Chapter 1
The Nature of Negotiation
Overview
This chapter is the foundation for the nature of negotiations. Friends, children, businesses,
police, nations, everyone negotiates almost daily. Negotiations occur for two reasons: (1) to
create something new that neither party could do on his or her own, or (2) to resolve a
problem or dispute between the parties. Perspectives used to understand different aspects
of negotiations include theory, research from economics, psychology, political science,
communication, labor relations, law, sociology, and anthropology.
Learning Objectives
1. Authors’ style and approach.
2. Characteristics of a negotiation situation.
3. Interdependence in negotiation.
1. Mutual adjustment throughout negotiations and making and interpreting
concessions.
2. Value claiming and value creation.
3. Definition and levels of conflict.
4. Major strategies for conflict management.
I. Authors’ Style and Approach
A. Use of terminology.
1. Bargaining: describes the competitive win-lose situations (haggling).
2. Negotiation: refers to win-win situations (to find mutually acceptable
solutions).
, B. “Heart of Negotiation” ̶ give-and-take approach.
1. Give-and-take is extremely important, but negotiation is a very complex social
process, where many of the most important factors that shape the negotiation
occur before the negotiation, or shape the context around the negotiation.
C. Insights drawn from three sources.
1. Personal experience.
2. Media – television, radio, newspaper, magazine, and Internet.
3. Social science research.
II. Joe and Sue Carter
An illustrative tale of negotiation.
III. Characteristics of a negotiation situation
A. Characteristics common to all negotiation situations.
1. There are two or more parties, individuals, groups or organizations.
2. There is a conflict of needs and desires between two or more parties, and the
parties must search for a way to resolve the conflict.
3. Parties negotiate because they think they can get a better deal by negotiating
than by simply accepting what the other side will voluntarily give them or let
them have.
, 4. When negotiating, a give-and-take is expected. To reach an agreement, both
sides will modify their opening statement to find a middle ground; they
compromise.
5. The parties prefer to negotiate and search for agreement rather than to fight
openly, have one side dominate and the other capitulate, permanently break off
contact, or take their dispute to a higher authority to resolve it.
6. Successful negotiation involves the management of tangibles and also the
resolution of intangibles.
a) Tangible factors: the price or the terms of agreement.
b) Intangible factors: The underlying psychological motivations that may
directly or indirectly influence the parties during a negotiation. They have an
enormous influence on negotiation processes and outcomes, so it is crucial
for negotiators to understand how they affect decision making and tangible
outcomes. Examples of intangible factors include:
(1) The need to “win” or avoid losing.
(2) The need to look “good” to those you’re representing.
(3) The need to defend an important principle or precedent in a negotiation.
(4) The need to appear “fair” or “honorable” or to protect one’s reputation;
and
(5) The need to maintain a good relationship.
IV. Interdependence
A. Working interdependently allows parties to achieve a possible outcome that is
better than they could achieve by working on their own.
B. Most relationships between parties may be characterized in one of three ways:
independent, dependent, or interdependent.
, 1. Independent parties are able to meet their own needs without the help and
assistance of others.
2. Dependent parties must rely on others for what they need; the dependent party
must accept and accommodate to that provider’s whims and idiosyncrasies.
3. When the parties depend on each other to achieve their own preferred outcome
they are interdependent; they are characterized by interlocking goals.
C. Types of interdependence affect outcomes.
1. The interdependence of people’s goals, and the structure of the situation in
which they are going to negotiate, strongly shapes negotiation processes and
outcomes.
a) Zero-sum distributive: Competitive situation where there is only one
winner.
b) Non-zero-sum integrative: Goals are linked to achieve a mutual gain.
D. Alternatives shape interdependence.
1. BATNA: Best Alternative to a Negotiated Agreement.
a) Whether you should or should not agree on something in a negotiation
depends upon the attractiveness of your best available alternatives.
b) Negotiators need to understand their BATNA, as well as the other parties’.
V. Mutual Adjustment
The Nature of Negotiation
Overview
This chapter is the foundation for the nature of negotiations. Friends, children, businesses,
police, nations, everyone negotiates almost daily. Negotiations occur for two reasons: (1) to
create something new that neither party could do on his or her own, or (2) to resolve a
problem or dispute between the parties. Perspectives used to understand different aspects
of negotiations include theory, research from economics, psychology, political science,
communication, labor relations, law, sociology, and anthropology.
Learning Objectives
1. Authors’ style and approach.
2. Characteristics of a negotiation situation.
3. Interdependence in negotiation.
1. Mutual adjustment throughout negotiations and making and interpreting
concessions.
2. Value claiming and value creation.
3. Definition and levels of conflict.
4. Major strategies for conflict management.
I. Authors’ Style and Approach
A. Use of terminology.
1. Bargaining: describes the competitive win-lose situations (haggling).
2. Negotiation: refers to win-win situations (to find mutually acceptable
solutions).
, B. “Heart of Negotiation” ̶ give-and-take approach.
1. Give-and-take is extremely important, but negotiation is a very complex social
process, where many of the most important factors that shape the negotiation
occur before the negotiation, or shape the context around the negotiation.
C. Insights drawn from three sources.
1. Personal experience.
2. Media – television, radio, newspaper, magazine, and Internet.
3. Social science research.
II. Joe and Sue Carter
An illustrative tale of negotiation.
III. Characteristics of a negotiation situation
A. Characteristics common to all negotiation situations.
1. There are two or more parties, individuals, groups or organizations.
2. There is a conflict of needs and desires between two or more parties, and the
parties must search for a way to resolve the conflict.
3. Parties negotiate because they think they can get a better deal by negotiating
than by simply accepting what the other side will voluntarily give them or let
them have.
, 4. When negotiating, a give-and-take is expected. To reach an agreement, both
sides will modify their opening statement to find a middle ground; they
compromise.
5. The parties prefer to negotiate and search for agreement rather than to fight
openly, have one side dominate and the other capitulate, permanently break off
contact, or take their dispute to a higher authority to resolve it.
6. Successful negotiation involves the management of tangibles and also the
resolution of intangibles.
a) Tangible factors: the price or the terms of agreement.
b) Intangible factors: The underlying psychological motivations that may
directly or indirectly influence the parties during a negotiation. They have an
enormous influence on negotiation processes and outcomes, so it is crucial
for negotiators to understand how they affect decision making and tangible
outcomes. Examples of intangible factors include:
(1) The need to “win” or avoid losing.
(2) The need to look “good” to those you’re representing.
(3) The need to defend an important principle or precedent in a negotiation.
(4) The need to appear “fair” or “honorable” or to protect one’s reputation;
and
(5) The need to maintain a good relationship.
IV. Interdependence
A. Working interdependently allows parties to achieve a possible outcome that is
better than they could achieve by working on their own.
B. Most relationships between parties may be characterized in one of three ways:
independent, dependent, or interdependent.
, 1. Independent parties are able to meet their own needs without the help and
assistance of others.
2. Dependent parties must rely on others for what they need; the dependent party
must accept and accommodate to that provider’s whims and idiosyncrasies.
3. When the parties depend on each other to achieve their own preferred outcome
they are interdependent; they are characterized by interlocking goals.
C. Types of interdependence affect outcomes.
1. The interdependence of people’s goals, and the structure of the situation in
which they are going to negotiate, strongly shapes negotiation processes and
outcomes.
a) Zero-sum distributive: Competitive situation where there is only one
winner.
b) Non-zero-sum integrative: Goals are linked to achieve a mutual gain.
D. Alternatives shape interdependence.
1. BATNA: Best Alternative to a Negotiated Agreement.
a) Whether you should or should not agree on something in a negotiation
depends upon the attractiveness of your best available alternatives.
b) Negotiators need to understand their BATNA, as well as the other parties’.
V. Mutual Adjustment
