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COMPETITIVE NEGOTIATIONS. Benefits of Integrative Bargaining  Increased efficiency.  Better agreements.  Preserving the relationship.  Reducing the.

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Presentation on theme: "COMPETITIVE NEGOTIATIONS. Benefits of Integrative Bargaining  Increased efficiency.  Better agreements.  Preserving the relationship.  Reducing the."— Presentation transcript:

1 COMPETITIVE NEGOTIATIONS

2 Benefits of Integrative Bargaining  Increased efficiency.  Better agreements.  Preserving the relationship.  Reducing the danger that the agreement will be repudiated.  Improve organization effectiveness.

3 The Limited Options of Competitive Dispute Resolution  Conflicts are Often Handled in a Competitive, “Positional” Way.  Disputes can spiral almost automatically through progressive stages in which the disputants harden positions, cease communications, employ advocates, distort perceptions, develop a sense of crisis, and commit ever-increasing amounts of funds, time, and energy.  This progression is sometimes endemic to the system. Such a system can exacerbate conflicts with the pressure of uncertainty of a decision by a third party (jury or judge) causing the conflict to settle.

4 The Limited Options of Competitive Dispute Resolution  Graphically illustrated, the positioning process looks like this: Issue Position Position

5 The Limited Options of Competitive Dispute Resolution  The parties often attempt to change each other’s perspective, something that is rarely achieved. As the inability to persuade becomes more obvious, the conflict escalates.Escalate IssuePosition

6 Escalation No Solution End of RelationshipEscalate IssuePosition

7 Going “Below the Line”  Focusing on interest may have better results. IssuePositionsInterest

8 Going “Below the Line”  To capture the potential of integrative bargaining, the parties must “go below the line” and conscientiously explore each party’s interests to see that they are satisfied.  Moreover, by focusing on interests, it is possible the parties can devise strategies to satisfy those interests that are creative and require less resources than strategies suggested by merely addressing the issues the parties raise and the positions they take.

9 Competitive Bargaining  Goal: To get the largest possible share of the bargaining range.  How: By demonstrating that the opposing side cannot get a better deal through further negotiation or trial.  Basic Format: Hide minimum (bottom line) or maximum (top dollar) disposition. Determine the deal most advantageous to the client and acceptable to the other side. Tactics can be used to change the oppositions minimum or maximum disposition.

10 Competitive and Distributive Bargaining  Assumes a relatively fixed pie or zero sum game.  Competitive bargaining starts from positions.  Parties need to realize there will be a bargaining dance; do not underestimate the need for both parties to negotiate.  There is a relationship between the size of the concession and time.  The bargaining dance usually ends about the mid point between two reasonable offers.

11 Basic Preparation for Competitive Negotiations  Define your opening, goals and bottom line.  Estimate your opponent’s goal and bottom line.  Prepare your factual, industry standard, legal, emotional arguments; prepare some competitive techniques and use anything else (with in the bounds of professional and ethical rules) that you think will give you leverage or help to persuade. Consider the other side’s arguments.  Plan what information you may want to disclose; identify information you never want to disclose. Define what information you want from the other side. (Give, Guard, Get).

12 Basic Preparation for Competitive Negotiations (cont.)  Try to get the other side to open; plan your opening (as high or low as possible with a credible argument) and plan your concessions. You must have a concession plan.  Make as small a concession as possible. Try to get the other side to make several concessions before you do.

13 ILLUSTRATION OF OPENING MOVES Defendant’s Opening Offer Plaintiff’s Reservation Figure Defendant’s Reservation Figure Plaintiff’s Opening Offer Zone of Agreement Insult Zone Credible Zone Reasonable Zone Credible Zone Insult Zone

14 Risks in Competitive Bargaining  Bias towards confrontation.  Focuses on manipulation.  There is less analysis and a competitive negotiator may not appreciate the other side’s position.  Interferes with personal and business relationships.  Communication is distorted.  It favors brinkmanship “this is my last offer”

15 The Law of Unintended Consequences  Dramatic action on a large system may produce effects that are quite unexpected and may be the opposite of what was intended. In particular, the long term effects may be in the opposite direction to the immediate effects.  Negotiation Effects Filing a lawsuit and/or competitive negotiations may sometimes result in terrible consequences for your client (remember it can be a bad game like the auction of the 20 dollar bill).

16 The Law of Unintended Consequences (cont.)  Competitive techniques can sometimes have a bad outcome – bad relationships, spending more money, delays, a declining position of leverage especially if you have a bad case (bluffing) or less money.  Be sure to explore the risks of competitive techniques before you use them.. Especially offensively, I use them a lot defensively but hesitate to use the, offensively.

17 Negotiating Styles of Participants Problem Solving Move Psychologically Toward Opponents Try to Maximize Joint Return Seek Reasonable Results Courteous and Sincere Begin with Realistic Opening Positions Rely on Objective Standards Rarely Use Threats Maximize Information Disclosure Open and Trusting Work to Satisfy Underlying Interests of Opponents Willing to Make Unilateral Concessions Try to Reason with Opponents Competitive/Adversarial Move Psychologically Against Opponents Try to Maximize Own Return Seek Extreme Results Adversarial and Disingenuous Begin with Unrealistic Opening Positions Focus on Own Positions Rather than Neutral Standards Frequently Use Threats Minimize Information Disclosure Closed and Untrusting Work to Satisfy Underlying Interests of Own Client Attempt to Make Minimal Concessions Try to Manipulate Opponents

18 Effective Legal Negotiators: Problem Solving  Problem Solving Objectives Conduct self ethically Maximize settlement for clients Get a fair settlement Meet client’s needs  Problem Solving Traits Trustworthy (but don’t reveal too much) Ethical Fair Professional Courteous Personable (don’t have a need to be liked) Tactful Sincere Fair-minded Realistic opening position Accurately evaluated case Does not use threats Willing to share information Skillfully probed opponent’s position

19 Effective Legal Negotiator Competitive  Aggressive Objectives: Maximize settlement for client. Obtain profitable fee for self. Outdo of out manuever the other side.  Aggressive Traits: Dominating Forceful Attacking Careful about timing & sequence of actions Rigid Uncooperative Gets to know opponent Disinterested in needs of others Unrealistic opening position Clever Uses threats Reveals information gradually Willing to stretch the facts

20 POWER BARGAINING TECHNIQUES  Argument Employed most frequently by lawyers. Primary objective is to prevail. Individual gives opponent reasons that convince those people to give them what they want to achieve. Reasons often involve factual arguments, and other arguments such as legal doctrines, statues, decisions, scholarly authorities, etc. Do not ignore the potential persuasiveness of emotional contentions.

21 POWER BARGAINING TECHNIQUES (cont)  Threats, Warnings, and Promises Rare for negotiation to occur without the presence of overt or implicit threats. A promise does not involve the suggestion of negative consequence, it is softer and says if you do this good think I will do that good thing. Promises and threats convey significant information regarding the transmitter’s perception of the other party’s circumstances: fear vs. giving them what they want Make sure to evaluate the possible risk and benefit that may be associated with affirmative promises of negative threat (law of unintended consequences).

22 POWER BARGAINING TECHNIQUES (cont)  Rational and Emotional Appeals Negotiators often use rational arguments to oppose the other sides position and emotional appeals when presented with objective arguments that undercut their position.  Ridicule and Humor Smiles and open laughter are often used in extremely one- sided initial offers. Sarcastic retorts may be used as not to mislead their unrealistic opponent into believing that their initial offers are not truly unacceptable. Humor can often be employed to soften the impact of negative statements, to relieve anxiety, or reopen blocked communication channels

23 POWER BARGAINING TECHNIQUES (cont)  Control of Agenda Limits talks to those topics that are of interest to their own clients. Proposed drafts can assist in gaining control of the bargaining agenda.  Intransigence Convincing opponents at critical points that people must take appropriate concessions if the discussions are to continue.  Straightforwardness People often expect opponents to be circumspect. Negotiators can use this as an advantage to surprise opponent by being straight forward, creating guilt of embarrassment of the other side.

24 POWER BARGAINING TECHNIQUES (cont)  Flattery Real or feigned respect for opponents may cause them to become more accommodating.  Manipulation of Contextual Factors Some individuals attempt to gain psychological advantage by controlling the day, time, location, and environment for the negotiations.  Silence Most potent, yet frequently overlooked power bargaining technique Many negotiations fear silence as they are afraid they will loose control of the interactions it they stop talking and they remember the awkwardness they have experienced in social settings during prolonged pauses.

25 POWER BARGAINING TECHNIQUES (cont)  Patience Negotiation process takes time to unfold. Patience can be used to wear down opponents.  Creation of Guilt, Embarrassment, or Indebtedness Parties who experience guilt, embarrassment, or indebtedness are particularly susceptible to requests for concessions.  Constructive Ambiguity If a topic is not important and cannot be agreed upon, both parties will agree to be vague and move on to more significant topics.

26 NEGOTIATION TACTICS – COMMON TECHNIQUES  Numerically superior bargaining team.  Use of asymmetrical time pressure.  Extreme initial offer/demand.  Take it or leave it.  Limited authority.  Nibble techniques.

27 NEGOTIATION TACTICS – COMMON TECHNIQUES (Cont)  Decreasing or limited time offers.  Real or feigned anger.  Walking out/hanging up.  Irrational behavior.  False demands.  Alleged expertise/snow job.  Disingenuous consecutive concessions.

28 NEGOTIATION TACTICS – COMMON TECHNIQUES (Cont)  Downplay of opponent concessions.  Feigned boredom or disinterest.  Good cop, Bad cop.  Belly-up.  Passive aggressive.  Splitting the difference.  The salami tactic.

29 COMPETITIVE NON-DISCLOSURE TECHNIQUES 1. Ignore the Intrusive Question If you don’t like the question – ignore it and move on. 2. Answer the Beneficial Part of Compound Questions If there is more than one part to a question, answer only the part you like and ignore the other portions. 3. Over- or Under- Answer the Question By giving too much general information or giving a broad answer, you can protect sensitive information and still answer the question. 4. Misconstrue the Question and Answer the Reframed Inquiry Restate the question in a different way that allows you to answer your new question and ignore the old one. 5. Answer the Opponent’s Question with Own Question Ignore the question by asking one of your own. 6. Rule the Question Out of Bounds Object by saying it inappropriately seeks confidential information protected by attorney-client privilege or no nondiscoverable matters covered by the work product doctrine.


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