«3 Chapter Distributive Bargaining T he negotiation model known today as distributive bargaining was first identified by R. E. Walton and R. B. ...»
Then in the second room, with group B, repeat the exercise, but this time give the volunteers this instruction: “Fairly divide the Snickers into two parts. Keep one for yourself and give the other to your partner, but don’t eat them until I tell you.” Again, inspect each pair of divided bars and determine how many are of approximately equal size.
Now bring the groups together and explain what just took place in each room. Did most of the volunteers in group A divide the Snickers bars into two parts of approximately equal size, even though your instruction was to divide them into two parts of any size? Did most of the volunteers in group B follow your instruction to “fairly” divide the Snickers bars into two parts of approximately equal size as well? If the volunteers in group A (the control group) are like most people, they choose to split the Snickers into two approximately equal parts, just like the volunteers in group B who were instructed to “fairly” divide the bars. Why? Ask the volunteers to explain their action. The explanation offered by most people is that even though the volunteers in group A were told “any size,” they chose to divide the bars into approximately equal size because they wanted to be fair! This is a demonstration of how the fairness norm affects behavior when individuals are in a distributive situation.
Exercise 2 A possible discussion point of the first exercise is the value of the good to be distributed. Some may posit that the value of a Snickers is too small to cause participants to slight their partners by dividing the bar unequally. To further explore the fairness norm, raise the value. The volunteers would be asked to distribute something of more value, such as a hypothetical $10,000 bonus from their employer, given to a group of employees who worked without an accident for the prior year. Volunteers would divide the bonus into portions of “any size,” keeping one portion for themselves and distributing the other portions to the other group members. Volunteers in the control group would be asked to divide the bonus “fairly.” Then of course the critical question for the group to discuss is: “Does raising the value change the outcome? Why or why not?” As a variation, to possibly change the outcome, ask each volunteer to divide the $10,000 bonus among a group of three employees, one of whom only worked half the year while the others worked the entire year. In this scenario volunteers usually apply the fairness norm of equity, and the employee who worked only half the year will usually receive half as much as the other two employees.
norm or any other norm is simply an external standard that people employ to guide them in negotiations. However it may provide a very convincing argument in support of a proposal. Using norms or standards does not provide negotiators with a means of reaching the “fairest” outcome. Why? Reasonable people can use different norms and facts to reach different solutions. However utilizing norms or standards can assist negotiators in their efforts to reach an agreement in at least three 68 Chapter 3 Distributive Bargaining ways: (1) Making decisions based on a norm such as fairness is easier than making decisions on offers that are randomly tossed out. (2) An offer based on a norm is more persuasive than an arbitrary number, and thus more likely to receive serious consideration. (3) It is easier to agree to the other party’s offer if it is based on a norm, because you are agreeing to a principle, not a pressure tactic.17 For example, would you find it easier to agree to “That is my final offer—it’s what I want, and I don’t have to explain it!” or “I can’t lower the price any more—it’s already $2,000 less than what we sold the last one for, and I matched your concession, which I think is only fair, so do we have a deal?” Reciprocity Norm The reciprocity norm, or the human tendency to respond to the actions of others with equal or similar actions, is a third major type of norm. Someone who believes that “an eye for an eye” is the most reasonable response to another party is applying the reciprocity norm. For example, a seller who drops her price by $2,000 may expect the buyer to counter with a $2,000 higher offer. At the negotiation table, a single act of hostility—or one of respect and cooperation—can be responded to with like action, and start an ongoing cycle that can last for years, even after the individuals who initiated it are long gone. Such cycles, which often grow from a perception of hostility or unfairness, can become vicious. Alternatively, they can be positive or virtuous if the negotiation process itself is perceived to be fair and the outcomes are perceived to be fair. Such cycles are often perpetuated by other human behaviors, including (1) naïve realism—when people assume their view of the world, and only their view, reflects reality, (2) confirmatory bias—when people tend to seek only information that confirms their original position or belief, and (3) accuser bias—when we tend to hold someone who has harmed us once excessively responsible for other actions. These human tendencies cause the cycles of vicious or virtuous behavior to be perpetuated, and the reciprocity norm to be practiced.18 Good Faith Bargaining Good faith bargaining is a fourth major type of norm, and in a negotiation situation generally means that people expect certain behaviors from the other negotiators,
including the following:
1. They will honor what they propose in bargaining; they do not retract an offer once made and accepted, and if necessary they sign written agreements.
2. They are willing to meet together, at reasonable times and places, to discuss issues.
3. They are willing to make proposals on each of the issues at hand.
4. They will engage in a process of give-and-take or compromise.
5. They provide only honest information, and if necessary will share their sources of information.
It is important to realize that in most negotiation situations, however, there are no legal or prescribed rules for good faith bargaining, and unfortunately reasonable people can disagree as to exactly what behaviors define “good faith.” Thus, one
Chapter 3 Distributive Bargainingparty may feel that the other has violated the rules of good faith bargaining, and discussions can be prematurely terminated. Why? It is often said that a negotiator’s greatest asset is integrity. Few negotiators will continue to meet with someone they no longer trust to be negotiating in good faith, since they cannot expect to reach an agreement, or if one is reached, they fear it will not be implemented as negotiated.
Workplace collective bargaining in the United States is a specialized negotiation situation that involves representatives from labor and management—an example of the good faith bargaining norm in action. The National Labor Relations Act of 1935 and its amendments require the representatives to meet at reasonable times and confer in good faith on issues such as wages, benefits, hours, and working conditions. This requirement includes active participation with an intention to reach an agreement and to sign binding agreements on mutually acceptable terms. It does not however, require either party to make a concession or agree to a proposal.
Returning to the Chapter Case, the buyers and the seller of the work of art (refer again to Figure 3.3) will draw upon one or more of the negotiation norms just discussed as a basis for making counteroffers to the other party and for evaluating the counteroffers received. In addition, during this give-and-take process they may choose to utilize one or more of the common negotiation tactics described in Chapter 2. As you recall, these tactics include (1) making extreme or even ridiculous opening offers—designed to cause the other side to question its own opening positions; (2) claiming limited authority to make concessions; (3) using emotional outbursts such as shouting, cursing, name-calling, and even walking out in a huff as part of a posturing strategy; (4) offering few concessions, they view concessions as a sign of weakness, and thus offer few themselves, and seldom offer a concession not even in return when concessions are made by the other side; (5) resisting deadlines and using time as their ally, preferring a delayed settlement if it gains something, however small, for their side; and (6) waiting to counter after receiving an offer (see Box 3.3).19 In time, the buyers and the seller in our Chapter Case (refer again to Figure 3.3) agreed upon a negotiated price, X, that fell within the ZOPA of $8,000–$11,000 and thus met the reservation price of both parties. Exactly which price a party accepts often depends on how the offer is framed when it is presented.
Framing Positions After identifying the issues to be negotiated, the next step in the preparation process is to carefully “frame” each issue (or group of issues)—that is, decide exactly how the issue will be presented to the other side in a context that is convincing. Framing is recognized as a key variable in the negotiation process because how an offer is framed has a significant impact on how it will be viewed by the other party. In general, the framing of a position refers to the wording and context of the offer. The art
Wait to Counter After receiving the opening offer from the other will make your opponent feel better about the party—or in fact any offer—a good tactic is to process. After waiting a respectful period of wait before responding. Why? A response time, you can reject the offer, or even better, delivered too quickly may cause the other respond with, “We have considered your offer party to think you did not seriously consider and would like to propose that you consider the merits of their offer, and may even appear this counteroffer …” This tactic of waiting to that you are belittling them. Waiting a respect- respond to an offer shows a level of respect for ful amount of time to respond, even if you the other party—and can help both parties never had any intention of accepting their offer, reach an agreement.
Source: Adapted from Michael R. Carrell and Christina Heavrin, The Everyday Negotiator (Amherst, MA:
HRD Press, 2004), 99–102.
of framing positions, offers, and counters is considered one of the key negotiation skills that must be learned by the novice negotiator.
Why is framing so important? Noted mediator Theodore Kheel explains that while the facts and numbers in a proposal are important, people often attach significant meaning to words, which therefore affects their view of the proposal. Kheel cites an interesting example in U.S. history. One Gallop survey taken the day after President Bill Clinton confessed his affair with Monica Lewinsky used traditional wording: “Now I’d like to get your opinion about some people in the news. As I read the name, please say if you have a favorable or unfavorable opinion of this person …” The result was 55% favorable, 42% unfavorable. Yet another Gallop survey on the same day used different wording: “Now thinking about Bill Clinton as a person, do you have a favorable or unfavorable opinion of him?” The result was 40% favorable, 48% unfavorable. Two polls taken on the same day by the same professional polling organization, with different wording, which therefore framed the question differently, produced significantly different results.20 One example of framing that received national attention occurred in the O. J.
Simpson murder trial. The prosecution chose to frame the trial as “O. J. Simpson the wife-beater v. The female victim,” while the defense chose to frame the trial as “O. J. the ethnic minority victim v. The racist police force”—the frame accepted by the jury that acquitted him.21 People often view the same issue quite differently, especially when they sit across from each other in negotiations. They naturally bring different perspectives, expectations, biases, and experiences to the table. How should an issue be framed?
First, consider each issue simply as a point of disagreement between the parties.
Issues may focus on procedures—exact payment method, the timing of delivery, and so forth—or on content—price, contract length, quantity. In general you can frame an issue in a slanted manner that puts your position in the best possible light (“A fair price is $20,000 because that is the book value”), or in a nonjudgmental manner that states the issue as a question and invites the parties to search for a solution (“How can we objectively estimate a fair price?”). This latter method of framing is less
Chapter 3 Distributive Bargainingantagonistic and moves discussions toward a process of creative problem solving if both parties are open to using it.22 Herb Cohen suggests that issues should be presented in terms of three critical elements:23
1. Information: What do you know about the priorities, limits, and strategy of the other side?
2. Time: Is either side operating under a deadline? Is there pressure from an outside party to settle quickly?
3. Power: Who has the ability to exercise control over the situation? Power can originate from different sources: (a) competition—if three parties make offers on the same house, who has the power? the seller, of course; (b) expertise—a third party supports your position and thus gives it validity; (c) persuasive capacity—experienced negotiators clearly present the issues, provide strong evidence to support their positions, and offer proposals that meet the needs of both sides.
The framing of an issue can greatly affect the outcome of the bargaining. Even a one-word change can significantly alter how both sides view the issues. For example, in negotiations to merge two organizations, the managers were reviewing the personnel files of each key person. In each case only one person would be retained.
In the case of one high-ranking position, a manager stated, “Now in thinking about Taylor, he is too valuable not to keep him, and in the HR director’s job.” The second manager who wanted his own person, Lane, in that position needed to quickly
reframe the issue of Taylor and repeated the statement with a one-word insertion: