Negotiation and intercultural management

• Target point / Aspiration point


  The ideal outcome in a negotiation scenario
• Under-aspiring negotiator


  • Sets his target too low, the negotiator opens the negotiation by requesting something that is immediately granted
• Over-aspiring negotiator / positional negotiator


  • Sets the target point too high and refuses to make any concessions
• Grass-is-greener negotiator


  • Does not know what he really wants, only that he wants what the other party does not want to give, and does not want what the other party is willing to offer
• Reservation point


  A quantification of a negotiator's BATNA with respect to other alternatives
• Failure to assess reservation point

  • Negotiators may agree to an outcome that is worse than their BATNA
  • Negotiators may reject an offer that is better than their BATNA
• Developing a reservation point

  1. Brainstorm alternatives

  2. Evaluate each alternative

  3. Attempt to improve BATNA

  4. Determine reservation point
• In a positive bargaining zone, negotiator's reservation points overlap: the most the buyer is willing to pay is greater than the least the seller will accept
• In a negative bargaining zone, the most the buyer is willing to pay is less than what the seller is willing to accept at a minimum
• Bargaining surplus


  The amount of overlap between parties' reservation points, a measure of the size of the bargaining zone
• You should not reveal your reservation point as the other party will offer you your reservation price, and you have no bargaining surplus
• You should not lie about your reservation point as it is unethical and reduces your bargaining zone
• You should not try to manipulate the other party's reservation point as it can backfire
• You should only make a "final offer" if you really mean it, as you cannot make another concession after that
• Face or dignity

  The value a person places on his public image, reputation, and status vis-à-vis other people in the negotiation
• Threats to face

  • Making ultimatums, criticisms, challenges, and insults
• When a person's face is threatened, it can tip the balance of their behaviour away from cooperation towards competition, resulting in impasses and lose-lose outcomes
• Developing a negotiating style

  1. Use the principle of reinforcement to shape behaviour

  2. Encourage counterparty's behaviour with positive reinforcement

  3. Discourage counterparty's behaviour by not responding
• Rational strategies for building trust

  • Transform personal conflict into task conflict
  • Agree on a common goal or shared vision
  • Capitalise on network connections
  • Find a shared problem or a shared enemy
  • Focus on the future
• Relationship conflict


  Rooted in anger, personality clashes, ego, and tension
• Task conflict

  Argumentation about the merits of ideas, plans, and projects, independent of the identity of the people involved
• Task conflict is often effective in stimulating the creativity necessary for integrative agreement because it forces people to rethink problems and arrive at outcomes that everyone can accept
• Psychological strategies for building trust

  • Similarity-attraction effect
  • Mere exposure
  • Physical presence
  • Reciprocity
  • Schmoozing
  • Flattery
  • Self-disclosure
• Similarity-attraction effect


  Negotiators are more likely to make concessions when negotiating with people they know & like
• Negotiators


  If they can forget the past and focus on the future, they can go a long way toward building trust
• Negotiators who expect future interaction with the counterparty

  • Have lower aspirations, expect negotiations to be friendlier, are more satisfied and predominantly use a problem-solving bargaining style
• Psychological Strategies for Building Trust

  • Similarity-attraction effect
  • Mere exposure
  • Physical presence
  • Reciprocity
  • Schmoozing
  • Flattery
  • Self-disclosure
• Similarity-attraction effect


  Negotiators are more likely to make concessions when negotiating with people they know & like. Savvy negotiators increase their effectiveness by making themselves similar to the other party (e.g., "mirror & match" the other party's body posture, mood, verbal style, dress code etc)
• Mere exposure


  The more we are exposed to something (e.g., a person, object or idea), the more we like it/accept it. Establish personal connections such that by the time of the final negotiation, both parties feel as though they were interacting with an old friend
• Physical presence


  Propinquity effect (closeness, close proximity). E.g., In the office, people given a corner seat or an office at the end of the corridor make fewer friends in the organisation
• Reciprocity


  We feel obligated to return in kind what others have offered or given to us. Acknowledge the favor, if we feel indebted, we should return the favor on a similar level (e.g., same price range)
• Schmoozing


  Means "small talk". Has a huge impact on our liking & trust of others (e.g., exchange pleasantries about the weather, favourite online games etc)
• Flattery


  People like others who appreciate & admire them. People are more likely to trust others who like them & to respond more favourably when they are flattered. Master the art of flattery, but it can backfire (e.g., The flatterer is suspected of having an ulterior motive)
• Self-disclosure


  Sharing information about oneself with another person. Building a relationship with another person by making oneself vulnerable. Invites the other person to reciprocate the disclosure, thereby increasing trust
• What Leads to Mistrust?

  • Breach or defection
  • Miscommunication
  • Dispositional attributions
  • Focusing on the "bad apples"
• Breach or defection

  A breach occurs when one or both parties violate the trust that has been built between them
• Miscommunication

  A miscommunication occurs when a real breach of trust does not occur, but one or both parties interpret it as such. Likely to occur when parties are not in regular contact
• Dispositional attributions


  Occurs when one party doubts the other's character & intention by citing them as a cause of behavior or incident (e.g., arrogance, greed etc)
• Focusing on the "bad apples"

  In a group, one person may have the reputation for being the less trustworthy, tougher, or less easy to work with than other members of the group. People's impression of the bad apples can spoil their impression of the entire group
• Steps toward Repairing Broken Trust

  • Arrange a personal meeting
  • Put the focus on the relationship
  • Apologise
  • Let them vent
  • Do not get defensive
  • Ask for clarifying information
  • Test your understanding
  • Formulate a plan
  • Think about ways to prevent a future problem
  • Do a relationship checkup