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Background reading material by Professor Omar Hasan Kasule Sr. for Year 2 PPSD session on Wednesday 14th November 2007
1.0 PRELIMINARIES
1.1 WINNING STRATEGY
Negotiating is strategy. You must have either an equilibrium or dominant strategy. If your strategy is dominated you will lose your interests. Since negotiation is strategy, never enter a negotiation unless you have a well worked out strategy and a clear objective. You should know your bottom-line from the beginning. You could change it upwards but never downwards. You should always have your worst-case scenario well worked out. You must take enough time to plan your negotiating strategy. Identify what is non-negotiable for you and the other party. Ask yourself whether you or they can afford a deadlock? What are your and their alternatives in case of a deadlock? You must not give away your strategy by careless talk. You can be truthful without divulging secrets. When pressed, it is better to say 'no comment' or non-disclosure of confidential information.
1.2 UNDERSTANDING THE OTHER SIDE
A key to good negotiation is to be able to understand the other party's negotiation strategy from the start of the negotiation. You should get as much information as possible about the negotiating party and their organization. Try to assess the other side's negotiation style: aggressive, cooperative, emotional etc. The other side may have hidden agendas. You must look for clues to uncover and understand them.
Understanding the validity of others’ arguments: Mature negotiators acknowledge the strong and valid points of the other side and convince them that they understand their point of view. Understanding does not imply acceptance but goes a long way toward a win-win outcome.
2.0 WISE USE OF NEGOTIATION POWER
A powerful negotiator can walk away in a deadlock and not lose much. He has alternative ways of securing his interests. He is patient and has no deadlines. He has a right sense of timing and is a good listener. It is possible to use both power and persuasion. Never forget that power by itself can not get you to a settlement. It only helps prevent break-off of negotiations. Power should be used only to make it hard for the other party to say no.
The other party must be 'helped' to see reality. They have to realize what will happen if the negotiations fail. Telling the other party that if agreement is not reached on price the deal will be abandoned is using power to prevent them from saying no to further negotiations. To make them say yes you have to employ the win-win technics. Warn the other party but do not threaten. Warning can be positive as an advance notice. A threat is negative and counter-productive. It will elicit a reaction and complicate everything.
Power is better demonstrated than used. Once used it loses all its effect because the other side then retaliates. If power is to be used, it must be used as a last resort. Avoid provocations. If power is to be used, it must be employed in a graduated way. Start with minimum power and increase it incrementally until the desired effect is obtained. Be prepared to neutralize any reactions. In a negotiating situation, you can extend your power by forming coalitions to increase your leverage. You can appeal to third parties to support your position. Whenever you exercise power in a negotiation be careful to leave the other party a way out. You are likely to achieve your objectives this way with minimum effort.
3.0 WIN-WIN NEGOTIATION
3.1 WIN-WIN VS WIN-LOSE
You have to be very careful in using a win-lose formula in negotiations. It can work only if you have a decisive advantage in power and if future relationships do not matter (a rare combination). Win-lose situations often end up as lose-lose to the detriment of both parties. It is advisable aim at a win-win outcome even if you can get away with a win-lose outcome. This is to avoid potential problems and bad feelings in the future. You should always remember that there are risks associated with winning in a confrontational negotiation situation. You may win the battle and lose the war. Future opportunities may be forfeited by winning in a way that leaves behind scars that can not heal.
Rationality and objectivity: Never allow negotiations to wander from rationality. Justify your positions all along and require the others to do the same.
3.2 INTERESTS AND CONCESSIONS
Each negotiation has a mixture of compatible and incompatible interests. There will be no negotiations at all if the parties involved have nothing compatible at all; if there is no common ground to start from. Every negotiation involves making concessions and compromises, otherwise there is no rationale for starting negotiating at all. Direct conflict or avoidance may be the other alternatives. A successful negotiator should plan to achieve set objectives while making concessions and compromises on issues of no consequence to him but may be important for the other party. Negotiation is finally a refinement of the ancient art of tit for tat. If good faith is shown and the other party responds likewise, more good faith can be shown. If the response is negative, it is matched and some concession given earlier can be withdrawn.
4.0 CONDUCIVE CIRCUMSTANCES
4.1 PRIVACY
Difficult negotiations with a potential for conflict or even deadlock should always be conducted in private. Parties not directly involved should not be informed. Negotiators who have to consider public reactions to the negotiations may resort to irrational positions that will ruin negotiations that could have succeeded.
4.2 HANDICAP
Negotiation handicap: In a negotiating situation each party has a handicap that can be exploited by the other party: what will be lost if no agreement is reached?, how much can it afford to wait?. A good negotiator always works out the worst-case scenario. Among the handicaps are: lack of time, deadlines, etc
4.3 PATIENCE AND TIME IN NEGOTIATIONS
Patience is power; the most patient party usually wins. Patient negotiators are more calm, and relaxed. They take their time and control the negotiation process. You may be under pressure of a deadline in some cases, never disclose the fact to the other negotiating party. They will try to force you into concessions you do not want. You should never negotiate in haste, however be aware of prolonged never-ending negotiations. They may wear you out mentally so that you end up making concessions that you should not have made.
5.0 SUCCESSFUL CONCLUSION
5.1 MULTI-ISSUE NEGOTIATIONS
Simultaneous negotiation over several issues at the same time increases the possibility of a compromise because one party may make concessions on some issues it does not value very highly while the other party does the same for other issues.
5.2 BRINKMANSHIP
You should be careful about the use of brinkmanship or bluffs. They lead to disaster in most negotiating situations. When faced with an ultimatum, do not be hasty in responding. Try to probe and understand how serious it is. What are the underlying circumstances. What would happen if you called the bluff?