Multiparty Negotiations - Power and Coalition Building

Power and Negotiation Agenda • Telepro Negotiation Discussion • Federated Science Negotiation Challenge • Negotiation Results • Federated Science Debrief next week Next week 1. Negotiating Change-4 person • Pre-exercise increased word limit 700 words 2. Pre-exercise Regular format 3. Clearly identify parts of assignment • • • • • • • My aspiration is My BATNA is My reservation point is My strengths/sources of power are My weaknesses are Emotions: I feel xxx I can manage my feeling by Telepro Negotiation Debrief Riding, Gary and Schroth, Holly, Telepro, Dispute Resolution Research Center, Kellogg School of Management. This is a dispute between a supervisor and an employee in which a third party, the supervisor's manager, becomes involved. The case can be used to teach mediation in the management context. It also illustrates how power and status differences between parties can be managed in a mediated context. Preparation: 15-20 min. Negotiation: 70 min. When do you need a third-party? • Deadlock or impasse • Unproductive tension and hostility • Anger and resentment overwhelm negotiators • Mistrust and suspicion are high Third-Party Intervention The goal of third-party intervention is to resolve a dispute. • Mediators influence process • Arbitrator determine outcome What can a third-party do to assist? • Reduce of tension • Control the number of issues • Enhance communication • Establish common ground • Highlight the desirability of certain decision criteria • Determine the outcome of a dispute Third-Party Intervention • Mediators influence process • Arbitrator determine outcome Mediator vs. Arbitrators Mediators seek to have the parties themselves develop and endorse the agreement. Arbitrators are most interested in outcomes and have the power to render a binding decision. Mediator vs. Arbitrators Mediators influence process Benefits Satisfaction Commitment to agreement Arbitrator determine outcome Pitfalls Chilling effect (final offer) Dependence Less commitment to settlement (binding) Mediation Effectiveness •Identifying issues •Uncovering underlying interests and concerns •Setting Agendas •Packaging, sequencing, and prioritizing agenda items •Interpreting and shaping proposals •Making suggestions for possible settlements Telepro Dispute Resolution Your Outcomes Dave’s View of Process Identify the issues Reduce Tension Uncover concerns Set the agenda Package agenda Shape proposal Make suggestions Make settlement attractive TOTAL Dave 1 Dave2 8.4 6.8 6.8 7.7 6.8 7.0 7.2 6.8 8.7 9.0 5.8 57.4 7.0 59.5 Telepro Satisfaction as Effectiveness Satisfaction? Dave 1 Jeff Kris Dave2 54/80 Process 50/80 9/10 Outcome 8/10 55/80 Process 45/80 8/10 Outcome 6/10 Satisfaction? Jeff Kris Dave 1 Dave2 (med.) (arb.) 9/10 Outcome 8/10 8/10 Outcome 6/10 Satisfaction? Dave 1 Dave2 (med.) (arb.) Jeff 54/80 Process 50/80 Kris 55/80 Process 45/80 Relationship Rating Received by Role Group: Jeff Dave 1 Dave2 (med.) (arb.) 4.68 Kris Dave 4.46 4.56 5.20 5.38 Relationship Rating Received by Role Group: Dave 1 Dave2 (med.) (arb.) Jeff 4.68 4.46 Kris 4.30 4.82 Dave 5.20 5.38 Perspective Taking Rating Received by Role Group: Dave 1 Dave2 (med.) (arb.) Jeff 5.56 3.92 Dave 6.47 5.95 Perspective Taking Rating Received by Role Group: Dave 1 Dave2 (med.) (arb.) Jeff 5.56 3.92 Kris 4.23 4.83 Dave 6.47 5.95 Trust Rating Received by Role Group: Dave 1 (med.) Dave2 (arb.) Jeff 3.83 4.15 Kris 4.35 4.63 Dave 5.02 5.66 Managers As Third-Parties Mediation increases satisfaction and commitment. Mediation can be misperceived as indecision or lack of leadership by subordinates. Arbitration, Rights, Power Power The trouble with •Power -- impact if balance of power shifts • dissatisfaction • resentment • revenge • non-compliance Rights The trouble with Rights • fairness of standard can be difficult to establish Rights and Power 1.Power can bring players to the table • e.g., environmental claims about hazardous waste 2. Only adjudication can authoritatively resolve some issues •e.g., Supreme Court Cases Fisher, R., Ury, W, and Patton, B., Getting to Yes: Video Workshop on Negotiation, Harvard Negotiation Project. Interests The trouble with Interests •Individual must be willing to come to the table The benefit of Interests •Can help uncover hidden problems •Identify trade-offs /win-win solution •Higher satisfaction with solution 5 Cures for Negotiation Breakdowns (Thompson, L., 2001 & Lewicki, R.J., 1999 & 2001) 1. Reduce Tension •Acknowledge Other’s feelings •Separate Parties •reciprocal de-escalation (a mutual good faith gesture) 2. Improve communication •Role reversal •Perspective Taking 3. Controlling Issues •reduce the number of parties and substantive issues •state principles •fractionate big issues (unbundle) •depersonalize 5 Cures for Negotiation Breakdowns (Thompson, L., 2001 & Lewicki, R.J., 1999 & 2001) 4. Establish Commonalities • super ordinate goals • common enemies • agree on rules and procedures • provide integrative frameworks 5. Make preferred option more desirable •framing a “yes able” proposal •de-emphasize demands and threats •sweeten the offer •use objective criteria Disputes Take A ways 1. Disputes involve a claim and its rejection 2. Disputes can be resolved through the use of interests, rights or power. 3. Interest-based solutions are most effective in terms of transaction costs, satisfaction with outcomes, relationship effects and recurrence Assisted Negotiation Take A ways Third-party involvement represents the failure of the negotiation process. Third parties can • provide breathing space •Re-establish communication •Refocus on substantive issues •Repair strained relationships • recommend time limits •Salvage sunk costs of stalled negotiations •Increase level of negotiator satisfaction Federated Science Negotiation Challenge 1. You have 20 minutes to prepare the case on your own. 2. You will have 10 minutes to plan further with a peer 3. You will have exactly 40 minutes to negotiate. 4. You will have 10 minutes to fill out the post negotiation paperwork and white board. 5. We will go over outcomes. Debrief next week. Mannix, E., Federated Science Fund, 1997, Dispute Resolution Research Center, Kellogg School of Management. Coalitions (Thompson, L., 2001) --Unite people for a single purpose Your coalition partners will vary in their agreement With your objectives and in their trust in you. First Define your Objectives! Federated Science: The Core Solution (Thompson, L., 2001) Step 1. Solve system of equations Step 2. Calculate the amount you are short Step 3. Reduce each parties share by 1/3 of amt. short The Core Solution -equal reduction (Thompson, L., 2001) Step 1. Solve system of equations Stockman= $260,000 Turbo= $180,000 United= $120,000 Step 2. Calculate the amount you are short and divide by number of parties. $560,000-$480,000=$80,000 $80,000/3=$26,666.67 Step 3. Reduce each parties share equally. Stockman= $233,333.3 Turbo= $153,333.3 United= $93,333.3 The Core Solution with a Twist -equitable reduction Step 1. Solve system of equations Stockman= $260,000 Turbo= $180,000 United= $120,000 Step 2. Calculate the amount you are short and $560,000-$480,000=$80,000 Step 3. Reduce each parties share proportionally. Stockman= $260,000 – (80,000*.464)=222,880 Turbo= $180,000– (80,000*.322)=154,240 United= $120,000– (80,000*.212)=102,880 The Shapley Model --determine value added Joining Order Stockman Value added STU 0 SUT 0 TUS 300 TSU Average 440 1300/6 United Value added 40 380 0 0 100 UST UTS Total/6 Turbo Value added 300 940/6 40 0 0 640/6 The Shapley Model Joining Order Stockman Value added --determine value added Turbo Value added United Value added STU 0 440 40 SUT 0 100 380 TUS 300 0 180 TSU 440 40 UST 380 180 1300/6 0 100 300 940/6 0 0 640/6 216,667 156,667 106,667 UTS Total/6 Average Raiffa’s Hybrid Model --the mean of the Shapley and core models Hybrid Core Shapley Stockman 233,333 216,667 225,000 Turbo 153,333 156,667 155,000 United 93, 333 106,667 100,000 Next week: Coalition Politics --Unite people for a single purpose Your coalition partners will vary in their agreement With your objectives and in their trust in you. Coalition partners may be 1. Allies or Bedfellows 2. Opponents or adversaries 3. Fence sitters