The Art of Negotiation

Mumtaz Zahra Baloch, Acting Director GeneralForeign Service Academy, Islamabad

We all negotiate• Social interaction inevitably leads to negotiations. We

negotiate in all aspects of life on a daily basis.• In family setting with our spouses, parents and children• At work place: colleagues, supervisors, subordinates• At school and university• While shopping

Why negotiate?• People negotiate when they do not have the power to

force a certain outcome.• They negotiate only when they believe it is to their

advantage.• A negotiated solution is advantageous only when a

better option is not available.

What is negotiation?• A process of securing an agreement between parties

with different needs and goals, but each having something to offer to the other, and each benefitting from establishing an agreement, though the balance of power can be dependent upon whether one party’s needs are significantly greater than the other’

Basic Principles of negotiations• Negotiation is a voluntary activity.• It takes place between parties with different positions• Negotiation starts when one party wants to change

status quo• Each party takes a position that it defends and makes

concessions to reach a compromise.• Any party can break away or refuse to enter into

discussion• Negotiation is incomplete if no mutually acceptable

decision is arrived at.

Distributive Negotiation

• Zero-sum negotiation.• National Budget, regular sale/purchase• Arguing over positions – positional bargaining • Parties compete over distribution of a fixed sum of value.• Key question , ‘Who will claim the most value?’• It is impossible to make trade-offs based on differing

preferences.• Leads to an unwise and inefficient agreement• Endangers a relationship• When many parties, positional bargaining is even worse as

reciprocal concessions are not possible.

Integrative Negotiation

• Win-win negotiation• Parties cooperate to achieve maximum benefits by integrating

their interests into an agreement (focus on interest not position)• The goal of each side is to create as much value for each other• Trade-offs: to get the most valuable, giving up the less critical• Mutual gain possible even when parties’ interests differ• All parties’ interests and preferences may be satisfied.• Respect for the other party’s interests• Long-term relationships possible

Types of NegotiationsCharacteristics Distributive Integrative

Outcome Win-lose Win-win

Motivation Individual gain Individual and mutual gain

Interests Opposed Different

Relationship Short-term Short or Long term

Issues involved Single Multiple

Principled NegotiationPrincipled Negotiation is an interest-based approach to negotiation that focusses primarily on conflict management and conflict resolution. Principled negotiation uses an integrative approach to finding a mutually shared outcome.

(Roger Fisher and William Ury)

Multi-phase Negotiations

• Implemented over time in different phases.• As parties proceed through phases, each upholding its

respective promises, future dealings ensue.• It allows parties to negotiate based on follow through

and continuing communication.• Advantages: Build trust. Monitor the other party, Walk

away from disconcerting negotiations

Multi-party Negotiations

• Coalitions or alliances can form among the parties and influence the process and outcome.• Coalitions have more power than any individual party

involved in the negotiation• A coalition is a temporary alliance of separate entities or

individuals who join together to seek a common purpose• If your party is relatively weak, consider forming a

coalition with others to improve your bargaining power:• If your party is up against a coalition, you might ways to

break apart the coalition.

BATNA• Best Alternative To a Negotiated Agreement• Your options if you fail to reach agreement during a

negotiation.• Your BATNA is your preferred course of action in the

absence of a deal.• Knowing your BATNA means knowing what you’ll do or

what will happen if you do not reach agreement.• Therefore, it is critical to know your BATNA before

entering into any negotiation.

ZOPA• Zone Of Possible Agreement• The range in which a potential deal can take place;

defined by the overlap between the parties’ reservation prices.

Putnam’s two-level game• Introduced in 1988 by Robert Putnam; game theory • simultaneous negotiations at both the intra-national level (i.e.

domestic) and the international level (i.e. between governments). • Over domestic negotiations, the chief negotiator absorbs the

concern of societal actors and builds coalitions with them; • At the international level, the chief negotiator seeks an

agreement that is acceptable to his constituency.• International agreements possible when the negotiators find

common ground acceptable to their respective constituencies. • Pressure groups within each constituency may act as informal

allies with the other party.

Steps in negotiations• Step 1: Determine satisfactory outcomes• Step 2: Identify opportunities to create value• Step 3: Identify your BATNA *-------------------------• Step 4: Improve your BATNA• Step 5: Determine who has authority• Step 6: Study the other side• Step 7: Prepare for flexibility in the process• Step 8: Gather objective criteria to establish fairness• Step 9: Alter the process in your favour

Barriers to an agreement• Die-hard Bargainers• Lack of Trust• Potential Saboteurs• Differences in Gender and Culture

Problem People• “separate the problem from the people” during the

analytical phase.• During actual negotiations individuals make a difference • Build a working relationship with your interlocutor.• No one expects you to make substantive concessions.• Coercion or appeasement rarely work• Try to understand the perspective of the other• All sides need face saving• Clear communication is the key

Some common Negotiation tactics• Negotiation decoy – later negotiate with other party• Extreme offers – Non-verbal bewilderment /surprise• The negotiation nibble (last minute requests)• Cherry-picking – “This is what other companies are offering.,

so you will need to at least match those.• Negotiation flinch – physical reaction like gasping for air,

surprise, bewilderment, laughter etc. • Good cop/bad cop. • Mandated authority • “Take it or leave it”

Some common negotiation tactics• Negotiation deadline • convince and impress• Moral appeal • Name dropping / picture / sudden appearance• Recessing ’ Let us have a break”• Full disclosure• Planting wrong information• Informals

What to do when you reach a road block?• Ask for a break• Look for a pattern• Switch spokespeople• Jointly document progress as it is made• Informal discussions• Use of mediator/third party intervention• Apply pressure?

Some cases• Post WWII: San Francisco Consensus• Kennedy Administration: US-USSR inspections of

nuclear sites• Pakistan-India over Kashmir• Anwar Saadat’s visit to Jerusalem in 1977• UNSG as “mediator” in Iran-US talks over the hostages• Iran talks with P5+1• Nepal-India talks on water

Thank you