6 Negotiations: Author Hal Stack for Chelst and Canbolat
15.3 Challenges to Effective Negotiation
Many factors converge to limit our effectiveness as negotiators. Some are rooted in our mental model of negotiations; others are found in the psychological
traps and biases that distort our judgment in decision making. Many of these are the same biases discussed in earlier chapters but are more critical now.
Negotiation is a real-time process during which there may not be time to reflect on and overcome these cognitive biases.
How we think about negotiation affects our choice of strategy and tactics. Many negotiators assume that their interests directly conflict with those of the
other party. They see all negotiations as a distributive, zero-sum game in which their gain is the other party’s loss. For them, negotiation is a test of wills that,
ideally for both sides, can culminate in splitting the difference.
Distributive negotiations usually involve a single issue in which one person gains at the expense of the other. Most negotiations,
however, involve more than one issue and the parties value the issues differently. Think of a company and its suppliers. Price is important but so
are quality support services and delivery time. As a result, an agreement may be found that is better for both parties than what they could have
achieved through a win-lose, distributive approach. Assuming that every negotiation is a fixed-pie, win-lose negotiation may result in no agreement
or missed opportunities for tradeoffs that could benefit both sides. This is reflected in former congressman Floyd Spence’s view of the Strategic
Arms Limitation Treaty negotiations between the United States and the Soviet Union in the late 1970s: “I have had a philosophy for some time in
regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in
their best interest, it can’t be in our best interest” Bazerman and Neale 1992.
15.3.1 Interests Instead of Positions
Similarly, our effectiveness is limited by our tendency to see negotiations as an argument over positions. A position is one party’s solution to a problem. It
does not address the concerns of the other party and is often a suboptimal solution, even from the point of view of the party proposing the position. The
logic of positional bargaining is that negotiators spend their time arguing the merits of their position while discrediting the position of the other party. Even
acknowledging the other party’s concerns is seen as weakening your position. This was clearly in play in the negotiations between Republicans and Democrats
on health care reform during 2009. Focusing only on whose position should prevail means that other and potentially superior solutions are never considered.
The solution may be one extreme or the other or, more typically, splitting the difference between the two final positions rather than accepting a solution to
address the real interests of the parties.
7 Negotiations: Author Hal Stack for Chelst and Canbolat
Fisher and Ury 1991 illustrate this in their book
Getting to Yes .
In negotiating the return of the Sinai to Egypt, Israel and Egypt could not agree on
where to draw the boundary separating the two countries. It seemed to be a classic zero-sum negotiation in which every square mile lost to one party was the
other party’s gain. When the negotiations became value added and the parties focused on their real interests, however, the dispute was resolved. For Egypt, the
critical interest was sovereignty over the Sinai, while Israel’s top concern was its security. The solution involved creating a demilitarized zone under the Egyptian
flag. Getting beneath the positions to the underlying interests of the parties was critical to reaching a breakthrough. This approach, when combined with
inventive solutions, led to an agreement superior to the position of either party.
Interests are the needs, concerns, or fears underlying your position. As negotiators, we often start the process with a definite position on a specific issue.
A potential employee, for example, may initially request 56,000 her position for her salary. However, the individual may not have clearly defined the
underlying interests that are much broader. These might include financial security, status, start date, paying off a college loan, location, and improved
career prospects. By failing to consider these interests and focusing only on salary, she may reject a job offer that does not meet her position of 56,000 but
which would better address her broader interests. The potential employer’s interests include maintaining a consistent salary schedule for new hires and thus
may be unwilling to offer a salary higher than 50,000. The employer can, however, offer generous moving expenses and a signing bonus and
accommodate her preference to relocate to Chicago. Understanding her interests and those of the potential employer can lead to a deal that will meet both parties’
needs. By focusing on interests, we can develop a better understanding of mutual concerns and invent solutions acceptable to both sides.
One way to get at underlying interests is to ask why. Why is this important to you? Why do you want this solution? In the Israeli and Egyptian
negotiations over the status of the Sinai, it was the recognition that Israel’s real interest was security and not land that led to an agreement. In the course of these
negotiations, a skilled negotiator asked the Israeli representatives why they insisted on keeping some of the Sinai. It was this simple question that produced
the eventual solution.
8 Negotiations: Author Hal Stack for Chelst and Canbolat
Activity – Interests vs. Positions: A position is one party’s solution to a problem. An interest is the underlying need or reason for taking a position. For the issue below, indicate
the parties’ respective interests.
Position of Employer: Employees must pay more of the cost of health insurance.
Interest of Employer: ___________________________________________ Position of Union: The employees will not pay more.
Interest of Union and Employees: ________________________________
Given the respective interests of the parties, what might be a solution that would address both their interests?
_________________________________________________________ 5. Activity – Think about the negotiations in which you have been involved.
For one of these negotiations complete the questions below:
Position - What did they say? ______________________________________ What were their underlying needs and interests? __________________
Closely related to the use of positional bargaining is a tendency to ignore the other side’s problem. The other side’s interests and concerns are seen as their
problem, not ours. But if the goal is agreement, negotiators must understand that any agreement must necessarily satisfy some of the other party’s interests and
priorities. It is to our benefit, then, to understand the other party’s interests and priorities and to help them solve their problem.
Table 15-1: Partisan perceptions of arms reduction proposal Believed Author of Arms Reduction Proposal
Group Evaluation Group I
Mr. Gorbachev Group II
President Reagan Favored Russian
56 27
Favored US 16
27 Favored Both Sides
28 45
Appreciating the other party’s interests is complicated by the problem of partisan perceptions, a tendency to “see” what is in our self-interest to see.
Partisan perceptions lead each party to see his or her demands as fair and reasonable, and the other person’s as one-sided and unreasonable. This partisan
perception leads us to reactively devalue any proposal put forward by the other side. This bias is illustrated by two groups who were asked to assess an arms
reduction proposal. One group was told Gorbachev was the author and the other was told that it was Reagan who was the author. Table 15-1 presents each
groups’ assessment of which country benefited most from the proposal. From
9 Negotiations: Author Hal Stack for Chelst and Canbolat
Group I, believing the proposal came from Mr. Gorbachev, 56 percent assessed the proposal as favoring the USSR. Only half as many made this assessment
when they believed the proposal was authored by Reagan Bazerman and Neale 1992. Similarly, it is not unusual for a proposal by labor to be dismissed by
management even when the proposal is objectively good for management, and vice versa.
Another obstacle is the challenge of managing the tension between creating value making the pie bigger and claiming value getting a bigger slice
of the pie. Information drives this tension. Discovering options that might create value and potentially make both sides better off requires sharing information
about one’s preferences, interests, and priorities. But if this openness is not reciprocated, the disclosing party risks being taken advantage of. As a result,
efforts to claim value tend to drive out moves to create it. This tension between efforts to create value and competitive efforts to gain individual advantages is
central to the negotiation process Lax and Sebenius 1986.
Negotiating effectiveness is further limited by decision-making biases that blind us to opportunities for better outcomes. We escalate our commitment to
our initial position even when it is no longer the best solution. We stay committed to an initial position or course of action even when the data will no
longer support it. We throw good money after bad rather than admit making a mistake. Commitment biases our perceptions and judgments. We seek out data
that supports our decisions while rarely searching for data that challenges them. This confirming-evidence bias leads us to give too much weight to supporting
evidence and too little to conflicting information. This would be the kindest interpretation of recent Wall Street decision making. This irrationality,
combined with our unwillingness to admit failure, to appear inconsistent, or to recognize that time and resources already invested are “sunk costs,” often leads
to irrational escalation. We see this play out in corporate mergers and acquisitions, price wars, and, tragically, in military actions.
One well-documented bias is that we anchor our judgments on an initial starting point and then adjust upward or downward; this occurs even when the
initial anchor is obviously arbitrary. The mind gives disproportionate weight to the first information it receives. In negotiation, opening offers will act as anchors
and will often have a powerful impact on our judgments. In the purchase of a new car, for example, the salesperson will attempt to anchor the negotiations
around the manufacturer’s sticker price while the purchaser will attempt to anchor around the invoice price.
We allow our judgment to be affected by how information is presented or framed. A proposal framed as a potential gain for the other party is more likely
to be accepted than one seen as a loss. In collective bargaining, for example, the union representative can view any management counter offer as either a gain
relative to the existing contract or a loss relative to the union’s initial proposal. Whether the offer is viewed as a loss or a gain will significantly impact the
1 Negotiations: Author Hal Stack for Chelst and Canbolat
party’s willingness to accept it. Similarly, framing with different reference points will impact the response of the other party. Many people will decline when
offered a fifty-fifty chance of either losing 300 or winning 500. Yet they are more likely to agree to the equivalent gamble when asked if they would prefer to
keep their checking account at 2,000 or accept a fifty-fifty chance of having either 1,700 or 2,500 in their account. Both offers are the same but have
different reference points. The second frame emphasizes the real financial impact of the decision Hammond et al. 2004.
Often we enter into negotiations overconfident that our position will prevail and we fail to consider better alternatives. Because of this overconfidence,
we underestimate the strength and validity of the other side’s position and are less willing to compromise. On other occasions we are under-confident and
settle for less than we should.
15.4 Managing the Negotiation Process
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