have found that the most effective type of apology depends on the nature of the mistake made.
In a study by Peter Kim of the University of Southern California, Cecily Cooper of the University of Miami, Kurt Dirks of Washington University, and Donald Ferrin of Singapore Management University, participants assumed the role of a manager responsible for hiring a senior level tax accountant. The participants watched one of four videotaped interviews of a hypothetical job candidate. During each video, the interviewer mentioned that the candidate’s previous employer had accused her of filing a tax return that understated the client’s capital-gains income. In one version of the video, the interviewer suggested that the candidate incorrectly filed the tax return because she is incompetent – she didn’t understand the mistake she made. In another version, he accused her of deliberately underreporting the earnings.
On August 2, Kofi Annan announced he was resigning as the special peace envoy of the United Nations and the Arab League. reports Rick Gladstone in the New York Times. Since February, the former Nobel Peace Prize winner and former U.N. Secretary General has attempted to negotiate a resolution of the Syrian conflict. The peaceful uprising against President Bashar al-Assad that began 17 months ago has since exploded into a civil war.
According to conventional wisdom, you should always hire a real estate agent when you’re trying to buy a house. The broker’s market expertise will help you decide what moves to make and what price to pay. Because the seller usually has his own broker, the motto “fight fire with fire” applies as well. Perhaps most important, home buyers don’t even have to pay their brokers; the seller’s broker splits the commission with your agent. Hiring a buy-side broker splits the commission with your agent.
You’re close to a deal, but concerns linger. Some of the contract seems less than precise. What in the world does “reasonable best efforts” mean, for example, or “good faith”? Negotiators in this commonplace situation face a choice: push for more precision now or sign the deal and hope the ambiguities won’t cause trouble down the road.
Advice seeking is a versatile negotiation tool, as long as you project the right image and tone. Here are three guidelines:
Negotiation preparation is as much an organizational task as an individual one. For example, when determining their best alternative to a negotiated agreement or BATNA (the point at which the negotiators ought to walk away from the table), executives should check in with key organizational leaders. If senior managers are unwilling to invest time in such a conversation – or if they offer less-than-helpful advice such as, “Whatever you do, don’t lose that account!” – an executive can’t be held responsible for poor negotiation preparation.
How can organizations capitalize on negotiation experience? Through reflective practice: the process of considering the results of each negotiation in light of initial expectations and then discussing what ought to be tried next. While each negotiator must take initiative for reflective practice, to truly learn from experience, most need continual coaching from mentors.
To further improve negotiations, a company could publish an internal negotiation newsletter that can be distributed through a secure company intranet. Each month, the person overseeing the newsletter could choose a negotiation involving someone within the company.
Toby knew that Dara was the perfect New York literary agent for him as soon as he heard her friendly, professional voice on the phone. Never mind that 17 other agents had already rejected his book proposal. Dara’s enthusiasm and recent sales convinced him to sign the three-year exclusive contract she mailed to him in Atlanta.
Just before a meeting with her boss, Cindy peeks into his secretary’s office and whispers, “How’s his mood today?” When the secretary gives a thumbs-up, Cindy decides the time is right to ask for a big raise.
In May, Alex Scally, one half of the Baltimore musical duo Beach House, was surprised to hear from fans in Britain claiming that a new song by the band was being used in a Volkswagen television ad. Scally hurried to watch the ad online. He and his partner Victoria Legrand had repeatedly rejected lucrative offers from Volkswagen and its ad agency, DDB, for permission to use Beach House’s 2010 song “Take Care” in an ad, reports James C. McKinley, Jr. in the New York Times.
Roger Fisher, one of the cofounders of the Program on Negotiation at Harvard Law School and Samuel Williston Professor of Law, Emeritus, was honored on the 8th of April with a celebration of his career, research, and contributions to both the HLS community and the field of negotiation.
In previous posts, the widespread belief that some people are honest negotiators and others are not has been shown to be inapplicable to real-world negotiations. Rather, because people respond strongly to their environment, ethical standards often vary depending on the context.
You’ve found a beautiful condo that you’d like to call your own. You conduct a thorough assessment of its value and identify several other appealing properties in the same neighborhood and price range. Believing you’ve found the magic bid, you phone your real-estate agent.
Have you ever won an auction only to realize later that you overbid for the prize? In competitive bidding situations, it’s easy to get carried away in the heat of the moment and overpay.
On June 5, another casualty in the European debt crisis emerged, as Spain announced that it soon would be unable to borrow in the bond market without assistance from other European Union nations. Emilio Botin, the chairman of Banco Santander, said about 40 billion euros, or $50 billion, in European funds would be needed to repair Spain’s banking sector, according to Bloomberg News.
Reading groups at Harvard Law School, consisting of 2Ls and 3Ls, present faculty and students with opportunities to study with one another in a less formal setting. Additionally, students are encouraged and are able to gain an in-depth knowledge of the particular reading group’s subject matter.
How do you resolve a conflict with a family member, when you have a misunderstanding? Can you learn to see their perspective? Can you articulate your mutual interests? Can you overcome your differences and work together toward a common goal? These were some of the questions discussed by a group of 80 young women leaders who attended a recent negotiation training led by PON’s Managing Director, Susan Hackley.
Imagine that you and a colleague get in an argument about the layout of a final report in front of a coworker you both like. Now suppose the same argument occurs in front of someone your colleague likes but you do not or vice versa – in front of an ally who is your colleague’s foe.
How well will you negotiate in front of your boss? Conventional wisdom suggests that the presence of superiors motivates us to put our best foot forward and seize opportunities to make a good impression. This expectation is probably overly optimistic.
Your boss, turning to you and a coworker near the end of your team’s weekly meeting, says, “So, which one of you wants to present our proposal in San Francisco next week?”
In past issues of Negotiation, we’ve reviewed the anchoring effect – the tendency for negotiators to be overly influenced by the other side’s opening bid, however arbitrary. When your opponent makes an inappropriate bid on your house, you’re nonetheless likely to begin searching for data that confirms the anchor’s viability. This testing is likely to affect your judgment – to the other party’s advantage.
Psychologists Amos Tversky and Daniel Kahneman identified the anchoring effect in 1974. Participants watched a roulette wheel that, unknown to them, was rigged to stop at either 10 or 65, the estimated the number of African countries belonging to the United Nations. For half of the participants, the roulette wheel stopped on 10. They gave a median estimate of 25 countries. For the other half, the wheel stopped on 65. Their median estimate was 45 countries. The random anchors dramatically affected judgment.
Negotiators tend to want the best of both worlds. When reaching an agreement, they want to nail down parties’ respective rights and responsibilities, but they also want to retain the flexibility to deal with ever-changing business conditions.
One solution to this apparent dilemma is to craft umbrella, or framework, agreements. (The term umbrella is more commonly used in the business world, while framework is more widely used in legal and diplomatic circles.) Such agreements set out general principals that will apply to more specific give-and-take contracts in the future. An umbrella agreement between a soft-drink company and a grocery chain, for example, would typically cover issues such as exclusivity, invoicing, confidentiality, and termination. Subsequent short-term contracts would set prices and promotional allowances for specific products.
As Professor Cheryl Rivers of Queensland University of Technology in Brisbane, Australia, points out in a recent literature review, seasoned negotiators often hear stories about the unethical behaviors of people of other nationalities. Perhaps the toughest problems arise surrounding what Rivers calls “ethically ambiguous” negotiation tactics. Ambiguity can lead us to reach sinister conclusions about the motives of our counterparts, particularly when we lack a solid understanding of an opponent’s culture.
What are social psychologists learning about the connections among emotions, negotiation, and decision making? Negotiation contributor Jennifer S. Lerner of Harvard Kennedy School and her colleagues have identified two critical themes. First, they have studied the carryover of emotion from one episode, such as a car accident, to an unrelated situation, such as a workplace negotiation.
Second, these researchers are studying the influence of specific emotions such as happiness, sadness, and anger on decision-making.
As discussed in past articles, anchoring and framing can bias important decisions in negotiation. A buyer may make a more generous offer than she intended, for example, after a seller drops anchor on a bold demand. A litigant who focuses on his chances of winning in court – a positive frame – may be less likely to settle than if he concentrated on a negative frame: his corresponding chances of losing.
Many researchers have studied how such biases are amplified or moderated by mood, expertise, and personality. Groundbreaking work by professors John D. Jasper and Stephen D. Christman of University of Toledo now suggests that our susceptibility to decision biases is hardwired.
It’s an article of faith in negotiation that expanding the pie of value enhances the parties’ welfare. When there’s only one issue on the bargaining table, the size of the pie is fixed. If one party gets more, the other party gets less. But when multiple issues exist, negotiators can expand the size of the pie by engaging in give-and-take trading that leaves everyone better off. The more issues that are to trade, it would seem, the happier negotiators should be.
Work by Charles Naquin, who teaches at the University of Notre Dame’s Mendoza College of Business, challenges this conventional wisdow. Naquin found that subjects who negotiated a four-issue simulation were significantly more satisfied with their outcomes than those who worked with eight issues. Although the latter group created demonstrably more value, they were less pleased with their results.
When a team is preparing for a critical negotiation, members need to appoint a leader, allocate roles and responsibilities, and discuss their at-the-table strategy. Another key objective that teams sometimes fail to discuss is the importance of staying “on message” – that is, making sure that statements by individual members don’t contradict the group’s agreed-upon positions and goals.
The Program on Negotiation Graduate Research Fellowships are designed to encourage young scholars from the social sciences and professional disciplines to pursue theoretical, empirical, and/or applied research in negotiation and dispute resolution. Consistent with the PON goal of fostering the development of the next generation of scholars, this program provides support for one year of dissertation research and writing in negotiation and related topics in alternative dispute resolution, as well as giving fellows an opportunity to immerse themselves in the diverse array of resources available at PON.
We are very excited to have three new fellows join us this fall:
The Program on Negotiation at Harvard Law School, in conjunction with the Future of Diplomacy Project at Harvard Kennedy School, honored distinguished statesman and former Secretary of State James A. Baker III as the recipient of their Great Negotiator Award for 2012. Secretary Baker served under President George H.W. Bush from 1989 to 1992.
A panel discussion was held on the afternoon of March 29 and included Program on Negotiation faculty members James Sebenius and Robert Mnookin, as well as Harvard Kennedy School faculty member Nicholas Burns. The Great Negotiator Award was created twelve years ago by the Program on Negotiation to recognize an individual whose lifetime achievements in the field of negotiation and dispute resolution have had a lasting impact.
Max H. Bazerman sat down with Sean Silverthorne of Harvard Business School’s Working Knowledge to discuss goal setting and how to effectively set goals on an individual and organizational level.
Researchers from top business schools have collaborated on research demonstrating that, in some cases, goal setting may actually do more harm than good.
Imagine that you are buying a used car from its original owner. Of course, you want to get the best deal you can for your money, while your counterpart wants to maximize the value of his asset. After haggling with one another, each side finally arrives at a price point acceptable to both parties.
The above scenario is common in many transactional negotiations: you play your cards close and share as little information as needed to achieve the end goal.
No one likes to go to court. Not only is it expensive and time-consuming, it often leads to frustrating results and damaged relationships. So is court-sponsored mediation a better route?
The answer is “sometimes,” according to a comprehensive study of court-affiliated mediation programs by Roselle L. Wissler of Arizona State University’s College of Law in Tempe. Settlement rates in these programs varied widely, ranging from 27% to 63%. In some programs, the percentage of settlements was higher than in nonmediated cases; in other programs, there was no difference. Several other studies have indicated higher compliance with mediated agreements than with court orders (though they found no significant difference between mediated agreements and privately negotiated settlements).