Negotiations and BargainingHow to get what you want when you interact with others

Published October 2011 Updated July 2014 16 lectures
Prof. Charles B. Craver
George Washington University Law School, USA

Business persons and lawyers negotiate regularly – even when they don’t realize they are negotiating. They negotiate with their own superiors and subordinates, their prospective and current clients, and on behalf of their firms and clients with outside parties. Most individuals have had minimal training in this critical area. Individuals... read morefrom many cultures dislike the haggling associated with most bargaining interactions. They assume that if they have been doing it for years, they must be doing it well, especially if they usually obtain what they hope to achieve. Nonetheless, they occasionally wonder about the attributes that are possessed by the most proficient negotiators.

It is important for business persons and lawyers to understand how negotiator styles influence their interactions. Should they be “win-win” cooperative/problem-solvers, “win-lose” competitive/adversarials, or “WIN-win” competitive/problem-solvers?

When business persons and lawyers prepare for bargaining interactions, they spend hours on the facts, the economic circumstances, the legal issues, cultural factors, and other relevant considerations. How much time do they spend on their actual bargaining strategy? Rarely more than ten to fifteen minutes! In fact, when most people begin their negotiations, they have only three things in mind directly related to their bargaining strategy: (1) their planned opening position; (2) where they hope to end up; and (3) their bottom line. In between where they begin and where they end up they wing it, thinking of their interaction as wholly unstructured.

Bargaining interactions are quite structured. The participants move through a series of stages. They initially prepare for their encounter by gathering the relevant information and by developing their bargaining strategy. They then work to establish rapport with the person(s) on the other side and to create a positive negotiation environment. They engage in an information exchange where they work to ascertain the items to be exchanged and the degree to which the other side values the different terms. During the next two stages, they work to divide the different items and to achieve a tentative agreement. During the final stage, they endeavor to generate an efficient accord which maximizes the joint returns obtained.

What bargaining tactics should they employ, and how should they counter the techniques being used by their opponents? Which techniques suit their own personalities, the personalities of their adversaries, and the particular circumstances involved?

Bargainers must listen carefully for verbal leaks which inadvertently disclose critical opponent information, and learn how to read non-verbal signals. Do men and women communicate differently? How do persons from low context cultures communicate differently from persons from high context cultures?

What are the optimal ways of influencing opponents and obtaining what you hope to achieve? How do different psychological factors influence the way in which people interact and make important bargaining decisions? How can individuals minimize the anxiety they often experience during critical bargaining interactions?

Most contemporary bargaining interactions take place at least partially through cell phone discussions and e-mail exchanges. What are the optimal ways to use these means of communication, and what are some of the practical and ethical problems involved?

When most persons commence bargaining interactions, they begin with elevated demands and deflated offers. They may over- or under-state the value of items to be exchanged for strategic purposes. Such “puffing” and “embellishment” are common. At what point would further misstatements constitute unethical behavior? Could the seller of a business suggest that he has an offer from another party when he does not? If he has another offer for $40 million, could he say that he has a $50 million offer?

How do business negotiations differ from other types of bargaining interactions? Many commercial dealings are now transnational is scope, as firms buy and sell goods and services with others around the world. How should such cross-cultural interactions be conducted?

When negotiating parties have difficulty reaching agreement, the assistance of neutral third party facilitators can be beneficial. What is the role of such mediators, and how should advocates interact with them? Even during established business relationships, disagreements may arise. What procedures can best be used to resolve such matters in an amicable manner?

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