Chapter 1

GROUP TWO
CHAPTER ONE: NATURE OF NEGOTIATION

Definition and Overview (should not be in the map): Negotiation is an activity, usually in form of a dialogue with the aim of resolving differences in interests between or among existing parties.
Negotiation is what we do in works of life ranging from domestic, business, social and political relationships. Strong negotiations skills will enhance your chances of succeeding in your relationships
Its purpose is to enable individual parties reach an agreement that is acceptable to them.
N1 – Characteristics of negotiation
1) Involves two or more parties: a) individuals, b) Groups, c) Organizations, etc
2) Conflict of needs and desires – parties have disagreed on a common interest
3) Parties choose to negotiate or not – subject to the likelihood of getting a better deal
4) A “give and/or take scenario exists – either party is ready to make a sacrifice for a reward
5) Parties prefer to resolve differences
6) Existence of negotiating factors
a. Tangible factors – crucial and would be managed (price, terms of agreement)
b. Intangible factors – underlying psychological motivations that could influence outcome negotiations
i. Need to win the other party
ii. Need to look good, competent and tough
iii. Need to defend an important principle – eg moral, social beliefs
iv. Need to appear fair and honourable
N2 – When not to negotiate… Do not negotiate when,
1) You could lose everything
2) You are sold out – running out of capacity in business
3) Demands are unethical (avoid the wrath of the law)
4) You don’t have time (time constraints exist)
5) Your counterparty acts in bad faith (you can’t trust the other party)
6) Waiting would improve your position (delays might make you benefit from technological or policy changes)
7) You are not prepared (adequate preparation pays in negotiations)
N3 – Interdependence of goals (needing each other to achieve the desired outcome. Interdependence occurs in three conditions
1) Distributive (mutually exclusive with only one winner) now loosing prominence
2) Integrative situation (mutually inclusive as in a “Win-Win” negotiation) focus is now centered on this as a plausible goal of negotiations: eg a singer and an instrumentalist can make a great music band
3) Existence of BATNA (Best Alternative To a Negotiated Agreement) – refers to the state, manner and extent of interdependence between parties
N4 – Common Differences in Negotiators (they impact the negotiators attitude)
1) Interests – objectives or goals may be in disagreement
2) Judgment about the future (general understanding of opportunities around)
3) Risk tolerance – while one party may love risks, the other may not
4) Time preferences – desired time to seal the deal or receive consideration may differ
N5 – Conflict in Negotiations (conflict is a perceived divergence of interest) we look at conflict under the following heads
1) Levels of conflict
a. Intrapersonal or intrapsychic – lies within an individual in form of ideas, thoughts, emotions, values etc
b. Interpersonal – between individuals (workers, spouses, siblings)
c. Intragroup – within a group. Eg; team – like Group one, family, organizations, political parties
d. Intergroup – between groups, organizations etc

2) Demerits of Conflicts
a. Breeds unhealthy competition
b. Distorts perception
c. Breeds emotionality – could arouse anger of pitySU
d. Reduces quality of communication
e. Likelihood of rigid commitments
f. Increases level of differences

3) Conflict Management Strategies– these are coordinated measures and efforts directed at minimizing or resolving differences in a negotiation
a. Contending – having little concern for the other party
b. Yielding – caring less about own objectives or outcomes
c. Inaction – indifference about whose goals are paramount
d. Problem solving – aimed at maximizing overall outcomes in a negotiation
e. Compromising – Moderate efforts towards ensuring neither party loses