Resolving conflict, creating value

By — on / Negotiation Skills

Significant business disputes typically involve more than one issue—including disputes that appear to be “just about the money.” Who pays and when? In what form is payment made, with what level of confidentiality, and with what effect on future disputes?

In the heat of the moment, disputants too often focus on one conspicuous issue (such as money), a mistake that risks masking other important concerns. Whenever more than one issue is on the table, it’s likely that parties will value certain issues more than others. You may be able to resolve the dispute by capitalizing on differences in relative preferences, priorities, or resources.

Consider the case of the electro-pop duo known as The Postal Service. After selling more than 400,000 copies of their 2003 album Give Up, primarily to the 18-to-33-year-old demographic, band members Jimmy Tamborello and Ben Gibbard received a cease-and-desist letter from the United States Postal Service (USPS) citing infringement of its trademarked name. The dispute could have turned ugly. After all, the parties appeared to be fighting over a single issue, with no obvious opportunity for value creation. The USPS was concerned about a dilution of its name in the marketplace. Given their recent success, the band members were reluctant to change their name.

Yet during negotiations, the band managed to turn the dispute into a synergistic opportunity by identifying the priorities and noncompeting preferences of both sides. Tamborello and Gibbard pointed out that the losses the USPS had suffered to Internet and e-mail communication were large, especially among the age cohort of the band’s fan base. The USPS agreed to grant a free license allowing The Postal Service to continue to use its name. In exchange, the band agreed to print a trademark notice on its albums, to promote the use of the USPS by its young fans, and even to perform at an annual USPS event. As this story illustrates, when negotiators take stock of each other’s priorities and resources, they often will spot opportunities for wise trades.

Adapted from “Create Value out of Conflict,” by Robert C. Bordone (professor, Harvard Law School) and Michael L. Moffitt (professor, University of Oregon School of Law), first published in the Negotiation newsletter, June 2006.

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