Bargaining for Advantage

by G Richard Shell

  In other words, the competitive person’s belief that others are competitive sometimes acts as a self-fulfilling prophesy. And the same process can sometimes work in reverse, with a cooperative person’s belief in cooperativeness allowing his or her counterpart to drop their guard and behave in a more reasonable, helpful way. Whether this works, of course, depends on what type of person is actually sitting on the other side of the table.

  By contrast, when two people displaying similar styles meet, the rapport can be instant. As the super-competitive Donald Trump notes in his 1987 book, The Art of the Deal, “When [a competitive person] says no, sometimes you can talk him out of it. You rant and rave; and he rants and raves back, and you end up making a deal.” The same sort of “style match” occurs when two cooperative people negotiate against one another.

  In general, my advice is to take a minute at the beginning of a negotiation to size up your counterpart and see which styles he or she is bringing to the table. You can do this by negotiating some smaller items before you get to the main event and gauge the other person’s reactions. Are they careful to reciprocate your every move? That is a sign of cooperativeness. Do they seem to be holding on to information and jumping on chances to “stay ahead”? You may have a competitive person on your hands. Either way, don’t waste time trying to convert the person to your preferred style. Just accept them as they are and work to achieve your goals.

  5. Do scores change over time?

  Scores are a function of the time and place in which one fills out the instrument. If one has had a recent, very bitter conflict that has ruined a relationship, there may be a tendency to regret this event and select more accommodating choices than would otherwise be the case. Similarly, if one has recently been taken advantage of in a tough negotiation, then one’s scores might reflect a desire to correct this by selecting more competitive statements than would ordinarily be true.

  If users can place their mind in “neutral” and simply do their best to select which of the statements in each pair better expresses their overall preferred attitude, however, the scores should be relatively stable over time. At the very least, the direction of these scores ought to remain relatively steady, with strongly preferred strategies maintaining their preferred positions—though by somewhat smaller margins. My own scores have not changed much over the years, for example. But the same may not be true for a younger or inexperienced negotiator who takes the assessment at one stage of a career and then, many years and experiences later, repeats it.

  6. How is the Bargaining Styles Assessment Tool different from the Thomas-Kilmann Conflict Mode Instrument referenced in the first edition of Bargaining for Advantage?

  The Bargaining Styles Assessment shares a common structure with the Thomas-Kilmann Conflict Mode Instrument (TKI), which I recommended in the first edition of this book. Both surveys feature a “forced choice” method of self-reporting that is used in many psychological assessments. Moreover, both tests incorporate the five style categories developed by Professors Blake and Mouton in the mid-1960s: competing, collaborating, compromising, accommodating, and avoiding.

  However, the statements used in the Bargaining Styles Assessment (and sequence in which they appear) differ from those used in the TKI and are more directly related to negotiation than are many of the TKI statements. Readers are encouraged to compare the two self-assessment approaches for themselves by ordering a copy of the TKI from its owner, Consulting Psychologists Press, Inc. at its Web site CPP.com and comparing their results from the two surveys.

  Appendix B:

  Information-Based Bargaining Plan

  Notes

  INTRODUCTION : It’s Your Move

  xx “You must actually negotiate”: James C. Freund, Anatomy of a Merger (New York: Academic Press, 1975), p. 10.

  CHAPTER 1: The First Foundation: Your Bargaining Style

  3 Danish folk saying: R.G.H. Siu, Folk Wisdom and Management 3,333 Proverbs (Washington, D.C.: Manuscript, 1994), p. 13.

  4 talking into the night: Bettye H. Pruitt, The Making of Harcourt General (Boston: Harvard Business School Press, 1994), pp. 219-242.

  4 of large, shady trees: This story is taken, with a few dramatic elaborations on my part, from the true story of a negotiation among the Arusha people described at length by anthropologist P. H. Gulliver. See. P. H. Gulliver, Disputes and Negotiations: A Cross-Cultural Perspective (New York: Academic Press, 1979), pp. 234-252.

  8 finally won a hand: Connie Bruck, Master of the Game: Steve Ross and the Creation of Time Warner (New York: Penguin Books, 1994), p. 93.

  8 CNN’s owner, Ted Turner: Larry King’s agent was Bob Woolf. See Bob Woolf, Friendly Persuasion: How to Negotiate and Win (New York: Berkley Books, 1990), pp. 147-148.

  14 using these two labels: Gerald R. Williams, Legal Negotiation and Settlement (St. Paul, Minn.: West Publishing, 1983), p. 19.

  14 John Carlisle in England: Neil Rackham and John Carlisle, “The Effective Negotiator—Part 1: The Behavior of Successful Negotiators,” Journal of European Industrial Training, Vol. 2, No. 6 (1978), pp. 6-11; Neil Rackham and John Carlisle, “The Effective Negotiator—Part 2: Planning for Negotiations,” Journal of European Industrial Training, Vol. 2, No. 7 (1978), pp. 2-5.

  15 toward affirming their status: Deborah Tannen, You Just Don’t Understand: Men and Women in Conversation (New York: William Morrow, 1990); Talking from 9 to 5: Women and Men at Work (New York: William Morrow, 1994).

  16 a bit more cooperatively than men: Amy E. Walters, Alice F. Stuhlmacher, and Lia L. Meyer, “Gender and Negotiator Competitiveness,” Organizational Behavior and Human Decision Processes, Vol. 76 (1998), pp. 1-29; Alice Stuhlmacher and Amy E. Walters, “Gender Differences in Negotiation Outcomes: A Meta-analysis,” Personnel Psychology, Vol. 52 (1999), pp. 653-677.

  16 a number of studies and contexts: Linda Babcock and Sara Laschever, Women Don’t Ask: Negotiation and the Gender Divide (Princeton, NJ: Princeton University Press, 2003). See also D. M. Kolb and J. Williams, The Shadow Negotiation: How Women Can Master the Hidden Agendas that Determine Bargaining Success (New York: Simon and Schuster, 2000).

  17 what scholars call “stereotype threat”: Laura J. Kray, Leigh Thompson, and Adam Galinsky, “Battles of the Sexes: Gender Stereotype Confirmation and Reactance in Negotiations,” Journal of Personality and Social Psychology, Vol. 80, No. 6 (2001), pp. 942-958; Laura J. Kray, Adam Galinsky, and Leigh Thompson, “Reversing the Gender Gap in Negotiations: An Exploration of Stereotype Regeneration,” Organizational Behavior and Human Decision Processes, Vol. 87, No. 2 (2002), pp. 386-409.

  18 cross-cultural issues can be showstoppers: Catherine H. Tinsley, “How Negotiators Get to Yes: Predicting the Constellation of Strategies Used Across Cultures to Negotiate Conflict,” Journal of Applied Psychology, Vol. 86, No. 4 (2001), pp. 583-593.

  19 people of equal rank: John L. Graham, “The Japanese Negotiation Style: Characteristics of a Distinct Approach,” Negotiation Journal, Vol. 9, No. 2 (April 1993), pp. 123-140.

  19 Latin America to negotiate a complex deal: Laura-Ann Dooly, “Culture Clashes Hinder Deals,” The National Law Journal, Vol. 22, No. 3 (September 13, 1999), pp. B1, B4.

  20 help you avoid cross-cultural meltdowns: The best overall treatment of cross-cultural negotiating issues is Camille P. Schuster and Michael J. Copeland, Global Business: Planning for Sales and Negotiations (Fort Worth, TX: The Dryden Press, HarcourtBrace College, 1996). There are abundant resources in the business press and literature on specific cultures and the problems that can arise for negotiators. See, for example, Terri Morrison, Wayne A. Conaway, and George A. Borden, Kiss, Bow and Shake Hands: How to Do Business in Sixty Countries (New York: Adams Publishing, 1995); John L. Graham and N. Mark Lim, “The Chinese Negotiation,” Harvard Business Review, October 2003, pp. 82-91.

  21 has confirmed its importance: Arvind Rangaswamy and G. Richard Shell, “Using Computers to Achieve Joint Gains in Negotiation: Towards an Electronic Bargaining Table,” Ma
nagement Science, Vol. 43, No. 8 (1997), pp. 1147-1163.

  22 straightforward dealing very highly: Gerald R. Williams, Legal Negotiation and Settlement (St. Paul, Minn.: West Publishing, 1983), pp. 20-40; Howard Raiffa, The Art and Science of Negotiation (Boston: Harvard University Press, 1982), pp. 119-122.

  23 all make a difference: I have explored these and related questions in an article. See G. Richard Shell, “When Is It Legal to Lie in Commercial Negotiations?,” Sloan Management Review, Vol. 32, No. 3 (1991), pp. 93-101.

  CHAPTER 2: The Second Foundation: Your Goals and Expectations

  26 King Ching of Chou (1100 B.C.): Violina P. Rindova and William H. Star-buck, “Ancient Chinese Theories of Control,” Journal of Management Inquiry , Vol. 6, No. 2 (June 1997), pp. 153-155.

  26 Sam Walton, founder of Wal-Mart: Sam Walton, “Running a Successful Company: Ten Rules That Worked for Me,” in Sam Walton: Made in America (New York: Doubleday, 1992), p. 246.

  27 “America wants big radios”: Akio Morita, Made in Japan (New York: E. P. Dutton, 1986), pp. 83-85.

  28 are to obtain it: Several research studies have shown that people who set specific goals outperform those who set general or “do your best” goals. See G. Lathan and E. Locke, “Self-regulation Through Goal Setting,” Organizational Behavior and Human Decision Processes, Vol. 50, No. 2 (1991), pp. 212-247. E. Locke and G. Latham, A Theory of Goal Setting and Task Performance (Englewood Cliffs, N.J.: Prentice-Hall, 1990), pp. 29-31; I. R. Gel-lately and J. P. Meyer, “The Effect of Goal Difficulty on Physiological Arousal, Cognition, and Task Performance,” Journal of Applied Psychology, Vol. 77, No. 2 (1992), pp. 694-704.

  28 with others at risk: For a good survey on the use of ambitious goals to raise performance, see Kenneth R. Thompson, Wayne A. Hochwater, and Nicholas J. Mathys, “Stretch Targets: What Makes Them Effective?” Academy of Management Executive, Vol. 11, No. 3 (1997), pp. 48-61.

  28 Cat replies, cutting her off: Lewis Carroll, Alice’s Adventures in Wonderland (New York: Penguin, 1960), p. 64.

  29 ought reasonably to accomplish: Peter M. Blau, Exchange and Power in Social Life (New York: John Wiley & Sons, 1964), pp. 145-151.

  29 to obtain doctoral degrees: U.S. Department of Education, National Education Longitudinal Study 1988-1994 NCES 96-175 (May 1996), pp. 45-46.

  29 the firmer our expectations grow: Scholars have identified these factors, and more, in a variety of empirical studies. See Reinhard Tietz, Hans-Jürgen Weber, Ulrike Vidmajer, and Christoph Wentzel, “On Aspiration-Forming Behavior in Repetitive Negotiations,” in Heinz Sauermann, ed., Bargaining Behavior (Tübingen, Germany: J.C.B. Mohr, 1978), pp. 88-102; Steven R. Wilson and Linda L. Putnam, “Interaction Goals in Negotiation,” Communication Yearbook, Vol. 13 (1989), pp. 374-406; Kristina A. Diekmann, Ann Tenbrunsel, Pri Pradhan Shah, Holly A. Schroth, and Max Bazerman, “The Descriptive and Prescriptive Use of Previous Purchase Price in Negotiations,” Organizational Behavior and Human Decision Processes, Vol. 66, No. 2 (1996), pp. 179-191.

  30 “What convinces is conviction”: Booz, Allen & Hamilton, Strategy & Business (New York: Fourth Quarter, 1997), p. 79.

  30 Florida Panthers (ice hockey): Gail DeGeorge, The Making of Blockbuster (New York: John Wiley & Sons, 1996), pp. 17-43. A friend of Huizenga’s notes that Huizenga “always keeps the carrot far enough out in front of him and he never really wants to catch it. That’s his personality. He’s never satisfied” (ibid., p. 42).

  30 a “positive bargaining zone”: Howard Raiffa, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University Press, 1982), pp. 45-50. Raiffa prefers to speak of “reservation prices,” but the “bottom line” concept is identical.

  31 with reference to their bottom line: Sally Blount White, Kathleen L. Valley, Max H. Bazerman, Margaret A. Neale, and Sharon R. Peck, “Alternative Models of Price Behavior in Dyadic Negotiations: Market Prices, Reservation Prices, and Negotiator Aspirations,” Organizational Behavior and Human Decision Processes, Vol. 57, No. 3 (1994), pp. 430-447.

  31 a powerful motivating force: Russel Korobkin, “Aspirations and Settlement,” Cornell Law Review, Vol. 88 (2002), pp. 1-49.

  32 all else being equal: Sally Blount White and Margaret A. Neale, “The Role of Negotiator Aspirations and Settlement Expectancies in Bargaining Outcomes,” Organizational Behavior and Human Decision Processes, Vol. 57, No. 2 (1994), pp. 303-317.

  32 negotiators have this ability: Neil Rackham and John Carlisle, “The Effective Negotiator—Part 2: Planning for Negotiations,” Journal of European Industrial Training, Vol. 2, No. 7 (1978), pp. 2-5 (reporting that skilled negotiators were significantly more likely to set both goals and limits in negotiation, whereas average negotiators set only a single-point objective).

  33 strategy earned him millions: Michael Pye, Moguls: Inside the Business of Show Business (New York: Holt, Rinehart and Winston, 1980), pp. 88-89.

  33 of records in half: Ibid., pp. 106-107.

  33 accept second-place status: Bryn Burrough and John Helyer, Barbarians at the Gate (New York: Harper & Row, 1990), pp. 325-326.

  34 the modest $2.10 goal: Sydney Siegel and Lawrence Fouraker, “The Effect of Level of Aspiration on Differential Payoff,” in Bargaining and Group Decision Making (New York: McGraw-Hill, 1960), pp. 61-70.

  34 with more modest goals: Arvind Rangaswamy and G. Richard Shell, “Using Computers to Achieve Joint Gains: Toward an Electronic Bargaining Table,” Management Science, Vol. 43, No. 8 (1997), pp. 1147-1163.

  35 would care to admit: Morris Rosenberg, Conceiving the Self (New York: Basic Books, 1979), p. 61.

  35 and lower their targets: Peter M. Blau, Exchange and Power in Social Life (New York: John Wiley & Sons, 1964), p. 145; Kurt Lewin, Tamara Dembo, Leon Festinger, and Pauline S. Sears, “Level of Aspiration,” in J. McV. Hunt, ed., Personality and the Behavior Disorders, Vol. 1 (New York: Ronald Press, 1944), pp. 337-340.

  36 as specific as possible: Vandra L. Huber and Margaret A. Neale, “Effects of Self- and Competitor Goals on Performance in an Interdependent Bargaining Task,” Journal of Applied Psychology, Vol. 72, No. 2 (1987), pp. 197-203.

  36 self-confidence and commitment: Visualization has been shown to enhance performance in a number of human activities, most notably athletics. See A. Bandura, Social Foundations of Thought and Action (Englewood Cliffs, N.J.: Prentice-Hall, 1986), pp. 61-62; Donald R. Liggett and Sadao Hamada, “Enhancing the Visualization of Gymnasts,” American Journal of Clinical Hypnosis, Vol. 35, No. 3 (1993), pp. 190-197.

  37 improves salespeople’s performance: Robert B. Cialdini, Influence: The Psychology of Persuasion (New York: William Morrow, 1984), p. 79.

  37 to achieve a goal: A number of studies have demonstrated that negotiators bargain somewhat harder when they think they are under the “surveillance” of a supporter or constituency. See Orly Ben-Toav and Dean G. Pruitt, “Accountability to Constituents: A Two-Edged Sword,” Organizational Behavior and Human Decision Processes, Vol. 34, No. 3 (1984), pp. 283-295; Peter J. D. Carnevale, Dean G. Pruitt, and Scott D. Britton, “Looking Tough: The Negotiator Under Constituent Surveillance,” Personality and Social Psychology Bulletin, Vol. 5, No. 1 (1979), pp. 118-121.

  38 for closing the purchase: Steve Massey, “US Airways Reiterates Cost-Cutting Warning to Unions,” Pittsburgh Post Gazette, April 11, 1997, p. A1 (describing US Airways CEO Steve Wolf’s announcement of a September 30, 1997 deadline for the settlement of a dispute with his pilots’ union because that was the date on which his contract with Airbus for $14 billion worth of planes would be canceled).

  38 winning a competition: Cialdini, Influence, pp. 264-265.

  38 “escalation of commitment”: Max Bazerman, Judgement in Managerial Decision-Making, 4th ed. (New York: John Wiley & Sons, 1998), pp. 66-78.

  39 regret the “winner’s curse”: Richard H. Thaler, The Winner’s Curse: Paradoxes and Anomalies of Economic Life (New York: Free Press, 1992), pp. 1-5.

  CHAPTER 3: The Third Foundation: Authoritativ
e Standards and Norms

  40 Samuel Taylor Coleridge: Michael R. Roloff, Frank E. Tutzauer, and William O’Daniley, “The Role of Argumentation in Distribution and Integrative Bargaining Contexts: Seeking Relative Advantage but at What Cost?” in M. Afzalur Rahim, ed., Management Conflict: An Interdisciplinary Approach (New York: Praeger, 1989), p. 109.

  40 J. P. Morgan: Ron Chernow, The House of Morgan (New York: Simon & Schuster, 1990), p. 114.

  42 restoring the peace: R. F. Barton, The Halfway Sun: Life Among the Head-hunters of the Philippines (New York: Brewer and Warren, 1930), pp. 65-86. This story is also retold in P. H. Gulliver, Disputes and Negotiations: A Cross-Cultural Perspective (New York: Academic Press, 1979), pp. 30-31.

  43 “the consistency principle”: Robert Cialdini, Influence: The Psychology of Persuasion , 2nd ed. (New York: William Morrow, 1987), p. 59.

  48 Experiments with Truth: M. K. Gandhi, The Story of My Experiments with Truth (Ahmedabad, India: Jivanji Dahyabhai Desai, 1927), pp. 272-276.

  49 a frock coat and necktie: Ibid.

  50 an otherwise negotiable issue: P. H. Gulliver, Disputes and Negotiations: A Cross-Cultural Perspective (New York: Academic Press, 1979), pp. 191-94; Dean Pruitt, Negotiation Behavior (New York: Academic Press, 1981), pp. 4-5; P. J. DiMaggio and W. W. Powell, “The Iron Cage Revisited: Institutionalism, Isomorphism, and Collective Rationality in Organizational Fields,” American Sociological Review, Vol. 48, No. 1 (1983), pp. 147-160.