In mediation, reconciling each side’s different interests in the pursuit of dispute resolution often assumes that a negotiated agreement (or mediated agreement) will offer a more desirable win-win negotiation outcome but, as negotiation studies have shown, sometimes lose-lose outcomes are your BATNA (Best Alternative to a Negotiated Agreement) in mediation scenarios. 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.
The Power of your BATNA at the Bargaining table
To illustrate, the alternative dispute resolution systems (ADR) 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.
Curhan, Neale, and Ross point out that many negotiation experts would claim that the couple’s gift exchange had a “lose-lose” outcome. In fact, as O. Henry describes, Jim and Della’s material losses are overshadowed by their deeper appreciation of their love.
Win-Win Negotiations and Mediation: Foregoing Economic Value in Favor of Improving Relationships?
Negotiators might be better off forgoing economic value in favor of improving their relationships, assert the research team. Indeed, it appears variables that improve economic performance may actually harm bargaining relationships.
In one intriguing study, pairs of negotiators engaged in a negotiation role play simulation. Half of the pairs were told that they worked for a firm known for its “extremely hierarchical corporate culture.” The other pairs were told that they worked for a firm known for its “egalitarian corporate culture.”
Those pairs who worked in an egalitarian culture achieved less joint gain at the bargaining table than did those pairs working in a hierarchical culture. However, those in the hierarchical culture came to less equal negotiated agreements. Negotiators from the egalitarian culture placed much greater value on their relationship with their opponents than did the negotiators from the hierarchical culture.
Curhan, Neale, and Ross argue that these results suggest that business negotiators should shift their attention from an integrative negotiations (value creation) focus to one emphasizing relationship building. But are the two goals truly incompatible? The best route is to focus on creating strong relationships and using the openness and honesty they foster to maximize mutual gains in negotiation scenarios.
Has your BATNA ever been to lose? Leave a comment below.
Originally published May 2014.