The result of cooperative problem-solving skills in a negotiation that uncover joint gains for both parties. Value creation is an aspect of Òwin-winÓ or Ònon-zero-sumÓ negotiation, in which both parties benefit from the agreement. (David A. Lax and James K. Sebenius, 3-D Negotiation [Harvard Business School Press, 2006], 17)
The following items are tagged value creation.
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.
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.
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.
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.
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.
In negotiation, including a matching right in an agreement can be a classic win-win move.
Suppose you’re a landlord negotiating with a prospective tenant. You want to maintain the ability to sell the apartment to someone else in the future, while your prospective tenant wants a commitment to rent the apartment for as long as she wants.
The solution might be to offer the tenant a matching right – the power to match any legitimate third-party offer. In this manner the tenant gains the opportunity to avoid the disruption of a move and you preserve your flexibility.
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.
Like other cognitive biases, competitive expectations can be insidious. Fortunately, there are several steps you can take to forestall their negative consequences.
By following these steps in your next negotiation, you’ll improve the chances of meeting everyone’s interests.
This course 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.