Newsletter

Negotiating Rationally
[Second Quarter, 1993]

M. Bazerman, M. Neale

From time to time we will report on books that we feel will be of interest to our readers. In this edition of THE SUCCESSFUL NEGOTIATOR, we highly recommend that you read the one recently published book, Negotiating Rationally, by Max H. Bazerman and Margaret Neale. As its title suggests, this book concisely lays out a more rational approach to negotiation. The text is quite readable and we feel everyone can benefit from it.

Bazerman and Neale are both Directors of the Center of Dispute Resolution at Northwestern's famed Kellogg Graduate School of Management. After having synthesized their studies of negotiating behavior of more then 10,000 executives and students over the past five years, they have come to a most disturbing conclusion: most people tend to act irrationally in negotiations. They give many real-life examples of this premise and note: "All executives have pervasive decision-making biases that blind them to opportunities and prevent them from getting as much as they can out of a negotiation." They list seven such behaviors...a few of which we list here: escalating your commitment to an initial course of action, assuming your gain must come at the expense of the other party, anchoring your judgments on irrelevant information, being overconfident and failing to focus on the other side's perspective.

Through simulations and exercises, the authors show how to avoid those irrational pitfalls by developing the ability to recognize individual limitations and biases and by focusing the negotiator's attention on the other party's behavior and needs. These exercises provide opportunities for the reader to audit his/her own decision making-processes and explain how to think rationally in choosing to reach an agreement or accept an impasse. They remind us that the goal of a successful negotiation is not merely "getting to a yes" but arriving at the best possible agreement. Sometimes, the authors suggest, an impasse or no agreement at all makes better sense then an agreement that is less then optimal. They state: "Remember, the goal of negotiating is not to reach just any agreement, but to reach an agreement that is better for you than what you would get without one."

The first chapter of the book describes Bazerman and Neale's general perspective. They define what negotiating rationally is and why the reader needs to develop this skill. The rest of the book is organized around these three sections:

The first section addresses the errors to expect if you and the other party don't negotiate rationally, as well as how to eliminate them. Examples are provided for the reader to audit his/her own decision-making process in two part negotiation.

The second section outlines a general framework for thinking more rationally about negotiation. One particular negotiation is analyzed in order to guide the reader through the steps necessary that must be taken to evaluate when and how to reach an agreement, and when to walk away ... in both cases, producing outcomes that are in your best interest. They pose one question that gives a flavor of their philosophy: "Is it better to be tough or soft? We propose that it's better to be rational. There are times to be tough and times to be soft; the rational manager evaluates each negotiation and creates a strategy that fits the particular context."

The third section goes beyond the standard two-party negotiation and looks at the variety of settings and contexts in which one must rationally negotiate with multiple parties and with a variety of issues and with constraints. Some factors considered are expertise, emotion and fairness, negotiating through third parties, competitive bidding, and negotiating through action, i.e., by means other then face-to-face negotiations (negative ads, letters, etc.).

This comprehensive book, structured to bring the reader from simple two-party negotiations to complex multiparty bidding, will help thoughtful negotiators to develop more rational negotiation skills.

International Program

Over the past year, we have conducted our Clinical Trial Negotiation Program in England, Brussels, Germany and the Netherlands, as well as in Southeast Asia. So we can better serve our international clients, we have had our case studies and practice negotiations tailored to reflect situations unique to Europe and Southeast Asia. In addition, the cases and practice negotiations are being translated into French and German.

New Program

We have recently developed a one-day, follow-up program to The Successful Negotiator, which uses a survey as its focus. The survey has been translated into French and German for European use and our plans call for translations into Spanish and Italian.