Conflict Management & Business Negotiation Negotiation Analysis

10th of May 2o12 2

Seminar Paper

Dobrescu Valentin - Octavian

The academy of economic studies <<Bucharest>> Business Administration

During a negotiation, it would be wise not to take anything personally. If you leave personalities out of it, you will be able to see opportunities more objectively.
Brian Koslow

n my project, I decided to describe a conflict which appeared in my last high-school year, relating to the fact that I chose to continue my studies at ASE Bucharest. This conflict appeared mainly between me and my father, due to differences in perception and the potential risks

involved in my choice of leaving Sighisoara for Bucharest in order to broaden my theoretical knowledge. I became aware of this conflict when I decided to tell my parents about my choice of starting a new life in Bucharest although none of my colleagues wanted to continue studying here (maily because of ideas that have nothing to do with the truth, such as a higher risk of being kidnapped, longer distances between landmarks a.s.o). I am going to start by identifying and ranking the goals from the perspective of each party involved in the conflict. There are four types of goals (GRIP), as follows: 1) Gain aspirations (G goals) the substantive and tangible things sough. My G goals were: -to live in a big city like Bucharest -to work in a bank in the future -to receive a good salary, allowing me to have an over-average life My fathers G goals were: -to limit my exposure to risk -to make sure that I will be near my hometown and come as often as possible to visit Page | 2

2)

Relationship goals(R goals) - the ones that go to the type of relationship sought or sought to be

maintained. My R goals were: -to obtain his commitment to my project -to continue my relation with him without damaging it -to feel his fondness for me -to obtain his commitment to my project His R goals were: -not to hurt my feelings, because he valued them -not to underestimate my capabilities 3) Ego issues (I goals) me in the conflict-my self-esteem and face-saving needs and goals. My I goals were referring at my fears and desires: -wanted not to loose -wanted to be viewed as a winner -not wanted to be treated unfairly, - wanted to be respected and to be treated with respect. 4) Process choices (P goals) how I wanted the interaction to proceed. For both of us: -the approach was constructive -the style was integrative -the manner of communication was friendly There are a few background issues which should be known before I start describing the actual negotiation. During a regular conversation which had taken place a few weeks ago, my parents have clearly stated that they would like me to be a student in Tg. Mures, Brasov or Cluj, the main idea behind this suggestion being that all my classmates had chosen one of these cities.

Page | 3

I did not want to choose any of the above mentioned civilized cities, because I preferred a city where my strengths could become more and more visible, a capital, a place for the best people from Romania, I really wanted to study in Bucharest. The initial action which led to this discussion was made by me, since I started talking about my future while my dad was next to me. The circumstances surrounding this act were related to the fact that I did not want my decision to be a secret, but I did not want any of my parents to try and change it through arguments either. This is why I considered that having this discussion with only one of my parents in a friendly environment was the best way to start talking about what I needed to tell them. The initial meeting was a common place where such encounters appeared often enough, my house from Sighisoara, during a sunny day from May. I was already aware of the differences of interests and the incompatibility of our expectations, but my interest was to limit the conflict part and to try to convince him that the choice I made was very important for me and that I had analyzed all the risks involved prior to choosing. Not choosing this path would have constantly made me think that I was not good enough for Bucharest, and therefore, such an option never occurred in my plans. Since I had a lot of time to prepare my initial speech, I decided to try to persuade my father that this is the best choice for me, leading to the most potential outcomes. The persuading arguments were that I thought a lot before making this decision and that I analyzed all the factors involved, the fact that the risks involved are less lower than the potential outcome of such a decision and that visiting them will be my pleasure no matter where around the world I would decide to live. My initial stated position was expressed in a clear manner, the fact that I wanted to continue my theoretical studies in Bucharest. My fathers initial stated position was that Bucharest is a risky decision, since the theft indicators are far higher there as compared to the other cities and that I should choose any other option in order to ensure my further success in life. Our bottom line positions had nothing in common of course, except the fact that I need to continue broadening my knowledge. My father had a different bottom line from the start of the discussions, since he made sure he mentioned it during previous chats. Knowing my father and the way he behaves in such tight situations, I understood that he was trying to limit my choices or to alter them in each circumstance where similar situations would arise out of the blur during regular chats, inclining the balance in the favor of the option he wanted me to choose. Page | 4

Unfortunately, as previously mentioned, our opinions were opposite and therefore, the negotiation which would shortly follow appeared to be a tough one, in which every involved party was going to present and sustain arguments in favor of an option. It seemed as if both of us were waiting for this moment although none of us really wanted to face it. When it comes to alternatives, these were relatively limited in my case, since the only one would have been not to trust myself and trust in a 100% proportion the judgment of my father, constantly feeling that the decision I made did not belong to me and that it did not lead to the best possible outcome. Such an alternative was inadmissible, considering the fact that I felt the need to break free from the once welcomed overprotection of my parents and start my own life, through meeting new people and getting to know new places, understanding and trying to get integrated in a totally different culture which has different values than the one in which I was raised in and is a lot more restrictive when it comes to new members. My fathers only alternative was to give away his ideal and his need for protection and suggest that my choice could be ok too. In this case, the needed turn would be of 360 degrees, since everything he would have wanted and expected from my university would have had to change. Thinking about potential outcomes, the alternative of my father would have been to say that I am right (unacceptable) or to admit that through trying to protect me, he could unwillingly destroy my future. Similar to my case, none of the alternatives can be considered adequate, therefore, negotiation through a minor conflict being definitely the only way out. Culture is a quality not of individuals, but of the society of which individuals are a part of. Culture is acquired through the acculturation or socialization by individuals from their respective societies said Cohen. Therefore, each culture is a unique complex of attributes encompassing every area of social life. Culture specifies what behaviors are desirable or proscribed for members of the culture (norms), for individuals in the social structure (roles), as well as the important goals and principles in ones life (values). Culture also specifies how things are to be evaluated. This implies that people of different cultures will have greater difficulty in interaction, understanding and ultimately in negotiation. Culture is a broad concept describing the basic things in human mentality and behavior, such as language, tradition, ideology, approaches and style. Negotiation, in turn, is a part of the human activity connected with problem solving, which is oriented towards peaceful means of dispute resolution. Page | 5

Negotiation in this context may be regarded as manifestation of culture because it embodies a certain code of conduct that is oriented towards civilized ways of solving disputes. Moreover, negotiation is a process of communication between actors seeking to arrive at a mutually acceptable outcome on some issue of concern. Usually, diplomatic negotiation is made up of a rather structured exchange of proposal between accredited representatives. This exchange may be conducted formally or informally, verbally or non-verbally, tacitly or explicitly. As mentioned previously, culture describes the basic tenets of human mentality and behavior. This mentality is transferred to the negotiating table and is revealed by the positions and actions each representative takes. The importance of recognizing the power of culture in constructing our realities is imperative because of the reluctance human beings have in tolerating challenges to these realities because they introduce unacceptable levels of uncertainty and doubt. By its nature, the negotiation process is a study in psychology. It proceeds as interplay of perception, information processing, and reaction, all of which turn on images of reality, on implicit assumptions regarding issues being negotiated, and on an underlying matrix of conventional wisdom, beliefs, and social expectations. Human minds are information processors and can be understood by the way they receive, store, organize and use information. While people are born with this capacity, just how the human mind does this depends on how it turns out to be programmed. The cultural differences that must be taken into account may turn out to be as important as that found in certain contrasting sets of values that determine the hierarchy of negotiating objectives themselves, or as trivial as behavior mannerisms or non-verbal cues that subtly block confidence and trust. Even gestures and other non-verbal behavior may contribute to a psychological unease that makes communication more difficult. In my case, the cultural differences were relatively reduced as importance, since my father and I share numerous common values and understand each others decisions very well. The only difference might be related to the age of the participants, but that is not one of the important aspects which might influence the outcome of our conflict in a noticeable manner. Although in most cases, cultural differences can make or break a negotiation which could result in a win-win case, here, the cultural differences were already known and accepted by both parties.

Page | 6

Most people assume everyone sees the world the same way. This can be expected because people are not able to compare what they see to what someone else sees (using language to describe visuals is inherently biased). This widely accepted assumption, however, is inaccurate. There is evidence that each person's perception of the world is different- if only in minor ways. For example, a perception discrepancy can be found when comparing how people suffering from anorexia nervosa see their bodies and how other people see the anorexics' bodies. The age difference previously mentioned could determine a different perception level, given the experiences, desires, successes and failures assumed by my father, which are far greater than the ones I had had in my life up to that point. Perception differences have in fact affected this negotiation, given the fact that I had seen Bucharest as a town of success, a town where everybody reaches the success I felt I needed in order to be confident in my own strengths whereas my father sees this town as a dirty place, overcrowded with people who try to be more successful than you and who are willing to do whatever it takes to reach their own desired level of life satisfaction. Both perceptions were of course exaggerated, the truth being in between. Assertive behavior means standing up for your rights and expressing your truths in a way that neither shrinks from what you want to communicate nor assumes that they are the only valid truths. Assertiveness also includes recognizing and respecting the equality, rights and truths of other people. In both persuasion and defending against persuasive efforts, assertive behavior is a powerful tool. During negotiations, the best approach is an assertive one, since this suggests that both involved parties have the desire and will to achieve a win-win solution for solving the crisis. During my negotiation with my father, we both expressed ourselves through the most assertive behavior possible, since neither of us would have continued listening to the other party in case of an aggressive or passive speech. Since we were both aware of this before starting the negotiation, there were no problems in maintaining an assertive behavior from the beginning until the end of the conflict. Power in negotiations comes from: Constructive Power - our ability to satisfy the other party's interests (needs), Obstructive Power the power that comes from our ability to block the satisfaction of the other side's satisfying their interests (needs), Jumping Power our ability to leave a negotiation, typically linked with how good our alternatives (BATNA) are, Personal Power our desire, confidence, skills, and knowledge (DECKS) to succeed. Some describe these components as Page | 7

the intangibles or art of negotiation, the power to satisfy another's interests (underlying needs), the power of knowledge, expertise, and/or a particularly elegant, moral, or ethical solution, the power to give another credit or special recognition, the power to apologize, the power of our alternatives: our alternative(s) if we do NOT do the deal and the power of alliances. In my case, my father had the power of alliances, since my mother had already agreed that Bucharest is not a suitable solution as the town in which I was going to continue my studies. Although I was aware of this power of his, my father it not use it at a high level. I let this slide, since it was not in my interest to inform him of the extra power he could use in order to persuade me to remain in a nearby town. Creating and claiming value are two of the most fundamental aspects of negotiation strategy that exist in tension with one another. In any negotiation, the parties must decide whether to be competitive, cooperative, or some of both. It is similar to the "prisoners' dilemma" in game theory, because the best outcome for one person is not necessarily the best for both, but if both pursue their best option, they will often both get the worst outcome. Value is created (or the "pie is enlarged") in negotiations through the cooperative process of integrative or interest-based bargaining. This means that the parties in a dispute have managed to find ways to increase the amount of beneficial goods (things they want or that will make their situation better than before) that will be divided between them. This may also be called "joint value" or "joint gains," meaning that new developments are considered improvements by both sides. The primary way to create value is to focus on the underlying interests of the disputing parties - why do they want what they want? By sharing information openly and communicating with one another, the parties work to find shared interests and create joint value. Creating value makes it more likely that both sides will get something they want out of the negotiation. This type of mutuallybeneficial outcome is called a "win-win" solution. The competitive process of claiming value involves dividing up a "fixed pie," or the total amount of value available to the disputing parties. This process is most closely associated with distributive bargaining, in which each side tries to get as much of the pie as possible. The more one side claims, the less the other side gets. This is also known as a "win-lose" negotiation. To claim value in a negotiation, you use competitive tactics to try to convince the other side that he wants what you have to offer much more than you want what he has. Some tactics for "winning" at distributive negotiation include starting high; conceding slowly; exaggerating the value of your concessions; Page | 8

minimizing the value of the other's concessions; concealing information; arguing forcefully for principles that imply favorable settlements; making commitments to accept only highly favorable agreements; and being willing to outwait your opponent. Creating new value improves both parties' outcomes. However, having created new value, negotiators must still divide the resulting "pie." Unfortunately, the cooperative strategies needed to create value tend to undermine the competitive strategies used to claim value (and vice versa). The exaggeration and concealment needed for effective competition is directly opposed to the open sharing of information needed to find mutual benefits. On the other hand, taking an open cooperative approach makes one vulnerable to the hard bargaining tactics of a competitive negotiator. Therefore, if both parties cooperate, the result is usually good, while if one cooperates and the other competes, the competitor usually does better. However, if both compete, they usually come out worse than they would if both cooperated - which is the same "payoff structure" as that of the prisoners' dilemma game. The assumption, however, is that claiming value in integrative (i.e., cooperative) situations is more likely to be balanced. This is because the parties are expected to develop cooperative relationships and communicate freely, which is not generally allowed in prisoners' dilemma games. When describing the negotiation I had with my father, I can observe that we both focused our negotiating techniques on a few core values, such as the fact that this negotiation is intended to allow me to have the best possible future. Since this was discussed and analyzed, I feel that we had a cooperative approach towards the problem, trying to achieve a solution which would as much as possible make both parties happy. Therefore, I feel that the results we reached depended on our cooperation strategy and on our capability to create value. Both me and my father have Type A personalities, meaning that we are ambitious, rigidly organized, highly status conscious, can be sensitive, care for other people, are truthful, impatient, always try to help others, take on more than they can handle, want other people to get to the point, proactive, and obsessed with time management. I am often considered a high-achieving "workaholic", due to the fact that I multi-task, push myself with deadlines, and hate both delays and ambivalence. When it comes to analyzing my temperament, I can conclude that I am a Choleric, characterized by the fact that I am most forceful and active of the four types; I am strong-willed, independent and opinionated. The choleric thrives on activity. I am practical and therefore able to make sound, quick decisions. I am not afraid of obstacles and tend to drive right through or over Page | 9

problems. I consider myself a natural leader, I have the most problem with anger and do not display compassion easily. I am also quick when it comes to recognizing opportunities and quick to capitalize on them. I feel that my strong will and determination often drive me to succeed where more gifted people give up or fail. My father is definitely a phlegmatic when it comes to temperament analysis, since he is best characterized by the words "easy going". He is the calm and steady person who is not easily disturbed. He is the easiest temperament type to get along with. Life for him is happy, unexcited and calm. Underneath the calm exterior, the phlegmatic is the most timid temperament type. He often uses humor to make his points. The phlegmatic is more an observer and does not involve himself in the activities of others. My father is also a teacher, a domain where this temperament style is destined to strive and succeed. When it comes to my negotiating style, I consider that I am a competing person - assertive and unwilling to cooperate. They place their needs above the needs of others and try to manipulate the situation in their favor. They are usually more concerned with winning the fight than finding the best solution whereas my father has a collaborating negotiation style - both assertive and cooperative, he is the exact opposite of avoiders. Collaborators seek a solution that satisfies all concerns while taking a leadership role in the conflict resolution. Collaborating involves creative solutions that embody the wants and needs of all involved in the conflict. If I think about the negotiating strategies we applied during the attenuation of this conflict, I might easily say that I had a Problem-solving approach - closer to Compromising than Competing in that it starts from a position of respect for the other party. I did not see the other person as competitor or threat, but rather as a person who has legitimate wants and needs, and that the goal of negotiation is less to make trades and more to work together on an equitable and reasonable solution. As a problemsolver, I sought to understand my fathers situation, explain my own situation as good as I could and then creatively seek a solution where we can both can get what we needed whereas my father considered a Compromising Strategy to be better in this situation - seeking some fair balance where both parties appear to get an equitable deal. A typical tactic people used is to 'split the difference', which is not necessarily the best way when the other person is using tactics such as highballing or asking for all needs, wants and likes. I am convinced that my father saw me as worthy and equal to him, and hence sought fair play. He realized that nobody can get everything they want and sought an equitable arrangement. Page | 10

O utcome Applying the above mentioned principles, techniques and styles led to a great outcome for myself. My father understood that I could never live with myself knowing that I did not try to succeed in Bucharest and that not trying to strive in this town would make me more unhappy than trying to be successful and failing in the capital of Romania. I have therefore achieved my BATNA and managed to overcome my expectations and properly impose my desires, reaching my goals through this path and succeeding the future I had planned for a long period of time. If I were to analyze the results of my fathers analysis of his negotiation, I would not be that charmed, since the style he applied had no chance against the negotiation style I used. Taking into consideration the fact that the whole negotiation was related to me being able to have a second great start in life (in a new town, surrounded by new people), we might consider that the goals of my fathers negotiation were also achieved and that he was able to imply the fact that he cared without having to ruin the trust and faith I have in his judgment. Therefore, I am proud to say that the right decision was taken by both parties that day. W ould I do anything differently ?

As mentioned previously, I am happy with the way things out for me and considered that the decision we took after the negotiation and after our small conflict was the correct one. However, I cannot know how my life would have been if if I would have cvhosen a different university, a different town or a different specialty.

Page | 11

ibliography:

Conflict Management, A Practical Guide to Developing Negotiation Strategies Auhtor: Barbara Budjac Corvette, 2006, Paperback, 336 pages
ISBN13: 9780131193239 ISBN10: 0131193236

Page | 12