1. International negotiation
Unit 4

2. Objetives Understand the concept of negotiation and its key elements.
Examine how to use negotiation to manage situations of interdependence.
Consider how negotiations may be practical in management conflict.
Understand the importance of goal setting in negotiations.
Analyze the major elements of negotiation strategy and the process of selecting a strategy.
Understand how most negotiations evolve through stages and phases.

3. Approach to the Subject
Negotiations
Negotiations occur for several reasons:
To agree on how to share or divide a limited resource
To create something new that neither party could attain on his or her own
To resolve a problem or dispute between the parties
Approach to the Subject
Bargaining.
Negotiation.
Three Important Themes
Negotiation.
Interdependence.
Understanding.

4. Interdependence Characteristics of a Negotiation Situation
There are two or more parties
There is a conflict of needs and desires between two or more parties
Parties negotiate because they think they can get a better deal than by simply accepting what the other side offers them
Parties expect a “give-and-take” process
Interdependence
This mutual dependency is called interdependence
Interdependent goals are an important aspect of negotiation
Interdependent parties are characterized by interlocking goals
Having interdependent goals does not mean that everyone wants or needs exactly the same thing
A mix of convergent and conflicting goals characterizes many interdependent relationships

5. Types of Interdependence Affect Outcomes
Interdependence and the structure of the situation shape processes and outcomes.
Alternatives Shape Interdependence
Evaluating interdependence depends heavily on the alternatives to working together
The desirability to work together is better for outcomes
Best available alternative: BATNA (acronym for Best Alternative to a Negotiated Agreement)
Mutual Adjustment
Continues throughout the negotiation as both parties act to influence the other
One of the key causes of the changes that occur during a negotiation
The effective negotiator needs to understand how people will adjust and readjust and how the negotiations might twist and turn

6. Mutual Adjustment and Concession Making
When one party agrees to make a change in his/her position, a concession has been made
Concessions restrict the range of options
When a concession is made, the bargaining range is further constrained
Mutual Adjustment and Concession Making
When one party agrees to make a change in his/her position, a concession has been made
Concessions restrict the range of options
When a concession is made, the bargaining range is further constrained

7. Two Dilemmas in Mutual Adjustment
Dilemma of honesty.
Dilemma of trust.
Value Claiming and Value Creation
Opportunities to “win” or share resources.
Most actual negotiations are a combination of claiming and creating value processes.
Value differences that exist between negotiators include:
Differences in interest
Differences in judgments about the future
Differences in risk tolerance
Differences in time preferences

8. Dysfunctions of Conflict
Conflict may be defined as a:
“Sharp disagreement or opposition" and includes "the perceived divergence of interest, or a belief that the parties' current aspirations cannot be achieved simultaneously“.
Levels of Conflict
Intrapersonal or intrapsychic conflict.
Interpersonal conflict.
Intragroup / Intergroup conflict.
Dysfunctions of Conflict
Competitive, win-lose goals.
Misperception and bias.
Emotionality.
Decreased communication.

9. Functions and Benefits of Conflict
Blurred issues.
Rigid commitments.
Magnified differences, minimized similarities.
Escalation of conflict.
Functions and Benefits of Conflict
Makes organizational members more aware and able to cope with problems through discussion.
Promises organizational change and adaptation.
Strengthens relationships and heightens morale.
Promotes awareness of self and others.
Enhances personal development.
Encourages psychological development—it helps people become more accurate and realistic in their self-appraisals.
Can be stimulating and fun.

10. Styles of Conflict Management
Contending.
Yielding.
Inaction.
Problem solving.
Compromising.
Goals – The Focus That Drives Negotiation Strategy
Determining goals is the first step in the negotiation process.
Negotiators should specify goals and objectives clearly.
The goals set have direct and indirect effects on the negotiator’s strategy.
The Direct and Indirect Effects of Goals on Strategy
Direct effects.
Indirect effects.

11. Strategy versus Tactics
Planning.
Approaches to Strategy
Unilateral.
Bilateral.
The Dual Concerns Model
Avoidance.
Competition.
Collaboration.
Accommodation.

12. The Nonengagement Strategy: Avoidance
Strategic Options
Per the Dual Concerns Model, choice of strategy is reflected in the answers to two questions:
How much concern do I have in achieving my desired outcomes at stake in the negotiation?
How much concern do I have for the current and future quality of the relationship with the other party?
The Nonengagement Strategy: Avoidance
If one is able to meet one’s needs without negotiating at all, it may make sense to use an avoidance strategy
It simply may not be worth the time and effort to negotiate
The decision to negotiate is closely related to the desirability of available alternatives

13. Active-Engagement Strategies
Competition.
Collaboration.
Accommodation.
Key Steps to an Ideal Negotiation Process
Preparation.
Relationship building.
Information gathering.
Information using.
Bidding.
Closing the deal.
Implementing the agreement

14. Information Needed to Prepare Effectively for Engaging the Other Party
Getting Ready to Implement the Strategy: The Planning Process
Define the issues.
Assemble the issues and define the bargaining mix.
Define your interests.
Know your limits and alternatives.
Set your objectives (targets) and opening bids (where to start).
Assess constituents and the social context of the negotiation.
Analyze the other party.
Present the issues to the other party.
Information Needed to Prepare Effectively for Engaging the Other Party
Resources, issues, and bargaining mix.
Interests and needs.
Walkaway point and alternative(s).
Targets and opening bids.

15. Constituents, social structure, and authority to make an agreement.
Reputation and negotiation style.
Likely strategy and tactics.

16. Activities
To be evaluated %
Forum: Creating a global business. Watch the video “BP’s Global Brand”, and discuss it through the following questions:
What are the key elements of BP’s strategy?
How would you create a global business?
Interventions: content, consistent with the discussion topic and argument.
10%
Write on a paper about the strategy followed by General Motors, Google and Domino’s Pizza, considering the characteristics of each.
Structure, content, grammar, consistent with the topic of the video and argument.