BA322:
Lesson 01: Negotiation Overview
Introduction
Complete the required readings before each lesson. The following information supplements the information presented in the textbook.
In business, you don't get what you deserve, you get what you negotiate.
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The quote above summarizes the importance of negotiation. In this lesson we learn important definitions that set the stage for the rest of the course. The definition of negotiation and characteristics of a negotiation situation are explored. We will discuss why people enter into a negotiation situation. Because negotiation is often employed to resolve conflict, we will cover the dynamics of conflict and how it relates to negotiation.
Learning Objectives
After completing this lesson, students will be able to:
- Define negotiation.
- Recognize the importance of negotiation skills.
- Identify the characteristics associated with negotiation situations.
- Explain the levels of conflict.
- Describe the five conflict management strategies.
Lesson Readings & Activities
By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 1 Course Schedule.
Why is Negotiation Important?
Negotiation occurs in every aspect of life. From business negotiations to deciding what movie to see with friends, your ability to negotiate matters. The most effective people use persuasion to get people to work toward the accomplishment of goals. Persuasion involves negotiation. Our definition of negotiation is the process that occurs when two parties try to come to a mutually acceptable agreement concerning a difficult conflict.
You are fortunate to be taking a course in negotiation. Not all colleges/universities offer such a course. The knowledge you gain from this course will save you time, money, and frustration. It will also help you with career advancement.
Skylar was being offered her first job out of college. Because Skylar did not realize she was in a negotiation situation, she took the company’s first offer. It was not until years later when Skylar discovered that her starting salary was much lower than a fellow employee who had the same position, but counter-offered the company’s initial salary proposal. Skylar was making less than a fellow employee. From that point on, Skylar recognized the importance of negotiation and made sure to negotiate raises and promotions!
It used to be that when you became employed by a company, you stayed with that company for decades and often retired from this company. Not so anymore. With downsizing and technology, you will likely work for many companies throughout your career. You may even switch industries a few times. Every new position requires new relationships, new ways of working, AND, you guessed it, negotiation. In order to negotiate, you need to learn to ask questions and gather information. It is from this information that you are then in a position to negotiate.
Critical Thinking
In what ways will the knowledge you gain from this course help improve your livelihood? Reflect upon the last 24 hours. Did you find yourself having to negotiate? Think about the upcoming 24 hours. What event(s) in your life are you going to have to negotiate in order to come to a mutually acceptable agreement with someone else?
Value Claiming and Value Creation
The text discusses two types of negotiation. Distributive (also known as zero sum, win-lose, fixed sum or competitive) and integrative (also known as non-zero sum, win-win, or mutual gains). It helps to think of these types as two opposite ends on a continuum. Each type of negotiation has characteristics associated with it as shown below:
| Distributive | 
|
Integrative |
| Value Claiming
Competitive Hide Information Win-Lose |
Value Creation
Cooperation Share Information Win-Win |
In reality, many negotiations contain both distributive and integrative characteristics. For example, although we desire a win-win situation in business negotiations, many are complex, and the “sub negotiations” (negotiations occurring within a bigger negotiation) may contain elements of value claiming.
As you progress through the course you must learn to distinguish between the two main types; recognize when to use tactics of each; and be comfortable in employing the tactics associated with each.
Negotiation Myths
There are many misconceptions about negotiation. Shown below are the most common myths. Believing these can hamper your ability to become a more skilled negotiator. The more you know about perceptions and negotiation, the better able you will be to alter your beliefs and behavior in a negotiation situation.
| Myths | Debunking the Myth |
|---|---|
| Negotiations are distributive | Many people believe that all negotiations are win-lose negotiations. If you believe this, you will fail to engage in collaborative negotiations (win-win). |
| You need to be either tough or weak | Instead of taking a tough or weak stance, it is better to take a reasoned approach based on knowledge that better outcomes (win-win) often can be achieved through working cooperatively instead of competitively. This doesn’t mean that you shouldn’t be firm, however, you should guard against being rigid. If you are too weak and make early concessions, you may preserve your relationship with the opposing negotiator, but lose opportunities to reach your own negotiation goals. |
| Good negotiators are born that way | This myth is false. Most excellent negotiators become superior by practicing and getting feedback on their skills. You too can learn to be a strong negotiator, but you have to take the time to learn and practice. |
| Experience is a great teacher | Experience can help a great deal, but is limited, because you do not always get corrective feedback that can help you improve your negotiation skills. As a matter of fact, you may learn the wrong lessons! |
| Good negotiators take risks | Even though tough negotiators can appear impressive, very few are effective. A strong negotiator takes calculated risks. That is, they evaluate strategies and tactics which help them to excel in negotiation situations. Knowing when and if to take risks comes from knowledge of the negotiating situation, common sense, and good judgment. |
| Negotiators rely on intuition | Effective negotiations require deliberate planning. As you will see in this course, the approach is systematic and requires more preparation than intuition. Does intuition play a part? Certainly. With more experience, you learn how to rely on instincts. But, intuition will never replace preparation and decision making. A crucial aspect of preparation is concrete information. |
Source: Adapted from Carrell & Heavrin. (2008). The mind and heart of the negotiator, pp. 9-10. Pearson/Prentice Hall.
Conflict Management - The Dual Concerns Model
The text introduces the “Dual Concerns Model.” This model is presented because it explains how people handle conflict.
It helps to give examples of each of these to further your understanding. As each is presented, think of a recent conflict situation in which you were involved. Which of the ways to deal with conflict did you employ?
Contending:
Pedro and Jose work together in the same department. Pedro wants to take Saturday off to attend a family event. Jose wants to take Saturday off to go to a sporting event. Both people can’t have the day off. In each situation, the men only care about their outcome (taking Saturday off). They don’t care about the other’s concerns. Each will try to convince their boss to give him the day off. This is a situation characterized by the expression, “I win and you lose.”
Yielding:
There are many times, especially in long-term relationships, when a person intentionally loses. This is called yielding. Instead of, “I win, you lose,” the phrase for yielding is, “I lose, you win.” It seems counterintuitive to allow someone to win in a negotiation, so let’s look at the following situation: Denise’s husband wants to go see an action-packed movie. Denise doesn’t really care about the type of movie they see. She would prefer to have her husband happy, so she allows her husband to “win” the negotiation. We often allow people to win in a negotiation because we know that in the future something will come up that we really care about. If we let the other person win in this negotiation, the next time it will be our “turn” to win.
Problem solving:
The words, “win-win” capture what occurs when people employ the problem solving approach to conflict management. For example, Zeluis and Hilga are trying to develop a proposal for a client that both share. Instead of being competitive, both want to act in the best interests of their client. Both care about each other’s outcomes, but also care about their own outcomes. They will work together to resolve conflicts.
Inaction:
There are times when you should walk away from conflict. Inaction describes the situation where your outcomes and the other person’s outcomes are of no importance. When the other person is acting unethically, for example, you should walk away, indicating you will not tolerate this type of behavior.
Compromising:
If you have a moderate concern for your outcomes as well as the other’s, it is called compromising. For example, if Jim wants to eat at a Mexican restaurant and Dave at a Chinese restaurant, they may find a compromise because both are only moderately concerned about where they eat.
At the beginning of this segment, I asked you to think of a conflict situation in which you were involved. Which method of conflict resolution did you employ? Keep in mind that there is no one best way to approach conflict. Much depends on the characteristics of the situation.
Check for Understanding
References
Thompson, L. (2005). The mind and heart of the Negotiator (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall.