Negotiation and Conflict Resolution
MaRS Discovery District Entrepreneurship 101
Presentation by Michael Erdle, Co-Founder Practical Resolutions Inc.
Introduction
v Negotiation
v Conflict Resolution
What is Negotiation?
v Negotiation is: v a process.
v a structured conversation.
v a means to an end (agreement about something).
v We do it all the time, without really thinking about it.
Basis for Negotiation
v Interests
v Rights
v Power
Escalation
Power
Power Strategies: • Take action unilaterally. • Win at all costs • Attack/Defend • Threaten • Coerce • Withdraw (Take the Ball and Go
Home) • Physical (or verbal) violence
Characteristics of Power: • Adversarial • “Win/Lose” at best • Usually “Lose/Lose” • Extremely expensive • Negative impact on future
relationships
Rights
Rights Strategies: • Contracts (guarantee the
minimum) • Policies, procedures, rules • Precedent • Past practice • Legal action • Third-party decisions
(e.g. arbitration)
Characteristics of Rights: • Adversarial • “Win/Lose” at best • Often “Lose/Lose” • Extremely expensive • Time-consuming • Impact on future relationships?
Interests
Interests Strategies: • Identify what’s really important • Dialogue about needs and wants • Honest sharing of information • Maximize results for all parties • Help everyone explore and
understand their own interests, and interests of other parties
• Needs an ongoing relationship
Characteristics of Interests: • “Win/win” process • Collaborative • Interdependent • Builds trust • Positive impact on future
relationship
Costs Go Up
Control Goes Up
Litigation
Arbitration Investigation/Fact Finding
Conciliation Mediation
Negotiation Problem Solving
Prevention
All out “War” Unilateral Action
Threats, Coercion Power
Rights
Interests
Power, Rights, Interests
The “Golden Rule”
De-escalation
Duty to Negotiate in Good Faith
v Obligation to respect the legitimate interests of other party and to deal promptly, honestly, fairly and reasonably with them. v Shelanu Inc. v. Print Three Franchising Corp. (Ontario Court of
Appeal)
v Implied in negotiation where there is an imbalance. v Wallace v. Grain Growers (Supreme Court of Canada)
Duty to Negotiate in Good Faith
Spectrum of contractual duties
Selfish Selfless
Honesty! Good Faith Fiduciary Duty �
Duty to Negotiate in Good Faith
v Fiduciary: v Trustee v Corporate Director v Lawyer
v Good Faith: v Professional Code of Ethics v Contract v Employee/Employer
Negotiation Steps
v Distributing Value vs. Creating Value v Opportunistic v Problem-solving
v Identify Issues v What does each side want and need?
v Consider Interests v Common v Complementary v Conflicting
Effective Negotiation
v Interests vs. Positions
v “Needs” vs. “wants”
v “Separate the People from the Problem.”
v Soft on the person
v Hard on the problem
v Consider other Options
Effective Negotiation
v Seek Objective Alternatives
v Determine BATNA and WATNA
v Best Alternative to Negotiated Agreement
v Worst Alternative to Negotiated Agreement
v Look for a “win-win” solution.
Effective Negotiation
v Successful relationships are built on communication and trust.
v Lack of trust leads to “win-lose” or “lose-lose”.
v Negotiation is one way of creating trust – or deciding whether trust is justified.
Multiple Negotiations
v Selfish strategy works in a “winner take all” game.
v Life is rarely like that.
v Most negotiations involve a continuing relationship.
v What happens if there’s a series of negotiations?
Multiple Negotiations
v “Tit-for-Tat” strategy is most successful.
v Four key conditions:
v Nice
v Retaliate
v Forgiving
v Generous
Multiple Negotiations
1. The player always cooperates, unless provoked.
2. The player always retaliates, if provoked.
3. The player is quick to forgive –co-operate next time.
4. The game must continue long enough for the ‘retaliation and forgiveness’ pattern to affect opponent’s behaviour.
Negotiation Styles
v Focus on “winning”.
v Focus on relationship.
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Win - Lose
Win - Win
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Focus on Rela,onship
Focus o
n Co
nten
t Negotiation Styles
Power Ploys
v Classic “Hard Bargaining” Ploys v Extreme claims, small concessions
v “Take or leave it.”
v Unreciprocated offers
v Threats and warnings
v Attacking the alternatives v Good cop, bad cop
Ways to Respond
v Extreme claims, small concessions v Tit for Tat – make equally small concessions.
v “Take or leave it.”
v Make a counter offer.
v Offer an alternative. v Don’t be afraid to walk away.
Ways to Respond
v Unreciprocated offers v Don’t negotiate against yourself.
v Wait for a serious counter offer.
v Threats and warnings
v Don’t make a counter-threat. v Challenge the underlying assumptions .
Ways to Respond
v Attacking the alternatives v Ask for an explanation.
v “Why do you have a problem with…?”
v Good cop, bad cop
v Negotiate with the boss. v Use the “good cop” to your advantage.
Understanding Interests
Common Interests
v Parties want the same things.
v E.g. company and workers both want to avoid strikes and workplace grievances (costs them both money).
Understanding Interests
Complementary Interests
v Parties want different things, but they don’t conflict.
v E.g. company wants to increase productivity & profits; workers want better pensions.
Understanding Interests
Conflicting Interests
v Parties want different and incompatible things.
v E.g. company wants to reduce labour costs; workers want to be paid more.
Negotiation Skills
v Communication is the key to effective negotiation.
v Assertiveness vs. Empathy
v Effective negotiator is assertive and empathetic
v What you say is often less important than how you say it.
v Tone v Body language
Negotiation Skills
v Understanding and recognition do not mean compromise and concession.
v “I understand” vs. “I agree”.
v Your own emotions and subconscious brain can hinder your ability to negotiate effectively.
Negotiation Skills
v Listening v Develop “active listening”.
v Understanding v Acknowledge the other person’s perspective.
v Flexibility v Be open to other options.
v Pragmatism v Accept the best available option.
Conflict Resolution: Match Process to Business Goals
v Litigation v Public
v Little control over time & expense
v Arbitration
v Private v Quicker and
cheaper?
v Mediation v Private
v Cheaper and quicker
v Control outcome
v Facilitation
v Informal v Inexpensive
Costs Go Up
Control Goes Up
Litigation
Arbitration Investigation/Fact Finding
Conciliation Mediation
Facilitation Problem Solving
Negotiation
All out “War” Unilateral Action
Threats, Coercion Power
Rights
Interests
Power, Rights, Interests
Facilitation
v Informal process
v Parties control process and outcome
v Facilitator ensures that all issues are addressed and all parties have an opportunity to be heard
v Examples: partnering workshops; joint problem-solving; facilitated negotiations (re-negotiations)
Mediation
v A more formal process of facilitated negotiation.
v The Mediator guides the process and helps the parties negotiate more effectively.
v The Mediator does not decide who is right or wrong.
Mediation
v Interest-based Mediation v Mediator is a facilitator. v Focus on interests, not legal rights or obligations. v Options for creative solutions.
v Evaluative Mediation v Neutral evaluation. v Based on legal rights & obligations.
Mediation
v Qualities of an effective mediator: v Subject area knowledge
v Negotiation & mediation process skills
v Lets parties make key decisions
v Creative approach to the problem
v Patience
Arbitration
v Adversarial process
v Less formal than litigation, but need to follow procedural rules for fairness and efficiency
v Not necessarily quicker or cheaper than litigation
v Parties can select arbitrator with particular legal, financial or licensing expertise
v Private – don’t “air dirty laundry”
Arbitration
v Qualities of an effective arbitrator:
v Subject matter expertise
v Active control over process
v Fairness and good judgment
Other Dispute Processes
v Executive Committee v Formal escalation process
v Risk that positions become harder as they escalate v Executives must remain engaged throughout the agreement
v Project Umpire v Can facilitate or mediate resolution of project disputes
v Can also provide neutral evaluation or non-binding arbitration v Umpire is engaged throughout the project
v Available to deal with issues on short notice
Resources
v Fischer, Ury and Patton: Getting to Yes, Penguin, 1991
v Ury: Getting Past No, Bantam, 1993
v Cohen: You Can Negotiate Anything, Bantam, 1980
v Mnookin, Peppet and Tulumello: Beyond Winning, Harvard University Press, 2000
v ADR Institute of Ontario (ADRIO) http://www.adrontario.ca/
Questions?
