Case Study on Extreme Negotiations

Case Study – Interview on Implementing Strategies in Extreme Negotiations

The following case study given by the lecturer is a summary of an interview of Jeff Weiss and Jonathan Hughes regarding their article published in Harvard Business Review on "Extreme Negotiations". 

As stated in the case study, extreme negotiations are defined as instances with high risk factors. People tend to carry out extreme negotiations when they feel susceptible or see a weakness in the other party. These types of negotiations can lead to long term damage to relationships among parties and should be handled with care, which can be difficult to initiate under extreme pressure and stress of the situation. It’s important to understand the motivations and reasons of the party enforcing extreme negotiations so that reasonable and trustworthy outcomes can be obtained through a range of solutions that will benefit both parties.

In order to lead a successful negotiation in an extreme condition, questioning in respectful, direct and non-threatening manner which will be easier and comfortable to answer should be followed. This will help to understand the reasons for the aggressiveness of the other party and thus prevent arriving at wrong conclusions about them. Suggesting resolutions and inviting them to critique it and also conducting background research on the situation is another approach on understanding the motives of the other party. This will help in learning the possible outcome that the parties expect through an extreme negotiation. It is important to stay calm and not overreact in these situations in order to avoid further clashing. It is also important to understand and follow the relevant cultural aspects, as there can be instances that the reasons may lay within them. An important factor to develop in an extreme negotiation is trust. It is important that the trust between people/parties should be at a reasonable level in order to face extreme negotiations successfully.

In order to launch a successful extreme negotiation, the parties must be prepared well before hand instead of relying on the spur of the moment actions. A negotiator can develop qualities such as focusing on disciplined preparations, practicing with low risk negotiations prior, developing ability to view situations in different perspectives when needed, reviewing the negotiations done by you as well as getting feedback from others and to teaching others. It is also important to know how to be persuasive and convince the other parties without being too aggressive by presenting them with reasonable facts and fairness.

In order to implement these strategies in an organizational level, negotiations can be treated as a process where developing strategies, preparing pre-negotiations, conducting negotiations, midcourse correcting, closing negotiations and reviewing and quality assuring is done.  Leaders should be selected and should be trained to possess a correct mindset throughout the negotiation. There should be a shared vocabulary and tools such as play-books with strategies, metrics and dashboards for and processing, and sophisticated development programs for negotiators. It’s best to encourage the negotiators with motivation and preparation as well as sharing prior success stories that can be used as learning options.

Best Alternative To Negotiated Agreement (BATNA) is an important phase where there is a backup plan in hand when dealing with negotiations. Following BATNA method means to investigate to all possible options and to compare amongst them in order to arrive at the most suitable decision. Many companies tend to use this method as this tends to present successful and positive results.

There are numerous situations that can lead to extreme negotiations and it is important to learn the best ways to handle these as individuals as well as organizations. 

Link of the case study - 

http://hbr.org/web/ideas-in-practice/implementing-strategies-in-extreme-negotiations

Negotiations

Negotiations can be stated as bargain for a particular reason that can advantageous or disadvantageous for party/parties involved in the negotiation. Harvard Law School (2013) defines negotiations as a conversation between 2 or more disputed parties “who seek to find a solution to a common problem, one that meets their needs and interests acceptably” (Harvard Law School, 2013). It helps in people to come to agreements about conflicting issues and resolve issues at hand. It’s an art that should be mastered in order to obtain best outcomes.

Negotiation can be comprised of 3 elements as follows

1.      Process – the manner in which the parties negotiate. This includes context, strategies used, parties involved, process where it’s played out etc.

2.      Behaviors – describes the existing relationship among the parties. This includes the communications between them, styles implemented etc.

3.      Substance – the reason that the negotiation is done about. This includes the outline of issues, options available to arrive at solutions, agreements made/can be made etc.

As stated by the lecturer, the outcome of negotiations can be classified as win-win, win-lose, lose-win or lose-lose situations. Most negotiation tend to end up either win-win or a win-lose situation as negotiation is a way of helping both or at least 1 party to obtain a good outcome.

Negotiations are often mixed up with bargaining. Though the two words carry almost similar meaning, Smoliar (2013) states that bargaining is a win-lose and a competitive situation that determines who is right while negotiation is a win-win situation which focuses on what is right. But negotiations cannot be win-win situations and bargains cannot be win-lose situations at all times. Therefore it can be seen that bargaining is a part of negotiations.

According to Glaser (2005), a good negotiation ends up with 3 principles;

1.      It should be a wise agreement that satisfies both the parties

2.      Should be efficient

3.      Shouldn’t have conflicts and damage relationships between parties

Glaser (2005) further states that a negotiation should focus on 4 aspects; people, interests, options and criteria. When negotiating it’s important to distinguish between parties involved and the problem at hand. There shouldn’t be a mixture of emotions and personal issues. Logical thinking and analyzing should be conducted always. Interest is another aspect that should focus on. When negotiating it’s important to focus on interests of the people rather than their positions. The parties should clearly outline their interest so it can arrive for a common agreement. It is also important to generate a wide range of options before settling into 1 so that the best option is being agreed upon. This will help in avoiding win-lose or lose-lose situations immensely. Lastly objective criteria should be used in event of conflict resolutions when there are differences.

Types of negotiations

Negotiations can be of 2 types, distributive/disruptive negotiations and integrative negotiations. Distributive negotiations occur when 2 or more parties have conflicting ideas or needs and is unable to come to a common decision. It’s a win-lose situation where one will definitely fail to obtain the required outcome expected through a negotiation. Integrative negotiations occur when parties engaged in negotiation are able to arrive at an acceptable conclusion that will be favorable for both parties. It’s a win-win situation where both parties gain a fair share of the outcome.

Class Activity – Role Play

In order to examine more into the above 2 types of negotiations, the lecturer appointed 2 groups each with 3 students to act out a scenarios depicting the above negotiation types. The group acting the disruptive negotiations enacted a scene of a foreign couple taking a ride in a local trishaw for a distance of 2km, where the standard charges are around Rs.200, but the couple was charged for Rs.1000. However much the couple argued, the driver refused to accept a lower amount and in the end they end up paying the obscene large sum. The following are some points that the author gathered based on the act

• ·         In disruptive negotiations, if 1 party is more knowledgeable in the situation than the other, it can be used against the other party. In the above scenario, the foreigner lacks knowledge in the standard charges while the driver knows this fact and took to his advantage
• ·         This type of negotiations can damage relationships between parties in the long run. Therefore this type usually occurs when the parties doesn’t have a future relationship among them (the foreigner will not be contacting that driver again)
• ·         Being thoroughly knowledgeable in the subject upon which the negotiation in taking place can help people to avoid disruptive negotiations

To depict integrative negotiation, the group enacted a scene of a family dispute between 2 sisters after their father’s death, in the process of dividing the property and valuables. Unable to come to a common agreement they decide to meet their lawyer, who helps in dividing the items equally and as per their needs and requirements. The following are some points that the author gathered based on the act

• ·         Intervention of a 3^rd party when necessary can help to maintain the neutrality of the negotiation thus preventing it to become disruptive
• ·         It’s important that the parties know what is really important to them and what they are willing to give up (1 sister wasn’t fond of the china set while the other were; hence the china was given up by 1 to the other). This can help in arriving at a favorable outcome.
• ·         As both parties gain positively through this type, long term relationships can be maintained

Personal styles

Then negotiating it’s important to know how to control and use the way of negotiating styles within a person. Individuals have varied styles and it’s important to understand the style within you and to develop of control based on the negotiation type and the situation at hand. The lecturer provided us with the following types of personality styles that can be within a person.

·         Self-denying – reluctant to give information or feedback, has hidden feelings. The downside includes not being able to tell what is needed thus leading to confusion.

·         Self-protecting – use diversions to evade your issues, doesn’t like talking about yourself, closed person. Disadvantage of this is that the person cannot express what is needed properly.

·         Self-exposing – center of attention, demands what you want, and speaks out. Can become aggressive and demanding which can be a disadvantage is certain situations

·         Self-bargaining – if another person initiates the negotiations then will participate and go forward. Sometimes situations that should be negotiated will pass on as that person will not take lead to negotiate

·         Self-actualizing –  this is the ideal situation that has a balance of all the above characteristics

Apart from the above, Knepper (2013) states the following as some personality traits that can exist;

Style	Pros	Cons
Dominance	Direct, independent, results oriented, strong willed	Can be rude or rough to others, insensitive, always needs victory, rigid
Influence	Likes team work, optimistic, social, motivates others	Can be emotional or personal, doesn’t have a proper vision about goals, too agreeable
Steadiness	Supportive, doesn’t like being center stage, try to avoid conflicts, good listener	Less resistant for changes, uncomfortable in volunteering, doesn’t perform well under duress
Conscientiousness	Cautious, like to be accurate, high in detail and planning	Wants perfection despite the costs, needs validations to be happy, doesn’t like taking chance

Table 1 - Personality Traits (Knepper, 2013)

With the consideration of different personality skills involved, negotiators can be divided in to 2 distinct categories as soft negotiators and tough negotiators. The following table shows a comparison between the 2 types.

Tough negotiators	Soft negotiators
Demands openly and doesn’t budge from their solution or idea	Modest and not over ambitious
Hard on people and problem. Treats the other party as adversaries	Treat the other party in a friendly manner and try to come to a peaceful agreement
Have high expectations	Doesn’t pressurize others but may yield to pressure
Doesn’t trust others	Trusts others
Not scared deadlocks or threats	Avoids deadlock and threats
Scared of time constraints	Might accept losses in order to come to agreements
Takes more, gives less	Gives more than needed

Table 2 - Types of negotiators (University of Utrecht, 2013)

Negotiating Styles

When conducting negotiations, there are different styles that the negotiators use which are based on their personality traits. As stated by Harvard Medical School (n. d) these styles can be categorized as Competing, Collaborating, Compromising, Avoiding and Accommodating. The following diagram depicts the characteristics of these styles.

Table 3 - Negotiating Styles (Harvard Medical School, n. d)

In order to determine the students’ negotiating styles, the lecturer provided a self-assessment which had a series of questions that was given marks according to the answer that was selected and a score was given. The author’s result of the assessment is as follows;

Style	Score	Interpretation
Competing	13	Low on competing style
Avoiding	16	Moderate to high in avoiding style
Collaborating	22	High on collaboration style
Accommodating	22	High on accommodating style
Compromising	20	High on compromising style

According to the above results it can be interpreted that the author likes to negotiate in a manner that all parties are satisfied and a positive outcome is obtained. It can be stated that the author is a soft negotiator and tries to avoid conflicts. However based on personal experiences, the author doesn’t entirely agree with the above results as the author tends to display characteristics of tough negotiators most of the time. Hence in author isn’t satisfied with the credibility of the self-assessment.

Guidelines for an effective negotiation

It’s important to know certain acceptable and favorable ways in conducting negotiations so as to avoid conflicts and arrive at contented agreements. According to Weiss and Hughes (2010) the following are some points to be considered in negotiations.

·         Be well prepared before a negotiation. It’s important to have thorough background knowledge of the situation and the parties involved and a structured process in hand as well as a steady and a disciplined composure

·         Create a corporative atmosphere for the parties to be comfortable during the negotiation without distractions

·         Always listen well to the other party before arriving at conclusions. It’s important to fully understand their need before assuming anything and taking rash actions.

·         Gain the trust of the other party

·         Try to look at every possible outcome before arriving at a final conclusion. Always try to seek for a win-win solution

·         Be mindful about what is needed and what you are ready to give up. It helps in reducing conflict of interests

·         Try persuasion over pressurizing by backing up your idea with logic and reasoned arguments.

BATNA (Best Alternative To Negotiated Agreement)

This was introduced by Roger Fisher and Williams Ury which states about the best possible outcome of a negotiation, even if it doesn’t satisfy fully the intended outcome. It’s the best alternative when the other party refuses negotiations or corporation. Similar to a backup plan, BATNA is an option that can be compared with other options available so that both parties will have a satisfactory outcome. BATNA helps to increase the bargaining power and helps to have a level ground with the other party if it come to difficult situations. (Spangler, 2012)

Spangler (2012) states that in order to determine a good BATNA there are 3 aspects to be covered. Firstly a list of actions should be compiled to be used in situations where an agreement is not reached. Next the ideas and options that are generated should be improved so that they can be converted to practical actions. Finally the best idea should be selected wisely. A BATNA should be attractive as the other party will accept it based on its attractiveness and the advantages to everyone.

Having a BATNA in a negotiation is a good approach in many situations. It helps in having a backup plan ready if all others fail thus not letting the negotiation to fail. Venter (2013) states that having a BATNA will help to avoid situations where is high pressure to make agreements where there will be fears of the expected outcome. It also helps to avoid the possibilities of options being failed when negotiators gets over confident about their options. BATNA helps in avoiding arriving at win-lose agreements and giving a win-win outcome to parties in a negotiation. Hence it’s important that companies should always be armed with a BATNA in event of negotiations.

In conclusion the author would like to state that it was a highly useful topic that provided much information that the author was unaware of. Specially the self-assessment provided an insight on how the author acts during negotiations. It’s is important to know the correct way of negotiating, specially within the industry where there are numerous instances will be encountered. As a student studying BIT negotiations with customers is inevitable and this was a great opportunity in learning the appropriate method to deal with it. The author likes to improve her negotiation techniques so as to become an effective negotiator in the future. 

References

Glaser, T. 2005. Conflict Research Consortium BOOK SUMMARY : Getting to Yes: Negotiating Agreement Without Giving In. [online] Available at: http://www.colorado.edu/conflict/peace/example/fish7513.htm [Accessed: 12 Nov 2013].

Harvard Law School. 2013. Negotiation Skills. [online] Available at: http://www.pon.harvard.edu/category/daily/negotiation-skills-daily/ [Accessed: 12 Nov 2013].

Harvard Medical School. n.d. NEGOTIATION STYLES. [e-book] Boston: Harvard Medical School. Available through: http://hms.harvard.edu/sites/default/files/assets/Sites/Ombuds/files/HMS.HSDM_.HSPH_.NEGOTIATION.STYLES.WhenToUseWhichStyle.pdf [Accessed: 12 Nov 2013].

Knepper, M. 2013. How Personality Dimensions Effect Negotiating Style and Tone. [e-book] Ryba Associates, Inc.. Available through: http://www.neostc.org/download/January_2013_Program_Presentation_Slides.pdfMar [Accessed: 12 Nov 2013].

Smoliar, L. 2013. Stop Bargaining and Start Negotiating. [online] Available at: http://www.inc.com/laura-smoliar/the-difference-between-bargaining-and-negotiating.html [Accessed: 12 Nov 2013].

Spangler, B. 2012. Best Alternative to a Negotiated Agreement (BATNA) | Beyond Intractability. [online] Available at: http://www.beyondintractability.org/essay/batna [Accessed: 12 Nov 2013].

University Of Utrecht. 2004. Negotiations. [e-book] Utrecht: University of Utrecht. Available through: http://www.cs.uu.nl/docs/vakken/vm/college9.pdf [Accessed: 12 Nov 2013].

Venter, D. 2013. BATNA Explained | Negotiation Academy. [online] Available at: http://www.negotiationtraining.com.au/articles/next-best-option/ [Accessed: 12 Nov 2013].

Weiss, J. and Hughes, J. 2010. Implementing Strategies in Extreme Negotiations. [online] Available at: http://hbr.org/web/ideas-in-practice/implementing-strategies-in-extreme-negotiations [Accessed: 12 Nov 2013].

Goal Setting

An idea of a person or a company of their future plans/objectives and how they are going to achieve it can simply be called as goal setting. It is a way of formally and constructively planning in order to achieve the needed. Foster (2013) states that that “setting goals put you in the driver’s seat”. This is due to the fact that it gives you control of your life and to precisely accomplish targets in your life by avoiding obstructions that might come in the way of achieving it.

Setting goals helps in making the present vision into a future reality. They are done step-wise, by deciding on the goal then deciding on the ways to achieve it by breaking it down to levels and finally working towards the ultimate result.

As stated by Stanley (2013) and Mayland Community College (2004), the following are some benefits of goal setting.

• ·         Transforms dreams/visions into a reality
• ·         Helps in maintaining focus and the direction in achieving the ultimate purpose
• ·         Reflects a person’s values as goals are guided by values and behaviors
• ·         Helps to be aware of ones strengths and weaknesses
• ·         Enhances and empowers the decision making capabilities
• ·         Increases motivation and give a purpose to do tasks
• ·         Helps to accept victory and defeat as one as well as to be responsible for one’s own actions

There are many ways that goals can be set. SMART goal setting is one of the popular and effective methods of goal setting. The following diagram depicts how to set SMART goals as stated by Extension (2008)

Figure 1 - SMART goals (Extension, 2008)

As shown above, in order to create SMART goals there are 5 areas that should be fulfilled. These goals can be further broken as short term, medium term and long term goals. Extension (2008) stated describes short term goals as goals that can be attained within a few days, weeks or months. Medium term goals are achievable within months or a couple of years and long term goals are achievable in more than 3-4 years. As requested by the lecturer, the author listed down her goals as follows

1. 1.      Short term

ü  Find a project proposal by the end of November

ü  Obtain A grades for the 3 current modules

1. 2.      Medium term

ü  Obtain a 1^st Class in completion of the BIT Degree in year 2014 by maintaining grades above 13

ü  To get a new mobile by beginning of 2015 with the author’s own money, the latest model at that time.

1. 3.      Long term

ü  Travel to Spain, Italy, France, Hawaii, Egypt and Greece before 2020 in business class

ü  To own a 5 star restaurant by the age of 35

Mackenzie (2013) states that another method for effective goal setting is GROW model. This helps in problem solving, generating good decisions and learning new skills. The GROW model can be described as follows.  

           G (Goal) – goals that are set, short or long term

           R (Reality) – asking question that helps to see reality and to improve self-awareness

           O (Option) – suggesting many options as possible which are creative and unique

           W (Will) – choosing the best option and how to embark on achieving through that

Learning about setting effective goals is important to everyone. Though people doesn’t realize, goals are set all the time, every minute every day. However small or big the goal is it’s important to know the correct way of setting the goal and working towards it. The effective methods that are used for goal setting should be learned and be applied when setting one’s own goal as they will give a solid foundation and guidance in achieving those goals. It helps in eliminating the risks of setting unrealistic and unplanned goals. Therefor the author would like to conclude that it’s important to have goals as persons or as an organization, and it’s more important to know how to achieve those goals effectively and successfully.

References

Extension. 2008. What are SMART Goals?. [online] Available at: http://www.extension.org/pages/11229/what-are-smart-goals#.Unz1bY2VOos [Accessed: 4 Nov 2013].

Foster, B. 2013. 10 Steps to Successful Goal Setting. [online] Available at: http://www.huffingtonpost.com/bradley-foster/how-to-set-goals_b_3226083.html [Accessed: 4 Nov 2013].

Mackenzie, B. 2013. Goal Setting. [online] Available at: http://www.brianmac.co.uk/goals.htm [Accessed: 4 Nov 2013].

Mayland Community College. 2004. Setting goals for success. [e-book] Mayland Community College. Available through: http://www.mayland.edu/aca111/GoalSetting.pdf [Accessed: 4 Nov 2013].

Stanley, C. 2013. The Advantages of Goal Setting. [online] Available at: http://www.christianpost.com/news/the-advantages-of-goal-setting-96016/ [Accessed: 4 Nov 2013].

Time Management

Time management is an important aspect in a person’s life, knowing how to effectively manage your time so that it will not be wasted and can obtain maximum use of it. University of Illinois (2007) states that successful time management means “accomplishing what is most important for you”. In order to accomplish your goals successfully, one must have ways of managing time. University of Illinois (2007) further states that many people try to maintain methods that are not suitable or adaptable for them. Techniques used can differ from person to person and it is important that one should identify a suitable time management technique for themselves.

The students were asked to state the various methods that are used by them to save time in doing their daily activities and the following is a list of items that was revealed.

Ø  Having phone reminders

Ø  Creating a to-do list

Ø  Making timetables

Ø  Roughly allocating times for the tasks due on a particular day

Ø  Prioritizing work

   Apart from the above ways given by the students the lecturer too added some methods of saving time such as;

Ø  Delegating work when possible

Ø  Start the day with the hardest task and work towards the easiest or vice versa

Ø  Not accommodating unscheduled tasks (sudden parties, meetings etc.) unless it’s absolutely necessary

Ø  Multitasking

Ø  Doing urgent matters rather than important matters

University of Pennsylvania (n. d) states that a major reason for poor time management is procrastination. They propose a framework that can be used for effective time management when doing tasks such as projects. It consists of the following 4 steps;

1. 1.      Preview – get an idea of the task at hand, what should be done etc.
2. 2.      Plan – make an orderly list of things that should be done in order to accomplish the task
3. 3.      Schedule –allocate rough time slots for various parts of the task
4. 4.      Get started – start the task in accordance with the first item needed to be completed
5. 5.      Get it done – when each step is done successfully congratulate yourself so that you will be motivated to continue effectively

There are many techniques available to manage time effectively. Out of those, the Eisenhower Matrix is a popular method of prioritizing the tasks to be completed. According to Michalakidis (2013), the Eisenhower principle is defined as “what is important is seldom urgent and what is urgent is seldom important”.  An important task helps to achieve personal goals while an urgent task is often concerned about another’s goal and needs immediate attention.

The following figure displays how an Eisenhower matrix is drawn as stated by Michalakidis (2013)

Figure 1 - Eisenhower matrix (Michalakidis, 2013)

The students were asked to draw an Eisenhower matrix in accordance with the activities that is scheduled to be done on the particular day. The author’s Eisenhower matrix is shown below

	Urgent	Not Urgent
Important	·         Do BDT home work ·         Attending lectures	·         Help a friend with the project ·         Make ARMPD blog ·         Find a FYP ·         Do chores at home
Not important		·         Watch a movie

Mind Mapping is another way of managing time by evaluating the tasks at hand. According to MindTools (2013), mind maps helps in effective learning, summarizing, brainstorming, improving information recording methods, solving problems creatively and to study/memorize information. It was popularized by Tony Buzan and can help to simplify difficult tasks so that it can be easily understood and accomplished. Mind maps can be hand drawn or computerized. There are various software such as CMAP Tools, FreeMind etc. that can be used.

Illumine Training (2013) has developed a basic structure for a mind map based on Tony Buzan’s concept which uses images, colors and catch phrases/words.

Figure 2 - Mind Map structure (Illumine Training, 2013)

The students were grouped into teams of four and were instructed to create a mind map based on the activities of an Eisenhower matrix of a member of the group depicting various activities to be done, the challenges that should be faced when accomplishing the tasks and ways of overcoming them. The following diagram is the mind map created by the author’s group

Figure 3 - Mind Map (Author, 2013)

Learning about effective time management is important to students when engaging projects, assignments, studying for exams etc. In future it is largely useful when working in the industry, to achieve targets and objectives set by the organization effectively. The author believes that it is important to learn about time management techniques and compare and contrast them in order to determine the best applicable technique to one’s life and the ability to effectively manage time determines the success of the goals that is achieved by a person. 

References

Illumine Training. 2013. How to Make a Mind Map. [online] Available at: http://www.mind-mapping.co.uk/make-mind-map.htm [Accessed: 30 Oct 2013].

Michalakidis, G. 2013. The urgency/importance matrix – Focus on good time management. [online] Available at: http://www.clininf.eu/practicemanagement/managers-mentorship/134.html [Accessed: 30 Oct 2013].

Mindtools. 2013. Mind Maps - Mind Mapping Training from MindTools.com. [online] Available at: http://www.mindtools.com/pages/article/newISS_01.htm [Accessed: 30 Oct 2013].

University Of Illinois. 2007. Counseling Center » Time Management. [online] Available at: http://www.counselingcenter.illinois.edu/self-help-brochures/academic-difficulties/time-management/ [Accessed: 30 Oct 2013].

University Of Pennsylvania. n.d. One of These Days I’ll Stop Procrastinating. [e-book] Spruce Street: University of Pennsylvania. Available through: http://www.vpul.upenn.edu/lrc/lr/PDF/procrastination%20%28W%29.pdf [Accessed: 30 Oct 2013].