Managing a Multiparty Negotiation

Expert advice on handling multiparty negotiation and the complications created by multiple parties.

By — on / Dealmaking

multiparty negotiation

What is multiparty negotiation? Multiparty negotiations can be incredibly challenging. Just ask the negotiators from over 170 countries who managed to reach agreement back in 2015 on a legally binding accord to combat climate change. The deal is aimed at reducing use of hydrofluorocarbons (HFCs), a chemical coolant used in air conditioners and refrigerators.

Experts say the outcome of the multiparty negotiation—held in Kigali, Rwanda—could be even more effective at combatting global warming than the higher-profile global climate change agreement reached in Paris in 2015. The Kigali multiparty negotiation took seven years to negotiate and reflects a compromise between rich and poor nations, the New York Times reports, in which wealthier nations will freeze production of HFCs more quickly than poorer ones.

Claim your FREE copy: Dealmaking

Discover how to boost your power at the bargaining table in this FREE special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.

The Kigali negotiations, which are expected to prevent an increase in atmospheric temperatures of almost one degree Fahrenheit, were intense and contentious. The morning after the deal was done, the “exhausted but exultant” negotiators gathered for an impromptu Champagne breakfast, according to the Times.

Multiparty negotiations are common, even among those who are not professional negotiators: think of department heads dividing up scarce resources, family members debating the future of a business, or a group of consumers launching a class-action lawsuit. Three issues in particular make multi­party negotiations more complex than two-party talks, according to Massachusetts Institute of Technology professor Lawrence Susskind and Harvard Law School professor Robert Mnookin: (1) coalition formation, (2) process-management issues, and (3) the fluctuating nature of each party’s best alternative to a negotiated agreement (BATNA). By preparing for these differences in negotiating strategy, you will be well positioned to thrive in your next multiparty negotiation.

1. Choose coalitions wisely

Amid the clamoring voices in a multiparty negotiation, it can be difficult to be heard. In such instances, you might choose to form or join a coalition with parties who share one or more of your goals.

Coalitions can be powerful organizational tools that build on strength in numbers in multiparty negotiation. But as anyone who has watched the TV show Survivor knows, coalitions are unstable and tend to promote adversarial bargaining. According to Susskind and Mnookin, your goal should be to build alliances to increase leverage without under­mining relationships with other parties. That means reaching across party lines to keep communication flowing among all negotiators.

You’ll need to carefully plan how and when to meet with potential coalition partners, say Susskind and Mnookin, as you could be asked to commit to a particular side before you have a chance to talk to other potential partners. If you do join a coalition, keep the flexibility you need to switch allegiances.

2. Manage the process

Whether you are negotiating with three parties, 30, or 300, interactions in your multiparty negotiation are bound to be more complicated than when you are dealing with just a single party.

Sometimes it makes sense to appoint a manager to oversee a multiparty negotiation. The manager can be in charge of putting together the group’s agenda, setting rules, summarizing understandings among parties, and communicating the final agreement to outsiders, among other tasks.

Another way to tame the potential chaos of multiparty negotiation is to create a payoff matrix of parties and interests before talks begin, according to professor Elizabeth Mannix of Cornell University. A payoff matrix is essentially a spreadsheet that lists the names of the parties in rows, the issues to be discussed in columns, and the parties’ priorities on those issues in the boxes that are formed. The negotiation manager can update the spreadsheet during the meeting, allowing parties to see at a glance what they have achieved and what still needs to be done.

When the numbers involved in a multiparty negotiation are especially large, consider breaking into smaller working groups to develop preliminary proposals on elements of the overall agenda, says Susskind. Such functional groups can serve to bridge differences among members of different coalitions.

3. Calculate dynamic BATNAs

As in a two-party negotiation, you should enter multiparty negotiations with a solid idea of your BATNA—that is, what you will do if a deal fails to materialize. Knowledge of your BATNA can help you stand firm in the face of offers that fall short of your goals.

You should also attempt to analyze the BATNAs of the other parties at the table. Roughly calculating the minimum you can offer someone to secure a commitment will help you immensely.

In multiparty negotiations among a large number of parties, determining each party’s BATNA can be a daunting, even impossible, undertaking. At the very least, try to foresee how parties may align and estimate the BATNA of each possible coalition.

Once discussions begin, parties’ BATNAs will begin to fluctuate, according to Susskind and Mnookin. A payoff matrix will help you keep track of shifting BATNAs in addition to parties’ preferences.

What have your experiences been with multiparty negotiation? Share your experience in the comments.

Claim your FREE copy: Dealmaking

Discover how to boost your power at the bargaining table in this FREE special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.

The Program on Negotiation at Harvard Law School
501 Pound Hall
1563 Massachusetts Avenue
Cambridge, Massachusetts 02138
tel 1-800-391-8629
tel (if calling from outside the U.S.) +1-301-528-2676
fax 617-495-7818