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Issues in negotiation

1. Biases hindering negotiation

Biases prevent people from negotiating rationally and getting the most they can out of a
situation. These common biases or mistakes are:

• People tend to assume that they will gain at the cost of the other party and thus, miss
opportunities for effective negotiation.

• Have a tendency to rely on readily available information.

• Over confidence of gaining favorable outcomes.

2. Role of personality traits.

• The negotiating parties view each other’s personalities and guess what may happen in
negotiation. Research has revealed that the personality-negotiation relationship has no
significant impact on outcomes.

3. Gender differences.

• A common view held by many people is that women are more cooperative and
relationship oriented in organizations than men but comparisons between male and
female managers find that there is not much difference in them as negotiators.

• Research shows that low power managers whether male or female, use softly
persuasive negotiation tactics-rather than direct confrontation and threats and if men
and women have similar power positions, there is not any significant difference in
their negotiation styles.
4. Cultural differences

• Negotiation styles clearly vary across national cultures.

• Cultural traits have a positive or a negative influence.

• For instance, in India certain castes are submissive, they accept negotiation where as
some castes are always hostile. This requires variable treatment with different castes
and culture.

5. Third party negotiation

• Sometimes both the parties are unable to negotiate in such a case a role of third party
is realized. There are four basic third party roles.

a) Mediator.

• A mediator is a neutral third party. He uses persuasions and suggestions, acceptable to

both the parties and is unbiased.

b) Arbitrator.

• An arbitrator is a person who has been given authority for negotiation. Arbitration can
be voluntary or compulsory and the decision is binding on both the parties.
c) Conciliator.

• A conciliator is a trusted third party who is adjudicating the case. Labour tribunals,
Panchayats etc, are examples. Also engage in fact finding, interpreting messages and
persuading disputants to develop agreements.

d) Consultant

• A consultant is a skilled and neutral third party who attempts to negotiate through
communication and analysis, aided by his knowledge and conflict management. His
role is not only to settle the issues but rather to improve the relations between the
conflicting parties so that they can reach a settlement themselves. This approach has a
long term perspective.

Approaches to negotiation

1. Individual differences

2. Situational characteristics

Situational characteristics are the context within which the negotiation takes place. They
include such things as:

• Types of communication between negotiators,

• the potential outcomes of the negotiation,

• the relative power of the parties (positional and personal),

• The time frame available for negotiation,

• No. of people representing each side, and the presence of other parties.
3. Game theory

It requires that every alternative and outcome be analyzed with probabilities and numerical
outcomes reflecting the preferences for each outcome.


• It requires the ability to describe all possible options and outcomes before the
negotiation starts.

• Often very tedious.

• Assumes that negotiators are rational at all times.

4. Cognitive approaches

It recognizes that negotiators often depart from perfect rationality during negotiation; it tries to
predict how and when negotiators will make these departures. These deviations include:

• Escalation of commitment to a previously selected course of action,

• Overreliance on readily available information,

• Over confidence of gaining favorable outcomes,

• Anchoring negotiation in irrelevant information.