Effective Negotiation Second Edition FROM RESEARCH TO RESULTS Effective Negotiation is a task-oriented and practical resource that provides the skills needed to reach a good agreement. It examines how negotiations work and covers key issues such as trust, power and information exchange, and how to manage the mix of competitiveness and cooperation that is found in all negotiations. draws on his extensive teaching and research experience to present useful, applicable strategies and advice on managing workplace and business negotiations, being involved in a mediation and negotiating across cultures. In stressing the need for pragmatism, Effective Negotiation helps readers become better negotiators, not only in business contexts but also in interpersonal and sales-based situations. Fully revised and updated, this comprehensive second edition boasts new features including chapter summaries, fundamental skills tips and a complete Negotiator Tool Kit. It incorporates up-to-date case studies, new material on mediation and on multi-party negotiations, and a new chapter on how to become an effective negotiator. The companion website, at www.cambridge.edu.au/academic/ effective, includes a full set of lecturer resources, including Powerpoint summaries, negotiation role plays, and expanded case material with extensive teaching notes based on the text. Effective Negotiation remains an essential resource for students and professionals in the fields of business and management, law, human resource management and employment relations. is Professor in the Business School at the University of Western Australia.
Effective Negotiation Second Edition FROM RESEARCH TO RESULTS
CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Mexico City Cambridge University Press 477 Williamstown Road, Port Melbourne, VIC 3207, Australia Published in the United States of America by Cambridge University Press, New York Information on this title: /9781107605381 2012 This publication is copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2010 Reprinted 2010, 2011 Second edition 2012 Cover design by Anne-Marie Reeves Typeset by Aptara Corp. Printed in China by Printplus Ltd A catalogue record for this publication is available from the British Library National Library of Australia Cataloguing in Publication data Fells, Railton Edward. Effective negotiation: from research to results/professor. 2nd ed. 9781107605381 (pbk.) Includes index. Negotiation. Contracts. Covenants. 302.3 ISBN 978-1-107-60538-1 Paperback Additional resources for this publication at www.cambridge.edu.au/academic/effective Reproduction and communication for educational purposes The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10% of the pages of this work, whichever is the greater, to be reproduced and/or communicated by any educational institution for its educational purposes provided that the educational institution (or the body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act. For details of the CAL licence for educational institutions contact: Copyright Agency Limited Level 15, 233 Castlereagh Street Sydney NSW 2000 Telephone: (02) 9394 7600 Facsimile: (02) 9394 7601 E-mail: info@copyright.com.au Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
Contents Preface vii Acknowledgements viii 1 Why isn t negotiation straightforward? 1 What is negotiation? 3 Some initial practical implications 4 The DNA of negotiation 8 Discussion questions 10 2 The DNA of negotiation 11 Parties to the negotiation 12 Reciprocity 20 From conflict to cooperation 20 Trust 26 Power 29 Information exchange 32 Ethics 35 Outcome 39 Becoming an effective negotiator 42 Discussion questions 43 3 The knight s move 44 Strategic choice 46 What factors need to be taken into account? 48 Quality of alternatives 54 Practical implications 56 Becoming an effective negotiator 63 Discussion questions 64 4 Phases and phrases 65 Phases in negotiation 67 A closer look at phases and phrases 70 Making sense of models and research 78 Becoming an effective negotiator 82 Discussion questions 83 5 A negotiation script and other ways to manage a negotiation 84 Developing a negotiation script 85 The Nullarbor Model of negotiation 89 The return journey 93 Managing the negotiations 93 Mediation 98 What do mediators do? 102 The mediation diamond 105 A pragmatic postscript 109 Discussion questions 113 v
CONTENTS vi 6 Digging deep to deal with differences 115 Differentiation: the issue dimension 118 Differentiation: the process dimension 119 Differentiation: the action dimension 122 Differentiation: the outcome 127 Managing competitiveness 128 Becoming an effective negotiator 131 Discussion questions 131 7 Light bulb moments: exploring for options 133 Exploration: the issue dimension 136 Exploration: the process dimension 138 Exploration: the action dimension 141 Exploration: the outcome 145 Becoming an effective negotiator 146 Discussion questions 147 8 A final balancing act: the end-game exchange 148 Exchanging offers 149 The issue dimension 153 Exchange: the process dimension 157 Exchange: the action dimension 161 Exchange: the outcome 164 Becoming an effective negotiator 164 Discussion questions 166 9 Building bridges 167 The structure of constituency negotiations 168 The effects of constituency and collectivity 175 Constituency and collectivity: effects on the negotiator 181 Managing workplace negotiations 184 Managing a business negotiation 192 Becoming an effective negotiator 200 Discussion questions 204 10 Cross-cultural negotiations: much the same but different 205 Developing a cultural awareness 207 Managing a cross-cultural negotiation 219 The issue dimension 220 The process dimension 221 The action dimension 224 Becoming an effective negotiator 226 Discussion questions 232 11 Becoming an effective negotiator 233 How might we recognise a good negotiation? 234 How might we recognise a good negotiator? 236 Good negotiators do not stop learning 238 References 241 Index 255
Preface I have written this book to help the reader understand the dynamics of the negotiation process and so be able to negotiate more effectively. This second edition is still grounded in negotiation research but I have endeavoured to make the practical implications for negotiators more explicit through actual examples and skills tips. I have also improved the negotiation tools, which I hope prove to be useful. Several case studies of negotiation are referred to in the text. I greatly appreciate the willingness of the people I interviewed to share their experiences, which enabled me to write the cases. They provide rich insights into what happens in real negotiations. The text, updated throughout, now includes a new section on mediation that explores how a negotiator can learn from the mediation process. A new final chapter integrates the earlier chapters and presents the characteristics of good negotiation and of a good negotiator. For those teaching negotiation new teaching materials based on the text have been prepared. In addition to discussion topics, case studies, role play exercises and other learning tasks, I ve written lecturer s notes to provide a research-based analysis for each of the cases. The cases can be used as discussion or assignment tasks or as examples to demonstrate aspects of negotiation that are described in the text. The motivation for using case studies is to promote a strategic, yet still pragmatic, approach to negotiation. The role play exercises come with notes on how to maximise their learning value. Using both case studies and role play exercises will provide a challenging and instructive learning environment for students. 2012 vii
Acknowledgements We are grateful to the following individuals and organisations for permission to use their material in Effective Negotitation. Page 3: Alexey Kashin/Shutterstock.com; 12: suravid/shutterstock.com; 45: huibvisser/shutterstock.com; 58: J.A. Halpert et al. (2010), Paths to negotiation success, Negotiation and Conflict Management Research, 3(2). Reproduced with permission from John Wiley and Sons; 66: ollirg/shutterstock.com; 88: Marcel Jancovic/Shutterstock.com; 89: Redrawn with permission of Great Southern Rail; 116: Doug Stevens/Shutterstock.com; 134: Michael D Brown/Shutterstock. com; 152: Scott Maxwell/LuMaxArt/Shutterstock.com; 183: National Media Museum/Science and Society Picture Library; 222: Gemenacom/Shutterstock. com; 223: Leonidovich/Shutterstock.com. All Shutterstock.com images 2012 Used under license from Shutterstock.com. Every effort has been made to trace and acknowledge copyright. The publisher apologises for any accidental infringement and welcomes information that would redress this situation. viii