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Chapter 4
Negotiation: Strategy and Planning
Overview
In this chapter, we discuss what negotiators should do before opening negotiations. Effective
strategy and planning are the most critical precursors for achieving negotiation objectives. With
effective planning and target setting, most negotiators can achieve their objectives; without them,
results occur more by chance than by negotiator effort.
Regrettably, systematic planning is not something that most negotiators do willingly. Although
time constraints and work pressures make it difficult to find the time to plan adequately, for
many planning is simply boring and tedious, easily put off in favor of getting into the action
quickly. It is clear, however, that devoting insufficient time to planning is one weakness that may
cause negotiators to fail.
The discussion of strategy and planning begins by exploring the broad process of strategy
development, starting with defining the negotiator’s goals and objectives then moves to
developing a strategy to address the issues and achieve one’s goals. Finally, we address the
typical stages and phases of an evolving negotiation and how different issues and goals will
affect the planning process.
Learning Objectives
1. Goals – The focus that drives a negotiation strategy.
2. Strategy – The overall plan to achieve one’s goals.
3. Getting ready to implement the strategy – The planning process.
I. Goals – The Focus That Drives a Negotiation Strategy
A. Direct effects of goals on choice of strategy.
1. There are four important aspects to understand about how goals affect negotiations.
a) Wishes are not goals, especially in negotiation.
b) Goals are often linked to the other party’s goals.
c) There are boundaries or limits to what goals can be.
d) Effective goals must be concrete, specific and measurable. If they are not, then it
will be hard to:
(1) Communicate to the other party what we want;
(2) Understand what the other party wants;
(3) Determine whether an offer on the table satisfies our goals.
2. Goals can be intangible or procedural.
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3. The criteria used to determine goals depend on your specific objectives and your
priorities among multiple objectives.
B. Indirect effects of goals on choice of strategy.
1. Short-term thinking affects our choice of strategy; in developing and framing our
goals, we may ignore the present or future relationship with the other party in a
concern for achieving a substantive outcome only.
2. Negotiation goals that are complex or difficult to define may require a substantial
change in the other party’s attitude. In most cases, progress will be made
incrementally, and may depend on establishing a relationship with the other party.
II. Strategy versus Tactics
A. Strategy versus Tactics.
1. A major difference between strategy and tactics is that of scale, perspective or
immediacy.
2. Tactics are short-term, adaptive moves designed to enact or pursue broad strategies,
which in turn provide stability, continuity, and direction for tactical behaviors.
3. Tactics are subordinate to strategy: they are structured, directed, and driven by
strategic considerations.
4. Accommodation, competition, and collaboration.
a) Accommodation is as much a win-lose strategy as competition, although it has a
decidedly different image it involves an imbalance of outcomes, but in the
opposite direction. (“I lose, you win” as opposed to “I win, you lose.”).
b) Competition is distributive win-lose bargaining.
c) Collaboration is integrative or win-win negotiation.
d) There are drawbacks to these strategies if applied blindly, thoughtlessly or
inflexibly:
(1) Distributive strategies tend to create “we–they” or “superiority–inferiority”
patterns, which may result in a distortion of the other side’s contributions, as
well as their values, needs and positions.
(2) If a negotiator pursues an integrative strategy without regard to the other’s
strategy, then the other may manipulate and exploit the collaborator and take
advantage of the good faith and goodwill being demonstrated.
(3) Accommodative strategies may generate a pattern of constantly giving in to
keep the other happy or to avoid a fight.
III. Getting Ready to Implement the Strategy: The Planning Process
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Effective planning requires hard work in considering the ten key steps for success.
A. Defining the issues or negotiation goal.
1. Usually begins with an analysis of what is to be discussed in the negotiation.
2. The number of issues in a negotiation, along with the relationship between the
negotiator and the other party, are often the primary determinant of whether one uses
a distributive or integrative strategy.
3. In any negotiation, a complete list of the issues at stake is best derived from the
following sources:
a) An analysis of all the possible issues that need to be decided.
b) Previous experience in similar negotiations.
c) Research conducted to gather information.
d) Consultation with experts in that industry.
B. Defining the major issue related to achieving the goal.
1. The number of issues in a negotiation, together with the relationship between the
negotiator and the other party, are often the primary determinant of whether one uses
a distributive or integrative strategy. Single-issue negotiations tend to dictate
distributive negotiations because the only real negotiation issue is the price or
“distribution” of that issue. In contrast, multiple-issue negotiations lend themselves
more to integrative negotiations because parties can use processes such as logrolling
to create issue “packages” that are mutually beneficial.
C. Assembling the issues and defining the bargaining mix.
1. The combination of lists from each side in a negotiation determines the bargaining
mix.
2. There are two steps a negotiator can use to prioritize the issues on an agenda:
a) Determine which issues are most important and which are less important.
b) Determine whether the issues are linked together or are separate.
D. Defining the interests.
1. Interests may be:
a) Substantive, that is, directly related to the focal issues under negotiation.
b) Process-based, that is, related to how the negotiators behave as they negotiate.
c) Relationship-based, that is, tied to the current or desired future relationship
between the parties.
2. Interests may also be based on intangibles of negotiation.
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E. Knowing your alternatives (BATNAs).
1. Alternatives (i.e., best alternatives to this negotiated agreement, or BATNAs) are
other agreements negotiators could achieve and still meet their needs. Alternatives are
very important in both distributive and integrative processes because they define
whether the current outcome is better than another possibility (with a different
negotiating partner).
F. Knowing your limits, including a resistance point.
2. Good preparation requires that you establish two clear points:
d) Resistance point – the place where you decide that you should absolutely stop the
negotiation rather than continue.
e) Alternatives – other agreements negotiators could achieve and still meet their
needs. Alternatives define whether the current outcome is better than another
possibility.
G. Analyze and understand the other party’s goals, issues and resistance points.
1. Gathering information about the other party is also a critical step in preparing for
negotiation. Learning the other’s issues, preferences, priorities, interests, alternatives
and constraints is almost as important as determining one’s own.
2. What information does one party need about the other party in order to prepare
effectively? Several key pieces of background information will be of great
importance, including their:
a) Broad, overall goals and objectives.
b) Issues and the likely bargaining mix.
c) Interests and needs.
d) Resistance point and alternative(s).
3. The other party’s goals.
Asking the other party to discuss their goals (either at the table or before negotiations
begin), or gathering data about the other party prior to negotiations, are two common
ways to gather this data. Most importantly, we should attempt to understand whether
the other party has the same goals as we do.
4. The other party’s issues and bargaining mix.
The more the negotiator can get even a general sense of how much the other is
capable of addressing and meeting the party’s issues or needs, and of what issues they
will bring to the bargaining table, the better we can predict how the process is likely
to unfold.
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5. The other party’s interests and needs.
1. In addition to learning about the party’s major issues and resources, we also need to
get information about his or her current interests and needs (see Chapter 3). This
information may be obtained through a variety of approaches:
a) Conducting a preliminary interview, including a broad discussion of what the
other party would like to achieve in the upcoming negotiations (focus on broad
interests, not just issues).
b) Anticipating the other party’s interests (as if you were “in their shoes”).
c) Asking others who know or have negotiated with the other party.
d) Reading how the other party portrays himself or herself in the media.
6. The other party’s resistance point and alternatives.
If the other party has a strong and viable alternative, he or she will probably be
confident in negotiation, set high objectives, and be willing to push hard for those
objectives. In contrast, if the other party has a weak alternative, then she or he will be
more dependent on achieving a satisfactory agreement with you and be less likely to
push as hard.
H. Setting one’s own targets and opening bids.
After negotiators have defined the issues, assembled a tentative agenda, and consulted
others as appropriate and necessary, the next step is to define two other key points: the
specific target point, where one realistically expects to achieve a settlement, and the
opening bid, representing the best deal one can hope to achieve.
1. Setting a target.
When setting a target – there are several principles to keep in mind:
a) Targets should be specific, difficult but achievable, and verifiable.
b) Target setting requires proactive thinking about one’s own objectives.
c) Target setting may require considering how to package several issues and
objectives.
d) Target setting requires an understanding of trade-offs and throwaways.
2. Setting an opening bid.
An opening bid may be the best possible outcome, an ideal solution, something even
better than was achieved last time. It is easy to get overly confident, however, and to set
an opening that is so unrealistic that the other party immediately laughs, gets angry, or
walks away before responding. See Box 4.4 for helpful advice on the setting of an
opening bid.
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I. Assessing the social context of a negotiation.
1. When people negotiate in a professional context, there may be more than two parties.
a) There may be more than two negotiators at the table. Multiple parties often lead
to the formation of coalitions.
b) Negotiators also have constituents who will evaluate and critique them.
c) Negotiation occurs in a context of rules – a social system of laws, customs,
common business practices, cultural norms, and political cross-pressures.
2. “Field analysis” can be used to assess all the key parties in a negotiation.
a) Who is, or should be, on the team on my side of the field?
b) Who is on the other side of the field?
c) Who is on the sidelines and can affect the play of the game? Who are the
negotiation equivalents of owners, managers and strategists?
d) Who is in the stands? Who is watching the game, is interested in it, but can only
indirectly affect what happens?
e) What is going on in the broader environment in which the negotiation takes
place? A number of context issues can affect negotiation:
(1) What is the history of the relationship with the other party, and how does it
affect the overall expectations they bring to this negotiation.
(2) What kind of a relationship with the other party is expected or desired for the
future, and how do these expectations affect the current negotiation.
(3) How often do we expect to negotiate in the future?
(4) What are the deadlines or time limits?
(5) What are the “rules of the game” by which this agreement will be managed?
(6) What is common and acceptable practice in the ethical system in which the
deal is being done?
J. Presenting issues to the other party.
1. Presenting and framing the issues.
Because of the breadth and diversity of issues that can be included in negotiations, it
is not possible to specify all the procedures that can be used to assemble information.
There are, however, some good general guides that can be used. A negotiator can ask
these questions:
a) What facts support my point of view?
b) Whom may I consult or talk with to help me elaborate or clarify the facts?
c) Have these issues been negotiated before by others under similar circumstances?
d) What is the other party’s point of view likely to be?
e) How can I develop and present the facts so they are most convincing?
2. When planning the process and structuring the context a negotiator should consider a
number of elements of protocol and process.
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1. The agenda to follow. Pendergast (1990) suggests five major concerns to be
considered in developing a negotiation agenda:
a) Scope: What issue should be considered?
b) Sequence: In what order should those issues be addressed?
c) Framing: How should the issues be presented?
d) Packaging: Should the issues be taken one at a time, or in various
groupings/packages?
e) Formula: Should we strive to first get an agreement on general principles, or
should we immediately begin to discuss each of the issues?
2. The location of negotiation.
3. The time period of negotiation.
4. What might be done if negotiation fails?
5. How will we keep track of what is agreed to?
6. How can we modify the deal if necessary?
Summary
Planning is a critically important activity in negotiation. As we noted at the outset, however,
negotiators frequently fail to plan for a variety of reasons. Effective planning allows negotiators
to design a road map that will guide them to agreement. While this map may frequently need to
be modified and updated as discussions with the other side proceed, and as the world around the
negotiation changes, working from the map is far more effective than attempting to work without
it.
We began this chapter with a basic understanding of the concepts of strategy. We then discussed
the importance of setting clear goals, based on the key issues at stake.
When negotiators are able to consider and evaluate each of ten factors of protocol, they will
know what they want and will have a clear sense of direction on how to proceed. This sense of
direction, and the confidence derived from it, is a very important factor in affecting negotiating
outcomes.