In the two previous sections in this series on negotiation (Parts 9 and 10) we discussed the inadequacy of our cultural assumptions about negotiation and explored several fundamental components of the negotiation process and how these components occur within a framework of relationships. This section looks at the actual management of the negotiation process.
Figure 1 shows the basic four-dimensional model of the negotiation process. The H stands for the horizontal dimension and is the one which is generally described in articles and books about negotiation.
The I stands for the internal dimension - the negotiation which occurs among members of each negotiating team.
The V stands for vertical hierarchy - the vertical relationship between your team and your organisational hierarchy.
The E stands for the external dimension, or the relationship which must be managed with interested outside parties such as the public, the press and the government. (These dimensions were discussed in detail in Part 10.)
The vertical dimension: managing your organisational hierarchy
The negotiation process, like chess, divides into three sequential stages. The opening-game represents the pre-negotiation preparatory phase where the overall framework is articulated and the specific details put in place prior to commencing with formal meetings. The mid-game represents the initial face-to-face contact and the subsequent formal and informal meetings where behaviour is more adversarial posturing than collaborative decision-making. Finally, the end-game represents the shortest, most intense meeting phase, where behaviour is more accommodative and where proposals and counter-proposals are exchanged at an accelerated rate, leading in the end to an agreement.
While relationships along all of the four dimensions are important in all three stages of the negotiation process, probably the most important relationship to be managed during the preparatory stage is the vertical one with your organisational hierarchy. If the preparation phase of the negotiation has not been managed properly with your organisation, it will be difficult, if not impossible, for you effectively to manage the process at the table.
In preparing for the negotiation with your organisational hierarchy, there is often considerable confusion about the goal, strategy, objectives and tactics to be employed. These terms are generally used interchangeably and it is helpful clearly to differentiate their meaning. (see Figure 2.)
The goal is simply the desired outcome. Once it is clearly articulated and agreed upon, an overarching strategy for reaching it can be put in place. Within the context of this overall strategy, specific objectives can be defined. Next, specific tactics can be identified and employed for use in achieving the objectives. Finally, the long-term implications of all of this must be considered negotiating a multiyear natural gas supply contract is not the same as negotiating for a gold amulet at a middle-eastern bazaar while on vacation.
Nailing down the goal. Many negotiators have been sent to the table with sketchy instructions, have worked hard with other teams to hammer out common areas of interest and fashion a tentative agreement and then returned home and attempted to sell the agreements to their organisational hierarchy.
They are surprised and say no-way and we lose credibility both with our own organisational hierarchy and with the other side because we must return to the table without approval of the tentative agreement. The subsequent table negotiation then becomes a form of damage control. The problems started right back in our organisations - when we were sent to the table with incomplete instructions.
Going into a negotiation without clear, explicit and comprehensive instructions is a prescription for disaster.
Defining the organisational strategy early. Typically, your own organisation is not very clear why it wants to get involved in a negotiation in the first place. It is inevitable that any position you bring to the table will reflect a policy that is a patchwork quilt of many organisational threads. Your main job at the beginning will be to push your hierarchy specifically to define its positions and, more importantly, its underlying interests in the negotiation.
At the same time that you are getting clear instructions and a clearly defined position, you must also prepare an overall strategy and prepare your organisation to alter its initial position later. You must challenge them to take into consideration what the likely reaction of the other side will be to their initial position. You and your organisation are building a strategic negotiation framework and you are building some flexibility into that framework.
Relationships within organisations are complex. Individuals and even whole departments will appear to be overly accommodative, overly aggressive or relatively collaborative.
Because of this organisational complexity, you should work to understand the forces operating in your organisation, which means having good answers to questions such as: How does it make decisions? Who are the key players? Who wants the negotiation to succeed? Who is indifferent? Who would like it to fail?
With knowledge of how your organisation works you can begin to orchestrate it. You must force the fragmented parts of your organisation to work together and give you guidance that is as clear, explicit and as comprehensive as possible. When you have spent time with your own organisational hierarchy prior to going to the table, you set the stage for your successful return. It may not be easy to interact with the organisational hierarchy first, but you have to negotiate vertically before you can effectively negotiate horizontally, internally and externally.
Your relationship to your organisational hierarchy gives you tremendous leverage within your team and with the other team. When you have negotiated well vertically, that is when you can come home with agreements that you can be proud of.
Setting limits: tactical confidence and a short leash. It is ironic, but the less freedom to bargain you have at the negotiating table the more confident and secure you will be concerning your teams position during the negotiation. Your tactical leverage as a negotiator at the table comes from that confidence you have when you know where you are going that ability to be believed by the other side because you know what you can deliver. Your organisational hierarchy gives you that power and confidence. The more explicit they are about your restrictions, the more freedom you have from insecurity. The shorter the leash, the more freedom and confidence you will have.
Keeping them informed. Just as important as getting good negotiating instructions and having a short leash is keeping your organisational hierarchy informed of the progress of the talks. It gives you much more control over the process than you would otherwise have. A rule of thumb is to send them as much as they can take - then send them some more.
This helps them remain part of the process. It also protects you. It will keep you informed about what are acceptable and unacceptable agreements and about what the machinations back at headquarters portend for the negotiations.
The internal dimension: managing your team
The way to begin managing your own team is to have some say about its initial make-up as this will affect how the team will work together later.
Composition. It is seldom possible to choose your own team. However, a rule of thumb is that you want a balanced mix of people sufficiently similar for clear and effective communication and who speak the same language (figuratively as well as literally) but not gridlocked because of irresolvable social, cultural or ideological differences.
On the other hand, you do not want a team of clones; so you also need a team that includes individuals who are sufficiently different to permit a richness of perspectives.
The context and content of any negotiation, of course, should to some extent determine the composition of a team. If the negotiation is about designing a lunar lander, than you would want someone with technical engineering expertise and experience in designing lunar landers. But that is not enough.
Behavioural skills. If we analyse any negotiation and consider only the technical aspects under consideration, we will overlook the behavioural patterns and not understand what is going on between the different sides.
Some cultures, the Japanese for example, have a reputation for being very much concerned with the behavioural aspects of their customers and competitors.
Western negotiators have noted that on a typical Japanese negotiation team, individuals will be designated as behavioural process observers. They will have nothing to do but watch the process of interaction, verbal and non-verbal, in order to understand better the negotiation. They try to understand the hidden meanings and messages within the negotiation messages such as: are the words of the spokesmen congruent with their non-verbal behaviour? Who are the informal leaders? Who is confident? Who is insecure? Who is trustworthy?
The important point to remember here is that we must not confuse technical expertise with process expertise. We must think through and address the process issues of a negotiation separately from the technical substantive issues. If we do not, the process aspect will inevitably be overlooked and we will severely handicap the negotiation for both sides. Both sides have a responsibility to understand what is going on during the negotiation.
Establishing norms. Regardless of how a team is designed, you will likely end up with differences of opinion on your team. You will inevitably have both stabilisers and destabilisers, for example, and you will need to manage them. In the course of the negotiation, you will find it helpful to create norms of openness, discipline and privacy.
You need a team that is open, i.e. in which members are relatively open with each other. This requires leadership on your part to help set the tone for an atmosphere of safety (one can make mistakes...) and trust (...if they are honest ones).
Having an open team is helpful but having a disciplined team is necessary. That means a group of individuals who are ready to work as a team. When time for discussion and debate is finished and a decision is to be made, a well-disciplined team will take responsibility for that decision, however it was made. There is an important difference between compliance and commitment, however, and the most effective discipline is not enforced by an authority from outside the individual but is generated from loyalty within each team member.
Your team should understand how it will be managed during the negotiation before it ever leaves the privacy of your office for the negotiation table.
Members need to know how the team will relate to the organisational hierarchy and what the procedures are for communication with the parties external to the formal negotiation.
And members need to know how the team is to relate horizontally with the other side, who will speak at the table or away from it, whether and when notes will be passed at the table. Well-trained teams, for example, never send a note on the subject under discussion. They think through the implications What message are we giving by sending a note at this time? Is there a better time when well be giving another signal? The conversations at the table are on the horizontal dimension; having conversations on the internal dimension at the table creates problems.
Caucus. The caucus is an adjournment of the direct discussions with the other side for the purpose of a private meeting of your team. The arrow in the figure points down toward a small triangle of Ss, DSs, and a QM (see Part 10). This depicts a negotiation team in caucus. Amateurish teams will conduct these internal negotiations in front of the other team or in public (at the table, in the hallway or at dinner) so the other team has no questions as to who is agreeing and disagreeing with whom.
More sophisticated teams will caucus in private, out of sight and earshot of the other team. And they will do this frequently. Effective use of the caucus is vital for you to negotiate effectively. If anything happens during a negotiation that you do not understand, that makes you feel uncomfortable, rushed, off balance, call a caucus. You cannot caucus too much. (see Figure 3.)
The general rules for caucusing need to be negotiated with the other team. Note well, however, that just as in passing notes, the context of when and how you call the break will be giving the other side information about you and how you operate.
Win-win sounds nice, but somebody usually loses. As an antidote to the win/lose adversarial mentality in which many negotiations take place, writers have begun to portray negotiation as a win-win opportunity. This reassuring talk about negotiation as win-win is not, strictly speaking, true. During a successful negotiation, there are usually losers as well as winners.
In complex negotiations, if a deal is struck, it is possible that the destabilisers on each team lost. This is most obvious in an arms control negotiation, where the doves and the QM may feel a fair deal has been consummated but where the hawks may feel they have lost, and so may subsequently do everything in their power to destroy the implementation of the negotiated settlement.
No pious talk about win-win solutions can hide this fact at some point you will have to address the losers on your own team, and ensure that that dynamic does not destroy the agreement after-the-fact. Figure 4 shows the way the real win-lose pie is cut.
The horizontal dimension
If your organisational hierarchy and your team have been managed well, you still need to manage the negotiation with the other side along the horizontal dimension. You cannot come to any agreement without the other side, and managing the horizontal dimension is the heart of the process of negotiation.
Sitting at the negotiating table has sometimes been compared to sitting in a pressure cooker. The experienced negotiator has learned to manage them by identifying the sources of the pressure and, when necessary, lessening those pressures on his or her own team and on himself.
Some things you can do to reduce the horizontal pressure on your team are: (a) have an alternative to this negotiation; (b) realise that you have control of the process; (c) recognise that first impressions last; (d) practice; (e) give yourself time; (f) give yourself space; (g) avoid destabilising the other team; (h) represent your true interests; and (i) notify the other team of your intentions.
Have an alternative. Probably the best way to reduce the pressure on your team is to have a set of alternatives to the agreement that you are presently negotiating. The better the alternative, the less pressure on you at the table. Having a BATNA (Best Alternative To a Negotiated Agreement Fisher & Ury, 1981) usually means, of course, that you have done some prior negotiation to develop an acceptable alternative.
Realise you have control of the process. Remember the First Rule of Negotiation that there are no rules for negotiation, they must first be negotiated. They cannot do anything without your assent.
First impressions last putting the right foot forward. Initial contacts set the stage for all subsequent meetings and mistakes can be lasting.
Practice makes perfect. Many experienced negotiators prepare their teams for the table negotiations by practising among themselves. They take the negotiations seriously enough to scrimmage, i.e., to put themselves in the other teams place.
Give yourself time. An hour might be an unacceptably long period to wait in Germany or it might be an insignificantly short period in the Middle East or Far East. Other things being equal, if one party to a negotiation is looking at his watch, while the other party is looking at her calendar, the side looking at his watch is already at a disadvantage.
If we have a return flight on a specific date and the other side knows this, they may plan the negotiation to use time to their advantage. We have put ourselves in an increasingly disadvantageous position as we approach the deadline and we may be tempted to make unwise concessions in order to reach an agreement before we must leave.
Collective bargaining negotiations between labour and management almost always take place under a deadline imposed by the expiration of a contract and the threat of a strike. The parties often use the deadline to move the process forward. In a sense, they are like poker players upping the ante. This is a frequent tactic but it obviously has its drawbacks.
Give yourself space. At some point in the negotiation, the other side will probe to discern the relationship between you, your team and the hierarchy that you represent. This can be either a legitimate search for information or a tactic to split your team and throw you off balance.
As a tactic to destabilise your side, the questions might be Do you have the authority to negotiate? You do, of course, or you would not be there at the table. A more sophisticated destabilisation tactic is: Do you have the power to close? This is clearly intended to shake your confidence and self-assurance. An effective response to that question can be I believe that I have as much authority to close as you do.
Keep in mind before you get hooked by such questions, however, that you do not even want to have the authority to close.
Very rarely will the closer come to the table to negotiate - for some very good reasons.
Let us say you have negotiated a good price on a new car. The salesman excuses himself to check with his manager. He returns and says something like Though of course I can see the reasonableness of your proposal, my manager says we would be giving the car away at that price. He has positioned himself between you and the real decision maker.
By using his absent closer, the salesman has reduced his personal power yet in fact given himself more power in the negotiation.
We use the same tactic when we tell him Ill have to check with my spouse. It may gratify your ego but if you tell him that you have the power to make the decision right then and there, youre bargaining at a disadvantage. Your apparent increase in personal power actually disempowers you to some extent. It is generally in your best interest to have your closer away from the table to protect you.
There may be times, however, when you want your closer(s) at the table. But this should only be done as part of a conscious strategy. In general, keep your closer away. It gives you more room to manoeuvre. And it makes it easier on your relationship with the other side.
Avoid destabilising the other team. The inexperienced negotiator often believes that if one wants an advantage in the negotiation, one should surprise the other side. This is a mistake. Surprises will destabilise and upset the other side. They will trust you less. In addition, you will be disadvantaged by their unpredictable response. You want to be able to manage the negotiation. If you destabilise the other side, you give up control of the process.
Represent your true interests. Inexperienced negotiators sometimes think it advantageous to misrepresent their bottom line as much as possible. They make an unreasonable demand or take what looks to others as an unreasonably extreme position.
This is generally a mistake because it may look to others (such as the Japanese, who tend not to misrepresent their bottom line) as insincerity when you eventually shift your position and make large or frequent concessions. In addition, if you misrepresent your true interests, how can the other side satisfy them?
Notify the other team of your intentions. Predictability is one of the reasons why it is so important to notify the other side of your intentions and your actions. Notification tipping off the other side early about any irregularities has several advantages: it increases the likelihood that they will trust you; it gives the relationship stability; it gives you credibility; it gives you an advanced warning of their probable reaction (and this is very useful information to have); and it gives you time to change your mind before you get publicly locked into a position.
There are several simple procedures that will be helpful for you in shaping the eventual outcome of a negotiation: (a) asking questions (b) paraphrasing their statements (c) taking better notes than they do (d) summarising often and (e) closing on your own words.
Ask questions. To convince you of anything, the negotiator must perform his or her basic job to create doubts in the minds of others as to the viability of their positions. The way experienced negotiators educate one another the way they manage information, persuade and create doubts - is not to make statements but rather to ask questions. Questions create doubts.
Paraphrase their statements. Rephrasing their words into your own terms will go a long way towards giving you control over the substantive aspects of a negotiation. One of your jobs as a negotiator is to interpret to the other side what you heard them say. Getting the agreement of the other side on your paraphrasing will allow you to control the language of the negotiation. Do this often during the meeting, and you begin to define the course of the talks.
Take better notes than they do. Taking notes of both meetings and phone calls with the other side has many advantages. It gives you material for the difficult analytical work that your team will be doing between meetings as you search for proposals that encompass your and the other sides interests. It gives you a record for your organisational hierarchy. And it gives you more control over the memory of the table process.
Go over your teams notes until everyone on your team agrees, then in the joint sessions compare your notes with the other sides. Yours will be better. Pretty soon they will be relying on your notes. Whoever controls the notes controls the memory of the negotiation. Whoever controls the memory controls the entire process.
Summarise often. This will permit you to consolidate your control over the whole process. The summaries can be verbal at the meetings, but should continually be formally typed-up and agreed by the other side. You will probably find yourself negotiating over the wording of the summaries. Getting agreement on your summaries protects you from the other side trying to assert that you agreed on something that you havent and thus keeps them from trying to wedge in any last minute concessions from you.
Close on your words. If you have paraphrased their words into your own, taken good notes and made good summaries of the discussions, you help to put your side in a position to close each session and the final agreement in your own words.
If you have ensured agreement on the small points covered along the way, whether they seemed important or not, you have done a lot to define the final agreement.
Shadow negotiations. Shadow negotiations are surreptitious conversations that take place away from the table. Although they might be an integral part of the strategic and tactical plan of a negotiation, shadow negotiations are usually impromptu or otherwise unauthorised private exchanges between individuals who are not on the same negotiation team but who share similar interests, such as ensuring the success or failure of the negotiation.
The principal shadow negotiations are pictured in Figure 5 as shaded arrows pointing away from the table, and implying that the conversations are indirect and often secret. Each of these shadow negotiations runs its own risks.
QM-QM shadow negotiations. As the negotiations progress and both sides become more comfortable with each other, you will begin to see changes in the tenor of the negotiations. As you build the relationship with the other team chief, you will begin to discover that you have the same job and the same problems. The person on the other side of the table your opposite number is struggling with exactly the same issues that you are.
The head of the two delegations may therefore find it helpful to speak alone from time to time.
When shadow negotiations occur more or less openly between the quasi-mediators they are often part of explicit team strategy. When initiated by the quasi-mediator without the knowledge of his or her team, the conversations usually concern how to handle members of his own team. One way you know the negotiation is approaching closure, for example, is when you and the other quasi-mediator are relying on one another to take care of each others problem team-members.
Two other reasons for quasi-mediators to get together alone are (1) to explore alternatives without affecting the expectations of those on ones own team (and thus the expectations of ones vertical hierarchy via the covert contacts of stabilisers or destabilisers) and (2) to defuse emotional situations.
To meet privately with the other team chief, you may need to cut out your team destabilisers and stabilisers this is the walk in the woods between the two chief negotiators. Such meetings can exacerbate suspicion on your team and make your internal negotiations more difficult unless you have discussed the strategic and tactical need for them and have established procedures for reporting back.
Stabiliser and destabiliser shadow negotiations. Shadow negotiations in which stabilisers or destabilisers are involved are either unauthorised contacts with members of the other team, secret contacts to allies back home in the vertical hierarchy or secret leaks to outside parties such as the press.
If the stabilisers get together, they may raise the expectations of the other side unrealistically. If the destabilisers get together, they may have enough power and enough muscle to tip over the whole deal. Unless you have a very good reason to the contrary, it is much wiser to limit the unplanned private exchanges to the team chiefs or to the whole group at planned informal social gatherings.
If the stabilisers or destabilisers make unplanned and unreported contact with their allies in the organisational hierarchy, it is probably intended to upset the negotiation from that direction. They may be looking for support for their positions and trying to bring pressure to bear on the team chief to change his or her position on a particular issue.
If they are making secret contact with parties external to the negotiation, they can be attempting to create public pressure for their position and indirectly to put pressure on those in their organisation and on their team who may disagree with them. These are all risky operations, from an individual standpoint, and can create irreparable damage to the success of a negotiation.
The external dimension: managing the outside parties
Virtually all of the real work in a negotiation is invisible to outside observers. Perhaps 90 per cent of what takes place occurs under the surface and is out of view.
One reason we know so little about the negotiating process is its inherent privacy. Basic to the process of negotiation is the discussion of tentative and exploratory proposals that necessitate privacy.
When exploratory proposals are leaked and made public, they typically become ammunition in the arsenals of one or another of the destabilisers. The leaks tend to derail the negotiation and serve to enhance the position of the destabilisers.
For these reasons, the private negotiation table can be considered a semi-public platform. No matter how private and secret negotiation at the table appears, experienced negotiators assume that they can be exposed, intentionally or inadvertently. The substantive issues, especially the difficult ones, be they horizontal, internal or with the organisational hierarchy, are most effectively dealt with informally and in private among the appropriate representatives.
Part of any negotiation is a negotiation about the release of information concerning the progress of the discussions. From time to time one is expected, or required, to share information about the negotiation with interested outside parties. This can best be planned for and negotiated in advance with ones vertical hierarchy and with the other negotiating team.
Conclusion
We have seen that the two-party negotiation model reveals a multidimensional structure with negotiations along vertical, internal and horizontal dimensions. The complete multidimensional structural model is illustrated in Figure 6.
Many negotiations, however, are even more complex than bilateral ones. Figure 7 depicts the complexity of a multi-party negotiation.
This is much more arduous to manage, principally because it is difficult to co-ordinate the different dimensions among all of the parties. Apart from the problem of complexity, however, the basic structural patterns of interaction and processes are the same in multilateral settings as are those we have sketched for bilateral negotiations. If you are aware of those patterns and understand them, you have a better chance of successfully managing the negotiation.
Remember, though, that a negotiated agreement is nothing but a promise on a piece of paper unless it is implemented. The best and in the final analysis the only guarantee of implementation depends on the trust that exists between the parties to a negotiation. The best way to ensure compliance is to keep a good relationship. Both sides should be willing to recognise the necessity for minor adjustments.
No list of insights or rules is by itself an adequate guide for successfully managing a negotiation. Negotiation is a behavioural event and knowledge of how to do it will be of little help unless it is put into practice and the skills developed. Any application of these insights requires good judgment on how and when to employ them. That is where experience comes in. That is where you become the expert. What you do is ultimately far less important than how you do it.
Signpost
Managing
Across
Cultures
The Module concludes a three-part series on negotiation. It will end in Part 16 with an examination of the approach to management of companies emerging from the command economy of the old Soviet Union. Earlier sections appeared in Parts 6,7 and 9 and looked at some of the implications of managing across different cultures and what international management involves, as well as negotiation. Related topics can be found in the Organisational Behaviour, Business Ethics and Socio-political Context and Business Environment modules.
Summary
In managing the verticle dimension (within your organisational hierarchy) it is important to nail down the goal of a negotiation, gain clear instructions, prepare a strategy, set limits to your freedom, and establish clear communications.
Where your own team is concerned (the internal dimension), take trouble over its composition so as to get the balance right, include behavioural process observers, establish norms for openness, discipline and privacy, and make sure you caucus in private. Despite pious talk about win-win you will have
to address the losers on your own team.
Negotiating with the other side is the heart of the process. Ways in which you can reduce the pressure include: having a set of alternatives to an agreement, making a good first impressions, preparing through practice, giving yourself time (deadlines have their pros and cons), having a closer of the deal who is absent, not destablising the other team, representing your true interests rather than taking an extreme position.
