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MAINTAIN YOUR NEGOTIATION SKILLS
Charles B. Craver
Lawyers and business people negotiate constantly both in their private lives and in their
professional lives. They negotiate with spouses, children, friends, acquaintances, and many
others in their personal lives. They also negotiate regularly at work – even when they don’t
realize they are negotiating. They interact with their own colleagues – then with prospective
clients and current clients. They also conduct bargaining interactions with outside parties on
behalf of their clients.
Most attorneys and managers have not had negotiation courses. For many years, most law
schools and business schools refused to offer such skills courses. In recent years, most schools
have added negotiation courses to their alternative dispute resolution curricula, but these tend to
be limited enrollment classes that are only taken by a few students. Public and private
professional development groups try to fill this void through half-day and full-day negotiation
programs, but most attorneys and business people prefer to obtain their professional development
credits through more traditional courses. As a result, the vast majority of lawyers and managers
have not received any training in the most significant skill they use every day.
Most individuals prepare for negotiations by gathering the factual, legal, economic, and
political information they think they need. They usually spend hours or even days on this task.
How much time does the typical person spend on their negotiation strategy? Usually about ten to
fifteen minutes! When they commence bargaining encounters, most negotiators only have three
things in mind directly relevant to their negotiation strategy: (1) where they plan to begin; (2)
where they hope to end up; and (3) their bottom lines. In between their starting point and the
conclusion of their interactions, they wing it, thinking of their encounters as wholly unstructured.
They fail to appreciate how structured negotiation interactions are, and they fail to have a
detailed plan that will guide them through the different stages of the bargaining process.
Negotiations go through distinct stages. During the Preparation Stage, representatives
must learn as much about their own situations as possible – and as much about the opposing
side’s circumstances as they can. When they have gathered the relevant information, they must
ask themselves three critical questions. First, What happens to their own side if they fail to
achieve any agreement with the other side? The answer to this question defines their bottom line.
They must not forget to look across the table and ask themselves what they think is likely to
happen to the other side if that party fails to reach an agreement with them. If they don’t ask the
second part of this first question, they will usually concede too much power to their opponent. If
their nonsettlement options are preferable to those possessed by the other side, they have
bargaining power; if the other side’s nonsettlement alternatives are preferable to this side’s
options, the other side possesses greater bargaining power.
The second question concerns the point at which they would like to conclude their
interaction – i.e., their aspiration level. Studies show that individuals with higher expectations do
better than persons with modest objectives. It thus behooves people to establish elevated
– but realistic – goals they can use to guide them when they deal directly with the
opposing side. The third question they must ask concerns their opening offer. Less
experienced negotiators often like to begin with modest opening offers hoping to induce
their opponents to respond in kind. This is a lovely concept, but it is empirically false.
People who begin with offers that favor the other party have the opposite impact because
of “anchoring.” The recipients of such generous offers think they will be able to do better
than they initially expected, and they raise both their aspiration levels and their own
opening offers. They want to be able to exploit the naivety of their opponents. On the
other hand, when persons articulate less generous opening offers, they undermine the
confidence of the persons on the other side, and those people lower their aspiration levels.
Negotiators should thus begin with higher demands or lower offers – but they must start
with positions they can rationally defend. If their positions are untenable, they lose
credibility and undermine the bargaining process.
Once negotiators are thoroughly prepared, they are ready to interact directly with
the other side. The initial part of their encounter is the Preliminary Stage during which
they establish their identity and the tone for the interaction. It is beneficial for negotiators
to establish some degree of rapport with the persons they are dealing with, because
people tend to offer better deals to individuals they find personally attractive compared to
those they dislike. Studies also show that negotiators who begin their encounters in
positive moods behave more cooperatively, reach more agreements, and achieve more
efficient agreements than those who begin in negative moods. Negotiators should thus
use the Preliminary Stage to create both beneficial personal relationships and positive
environments.
Once the small talk of the Preliminary Stage concludes, the parties enter the
Information Stage during which they work to discover each side’s underlying interests
and objectives. The best way to accomplish this objective is to develop broad, openended questions that will induce the other party to talk. The more time they speak, the
more information they disclose. Questioners need to listen for verbal leaks which
inadvertently give away important information. For example, someone who indicates that
she is “not inclined to go above” a certain number will do so. Someone who says that
they “don’t have much more room” clearly has more room. They should also be aware of
nonverbal signals that may be congruent with what is being said verbally, or which
contradicts those statements. The contrary nonverbal signs are usually more trustworthy
than the verbal messages, because most people find it easier to be deceptive verbally than
nonverbally.
Different psychological factors should also be considered. Gain/loss framing
indicates that persons facing a sure gain and the possibility of a greater gain or no gain
tend to be risk averse and take the certain gain. On the other hand, people facing a sure
loss and the possibility of a greater loss or no loss tend to be risk takers hoping to avoid
any loss. It thus helps to frame offers as gains to the other side, to induce them to behave
in a more risk averse fashion. Regret aversion suggests that people prefer to make
decisions they are less likely to regret in the future. For example, a business owner
considering a decent buyout offer is likely to accept that offer to avoid the possibility of
having to sell for less and regret the fact she did not accept the earlier offer.
Near the end of the Information Stage, the parties stop asking each other
questions, and talk about what they must obtain if a deal is to be reached. They have
entered the Distributive Stage. During the Information Stage they create value, and
during the Distributive Stage they claim value as each vies for the different items to be
exchanged. Negotiators need to have planned concession patterns they hope will lead
from their opening offers to the area in which they hope to conclude the interaction. They
should know which bargaining tactics they plan to employ, and know how to recognize
and counteract the techniques used by their opponents.
Toward the conclusion of the Distributive Stage, the participants see an agreement
on the horizon, and they enter the Closing Stage. Since human beings like certainty, the
parties often move swiftly to solidify the deal. The Closing Stage is a time for patience
and deliberate action. Instead of moving quickly toward closure, negotiators should move
carefully. They should avoid consecutive concessions that would cause them to bid
against themselves. They should work to induce the other side to close a majority of the
distance remaining between the parties. If they are successful, the opposing side may
close sixty, seventy, or even eighty percent of the gap, providing this side with a real
gain.
Once the Closing Stage is done and the parties have an agreement, they often go
home and forget the Cooperative Stage. At this point, their agreement may not be
efficient. Both sides have over- and under-stated the value of items for strategic purposes.
Different terms may have ended on the wrong side of the bargaining table. To ameliorate
the impact of this phenomenon, each party should offer to trade items they value less for
terms they prefer. They hope to expand the overall pie being divided and make exchanges
that simultaneously improve their respective positions. They want to reach the Pareto
superior point at which neither can gain without the other suffering a loss. Only when
they reach this point should they consider their interaction done.
Lawyers and business people constantly keep up with their substantive areas of
expertise. They read professional journals and books, and they attend professional
development programs. When was the last time they read anything pertaining to
negotiating or participated in a negotiation training program? For most, the answer to this
inquiry is “never.”
If an outstanding substantive expert interacts with an exceptional negotiator, the
latter will generally prevail. The results of their interaction will be determined more by
bargaining skill than by substantive knowledge. It thus behooves attorneys and business
people to take some time each month to keep up with their negotiation skills. They should
look for favorable reviews of negotiation books and read some. When they see a good
negotiation course advertised, they should attend. Some of the excellent books I would
recommend include: J. Thomas, Negotiate to Win ((Collins 2005); J. Brett, Negotiating
Globally (Jossey-Bass 2001); H. Cohen, Negotiate This (Warner Bus. Books 2003); R.
Dawson, Secrets of Power Negotiating (Career Press 2nd ed. 2001); R. Fisher & W. Ury,
Getting to Yes (Houghton Mifflin 1981); D. Kolb & J. Williams, Everyday Negotiations
(Jossey-Bass 2003); R. Korobkin, Negotiation Theory and Strategy (Aspen Law & Bus.
2002); M. Latz, Gain the Edge: Negotiating to Get What You Want (St. Martins 2004); L,
Miller & J. Miler, A Woman’s Guide to Successful Negotiating (McGraw-Hill 2002); R.
Mnookin, S. Peppet & A. Tulumello, Beyond Winning: Negotiating to Create Value in
Deals and Disputes (Harvard Univ./Belknap 2000); H. Raiffa, Negotiation Analysis
(Harvard Univ./Belknap 2002); R. Shell, Bargaining for Advantage (Viking 1999); P.
Stark & J. Flaherty, The Only Negotiating Guide You’ll Ever Need (Broadway Books
2003); W. Ury, Getting Past No (Bantam Books 1991). I would also encourage lawyers
and business people to read books on nonverbal communication that will help them
interact more effectively with others in general and with negotiation opponents in
particular. Some of the good books in this area include: H. Calero, The Power of
Nonverbal Communication (Silver Lake 2005); J.-E. Dimitrius & M. Mazzarella,
Reading People (Random House 1998), D. Morris, Bodytalk (Crown 1994); G.
Nierenberg & H. Calero, How to Read a Person Like a Book (Cornerstone 1971). Others
can be found in the psychology section of most book stores or through Amazon.com.
If attorneys and business people occasionally read a book on negotiation and a book or
two on nonverbal communication, they will greatly enhance both their bargaining skills –
and their general ability to relate to others personally and professionally. They will
appreciate the negotiation process and know how to plan the strategies that will enable
them to achieve their goals. As a result, they will become far more successful negotiators.
Charles B. Craver is the Freda H. Alverson Professor of Law at George
Washington University. He is the author of Effective Legal Negotiation and
Settlement (5th ed. 2005 Lexis) and The Intelligent Negotiator (2002
Prima/Crown) and coauthor of Alternative Dispute Resolution: The Advocate’s
Perspective (2nd ed. 2001 Lexis). He can be reached at [email protected]
Copyright 2006 by Charles B. Craver
Copyright © 2006, The Negotiator Magazine