Dyanamic-Negotiation---Seven-Propositions-About-Co

DoNotCopy9-801-267REV:OCTOBER16,2002________________________________________________________________________________________________________________ProfessorMichaelWatkinspreparedthisnoteasthebasisforclassdiscussion.Copyright©2000PresidentandFellowsofHarvardCollege.Toordercopiesorrequestpermissiontoreproducematerials,call1-800-545-7685,writeHarvardBusinessSchoolPublishing,Boston,MA02163,orgoto—electronic,mechanical,photocopying,recording,orotherwise—withoutthepermissionofHarvardBusinessSchool.MICHAELWATKINSDynamicNegotiation:SevenPropositionsaboutComplexNegotiationsWhiletherearemanybooksandarticlesonthebasicsofnegotiating,fewaddressthecomplexitiesthatcharacterizereal-lifenegotiationsingovernmentandbusiness.Practitionerscanobtainsoundadviceonconductingnegotiationsinvolvingafewpartiesandamodestnumberofissues.Butthereislittleinformationavailableonhowtobuildcoalitionsinmultipartynegotiations,ortomanageinternaldecisionmakingwhilerepresentingone’sorganization,ortopreventdisputesfromescalatingandpoisoningdeals.Whileimportantresearchhasbeendoneonthesesubjects,littleofitisaccessible,eventothemostsophisticatedpractitioners.Moredeeply,existingmodelsofthenegotiationprocesstendtosufferfromoneormoreofthreefundamentaldeficiencies:theyaresimplistic,sterile,and/orstatic.Theyaresimplisticwhennegotiationsaretreatedasisolatedinteractionsinvolvingjustafewnegotiatorsandwell-specifiedissueswhenmostnontrivialnegotiationsinvolvemanyparties,evolvingsetsofissues,representativesoforganizations,andlinkagestoothernegotiations.Theyaresterilewhentheyabstractawaytheemotionaldynamicsoftheprocess,ignoringtherealitythatnegotiationsalmostalwaysinvolveexistingorlatentsourcesofconflictthatcouldescalateandpoisonthepotentialforagreement.Theyarestaticwhentheydon’tdoagoodjobofcharacterizingthecomplexdynamicsthatshapetheevolutionoftheprocess.Toillustratethesedeficiencies,considernegotiatingtopurchaseanewhome.Thiscommonplacesituationcouldbetreatedasaone-timenegotiationinvolvingtwopartiesandafewissues.Youdecidewhathouseyouwanttobuy,dothenecessarypre-negotiationpreparation,establishingyourinterests,alternativestoagreement(i.e.,BestAlternativeToaNegotiatedAgreement,orBATNA),andbottom-line,andthenassessingthoseoftheseller.Youmakeanofferandthesellerresponds.Theprocessadvancesthroughofferandcounterofferuntilagreementisreachedoryouabandonyourefforts.Whenviewedinthisway,thekeyistodogoodpre-negotiationpreparationandthentoformulateastrategyformakingandrespondingtooffers.Butisitreallythatsimple?Asanyonewhohasboughtahouseknowsalltoowell,inpracticethingstendtoberathermorecomplicated.Youmaybelookingatmanypropertiesandthesellerlikewisemaybedealingwithmultiplepotentialbuyers.Youprobablyhavetoarrangeamortgagewithabankandmaybeexploringanumberofoptionsforfinancing.Youmayneedtoclosethesaleonyourcurrenthomeandmovebyacertaindate,sodeadlinesmayshapetheprocess.Beyondtheobviousissueofprice,repairsandotherissuesmayemergeaspotentialdeal-breakers.EvenasyouDoNotCopy801-267DynamicNegotiation:SevenPropositionsaboutComplexNegotiations2negotiatewiththeseller,youalsomayhavetoengageintenseintra-familynegotiationswithyourspouse.Finally,youmayhavetonegotiatewithareal-estateagentwhorepresentstheseller,butwhohashisorherownindependentinterests,includingpreservingone’sreputationandgettingonwithotherbusiness.This“simple”housepurchaseisactuallyamultiparty,multi-issuenegotiationinvolvingrepresentatives,deadlines,andlinkagesamongsetsofnegotiations.YourperceptionsofyourinterestsandBATNA,farfrombeingstatic,maychangedramaticallyastheprocessunfolds.Mostreal-worldnegotiationsexhibitthesesortsofcomplexities.Infact,whenonegoeslookingfor“simple”negotiations,itprovesachallengetofindthematall.Theimplicationisthatframeworksthatfocusonsimplenegotiationscanfallfarshortofwhatisnecessarytohelppractitionerswiththesituationstheyfaceintheirprofessionalandevenprivatelives.Complexityistheruleinnegotiation,nottheexception.Thisnotechallengesthewaywethinkaboutnegotiation,highlightingtheneedtomovefromsimplistic,sterile,andstaticconceptualizationstofullyembracethecomplexitythatcharacterizesreal-worldnegotiations.Atthesametimewerecognizetheneedtoavoidbeingswampedbycomplexityandtodevelopframeworksandrulesofthumbthatcanhelppractitionerstonegotiateinacomplexworld.SevenPropositionsThefollowingsevenpropositionsaboutcomplexnegotiationslayoutkeydimensionsofcomplexityinnegotiationandputforwardconclusionsaboutwhatittakestobeeffectiveinnegotiatingdynamically:1.Uncertaintyandambiguityarefactsoflifeinnegotiation.Skillednegotiatorsseektolearnandtoshapeperceptionsthroughorchestratedactionstakenatandawayfromthenegotiatingtable.2.Thereisorderinthechaosofnegotiation.Negotiationsexhibitclassicnonlinearpatternsofinteractionthatskillednegotiatorsrecognizeandexploit.3.Whilenegotiationsoccurringindiversecontextsmayappeartobeverydifferent,theyoftenhavesimilarunderlyingstructures.Skillednegotiatorsreco