Power Persuation and Ethics

The Mind and Heart of the Negotiator (4th Edition)

Date 13th April 2011

Advanced Negotiation SkillsPower, Persuasion, and Ethics

After studying this part you will be able to answer the flowing:1. What are the importance of BATNA and other sources of power?2. Should you have a power to be a persuasive negotiator?3. How can ethics affect negotiation success?

Contents

CHAPTER 7..................................................................................................................................................................................... 4

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POWER, PERSUASION, AND ETHICS................................................................................................................................................ 4

KEEP YOU OPTIONS OPEN:.................................................................................................................................................................4 SIGNAL YOUR BATNA, BUT DON’T REVEAL IT:.......................................................................................................................................4 ASSESS THE OTHER PARTY’S BATNA...................................................................................................................................................4

SOURCES OF POWER...................................................................................................................................................................... 4

ANALYZING YOUR POWER............................................................................................................................................................. 4

1. POTENTIAL POWER:......................................................................................................................................................................... 42. PERCEIVED POWER:..........................................................................................................................................................................43. POWER TACTICS:.............................................................................................................................................................................44. REALIZED POWER.............................................................................................................................................................................4

PERSUASION TACTICS.................................................................................................................................................................... 5

CENTRAL ROUTE PERSUASION TACTICS:......................................................................................................................................... 5

1. THE POWER OF AGENDA...................................................................................................................................................................52. THE POWER OF ALTERNATIVES............................................................................................................................................................53. THE POWER OF OPTIONS..................................................................................................................................................................54. ATTITUDINAL STRUCTURING...............................................................................................................................................................55. THE POWER OF CONTRAST................................................................................................................................................................56. COMMITMENT AND CONSISTENCY.......................................................................................................................................................67. FRAMING EFFECTS:..........................................................................................................................................................................68. FAIRNESS HEURISTICS :.....................................................................................................................................................................69. TIME PRESSURE...............................................................................................................................................................................6

PERIPHERAL ROUTE PERSUASION TACTICS..................................................................................................................................... 6

1. STATUS.......................................................................................................................................................................................... 62. GENDER.........................................................................................................................................................................................63. SOCIAL NETWORKS...........................................................................................................................................................................64. PHYSICAL APPEARANCE.....................................................................................................................................................................65. DELAYED LIKING.............................................................................................................................................................................. 66. TO ERR IS HUMAN...........................................................................................................................................................................77. PRIMING THE PUMP.........................................................................................................................................................................78. RECIPROCITY VERSUS COMPLEMENTARITY.............................................................................................................................................79. SOCIAL PROOF................................................................................................................................................................................ 710. REACTANCE TECHNIQUE................................................................................................................................................................711. FOOT-IN-THE DOOR TECHNIQUE.....................................................................................................................................................712. DOOR-IN-THE FACE TECHNIQUE.....................................................................................................................................................713. THAT’S-NOT-ALL TECHNIQUE........................................................................................................................................................7

ETHICAL NEGOTIATION.................................................................................................................................................................. 7

OTHER QUESTIONABLE NEGOTIATION STRATEGIES..........................................................................................................................................7PSYCHOLOGICAL BIAS AND UNETHICAL BEHAVIOR...........................................................................................................................................7

NEGOTIATION CASE: MGD'S FIRST TENDER.................................................................................................................................... 8

CASE STUDY AND ANALYSIS........................................................................................................................................................... 9

FIRST: PARTIES OF NEGOTIATION:.................................................................................................................................................. 9

1- MGD COMPANY.............................................................................................................................................................................92- SAUDI ARABIA MARKET.....................................................................................................................................................................9

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3- COMPETITORS: ABOUT 15 COMPETITORS.............................................................................................................................................9

SECOND: CHALLENGES:.................................................................................................................................................................. 9

1-EXTERNAL CHALLENGES:.........................................................................................................................................................................92- INTERNAL CHALLENGES:.........................................................................................................................................................................9

THIRD: KEY NEGOTIATION ELEMENTS TO WIN THE TENDER:........................................................................................................... 9

1- POWER AND PERSUASION:.................................................................................................................................................................92- ETHICS:........................................................................................................................................................................................103- CREATIVITY AND PROBLEM-SOLVING.................................................................................................................................................10

FOURTH: THE TENDER'S RESULT:.................................................................................................................................................. 10

QUIZ: HOW ASSERTIVE ARE YOU?................................................................................................................................................ 11

THE IMPORTANCE OF ASSERTIVENESS:........................................................................................................................................................11QUIZ: HOW ASSERTIVE ARE YOU?.............................................................................................................................................................11TO BE SUCCESSFUL, A NEGOTIATOR MUST MUSTER AN APPROPRIATE LEVEL OF ASSERTIVENESS...............................................................................11

Chapter 7Power, Persuasion, and Ethics

YOUR BATNA IS YOUR MOST IMPORTANT SOURCE OF POWER IN NEGOTIATION

BATNA: Best Alternative To Negotiated Agreement.WOTNA: Worst Outcome To No Agreement.Unfortunately most of the time, people do not have a great BATNA . For this reason, it is imperative that negotiator cultivate and improve their BATNA prior to negotiating.

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Keep your options open:Your BATNA may be great now, but as we have noted. BATNAs are always changing. Thus, it is important to keep your options open even after you have come to the negotiation table because negotiations could break down for a variety of reasons at any point prior to mutual settlement.

Signal your BATNA, but don’t reveal it:Negotiators often get seduced into revealing their BATNA, but the minute they do, the cat is out of the bag. On the other hand, if the counterparty does not believe you actually have a BATNA, you should signal that you have options without revealing their exact value. However, alluding to options you do not actually have is misrepresentation, which is unethical. It is not misrepresentation to signal to the other party that you have alternative courses of action (if actually do)

Assess the other party’s BATNA.It pays to research the other party’s BATNA as best you can. Negotiators who even think about the counterparty’s BATNA do better in terms of slicing the pie than those who don’t. your investment into researching the other party’s BATNA is time well spent.

SOURCES OF POWERSources of power are present in negotiation, such as the contribution a negotiator makes to a negotiation. When you bring resources to a negotiation and the other party puts s high value on those resources, your contribution is great. When the bargaining zone is small, BATNAs exert a stronger effect on resource allocation than do contributions; however when the bargaining zone is large, contribution exert a stronger effect than do BATNA.

ANALYZING YOUR POWERPower in negotiation can be analyzed in terms of four vantage points:

1. Potential Power: A negotiator’s potential power is the underlying capacity of the negotiator to obtain benefits from an agreement. It is a function of the counterparty’s dependence on you. How much someone depends on you in a negotiation is based upon how much he or she values the resources you provide and the value of alternatives to negotiation with you.

2. Perceived Power:is a negotiator’s assessment of each party’s potential power, which may or may not square with reality. Whereas a negotiator’s alternatives affect the distribution of outcomes perceived power, as well as actual alternatives, affect the integrativeness of outcomes.

3. Power Tactics:comprise what is commonly studied in negotiation behavior and refer to the behaviors designed to use or change the power relationship.

4. Realized Power: Is the extent to which negotiators claim benefits from an interaction.

PERSUASION TACTICSWe identify techniques Persuasive Negotiators can use to induce attitude and behavior change in their opponents. There are two routes of persuasion:Central route: it is direct, mindful, and information-based. Here activities such as evaluating the strength or rationality of the counterparty’s argument and deciding whether its content messages are processed via this central route, persuasion will occur to the extent that the arguments presented by a negotiator are convincing and facts marshaled on their behalf are strong ones. The central route is ideal when dealing with analytical people who focus on information, facts, and data.

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Peripheral route:it is a contrast with the central route. Persuasion is more likely to occur through the peripheral route when the negotiator is distracted or highly emotionally involved in the situation.

Central Route Persuasion Tactics:1. The power of Agenda

In a negotiation, players explicitly or implicitly follow an agenda. Most commonly negotiators discuss the issues in a one-by-one, “Laundry List” Fashion. Negotiations often involve a discussion of who will control the agenda.Packaging of Issues, that integrative opportunities can be discovered. Nevertheless, the savvy negotiator may use the power of agenda not only to expand the pie but also to slice the pie in a manner favorable to himself or herself. The negotiator who lays out the issues in a way that reflects his or her own priorities may be more likely to achieve gains on his or her high-priority issues.Defense: It is a good idea to discuss what may seem to be an implicit or unspoken agenda (e.g., “I get the sense that you have an agenda of how you would like to cover the issues. I would like to hear your ideas and then tell you mine. May be we can come up with an agenda that makes sense for both of us after hearing each other out”)

2. The power of alternativesNegotiators who generate several alternatives for each issue may have a bargaining advantage because they formulate alternatives that benefit themselves.Defense:You do not need to be too much on the defensive if the counterparty is laying out the alternatives. This factor is helpful for you in trying to assess the counterparty’s needs and interests. Make sure that you have thought about your own alternatives and get those on the table.

3. The Power of Optionswe strongly advocated that negotiators generate several options, all equal value to themselves. The negotiator who generates options is at a power advantage in the negotiation.Defense:if you find the counterparty suggesting several options, it is actually good news because It suggests that your opponent is not a positional negotiator. However, make sure that you do not offer unilateral concessions. The best way to avoid making unilateral concessions is to generate several options to present to the other party.

4. Attitudinal Structuringif a negotiator suspects that the counterparty has an uncertain or unspecified BATNA, he or she can influence the opponent’s perception of his or her BATNA. Thus, a negotiator may manipulate the counterparty into revealing his or her BATNA.Defense:The best strategy to use when the counterparty attempts to manipulate your BATNA is to reach your BATNA and develop your reservation price before negotiation.

5. The Power of ContrastNegotiators may often invent irrelevant alternatives for the counterparty to consider. The negotiator who proposes these irrelevant alternatives known as the other party will find them unacceptable, but these alternatives create a psychological contrast effect.Defense:the best defense against the contrast effect is to set a well-formed target point prior to negotiation.

6. Commitment and ConsistencyThe consistency principle describes the human need to be consistent in our beliefs, feelings, and behaviors. To contradict ourselves, whether in thought or in deed, is assign of irrationality. Thus savvy negotiators will often attempt to get a verbal commitment from the counterparty.Defense: be careful what you agree to in a negotiation. If a car seller asks whether you are ready to buy a car, do not immediately say “Yes!” but, rather, “That depends on the terms”.

7. Framing Effects:

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Capitalizing on the half-full or half-empty glassPeople are risk-averse for gains and risk seeking when it comes to losses. Recall that the reference point defines what a person considers to be the status quo from which gains and losses are evaluated.Defense:Determine your reference point prior to entering into a negotiation to avoid being “framed”

8. Fairness Heuristics : Capitalizing on Egocentric BiasFairness is a hot button in negotiations, To the extent that negotiators are characterized their offer as “Fair” they increase the likelihood that it will be accepted by the other party However multiple indexes and measures of fairness exist.Defense:Be aware of the many rules of fairness (e.g. Equity, Equality, and need)

9. Time PressureCommon intuition states that the negotiator who is under the most time pressure is at a disadvantage in negotiation. Time limits may be an advantage for the negotiator.Defense: Remember that the party who has the deadline in effect sets the deadline for the other party. You have to agree before going in negotiation that you will meet the deadline you agreed upon.

Peripheral Route Persuasion Tactics1. Status

The position of the negotiator in the organization plays a good role in persuasion2. Gender

Across the board, men are more successful than women in terms of pie-slicing they inevitably get a bigger slice.3. Social Networks

whereas information power in a negotiation refers to the power associated with what you know, network power refers to the power associated with who you know. Social capital is the power that results from managers’ access to other people within and outside of their organizations.

4. Physical AppearancePhysically attractive people are more effective in getting what they want than are less physically attractive people, independent of their actual skills. And the work produced be allegedly attractive people is more highly valued than that produced be less-attractive people. People think attractive people are more talented, kind, honest, and intelligent than unattractive people. This attribution of positive qualities to attractive people is a part of halo effect. Be aware of how your judgment (and others’) is affected by physical appearance.

5. Delayed LikingShould you show your liking for the other party immediately or wait a while? In terms of gaining compliance from the other party, it is far more effective to grow to like the other party. The most effective type of liking (in terms of getting what you want from someone) is not like the other person immediately. Rather, people who grow to like someone are more effective in getting what they want than if they show their liking for the other person immediately.

6. To Err is HumanNegotiators are naturally suspicious of smooth-talking and attractive negotiators. Therefore, it is important to show the counterparty that you are human and have your own foibles and faults.

7. Priming the PumpPeople judgments and behaviors are affected by unconscious priming, which refers to the impact subtle cues and information in the environment have on our behavior (at a level below our conscious awareness)

8. Reciprocity versus ComplementarityWe’ve mentioned before that the powerful process of reciprocity in negotiation.

9. Social ProofAccording to the social proof principle, we look to the behavior of others to determine what is desirable, appropriate, and correct.

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10. Reactance TechniqueReactance Technique also known as reverse psychology or the boomerang effect. It refers to people’s innate and need to assert their individual freedom when others attempt to take it away. Negotiators can use an interesting form of reverse psychology to extract what they want and need from the counterparty. (Warning: This technique can be extremely risky to use; we argue that negotiators practice with it before negotiating so as not to make fatal errors)

11. Foot-in-the Door Techniquein the Foot-in-the-Door Technique, a person is asked to agree to a small favor or statement (such as agreeing with a question like “Are you ready to buy a care today at the right price?” or signing petition).

12. Door-in-the Face TechniqueThe Door-In-The-Face Technique or the Rejection-Then-Retreat Tactic, in which a negotiator asks for a very large concession or favor from the other party-One that the counterparty is almost certain to refuse

13. That’s-Not-All TechniqueMany Negotiators engage in That’s-Not-All Technique (also known as sweetening the deal) by offering to add more to a negotiated package or deal.

Ethical NegotiationNegotiation creates incentives for people to violate ethical standards of behavior. But more often negotiators must deal with many shades of gray.LyingLying is regarded to be unethical. The key aspects of lying are

a. The speaker is aware that he is misrepresenting information. b. Regarding a material fact, the other party.c. Relies on this factd. By doing so is damaged in some way- economically or emotionally

Other Questionable Negotiation Strategies 1- Traditional competitive bargaining2- Manipulation of an opponent’s network3- Reneging on negotiated agreements 4- Retracing an offer.5- Nickel-and-diming

Psychological Bias and Unethical Behavior• Human biases that give rise to ethical problems in negotiation

– Bounded ethicality.– Illusion of superiority.– Illusion of control.– Overconfidence.

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Negotiation Case: MGD's First TenderWith Ministry of Education, Saudi Arabia

MGD is an e-learning services providing company, provides computers and other modern components and products that servers the education process. MGD, established with a Saudi capital and most of its staff are Egyptians - had entered the e-content field before less than 3 years, by covering few schools. The company decided to break into that field of a wider door by engaging in the tender of Saudi Ministry of Education, which is the largest in the Saudi market. Success in the Saudi market may be followed by greater successes in the GCC market in general.

The company faced many internal and external challenges, either from the nature of the Saudi market itself, the GCC market in general, or the company's less available resources, size and brand compared to competitors. After an extensive study, the company accepted the challenge and decided to compete in that tender and build a wide base of internal relations derived from its relations with capital owners and Saudis experts and scholars to raise confidence. In addition, MGD started to build external partnerships with the Polish YPD and the Turkish Alaa, and utilizing the British experience.

The recruitment process was conducted on basis of creativity as a key element for the selection of employee.

Technical and financial proposals have been prepared after extensive and accurate studies. Creative and unprecedented steps in the Saudi tenders have been taken in our proposal, both in the method of presenting the technical offer and its contents, as well as elements in support of building confidence in the power of content to be submitted by the company, in addition to the continuous follow-up, modernization and assessment upon which the submitted plan of action was built.

After discussing the offers by the evaluation committees the tender has been awarded to MGD Company, which is considered antecedence for the company that will open several GCC markets.

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Quiz: How Assertive are you?The Importance of Assertiveness:Passive ____________________________________________________________Aggressive Nonassertive Indirect Assertive Aggressive

Passive Wimp Manipulative Weasel Win-Win(Team Player) Bully

Self-denying, Sneaky, coy, Stands up for Denies others’placating, seductive, own rights while rights; dominating;

demanding;submissive, vindictive, respecting judgmental;avoiding; soft voice; revengeful; others’; makes chooses fordowncast eyes; chooses for own choices othersdoormat Others

Quiz: How Assertive Are You?Respond to each item with a yes or no. Then check your score with the key at the endof the quiz. This quiz will let you know if you need to work on being more assertive.1. I state my own view when someone with more authority disagrees with me.2. I express irritation if someone with whom I am speaking begins talking to someone

else in the middle of our conversation.3. I insist that the landlord or repairperson make timely repairs.4. I openly express love and affection and tell people that I care for them.5. I make direct eye contact when speaking with others.6. When a person is being highly unfair, I call it to his or her attention.7. I ask friends for small favors or help.8. I say no without apology if people make unreasonable demands of me.9. At work, I suggest new procedures or ways of doing things.10. I cut short telephone calls when I am busy.11. I am able to refuse unreasonable requests made by others.12. I look for a seat in the front of a crowded room rather than stand in the back.13. If someone keeps kicking the back of my chair, I ask him or her to stop.14. I can speak in front of a group without becoming overly anxious.15. I have confidence in my own judgment.16. I seek repayment from a friend who borrowed $20 and has forgotten to repay me.17. I stay calm when others are scrutinizing my work or reviewing it.18. I speak up in a meeting if I feel that my idea is relevant.19. I do not apologize for what I am about to say.20. I ask a friend who keeps calling me very late at night not to call after a certain time.21. When merchandise is faulty, I return it for adjustment.22. I can ask for a raise or promotion without feeling overly anxious.23. I speak firmly and loudly enough to be heard and understood.24. I state my own and others’ limitations without feeling guilty.25. When I meet someone for the first time, I introduce myself and extend my hand.26. I can work with others without trying to make them feel guilty or manipulated.27. I express my opinions rather than keep them to myself.28. In a restaurant, if my meal is unacceptable, I ask the waiter to correct it.29. I am able to confront an issue or problem at work rather than call in sick.30. I insist that my spouse or roommate take on a fair share of the household chores.

Scoring Key: (A) 22 or more yes responses _ you’re assertive enough. (B) 15–21 yes responses _ You have some areas to work on. (C) Fewer than 15 yes responses _ you’re the mayor of Wimp City!

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To be successful, a negotiator must muster an appropriate level of assertiveness.

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Power Persuation and Ethics

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