In this module, you learned the importance of planning prior to entering the negotiation waters. In order to stay afloat during the process, you need a strong plan of action and the ability change direction when the tide changes. Keeping with a nautical theme, your assignment will center on purchasing a boat from Captain Bob’s Boat Emporium. You spent months searching for the perfect boat and located it at Bob’s. The price of the boat is currently $25,000, which based on your research is about 15% higher than the Fair Market Value. In a few days you are meeting with Randy, a salesperson from the store.
In your paper for this week you will address the following:
- Compare and contrast, then select the appropriate approach that you should take for this situation: distributive versus integrative.
- Create a plan for negotiation in which you address the following:
- Define the interests of both parties
- Identify your limits
- Generate alternatives
- Set a target price
- Analyze the other party
Integrative Negotiations Aim for the Win-Win
Typically the word negotiation conjures up images of a tug-of-war, a game of give and take until someone is the ultimate victor. If there is one ultimate victor, then those who are left without the rope are the losers. This mentality usually prevails in a negotiation situation where both parties aim for the biggest piece of the pie. While there is a time and a place for this type of distributive bargaining, there are other times where the integrative approach works best.
The integrative approach works by having the parties to the negotiation identify their individual and common goals and aim towards a win-win for the parties. Rather than viewing the other party as the opponent, both parties’ goals are part of the process. The integrative approach works best when the parties want to preserve a relationship such as a continued business relationship.
In order to achieve the win-win, the parties need to follow four steps:
- Identify and define the problem
- Understand the problem and bring interests and needs to the surface
- Generate alternative solutions
- Evaluate the alternatives and select a fitting solution
Identify and define the problem
On its surface, this would seem to be the easiest part of the process; however many integrative negations stall at this step. Think about a time that you have wanted to negotiate something, such as a raise. Ultimately you want to achieve a raise, but there may be other sub-issues such as better hours, vacation time, etc. These sub-issues sometimes cloud the overall goal and may become a prevailing issue. It is important to layout all of the issues prior to coming to the negotiation table so that these sub issues, while important, do not overshadow your overall goal of a raise.
Understand the problem and bring interests and needs to the surface
For a win-win to be achieved the parties must understand the problem that they identified in the first step and then bring interestsand needs to the surface. Interests are the underlying needs, concerns, desires that motivate the parties in a negotiation to make certain decision. There are four types of interests that prevail in an integrative negotiation.
- Interests in principles
One of the important things to remember is that the parties all have interests; however, they will vary depending on the party and the situation. When people feel as though their interests are at stake or are not being taken seriously the negotiation can derail until these are brought back into the proper perspective.
Generate alternative solutions
This is more than throwing the spaghetti at the wall and seeing what sticks. Generation of alternative solutions is the creative part of the process. Now that you have identified the problems and interests, it is time to start ascertaining a solution that will be mutually satisfying.
Evaluate the alternatives and select a fitting solution
Hopefully all of the parties identified a wealth of alternative solutions in the previous step. At this time, both parties need to start eliminating and selecting the fitting solution to the identified problem. Narrow the options so that you are not facing too many options. It is important to set forth objective standards as to how you will select the solutions. This is no time for emotional, subjective choices. Do not rush into a solution. A good practice is setting a time limit as you discuss the alternatives. Once time is up, walk away from the negotiation table and return at a set time to make the final decision. This will give the parties time to cool off and collect their thoughts. Once the appropriate solution is agreed upon, write it out and make sure that both parties fully understand the solution.
The Importance of Planning for a Negotiation
Just like a marathon runner prepares for the 26.2 mile race, a negotiator needs to properly get ready for negotiations. Without proper preparation, you run the risk of not making it to the finish line. Sometimes the end goal is the only thing that parties think about as they step-up to the negotiation table. While selecting an outcome is important, the following steps need to be contemplated so that the outcome can be achieved:
- Defining the issues.
- Assembling issues and defining the bargaining mix.
- Defining interests.
- Defining resistance points.
- Defining alternatives (BATNA).
- Defining one’s own objectives (targets) and opening bids (where to start).
- Assessing constituents and the social context in which the negotiation will occur.
- Analyzing the other party.
- Planning the issue presentation and defense.
- Defining protocol-where and when the negotiation will occur, who will be there, what the agenda will be, and so on.
From the above list, some steps may come together quicker than others; however, not one step is more or less important than the others. This list is not exhaustive, but it is a good starting point. Above all, commit to your plan once you create it. Negotiations can be a stressful time for one, the other, or all parties. Having a roadmap in place can keep you on track for achieving your goals.