5
The Negotiation Session

Learning Objectives

By the end of this chapter, you should be able to:

• Use the location and setting to gain the advantage in negotiation.

• Use the opening statement and the agenda to control the progress of negotiation.

• Use techniques of persuasion and documentation to manage a negotiation.

After all the prenegotiation activity and planning have been completed, it is time to sit down and reason together as civilized people. This time of testing should be approached with confidence and certainty.

PRINCIPLES OF PERSUASION

A number of years ago, Carl I. Hovland published the results of a series of experiments regarding persuasion that are still of value. In essence, the experiments proved that:

• It is more effective to present both sides of an issue.

• It is better, when the pros and cons of an issue are being discussed, to present the communicator’s favored viewpoint last.

• Listeners remember the end better than the beginning, particularly when they are unfamiliar with the argument.

• Listeners remember the beginning and end of a presentation better than the middle.

• Conclusions should be stated explicitly rather than left for the audience to determine.

• Repetition of a message leads to learning and acceptance.

• A message that first arouses a need and then provides the information to satisfy it, is remembered best.

• When two messages must be delivered, one of which is desirable to the audience and the other undesirable, the more desirable message should be presented first.

• A message that requires the greatest amount of opinion change is likely to produce the most change.

• Learning and acceptance are improved if stress is placed on similarities of position rather than differences.

• Agreement is facilitated when the desirability of agreement is stressed.

• Agreement on controversial issues is improved if they are tied to issues on which agreement can be easily reached.

TERMS

The words buyer and seller are used in this discussion for ease in communication because, in most negotiations, one side has approached the other with a proposition to be dealt with. This may involve labor/management disputes, business mergers or reorganizations, job seeking, purchasing activities, or any management or personal considerations that involve reconciling two points of view.

NEGOTIATION SITE

As a general rule, negotiations take place at the seller’s place of business when they involve essentially personal matters and at the buyer’s office when they involve commercial or job-related dealings. The basic reason given for this is that it is convenient for the principal party—“All the figures are in my office”; “I have all the proper legal forms (deeds, notes, liens, and the like).”

This may really be the first evidence of power: You come to me. Thus, the simple matter of where to meet can be used to your advantage. Most people are more comfortable, and therefore more effective, in familiar surroundings because they feel they have a degree of control there that is not always possible in strange environments. So, if you have the option, you will probably have the client come to you.

If the option falls to your opponent, you can arrange to have several equalizers to balance the disadvantage of negotiating on unfamiliar turf. Among these will be ways to get away from the negotiation table for a time if it appears desirable to do so. If you don’t like the deal after hearing all the details, you can always go home, or ask to adjourn for a few days to get an important piece of information at the office.

Seating

Experienced negotiators will use the most commonplace tools to enhance their effectiveness. Often the buyer will occupy the end of the meeting table with his or her team on one side and the seller and the seller’s team on the other. Frequently, the seller will maneuver to place his or her chief negotiator eyeball to eyeball with the buyer to establish equality of position.

In some cases, the buyer will sit at the head of the table with his or her team strategically placed on either side. The seller and the seller’s group have the less desirable, lower end of the table. The purpose of this may be to place members of the buyer’s team in positions where it is possible to read the notes taken by the members of the seller’s team. Such an arrangement usually permits the seller’s team to read notes too. Whatever the seating arrangement, it should not be changed unless the alteration is for the host’s benefit.

Lighting

The lighting in the room also has a psychological impact. It is not uncommon for the buyer’s team to be seated in front of windows, with the seller’s team facing the light. This gives the advantage of having the buyer’s face in a dimmer area where it cannot be easily read. Because soft lighting produces a restful effect and bright lights stimulate, the host, who controls the switch, can influence the mood of the session to some degree.

Decor

Color and decor are believed to have a psychological impact on people. Cool colors, such as green or blue, are restful and serve to increase the ability to concentrate for longer periods of time. Bright colors have a stimulating effect. One study suggests that drivers of yellow cars generate aggressiveness in other motorists. If valid, this observation could be useful to the host negotiator. Some believe that somber, opulent surroundings encourage careful, reasoned deliberations, while more contemporary environments stimulate innovation and creativity. Therefore, attention should be given to the room in which negotiations take place and, at the very least, the furnishings and decor should be comfortable, inoffensive, and appropriate to the business at hand.

ANATOMY OF THE NEGOTIATION SESSION

Negotiations are divided into three major parts: the fact-finding session; the bargaining session; and the finalizing session. Each of these sessions has characteristics of its own.

Fact-finding

In the opening session, ground rules are established about the areas to be negotiated, the time available, and so on. Little of this is done openly. In what often appears to be social or get-acquainted conversation, each side assesses the adequacy of its prenegotiation efforts and maneuvers for later advantage.

It is common for the host to ask a series of broad questions designed to determine that both sides are concerned about the same overall issues, and to find out if the guest has necessary authority to bind his or her principal to whatever agreement is reached. Such questions should be answered directly and without elaboration.

If you are the host, you can expect to learn a good deal if you listen, without arguing or making contentious statements, until all the information requested has been provided. If you are not satisfied with the answers given or the manner in which they are presented, adjourn negotiations until adequate data are supplied or a new cast of characters has been assembled. Tact should be used to avoid setting a hostile tone for the balance of the proceedings.

This is a time to listen and observe. Both you and your opponent should be aware that this is not the time for debate. The purpose of the fact-finding session is to be sure that your homework has been properly done and that the strategies and tactics you have prepared are as effective as possible.

Recess

A recess to evaluate new information should be scheduled to follow the fact-finding session. It also provides an opportunity to evaluate the opponent’s representatives. At the end of the fact-finding session, both sides should have a thorough understanding of the principal issues to be raised and a good idea of the position each side is likely to take. Recess discussions should be structured to allow each team member time to comment. Following this input, appropriate realignments, reassessments, and reassignments should be made. The recess is a valuable opportunity to strengthen presentations. It should not be wasted.

The Bargaining Session

The bargaining, or negotiating, session is the feature attraction. This is the time when opposing strategies and tactics collide; when objectives are reinforced or abandoned; when questions are asked, answered, parried, or ignored; and, when each side strives to achieve maximum advantage. If skilled negotiators are involved, both sides will try to avoid an impasse, find practical alternatives, and develop approaches that both can find acceptable.

As a practical matter, even if one bargainer has a weak case, often he or she comes away from the session gaining more than losing. If the bargainer’s case is strong to begin with, those crumbs he or she throws to an opponent can produce much good will and strengthen later relationships.

The Final Session

Once the bargaining is complete, each side should ensure that there is a clear, mutual understanding of what has been accomplished. Most often areas of agreement are readily apparent and can be further clarified through a verbal summary at the close of negotiations.

It is always wise to allow for the possibility of later disagreement. If this is at all likely to occur, a written agreement should be worked out, regardless of whether it is customary practice.

Once decided, formal or complex agreements should be reduced to writing, signed by both sides, and copies distributed to serve as documentation of the results of the session. This procedure is important to ensure that both sides fully understand all points that have been agreed upon.

If some important conditions have been overlooked or misunderstood, participants may be unable to accept the final agreement and negotiations must be reopened. If any doubt exists regarding a true meeting of the minds, it is more efficient to resolve it before negotiations finally adjourn.

All documentation of any negotiation should be retained for the life of the agreement.

CONTROLLING THE SESSION

Effective negotiators have much in common with effective leaders. Both are able to control, rather than be controlled by, the situation in which they find themselves. Both function in such a way as to have a significant impact on the others with whom they are dealing.

Earlier we discussed the reasons why successful negotiators must maintain good control over their actions and those personal factors that motivate them. We have mentioned methods by which they can maintain objectivity, or at least the appearance of it, and retain control over the deliberations. When actual negotiations begin, these skills should be so well established that they come into play automatically.

At this point, one must assume that the adversary has a high degree of skill and motivation. As the stakes are real and the opponent is skilled, the art of negotiation must be well-practiced by the time the sessions take place. A relatively simple method of establishing initial control—even as early as the fact-finding session—is through an effective opening statement.

The Opening Statement

The introduction to the proceedings may be done by the host or given over to the guest. In either event, the opening statement should set the tone for the entire negotiation session. Whether it is best to open with an aggressive statement or with a calm and reasonable presentation of facts is a matter for individual choice. It will depend partly on the personality of the negotiator and partly on the circumstances under which the bargaining takes place. In addition to establishing the atmosphere for the negotiation session, an opening statement can:

• Fix parameters for discussion.

• Set up ground rules for the session.

• Stipulate prior agreements (or matters previously settled).

• Ensure that both sides are aware of the overall issues to be resolved.

The Agenda

The agenda also can serve as a tool for establishing control. Each side should have an agenda since a negotiation is in fact a conference—regardless of whether there are two persons meeting or two hundred. It is not uncommon for each side to have two agenda, one that is shared with the other side to establish the order of procedures, and one that is far more detailed and never shown to anyone outside the team.

An agenda, established beforehand, is an idea of how things should go, and helpful in even the most informal situations. For example, it should always be a part of the planning related to personal business of any significance. Perhaps the negotiator would prefer to proceed issue by issue, resolving one before going on to the next. The other side may want to discuss the bottom line first. Often the negotiator who wants to resolve each issue in a prearranged order takes this position to conceal an overall strategic plan.

If, as the opponent, you prefer another approach, a sound argument is to point out that the negotiation includes settling a series of issues and that it is unlikely each side will agree to the proposed solution offered by the other on every point. Therefore, negotiations will be unduly hampered if agreement and settlement on each issue must be reached before the next topic is considered.

The order in which issues are presented can be important. The negotiator must decide whether or not to introduce easily manageable matters at the outset, or whether to present the most controversial issues first. The latter technique gets problems out of the way early and allows smooth sledding for the balance of the discussions. However, this approach also makes it more difficult to establish a cordial atmosphere of mutual respect. This is often important in getting over high hurdles that have been postponed until later. Generally speaking, deciding to present hard issues early is better when the two participants are bargaining from positions relatively equal in strength.

It is important to mention at this point that control and high visibility are not necessarily synonymous. Where there should be only one lead negotiator for each side, that individual need not use the bulk of the floor time. Sometimes it is better for the negotiator to assume the role of moderator, introducing a topic and appointing a spokesperson, maintaining order, moving from point to point as agreement is reached, tabling those issues where agreement is not yet possible.

As moderators, negotiators remain independent of the action and control the session by passive means. They also act as observers, saying as little as possible, and note any significant behavioral characteristics of the opponents. When it is to their advantage to speak, they may step in and gather up the reins of the transaction.

BARGAINING AS THE SESSION PROGRESSES

Hosts are expected to take the lead when negotiations begin. Opponents will assume a defensive or offensive tactical stance. As issues are presented, hosts will attempt to convince the other side of the rightness of their position. Opponents will counter by discussing the risks that must be taken to meet the host’s needs. Neither side should belabor these points, and exploring alternative solutions should be encouraged.

If one side objects to an approach offered, the party offering should state his or her objective, justify it, and ask the other side how they could work together to achieve it. If agreement on a particular issue is not possible at the time, neither side should talk it to death. Both sides should avoid providing the other side with an opportunity to accuse them of stalling or otherwise failing to bargain in good faith.

As the negotiations continue and lesser issues are resolved, more sensitive areas are exposed and greater problems are encountered. If differences between the parties are small, compromise should be sought. If this is not possible and the two sides are far from agreement, the side with the better position will make a small concession on the condition that the other side also concede something.

When all else fails, the stronger team should not hesitate to use its strength, indicating clearly that it is to the other’s advantage to concede rather than test the stronger team’s superior position. This is the hole card that is exposed at a critical moment in the negotiating process. However, negotiation does not require either party to sacrifice legitimate objectives in order to secure agreement.

Generally speaking, negotiations take place at the seller’s place of business when they are personal, and at the buyer’s place of business when they are commercial or job-related.

The lighting, seating, and furnishings of the meeting room have some potential for psychological advantage in negotiations.

Negotiators may choose to serve as moderators rather than as principal speakers, which may increase their maneuverability.

Why prepare two agenda? One may serve as a conference guideline, and the other as a battle plan for one side.

The opening statement serves the purposes of:

• Setting time limits for the negotiation.

• Defining the area of negotiation.

• Providing the ground rules.

• Stating points that have been agreed on.

• Restating the overall issues to be resolved.

• Establishing initial control.

If there is an objection to a negotiating approach offered, the party offering should restate the objective, justify it, and ask the other party how they can best work together.

A recess provides an opportunity to do what may be necessary to complete negotiations successfully: realign the negotiation plan, reassign responsibilities, and reassess respective bargaining positions.

Finally, document and retain all significant points of agreement and disagreement. In the event of a later dispute over what was agreed to or the manner in which unsolved issues or disagreements are to be handled, such documentation will prove invaluable.

Review Questions

1. A major part of the negotiating session is:	1. (d)
(a) fact-finding.
(b) bargaining.
(c) finalizing.
(d) all the above.
2. To be effective, both negotiators and leaders must maintain control over the situation.	2. (a)
(a) True
(b) False
3. The tough issues should be addressed first, while everyone is fresh, and have relatively equal bargaining strength.	3. (a)
(a) True
(b) False
4. When the pros and cons of an issue are being discussed, it is best to present your point of view when?	4. (b)
(a) First
(b) Last
(c) Middle
(d) Anytime
5. An effective method of reaching agreement on a controversial issue is to:	5. (c)
(a) require the other side to concede as a show of good faith.
(b) avoid controversy altogether.
(c) link the issue to another one on which agreement can easily be reached.
(d) link the issue to another one equally controversial.
6. Documenting the results of a negotiation ensures that both sides fully understand all the points that have been agreed upon.	6. (a)
(a) True
(b) False