2nd Week Learning Log - Negotiations

4/11/2014

Second week study session begins with the topic "Negotiations". Lecturer started a small discussion with the students in the class, questioning their opinion about the term negotiation, reasons to get involved and drop out of a negotiation.

An overall idea of the students was that negotiation is bargaining or an interaction of influences. Reasons to get involved in a negotiation are :-

• to resolve disputes 
• agree upon course of action 
• bargaining for individual or collective advantage or 
• crafting outcomes to satisfy various interests.

Most of the time people tend to drop out of negotiations due to lack of their knowledge, facts and evidence about the topic or argument in hand or because of their personality traits.
But more formally "Negotiation is a process where two parties with differences which they need
to resolve are trying to reach an agreement through exploring for options and exchanging offers" (Fells, 2006). Furthermore dealing a negotiation is like martial arts where it should be mastered in order to obtain best outcomes.

As stated by the lecturer, a negotiation can be comprised of 3 elements such as:

1. Process - The way of negotiation, or how two parties going to resolve the deal; their "Game-plan" This includes context, strategies used, people of both sides involved & where it take place
2. Behaviors - This mainly rely on the existing relationship between parties, and includes communication styles implemented, to do this properly you should pay attention to the personality traits of the other person/side and based on that decide a suitable style 
3. Substance - The reason for the whole negotiation; this consists of outline of the issue, facts on each side, options available to arrive at solutions, and agreements that made or accepted. 

According to (Fells, 2006) there are 6 important elements for a negotiation mutually called as "The DNA of negotiation" it consist of: 

• Reciprocity - What one party does in order to get  reciprocated by the other, this influence the pattern and progress of the negotiation also it's an aspect of process that can be managed.
• Trust - Is an expectation that the other party will act in a beneficial manner rather than an exploitative strategy. This is vital when doing cooperative negotiation, but trust is fragile and easily overestimated.
• Ethics - The legitimate behavioral patterns expected when doing negotiations 
• Power - Paradoxically, if the parties are not negotiating well, the power that negotiators have relates to the alternative ways other than negotiation to achieve their desired objectives
• Information exchange - particularly information about possible solutions on the one hand and walk-away alternatives on the other 
• Outcome - Reason for entering into a negotiation is to reach an agreement, and better the negotiation better the outcome will be. Negotiators are often encouraged to achieve a win-win outcome.

As mentioned in the last point negotiation outcome situations may classified as: 

• Win-Win situation
• Win-Lose / Lose-Win Situation  
• Lose-Lose Situation 

Most of the negotiations will end in Win-Win or Win-Lose situation because negotiation is a process that helps one or both parties to obtain better outcomes. Also (Glaser, 2005) states that negotiation should always keep focus on 4 main Principles: people, interests, options and criteria. When negotiating it's a must to differentiate between parties involved and the issue at hand. Logical thinking and analyzing is encouraged over emotional influences and personal matters. In relevant to interests you should pay attention to people's interests rather than their social positions. Negotiators are instructed to outline their interests to the other party well enough to arrive at a common solution. Generating many options is also advantageous to choose upon the best later on, Finally objective criteria is used when a conflict situation is occurred. 

Fisher & Ury (1999) states that a good negotiation should consist of 3 criteria: 

1. It should be a wise agreement that satisfy both parties involved in the negotiation
2. Should be efficient as well
3. Should not have conflicts that damage relationship between parties, thus improvement is what's important-which takes time, energy and commitment of the both parties 

Types Of Negotiations

• Distributive Negotiations - Also called as disruptive negotiation where both parties have conflicting ideas and interests, and unable to settle with a common solution. It's a Win - Lose situation where one will fail to obtain an outcome. 
• Integrative Negotiations - Both parties engaged in the negotiation are able to arrive at a common favorable solution. It's a Win - Win situation. 

(Source: http://cas.upes.ac.in/pdf/NEGOTIATION%20SKILLS.pdf)

B.A.T.N.A. (Best Alternative To Negotiated Agreement) 

This method was introduced by Roger Fisher and Williams Ury that mentions about a best possible solution of a negotiation, even it fully doesn't satisfy the interests/needs of both parties. This is considered as the best outcome when the other party refuse to negotiate or corporate, informally this is a backup plan. BATNA is allowed to compare with other available solutions and often considered to be the only option that satisfy both party A and B. 

 In order to determine a good BATNA there are 3 aspects to be covered: Firstly a list of actions should be compiled to be used in situation where an agreement setting is hard to achieve. Secondly the conditions presented should be practical enough and must be accepted by the both parties. Finally the most realistic conditions should be selected for BATNA. (Spangler, 2012) Having this approach is an advantage when negotiating, (Venter, 2013) states that it avoids high pressure to go into agreements with losses, also avoid the possibilities of options/conditions being failed when negotiators gets over confident about their options, without knowing other side's counter conditions or arguments. Ultimately BATNA will give out a Win - Win solution to the parties involved and keep the negotiator relationships smooth and safe. 

Personal Styles 

When engaged in a negotiation, it is important to know how to control and utilize ways of negotiating styles withing yourself. As an individual it is vital to understand the style within you among different styles and important to develop the control ability of those according to the problem in hand. The lecturer provided us some personal styles that can be found among ourselves:- 

• Self-denying – Reluctant to give information or opinion, has hidden feelings within themselves. The downside of this situation includes not being able to express what is needed thus leading to confusion.
• Self-bargaining – If another person initiates the negotiations then this person will participate and go forward. Sometimes situations that should be settled/discussed will pass on as that person will never take lead to negotiate.
• Self-protecting – Use diversions to evade issues, doesn't like talking about oneself, a closed person. Disadvantage of this style is that the person cannot project/tell what is needed properly.
• Self-exposing – Center of attention, demands what is needed, over confident and speaks out. Can become aggressive and demanding which can be a disadvantage is certain situations
• Self-actualizing – This is the ideal situation that has a balance of all the above characteristics

After considering different personal styles negotiators can be identified or differentiate between main 2 categories such as: Tough & Soft Negotiators. Following table will depict a comparison among them: (University of Utrecht, 2013)

Tough Negotiator	Soft Negotiator
The goal is victory	The goal is agreement
Make high demands openly	Modest and not over ambitious
Demand concessions as a condition to friendship	Make concessions to cultivate friendship
Have high expectations	Be considerable
Stick with the desired demands	Make frequent concessions
Not scared deadlocks or threats	Avoids deadlock and threats
Hard on people and issue. Treats the other party as adversaries	Treat the other party in a friendly manner and try to come to a peaceful agreement
Doesn't trust others	Trusts others
Takes more, gives less	Gives more than needed
Apply pressure	Yield to pressure
Try to win a contest of will	Try to avoid a contest of will
Insist on position	Insist on agreement
Demand one-sided gains as a price for agreement	Accept one-sided losses to reach agreement

Class Activity - A Role play
Then the lecturer assigned the students to do a negotiation as a role play, dividing the class into two sectors and choosing 3 representative speakers from each team to negotiate with the other team.

Issue Given - "HP Announces another 5,000 Layoffs, For a total of 34,000" One team was representing HP high level executives and the other team represent the union of HP for minor staff and labors at chopping list.
Negotiation started with HP cutting off another 5,000 labors beyond the 29,000 jobs it had previously targeted. Union at the beginning pointed out that HP has got addicted to layoff their employees providing efficient evidence from several newspapers and online reliable records. And as a counter argument HP executives said that the company is facing a loss at the current moment and reducing fixed cost (salaries) is there best solution in hand. To oppose this argument members of the Union team provided many evidence that clearly shows HP is not undergoing a loss instead making profits at that moment. (eg- November month salary increment of the CEO M. C. Whitman-Referenced from US Securities and exchange commission/The Register.CO.UK) HP executives again said that the upper management is important rather than minor staff so higher losses should be taken by minor staff and re-emphasize the social position over real issue which is not suitable when negotiating formally. Union also emotionally blackmailed executives in order to gain their rights. After few other arguments 1st phase of the negotiation ended with conditions such as salary cuts for both parties up to 20% & renewal of the job contract for 3 years. Second phase was more argumentative from the both of the sides sticking on to their interests and not considering about other parties, Finally the lecturer advised the teams to go forward with the BATNA plan which was written and accepted by the both parties at the beginning of the negotiating. It agrees to pay 65% of the basic salary to the terminated employees for 1 year until they find new employment. Also to provide them a recommendation letter with good will & to cut 10% of executive and 15% of minor workforce salaries of the current active employees. And I was glad to be a speaker of this activity which gave me a realistic feeling of extreme negotiations.

Negotiating Styles

When negotiating there are different styles that can be used by negotiators based on personality traits. Harvard Medical School (n. d) states that these styles can be categorized as Competing,Collaborating, Compromising, Avoiding and Accommodating. Following diagram will portray the characteristics of these styles: 

In order to determine students' negotiating style, the lecturer provided a self-assessment questioner, that give marks according to the answer selected and calculate an overall mark that pretend students' percentage of style out of the given categories

Results I obtained are as follows:

Style	Score	Interpretation
Competing	12	Low on competing style
Avoiding	18	High on avoiding style
Collaborating	21	Moderate to high on Collaborating style
Accommodating	17	Moderate to high on Accommodating style
Compromising	22	High on compromising style

Overall result was given as Moderate to Low on Assertiveness & Moderate to High on Cooperativeness. Meaning that the I likes to negotiate in a manner that both parties involved in the negotiation gets benefits and expects positive outcomes most of the time. Also indicates that I'm more of a soft negotiator. But depending on the personal experiences I cannot agree fully with the above given results since in some situations I tends to display characteristics of tough negotiator like in the class activity mentioned before, but I think my cooperative quality is accurately identified by the assessment. Therefore I sometimes find myself changing negotiation styles depending on the situation. 

To conduct an effective negotiation: Weiss and Hughes (2010)

• Be well prepared before a negotiation. It’s important to have thorough background knowledge of the situation and the parties involved and a structured process in hand as well as a steady and a disciplined composure
•  Create a cooperative atmosphere for the parties to be comfortable during the negotiation without distractions
• Always listen well to the other party before arriving at conclusions. It’s important to fully understand their need before assuming anything and taking rash actions
• Gain the trust of the other party
• Try to look at every possible outcome before arriving at a final conclusion. Always try to seek for a win-win solution
• Be mindful about what is needed and what you are ready to give up. It helps in reducing conflict of interests
• Try persuasion over pressurizing by backing up your idea with logic and reasoned arguments.

                    (Win-Win Negotiation: Learn how to Negotiate Effectively Without Damaging Relationships: MindTools)

In conclusion I would like to mention that it was a highly useful topic that improves lot of negotiation skills within me and provided many previously unknown knowledgeable factors relating to the topic. Especially the self assessment given by the lecturer gave a good insight about my negotiating styles and found areas which I may improve to become a successful negotiator in the industry in near future. Finally I hope you too gained something important out of this blog post. 

I hope you enjoyed my 2nd-week learning log :) Have a nice day, Thank You!!! 

References:-

• Fells, R. (2006). Effective Negotiation From Research to Results. London: Cambridge University Press. 
• Glaser, T. 2005. Conflict Research Consortium BOOK SUMMARY: Getting to Yes: Negotiating Agreement Without Giving In. [online] Available at: http://www.colorado.edu/conflict/peace/example/fish7513.htm [Accessed: 20 Nov 2014].
• Harvard Medical School. n.d. NEGOTIATION STYLES. [e-book] Boston: Harvard Medical School. Available through: http://hms.harvard.edu/sites/default/files/assets/Sites/Ombuds/files/HMS.HSDM_.HSPH_.NEGOTIATION.STYLES.WhenToUseWhichStyle.pdf [Accessed: 20 Nov 2013].
• Spangler, B. 2012. Best Alternative to a Negotiated Agreement (BATNA) | Beyond Intractability. [online] Available at: http://www.beyondintractability.org/essay/batna [Accessed: 20 Nov 2014].
• University Of Utrecht. 2004. Negotiations. [e-book] Utrecht: University of Utrecht. Available through: http://www.cs.uu.nl/docs/vakken/vm/college9.pdf [Accessed: 20 Nov 2014].
• Venter, D. 2013. BATNA Explained | Negotiation Academy. [online] Available at: http://www.negotiationtraining.com.au/articles/next-best-option/ [Accessed: 20 Nov 2014].
• Weiss, J. and Hughes, J. 2010. Implementing Strategies in Extreme Negotiations. [online] Available at: http://hbr.org/web/ideas-in-practice/implementing-strategies-in-extreme-negotiations [Accessed: 20 Nov 2014].