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- The Art of Effective Business Negotiation
The People Factor in Negotiations
The People Factor in Negotiations: Personality
TEACHER: I will start this module by making a confession to you. I get the feeling that teaching you about negotiations is very difficult. I feel a bit apprehensive about the best way to continue.
STUDENT: Well, I understand that. It is a rather elusive subject, but I will do my best to cooperate with your teaching effort.
TEACHER: Very well. The point of my statement was to get a reaction from you and establish if you are by nature (personality) a cooperator or a competitor. Your response indicates that your Motivational Orientation is one of being a cooperator. A competitor would have answered my comment with something on the line of "Well, this is your problem, not mine. I am a good student. Maybe you are not as good a teacher as I am a good student".
STUDENT: So it was a trap. OK, I get the point. You are telling me that all people have a basic motivational orientation either to be competitors or cooperators.
TEACHER: Yes, but this is a generalization defining both extremes. Real people have a mixture of both orientations, but in general each individual has a natural inclination towards one of these extremes.
And now we begin our discussion on the role of personality in negotiations. Allow me to express a truism: negotiators are people, and people have different personalities. Therefore, it is reasonable to conclude that personality influences negotiation behavior and, in consequence, the results of the negotiation process.
As proven by your reaction to my statement at the beginning of this session, your personality traits are a predisposition to react in a given form to given stimuli. You responded in a way that was natural to you. It is safe to assume that you would respond in a similar way each time you are in a similar situation.
STUDENT: You are telling me that I am very predictable. Is that good or bad in negotiations?
TEACHER: The point is not whether it is good or bad. The point is whether a negotiator can learn to "manage" his or her personality to respond in the most convenient way. Ideally negotiators should respond to situations according to a cool evaluation of what the best response is, not automatically according to what comes natural to them.
Personality can be defined as an array of traits. The most important work describing the different personality styles of negotiators is the book by Rubin and Brown "The Social Psychology of Bargaining and Negotiation".
We shall continue with the classification of personalities in connection with negotiation behavior.
As we have already seen,
In the aspect of Motivational Orientation (MO) we have two categories:
* Cooperators, or
Now let me add that regarding Interpersonal Orientation (IO) people can be classified according to their degree of social awareness and social ability. The higher a person’s IO is, the more this person will be responsive to his or her relationship with the other negotiators. We can define the extremes to be
* Accommodators (high IO), or
* Avoiders (low IO)
STUDENT: Which personality style is most successful in negotiations?
TEACHER: There is no single answer to this question. Anthropologists say that the key to the survival of the human species is our adaptability. This does not mean that every individual is adaptable. The species is adaptable because individuals have very different traits, and some will adapt to almost any change in the environment, thus ensuring the survival of the species.
STUDENT: Sorry, I thought this was a Negotiation class. I am not interested in anthropology. And I'm saying this to show you that I am not always a "cooperator" nor an "accommodator"!
TEACHER: Naturally. I was using an illustration. My point is that any of the four basic negotiation styles can be highly successful or fail miserably under different circumstances.
STUDENT: Now, if personalities can not be changed, what is the point of your telling me about the different styles?
TEACHER: Two reasons. One is that if you are able to recognize the style of your counterpart, you may be able to manage your relationship more effectively. The other reason is that it may be possible for you to manage a zone of your own personality. This would allow you to be more efficient as a negotiator by adapting at least part of your own unique personality to different circumstances.
Now let me challenge you a bit. A negotiation is going on between Mary and John. John mentions that his boss is a very tough person and that he expects him to return to the office with a good deal. Give me examples of how Mary, John’s counterpart, would react if she were an avoider, and how she would react if she were an accommodator.
STUDENT: Let’s see. Mary the avoider may simply ignore the remark, shrug or even say "sorry, this is not my problem". She may interpret John’s remark as a signal of weakness and press harder. Mary the accommodator instead would show some sympathy and suggest that she is ready to work with John to find a mutually advantageous solution which would help John to please his boss. Since she is an accommodator, not a fool, she may add that this will depend on reaching an agreement advantageous for both parties, not just to make John happy.
I can tell you that much. I wouldn’t know which attitude would be more advantageous for Mary to take as a negotiator.
TEACHER: Neither would I. This depends on the circumstances. If John’s remark is a trick and he is fishing for Mary’s sympathy to gain advantage, responding as an avoider would be the best. If John is sincerely indicating his willingness to reach a deal convenient for both parties, the accommodator reaction would possibly be the best for Mary to make.
Continuing with the personality factor in negotiations, let’s look at the contribution of Andrew Gottchalk, formerly from the London Business School and a person with long time associations with professional business negotiators. Gottchalk also defines four styles, emphasizing in his successful negotiation seminars his concept of the "habit zone" and the "managed zone" of people’s personality. He maintains that the habit zone changes very slowly or not at all, while the managed zone can change quickly to adapt to circumstances if we learn how to do it. Negotiators can also expand their managed zone by learning behaviors basically alien to their particular basic style.
STUDENT: You mean that, according to Gottchalk, Mary the avoider could learn to expand the managed zone of her personality and react more positively to remarks like the one John made, if she decided that this attitude was more advantageous for her in that particular circumstance? Instead of reacting automatically according to her true "natural" style, she could learn to manage her behavior.
TEACHER: Exactly; she could widen her repertoire of behaviors to rapidly adjust to different circumstances.
Negotiators behave with a mixture of their habits and learned behaviors. The more in control of themselves they are, the more easily they will be able to change according to circumstances and to the other negotiator’s behavior. When they lose control, they will tend to relapse to their basic personality traits. Which of course depend on each person’s genetic inheritance, upbringing, life and work experience, etc.
STUDENT: You said Gottchalk had defined four styles, but did not elaborate. Are you going to?
TEACHER: Of course, what do you think I am, an incompetent teacher? Don't be pushy, will you?
STUDENT: I can see what you are trying to show me by your intemperate response to my innocent question. You are illustrating a reversion to his basic personality traits (over-sensitivity, irritability) of a person who lost control after being able to "manage" his or her behavior for a time. And no, I do not think you are incompetent.
TEACHER: I know I am not. And I know you don’t think I am. As you so quickly discovered, I was trying to drive a point home. Anyway, here are Gottchalk's four styles. Please remember, these are not real people, these are stereotypes. In practice real people possess a varying mix of these personality styles.
* The tough style negotiator. Dominant, aggressive. Power oriented. Does not avoid conflict, and many times provokes it, and enjoys it. Competitive, takes risks, and hates losing. Assertive, does not care about other people’s feelings. This style can be effective under the right circumstances. There are also negative aspects: a tough style negotiator can easily be excessively aggressive if upset about not getting his or her way; makes threats, gets into arguments (the bad kind of arguments). Can be perceived as manipulative, inflexible and obstinate, thus creating strong resistance from the other party.
Gottchalk’s advise if you have to deal with this style of negotiator:
1. Give them recognition...
2. but not flattery; they will interpret it as weakness on your part
3. Do not engage in "small talk", stay on the issues and emphasize common goals
4. You can always say no; do not allow yourself to be bullied...
5. but do not play along entering into arguments. Slow down the process to allow the other negotiator to realize that you are not going to surrender.
* The warm style negotiator. People oriented, understanding, supportive and collaborative. Friendly, interested in other people. A good listener. Supports other people’s proposals. Tends to trust others. Patient and calm under pressure. Optimistic about the final results of the negotiation. Seeks and takes advise. Is ready to concede reasonable points of counterparts. The bad aspects: too concerned with relationships, can be soft on issues and submissive. May jeopardize his or her own interests. Is easily disillusioned. Trusting others too much can turn into gullibility. May panic under pressure.
1. Build trust but keep a courteous distance.
2. Get him or her to your side, and ask for more. Do not put on excessive pressure to avoid a retreat in panic.
3. Advance cautiously and slowly.
4. Make sure his concessions will be supported by his superiors.
My own advise: careful, it may all be a ploy to trick you!
* The number stylist. Rational, analytical. Good grasp of detail and facts. Well prepared and well organized. Difficult to upset emotionally, is concerned basically with the practicality of the deal. Can it be implemented? Good at using objective data to justify positions, proposals and negatives. Negative aspects: too focused on details, may miss the basic issues. Emotionally cold. Tends to be obsessive. Despises people using wrong or irrelevant numbers and information.
1. Do not allow the agenda to be delayed by too much detail. Keep it moving.
2. Show and actually take interest in the number stylist’s facts and numbers, they may contain valuable information,
3. Any set of numbers you present must be accurate, your party can not refrain from checking them.
4. Show respect for your party’s expertise.
* The dealer. Flexible, compromising. Great persuasion skills, never gives offense. Open and imaginative, sees opportunities and finds ways to make them work. Highly articulate and willing to make progress. Good to make and accept "if-then" proposals. The negative aspects: too ready to compromise; too little command of details which may lead to sacrificing his or her own interests. A fast talker and too ready to shift positions, may impress others as tricky and insincere.
Gottchalk advises to be positive with dealers. Let them talk to get information. Insist on frequent summarizing and note taking for the minutes of the meeting. Do not let yourself be side-tracked. Insist and repeat your position as needed.
STUDENT: Gottchalk’s classification of styles and his advice on how to react to them is convincing. But I know you are very inclined towards G.Kennedy’s opinions. What does he think about personality analysis in negotiations?
TEACHER: As I said before, a book I consider important if you are seriously interested in business negotiations is Kennedy’s Pocket Negotiator, which the author himself defines as "an aide-mémoire, not a treatise". In this book Kennedy says that these "insights into personality styles" are based on a shaky hypothesis. He concedes that they may be helpful in some circumstances. But relying too much on this approach to evaluate your opponent may be dangerous. Most people, as I said before, are in real life a mix of styles. And they are often able to switch from one style to another. So, if you define your opponent clearly as having one of these specific styles and predict a behavior based on this analysis, you might make a costly mistake. Not because your judgment was wrong to begin with, but because your opponent may be able to switch styles. He or she may start showing a very cooperative behavior and suddenly become highly competitive.
Kennedy’s proposition is to rely more on the actual behavior of the negotiators than on establishing their personality style. He argues that behavior is "much more clear cut, more visible and more reliable that the negotiator’s personality traits".
STUDENT: I see. So we are now moving on to study "behavioral styles" as distinct from "personality styles". Right?
TEACHER: Correct. Let’s move on.
The People Factor in Negotiations: Behavior
Negotiation is of course a decision making process. But is different from other types of decision making processes in business because it involves trading. The decision must be finally taken by an agreement made by two parties with different interests and at least a certain degree of decision power on the final outcome. If one of the parties has no decision power, then there cannot be any negotiation.
In negotiations both parties trade something they have and others want for something others have and they want.
STUDENT: You are repeating yourself. This is the same as the example of shirts and pants on Module I.
TEACHER: Yes, but we are at a more advanced stage now, and I had to re-formulate the definition of negotiations in a more refined and general way. But you are right, the essence is the same.
STUDENT: Fine. Your definition that negotiators are traders should mean that both parties must enter a negotiation willing to reach a deal involving an exchange of goods or services. Or money, of course.
TEACHER: Ideally yes, but let me tell you that negotiations do not necessarily begin with both parties acting as bona fide traders. Many times one of the parties intends to get something for nothing by exploiting the other party’s ignorance, or by making threats. The notion of fairness is frequently absent in the mind of one or both negotiators.
STUDENT: I hope you will now tell me how to proceed if my counterpart in a negotiation does not really want to trade but wants to take advantage of me.
TEACHER: Certainly, but a little later. Let me first define the behavioral styles you will encounter in your negotiations.
* Those who want something for nothing. Kennedy calls them Reds.
* Those who exchange (trade) something for something. Kennedy calls them Blues.
As in the case of personalities, real people show behavioral styles that are a continuum going from extreme Red to extreme Blue. Most of us are naturally in some intermediate zone. But let’s describe the two extreme styles.
* see every negotiation as a contest they have to win and you have to lose.
* try to win by exerting some form of force or domination on you.
* believe in the zero sum concept. All they win you lose and vice-versa.
* do not have a notion of fairness in negotiations. They will lie, bluff, use ploys and dirty tricks, and will not stop short of coercion.
* are willing to trade, to get something by giving you something
* are ready to cooperate with you to find a solution advantageous for both of you
* do not use manipulation, tricks and ploys, believing instead in considering each party’s interests as a way to reach a solution.
* think that most of the times zero sum is not a valid concept and solutions can be found that add value to both parties.
STUDENT: So, when a Red and a Blue negotiate, who wins more often?
TEACHER: Several outcomes occur. The Reds may succeed in intimidating the Blues and make them surrender and give up something for nothing. But Reds may also encounter Blues who are assertive and resist the Reds’ aggressive behavior. This may lead to the negotiation to be abandoned, or may force the Reds to change their behavior and recognize that they must trade if they want to reach a deal.
STUDENT: I met several Reds during the many years I drove in countries where corrupt policemen are the norm. I was stopped many times without good reason and Red Cop threatened to write me a ticket. This was his way to open a negotiation on the size of the "contribution" I would make if he changed his mind about the ticket. I usually behaved as an Assertive Blue. I did not argue, I told the officer to go ahead and write the ticket if he thought it was his duty. But that of course I would dispute it in court, since both he and I knew there was no ground to write it. Red Cop was not really interested in giving me a ticket but in collecting a bribe and as he realized that I was not going to pay, in almost every occasion I got away without the ticket.
TEACHER: Very clever. But maybe you did not even notice that you acted as a disguised, devious Red rather than as an Assertive Blue. You apparently recognized the policeman's authority, but then your firmness and your statement that you would dispute the ticket in court contained a hidden threat for Red Cop. Because you did not propose a trade. You came across as maybe being somebody important with power to somehow harm Red Cop, who knew that his behavior was illegal. So he turned into a Submissive Blue and capitulated by letting you go.
And your story opens the way for me to define four combinations of Red and Blue.
Reds may be:
* Aggressive: want something for nothing. Make threats. Impress you with their power over you.
* Devious: do not make open threats but use finesse. Hide their Red behavior. (Dear Student, do not get angry at me, but this was yourself dealing with Red Cop!)
Blues may be:
* Submissive: ready to capitulate and give something for nothing.
* Assertive: firmly insist that no deal is possible without a trade of something for something.
STUDENT: And according to your interpretation of my dealings with Aggressive Red Cops, I am a Devious Red!
TEACHER: I don’t think so. What I said was that on these particular occasions, when confronted with an aggressive Red Cop, you behaved as a Devious Red. I did not mean that you are always a Devious Red.
The idea of observing behaviors rather than personalities is based on the belief that all of us may behave in different occasions as any of the described types. Sure, people may have an inclination towards one or the other types of behavior. But most of us are capable of all attitudes.
To illustrate this, we will use today’s Q&A session. The questions will define behaviors and you will answer to which of the described styles each behavior belongs.
Questions and Answers Session
You make an unconditional offer. To which of the described styles does this behavior belong?
You make an unilateral demand without offering anything in return. To which of the described styles does this behavior belong?
You take advantage of somebody’s fear or ignorance hiding your real intention. To which of the described styles does this behavior belong?
You keep making offers in the "if-then" format, offering something on condition that the other party gives you something in return. And you reject outright all unilateral demands from your counterpart. To which of the described styles does this behavior belong?
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