Bargaining for Advantage: Negotiation Strategies for Reasonable People

by G. Richard Shell

To be good, you must learn to be yourself at the bargaining table. Tricks and stratagems that don’t feel comfortable won’t work.

you need to focus on being alert and prudent.

skilled negotiators see more than just opening offers, counteroffers, and closing moves when they look at what happens at the bargaining table. They see psychological and strategic currents that are running below the surface. They notice where the parties stand in terms of the reciprocity norm.

They look for opportunities to use what psychologists call the consistency principle, which underlies most discussions of fairness in negotiations. They know that the timing of a proposal can be as important as its content.

solid planning and preparation before you start, careful listening

thoughtful attention

My approach focuses on six psychological factors or, as I call them, “foundations” of effective negotiation. These Six Foundations, described in part 1, are personal bargaining styles (see the personality assessment in appendix A), goals and expectations, authoritative standards and norms, relationships,

other party’s interests, and the diverse ingredients that go into that most important of all bargaining assets: leverage. With information on these foundations in hand, you are ready to move down the predictable, four-stage path that all negotiations follow: the creation of a negotiation plan (a simple preparation template is provided in appendix C), preliminary exchanges of information, proposal trading, and finally the closing and commitment stage.

preparation, information exchange, explicit bargaining, and commitment.

people get down to the business of making concessions and establishing commitments.

Let’s begin our journey to enhanced negotiation skills by identifying more precisely when you should be negotiating and when you should be relying on the two other key interpersonal skills mentioned above: influence and persuasion. The diagram

In general, your credibility as an influencer comes from people’s perceptions of four things: your authority, knowledge, competence derived from real-world experience, and trustworthiness.

Persuasion is a verbal skill. It involves using arguments, reasons, and justifications to make your case.

cooperative and competitive.

bring that professional mind-set to all your negotiations. When negotiating for a raise, think of yourself as advocating for your family or your future retired self, all of whom need financial security.

culture,

improve their negotiation results. They are: A willingness to prepare High expectations

The patience to listen A commitment to per...

An expectation, by contrast, is a belief about what we ought reasonably to accomplish. If we fall short of our expectations,

Summary The first important step in preparation is committing to ambitious, specific, justifiable goals. Clarity of purpose and optimism are key attitudes to bring to the goal-setting process.

“productivity.” Finally, the single most common tactic for closing a negotiation is a standard allocation formula: splitting the difference.

Why are standards and norms—particularly standards the other side has adopted—such an important part of bargaining? Because, all else being equal, people like to be seen as consistent and rational in the way they make decisions.

beliefs. Negotiations are fertile ground for observing the consistency principle at work. When the other party justifies its proposal using fairness standards you have publicly committed yourself to in the past, you have a problem. You must either walk away from the standards (and look like a hypocrite) or debate their application to the present case—a move that subtly moves you toward the other side’s position.

Normative leverage is the skillful use of standards, norms, and precedents to gain advantage or protect a position.

The best practice is therefore to research the other side’s preferred standards, then frame your proposal within them. If your proposal cannot be defended using their standards, prepare to argue for an exception to their standards based on the special facts of your case. Attack their standards directly only as a last resort.

positioning your needs within the normative frameworks other parties use to make decisions, you show them respect and, as a result, gain their attention.

The goal of a consistency trap is to precommit you to a seemingly innocent standard and then confront you with the logical implications of the standard in a particular case—implications

In these difficult cases, you will need to resort to explicit leverage and search for an ally—a third party to whom your bargaining counterpart is answerable and who is more sympathetic to your norms. Once

Allies serve as audiences to guarantee the application of standards that ought, in fairness, to apply.

conventions and norms of that organization. Your credibility as an effective advocate will depend on this.

Market-shaping and legal standards aside, most fairness norms in negotiations are contestable. They

“positioning themes.” A positioning theme is a crisp, memorable phrase or framework that defines the problem you are attempting to solve in the negotiation using words the other side can understand.

fragile interpersonal dynamic: trust. We trust others when we sense that we can rely on

Finally, what is the secret to creating and sustaining trust in negotiation? A simple but sturdy norm in human behavior: the norm of reciprocity.

others’ thoughts and perceptions, known as perspective-taking ability, are even worse.

Boiled down to its essence, the norm of reciprocity in negotiation amounts to a simple, three-step code of conduct. First, you should always be trustworthy and reliable yourself. Second, you should be fair to those who are fair to you. Third, you should let others know

Relationships After the panic of 1873, the relationship between J. P. Morgan and Andrew Carnegie was based on a degree of mutual

remember that sincerity in your conduct is always the key to any of these methods working effectively.

guanxi (pronounced “gwang-chi”). As one prominent Asian business publication put it, “Connections

too. We are just less forthright about

the more likely they are to focus during planning on possible areas of common ground between the parties.

Identify the decision maker. Look for common ground: how might it serve the other party’s interests to help you achieve your goals? Identify interests that might interfere with agreement: why might the other side say no? Search for low-cost options that solve the other party’s problems while advancing your goals.

Leverage is your power not just to reach agreement but to obtain an agreement on your own terms.

definition: The party that thinks they have the most to lose from a “no deal” outcome has the least leverage; the party that thinks they have the least to lose has the most leverage. Note well: this is a

psychological

second point about threats: they are effective only if they are credible.

overall question of what leverage is. If you were alert, you noticed that insights into others’ needs (chapter 5) and analysis of the standards they believe in (chapter 3) play key roles in assessing leverage. But there are two additional elements we are meeting for the first time. First, there is the threat

the basic emotion underlying all leverage assessments: fear of loss.

Now that you understand situational analysis and the importance of preparation for both perspective taking and planning your methods of communication, you can combine this knowledge with the Six Foundations to create a specific bargaining plan. As noted above, appendix C provides a simple, fill-in-the-blanks

from systematic preparation are essential to Information-Based Bargaining. But good planning is only a start. One of the best uses of preparation is to make a list of specific questions you intend to ask early in the negotiation.