Title: InterestBased Bargaining
1Interest-Based Bargaining
- Ronald L. Seeber
- Cornell University
- April 19, 2004
2Why Consider Change In Your Approach To
Bargaining?
- Frustration with existing bargaining process.
- Dissatisfaction with bargaining outcomes.
- Inconsistency with other workplace processes and
labor management interactions.
3Conflict Is Healthy
- Conflict is like pain,
- Dont have to like it,
- But it serves a purpose
- Tells you that something needs fixing
- Dont view negotiations as a sign of (or penalty
for) failure . . . look at it as an opportunity
for improvement.
4Two Approaches to Negotiation
- Positional Bargaining
- the conventional approach
- Interest-based Bargaining
- also known as principled negotiations
5Position
- A Position Is
- a single answer or solution to a problem,
- one which the other party frequently cannot
accept.
6Interest
- An Interest is
- a fear
- a need
- a worry
- a concern
7Basis Elements of Negotiation
The outcome of any negotiation will reflect the
extent and manner in which the parties deal with
the basic elements of negotiation.
- POWER
- Ill have it my way because I can.
- RIGHTS
- Ill have it my way because Im entitled to it.
- INTERESTS
- Ill have it my way because I need it.
8Fundamentals of Positional Bargaining
Most people think negotiators have two choices
- Win-Lose Choice
- Assumption the pie is fixed
- Negotiators have a direct conflict of interests
and objectives - Win-Win Choice
- Assumption the pie can be expanded
- Negotiators have compatible interests and
objectives
9Win-Lose Negotiating
- When one partys goals are in direct conflict
with those of the other party - Win-lose negotiating is the equivalent of
playing a zero-sum game - I winyou lose
10Win-Win Negotiating
- When one partys goals are not in fundamental
conflict with another partys goals - Win-win negotiating is the equivalent of
playing a non-zero or variable sum game - I winyou win
11In Most Negotiations...
- The parties objectives are partly conflicting
and partly compatible - The negotiators have mixed motives
- They may be able to expand the pie but
ultimately they need to divide it
12Characteristics of Positional Bargaining
- Open with an extreme position
- why is this such a common practice?
- Trade concessions toward mid-point (compromise)
- if more attention is paid to positions, is less
time devoted to meeting the underlying interests
of the parties?
13Characteristics of Positional Bargaining
- Use tactics to keep other party off balance
- Argue merits of your position, defending it from
attack by the other party - Discredit the positions and claims of the other
party
- what are the possible effects of doing this?
14Potential Limitations of Positional Bargaining
- Effects on the negotiation process
- Effects on the relationship between the parties
- Effects on trust and other attitudes
- Effects on brainstorming and creativity
- Do these limitations matter to you?
15Integrative Solutions
- Assumes that interests seldom, if ever, clash
inherently - Human imagination in devising new alternatives is
the major key to integrating interests and
successfully concluding negotiations. - Compromise is one form of integration, but should
be solution of last resort
16Premises of Interest-Based Bargaining
- Most negotiations are not purely win/win or
win/lose - Bargaining over positions can have negative
consequences - Life isnt usually a zero-sum game
17A Rose By Any Other Name . . .
- Getting to Yes Negotiation
- Win-Win Negotiation
- Principled Negotiation
- Integrative Negotiation
- Mutual Gains Negotiations (MGN)
18Range of Application
- Can be used whether
- single or multiple issues
- two or more parties
- formal or informal bargaining
- relaxed or volatile situations
- all or only one party intends to use it
19Interest-Based Bargaining As A System
- Assumptions
- taken for granted
- Principles
- general guides for action
- Techniques
- specific things to do and not do
- Structures
- props, physical layout
- Steps (Micro Macro)
- sequence of activities
20Principles of Interest-Based Negotiations
- Premise
- Dont bargain over positions
- Methods
- Separate the people from the problem
- Focus on interests, not positions
- Invent options for mutual gain
- Insist on using objective criteria
- Know and use your BATNA
21Does Where You Stand Depend On Where You Sit?
- UNION
- Equal treatment
- Democratic decision-making
- Challenge to authority
- Mutual protection
- Seniority
- Past practice
- Guarantees
- MANAGEMENT
- Hierarchical
- Factual decision-making
- Control individuality and competition
- Performance
- Efficiency
- Ambiguity
- Flexibility
22Obstacles to Creating Options
- Premature judgment
- Looking for a single answer
- Assumption of a fixed pie
- Attitude that solving their problem is their
problem
23Objective Criteria?
- Market Value
- Prevailing Wage/Price
- Various Price Indices
- Cost of Living
- Precedent
- Scientific Judgment
- Professional Standards
- Legal Decisions
- Moral Standards
- Equal Treatment
- Tradition
- Community Practice
24Should You Have a Bottom Line?
- How do you establish a bottom line?
- Should you establish your bottom line in advance
of negotiations? - If you have a bottom line, should you let your
opponents arguments affect it? - Should you reveal your bottom line to your
opponent? - if yes, when?
25BATNA Best Alternative To a Negotiated Agreement
- Another approach to the bottom line
- How do you determine a BATNA? Ask yourself two
questions - What will you have if you dont reach agreement?
- Will what you have if you dont reach agreement
be better than what you get if you do reach
agreement?
26BATNA Best Alternative To A Negotiated Agreement
- Why bother?
- Protects you against accepting an agreement you
should reject, or rejecting an agreement you
should accept (benchmark). - Better than - Lets negotiate first and see what
happens, or If things dont work out, then I
will figure what to do.
27BATNA Best Alternative To A Negotiated
Agreement
- Should you disclose your BATNA?
- Yes, if it is extremely attractive - this
shortens the dance - No, if you have a poor BATNA - disclosing it will
only weaken your hand
28Consequences of Establishing and Focusing on
Bottom Line
- PRO
- Protects you from accepting a very bad agreement
- CON
- Limits your ability to benefit from what is
learned in negotiations - Shuts off receiving information that may lead you
to change your mind - Inhibits imagination
29What Is A Good Conclusion?
- Is it better than alternatives away from the
table (BATNA)? - Does it satisfy my interests?
- Am I well satisfied?
- Is the other side acceptably satisfied?
- Did it minimize transaction costs?
- Is it compliance prone?
- Does it improve my relationship with the other
party?
30Contract Negotiation ApplicationStep 1 -
Pre-Training Discussions
- Trainer(s) meet separately with principal
managers and union officials to discuss MGN
generally, and more specifically the training and
options to follow.
31Contract Negotiation ApplicationStep 2 - Training
- A two day off-site program of simulation-based
learning of personal skills and negotiation
structures supportive of mutual gains bargaining.
32Contract Negotiation ApplicationStep 3 -
Groundrules
- The subject of ground rules and a listing of
options is raised at the conclusion of the
training (step 2), but thorough discussion and
decision-making is reserved for another day.
This allows individuals some time to think
privately, and also permits the two committees to
meet separately first.
33Contract Negotiation ApplicationStep 4 -
Negotiations
34Contract Negotiation ApplicationStep 5 -
Post-Negotiation Review
- Fairly soon after the conclusion of the
negotiations, it can be beneficial for the two
committees to meet once more to review the
process of the recently concluded bargaining, in
order to identify those aspects which seemed to
work well, and those that did not.
35Correlates of Successful Implementation
- Joint readiness for process change
- Part of broader patterns of labor and management
interaction - An external focus
- Immediate usage
- Sober expectations
36Questions or Comments?
- Ron Seeber
- 607-255-4371
- rs60_at_cornell.edu