MA GLOBAL BUSINESS

CORE COURSE IN
HUMAN RESOURCE MANAGEMENT IN THE GLOBAL ENVIRONMENT
Academic year
2007 - 2008

Competencies IHRM
Competencies: learning, practising and assessing , in a global business negotiation
and cross cultural environment, how to develop the required skills to:
Separate the people from the problem: Be “unconditionally
constructive” on the relationship

Focus on global, win-win interests, and not in particular positions

Negotiation Skills
Invent options for mutual gain: creating and distributing values
between all parties
Develop objectives criteria to sustained fruitful and long term
agreements
Recognize cultural diversity as the main Challenge of the Global
IHRM
Seek to understand and improve the interaction of employees,
clients, suppliers, and alliance partners (stakeholders), from different
countries and cultures
Cross Cultural Skills
Assume the compromise to learn from any cross cultural experience
and adopt the vision of taking the cultural values into the global
strategy
Build-up competitive advantages based on Global Values & Global 1
José Javier Rivera © 2006
Skills

International Human Resources Management

Negotiation Skills
The Harvard Negotiation Project

Prof. Asociado: José Javier Rivera - j.javier.rivera@uv.es

Departamento de Comercialización e Investigación de Mercados
Facultad de Economía - Universitat de València

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 The Harvard Negotiation Project (HNP)

Contents:
HNP Concept & Proposals
Collaborative Negotiation: Table & Elements of the HNP
Strategic guidelines for collaborative negotiation
HNP Conclusions
Negotiation Case

Negotiating collaboratively requires a systematic

focus on all phases of negotiation activity
Preparation

Conduct
Success

4
José Javier Rivera © 2006
Preparation

Success

Conduct

The Circle of Value: a framework for

conducting collaborative negotiations

Build relationships. Relationship Communication

Be “soft” on the
people.

Positions
Negotiation
Focus on Interests
Interests Table

Explore options for Options

creating and
distributing value.

Legitimacy
Use Objective If “No” If “Yes”
Criteria
Make choices
Alternatives Commitment 5
José Javier Rivera © 2006

2
 The Harvard Negotiation Project

The Harvard Negotiation Project was the first, and remains the foremost,
interdisciplinary research center on negotiation in the world.

Drawing from numerous fields of study, including law, business,

government, psychology, economics, anthropology, and education, The
Harvard Negotiation Project works to connect rigorous research and
scholarship with an understanding of practice.

Founded and based at Harvard Law School, The Harvard Negotiation

Project is a consortium of faculty, students, and staff at Harvard
University, Massachusetts Institute of Technology, and Tufts University.

http://www.pon.harvard.edu/

The Harvard Negotiation Project

…some Responses to today global business challenges:

9 Organization structures are generally "flatter," and less

hierarchical;
9 Cost-effectiveness is emphasized, but so too is…
9 Customer satisfaction, quality, and continuous R & D
development …

http://www.pon.harvard.edu/

The Harvard Negotiation Project

Our Responses to today global business challenges:

9 The Creation and Managing of Global Value for Global firms is

mainly based on business alliances
>>> where making agreements with local and global clients,
suppliers, employees, shareholders, institutions…(stakeholders),
while developing the most of partners relations, is becoming the
first challenge for today managers

9 The Creation and Managing of cross cultural teams, as a logical

need for global business, but also a platform for global business
success

3
 The Harvard Negotiation Project

In order to achieve the global business challenge, from a

“collaborative negotiation oriented skill”…
The Harvard Negotiation Project is focus on faculty & professionals
who are keenly aware of these changes in global business &
organizations and who are working to:
9 develop, implement, and evaluate ways that negotiation
theory and practice can contribute to understanding these
changes and, in some instances, can even serve as a
catalyst for change.
It is the Harvard Negotiation Project belief that a negotiated
approach to change is a core competency -- not just a helpful skill -
- as work becomes more knowledge-driven and as competitive
pressures become more intense.

http://www.pon.harvard.edu/

Negotiating collaboratively requires a systematic

focus on all phases of negotiation activity
Preparation

Conduct
Success

Agenda

The keys to collaborative negotiation

Fundamental elements of negotiation

Definingsuccess
Preparing systematically
Conducting the negotiation

4
 The fundamental elements of negotiation

z The things you want

y Interests, including
y a sense of Legitimacy
y and at least a working Relationship

z Ways to get what you want

y Alternatives — Things you can do without the agreement of
the other side
y Options — Possibilities that require both sides’ agreement

z Agreements/decisions to do something
y Commitments

z Process — How you communicate about these things

y Communication

Defining success
Preparation

Conduct
Success
Preparation

Success

Conduct

Common measures of success

Winning Not Losing

„ Got a deal
„ Madefewer
concessions
„ Got more than I
„ Broke their bottom line expected
„ Gota better deal than
„ We are both happy
them
„ Agreed above my „ We didn’t fight
bottom lime

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 Preparation

Success
Conduct

A systematic definition of success

No agreement, or an agreement that:
z Is better than your Alternatives (Best Alternative To a
Negotiated Agreement)
Substance

z Satisfies Interests: (Interests ≠ Positions)

– Ours, very well
– Theirs, at least acceptably
– Others’ tolerably
z Is efficient: Among the best of many Options
z Is Legitimate: No one feels “taken”
z Involves well-planned Commitments: realistic, sufficient,
operational
Where the Process:
z Is efficient: The product of good Communication
z Helps build the kind of Relationship you want
Preparation

Success

Conduct

The Pareto Frontier

Unrealized Value

Supplier’s Units
of Satisfaction

Customer’s Units
of Satisfaction

The Pareto Frontier: Efficiency Definition

z An allocation of goods is Pareto efficient if no alternative

allocation can make at least one person better off
without making anyone else worse off.

– Inefficient if can re-allocate to make better

without making anyone else worse
– Assumed that decisions are made with this in
mind….to implement a win-win agreement

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 Preparing systematically
Preparation

Conduct

Success
Preparation

Success

Conduct

Preparing to negotiate collaboratively:

Key questions to ask

Positions
z Each side’s needs, desires, concerns and fears.
z What each party has decide upon.
z What each party pretend to obtain from de the negotiation in a
preliminary phase

Interests

z The reasons why of my needs, aims, and concerns?

z How do I prioritize my needs, aims, and concerns?
z The reasons why of their needs, aims, and concerns?
z Which interests are shared, which are just different, and which
conflict?
Preparation

Success

Conduct

Preparing to negotiate collaboratively:

Key questions to ask

Alternatives

Identifying your BATNA and the other side’s BATNA

z What are my alternatives? Of these which is my best (BATNA)?
z What do I think their alternatives are? Of these which is their best
(BATNA)?
z Can we improve ours? Worsen theirs?

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 Preparation

Success
Conduct

Preparing to negotiate collaboratively:

Key questions to ask (cont.)

Options

z What are several possible agreements or pieces of agreements

that might creatively satisfy both our interests?
z What are some ways to use our different interests to create
value?

Legitimacy
z What external criteria would be favorable to us? Potentially
persuasive to them?
z What standards might a judge apply? What “ought” to govern
an agreement?
z What will they argue? Our best response?
Preparation

Success

Conduct

Preparing to negotiate collaboratively:

Key questions to ask (cont.)
Commitments
z What level of authority do I have to reach a commitment?
z What level of authority do I think they have?
z What are mechanisms for revisiting commitments over time?
z What level of commitment should I aim for at this meeting?

Relationship
z What kind of working relationship would I like to build with them?
z How is it now?
z How would we like it to be?
z What can we do to bridge the gap at low cost and risk?
Preparation

Success

Conduct

Preparing to negotiate collaboratively:

Key questions to ask (cont.)
Communication
z What do we want to learn from them?
– How can we improve our listening?

z What do we want to communicate?

– What will be persuasive to them?
– How can we make our messages unambiguous?

z What’s our agenda and plan for the negotiation?

– How will we start off?

z What negotiation “system” would we like to use?

– How should we handle disagreements?

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 Conducting the negotiation
Preparation

Conduct

Success
Preparation

Success

Conduct

A common negotiation dilemma

A Good
Relationship

The Best Deal

Preparation

Success

Conduct

A common negotiation dilemma

Soft Hard
„ “Have to talk”: Participants „ “Don’t have to talk”:
are friends; the goal is Participants are adversaries;
agreement the goal is victory

„ Make concessions “for the „ Demand concessions to have

relationship” (soft on the a relationship (hard on the
people and the problem) people and the problem)

„ Open with a reasonable „ Open with an extreme

position position

„ Concede generously „ Concede stubbornly

„ Make offers — avoid a „ Make threats — win a contest

contest of will of will

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 Preparation

Success
Conduct

Positional Bargaining:
The Dance of Concessions
“A reasonable price of . . .”
No Deal
“Just for you…”
(Go to BATNA)
“That’s my bottom line”
Threat
“Take it or leave it”

Split-the-difference compromise

“Last” Final Offer

Counter-
Threat “Final” Offer

Fallback (Minor Concession) No Deal

Walk Out
(Go to BATNA)
Extreme Opening Position
(Temporarily)
Preparation

Success

Conduct

What’s wrong with traditional

positional bargaining?
z It rewards stubbornness
z It promotes deception
z It erodes trust and damages relationships
z It impedes creative problem-solving
z It traps both sides in the “Hard-Soft” dilemma (negotiate hard
to get the best deal, or soft to preserve the relationship)

Best for: Simple transactions; low stakes; market

context;
or one-shot (?) deals
Preparation

Success

Conduct

The Circle of Value: a framework for

conducting collaborative negotiations

Build relationships. Relationship Communication

Be “soft” on the
people.

Positions
Negotiation
Focus on Interests
Interests Table

Explore options for Options

creating and
distributing value.

Legitimacy
Use Objective If “No” If “Yes”
Criteria
Make choices
Alternatives Commitment

10
 Preparation

Success
Conduct

What’s better about

the Circle of Value approach?
z Resolves the “Hard-Soft” dilemma

z It avoids arbitrary outcomes

z It is neither adversarial, nor naive

z It builds trust and improves relationships

z It promotes creative problem-solving

z It sets good precedents for resolving differences that make future

interactions more efficient and productive

Best for: High stakes; important, complex, and/or multiparty

problems; where precedent and relationship matter
Preparation

Success

Conduct

Negotiation: A fundamental choice

Classic Positional Bargaining Joint Problem–Solving

Relationship Communication
“A reasonable price of . . .”

“Just for you…” No Deal

(Go to BATNA)
“That’s my bottom line”
Interests
Threat
“Take it or leave it”

Split-the-difference compromise
Options
“Last” Final Offer
Counter-
Threat
“Final” Offer
Legitimacy
No Deal
If “No” If “Yes”
Fallback (Minor Concession) (Go to BATNA)
Walk Out
Extreme Opening Position
(Temporarily)
Alternatives Commitment

Assumptions Assumptions
Pie is fixed Pie can be expanded
Only job of negotiator is to claim value Negotiators should work together to create
and distribute value
Preparation

Success

Conduct

Strategic guidelines for collaborative

negotiation: Communication

z Negotiate over the process first (set an agenda,

clarify goals)

z Balance advocacy and inquiry

z Summarize and test your understanding of what they

are saying often

z Explain your reasoning, inquire into theirs

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 Preparation

Success
Conduct

Strategic guidelines for collaborative

negotiation: Relationship

z Be “unconditionally constructive” on the relationship

z Separate the people from the problem

– Attack the problem, not the people
– Use interests, options, etc. to address the problem
– Discuss people issues separately and explicitly

z Speak for yourself, not for them

z Avoid trying to fix relationship problems with substantive

concessions
Preparation

Success

Conduct

Strategic guidelines for collaborative

negotiation: Interests
z Clarify interests, not positions

z Consider sharing your interests first

z Ask "why" to elicit their interests

z Solicit criticism of possible options (ask “Why not?”)

z Look for key differences in interests to create value

Preparation

Success

Conduct

Strategic guidelines for collaborative

negotiation: Options

z Jointly brainstorm multiple options

z Separate inventing from deciding

z Present them within possible solutions, not problems

z If you get stuck, go back to the underlying interests

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 Preparation

Success
Conduct

Strategic guidelines for collaborative

negotiation: Legitimacy

z Focus on why an option is fair or how it is defensible

– Use criteria as a “sword” — “Let me show you why”
– Use criteria as a “shield” — “Why?” “Based on
what?”

z Look for fair procedures

z Be open to persuasion

z If you compromise, base it on standards

Preparation

Success

Conduct

Strategic guidelines for collaborative

negotiation: Alternatives (BATNA)

z Acknowledge BATNA as a choice

z Acknowledge theirs BATNA and Test theirs BATNA

– How well does it satisfy their interests?

z Use discussions about BATNA as an opportunity

– To learn about interests

– To create options jointly that are better than your
BATNAs
Preparation

Success

Conduct

Strategic guidelines for collaborative

negotiation: Commitment

z Make commitments with care, after learning all you can

z Commit early to process
z Commit to substance at the end of the process
– Nothing is agreed until everything is agreed
z As you decide, keep your definition of a Good Outcome
in mind
z Make sure both of you know exactly to what you are committing
– Review your understanding
– Ask yourselves if it has the necessary detail to be
implemented

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 The Harvard Negotiation Project
Conclusions
9 Be ready for complex business negotiations
9 Be professional to identify win – win situations
9 The harvard negotiation “circle of value” is learned through preparation
and practice
9 A win – win negotiation approach and skill can make the difference in a
business situation = creating or not creating long term Value for you
and your partners
9 Assume the negotiation skill as a personal competency
9 Implement the negotiation competency as an organizational skill and
permanent learning process from any “negotiation table”
9 The negotiation competency of your organization is a platform for
building up competitive advantages in the global business

39
José Javier Rivera © 2006
Preparation

Success

Conduct

The Circle of Value: a framework for

conducting collaborative negotiations

Build relationships. Relationship Communication

Be “soft” on the
people.

Positions
Negotiation
Focus on Interests
Interests Table

Explore options for Options

creating and
distributing value.

Legitimacy
Use Objective If “No” If “Yes”
Criteria
Make choices
Alternatives Commitment

Negotiating collaboratively requires a systematic focus on all phases of

negotiation activity

The 4 laws of the Harvard Negotiation Method

SEPARATE THE PEOPLE FROM THE PROBLEM

FOCUS ON INTERESTS, NOT POSITIONS
Preparation

Conduct
Success

INVENT OPTIONS FOR MUTUAL GAIN

INSIST IN USING OBJETIVE CRITERIA

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 Be Creative, Constructive, and
Fair, to solve problems, create
value and manage
partnerships!

42
José Javier Rivera © 2006

The goal: A fair agreement

… “meetings the legitimate
interests of each side to the extent
possible, resolving conflicting interests
fairly, durable, and taking community
interests into account,”

43
José Javier Rivera © 2006

Let’s develop new win-win skills , for new

global management challenges.

Let’s start practicing “The Harvard Negotiation

Method”, in order to win value for our own
professional career and business organization.

In any professional and business situation…

so the “story” would be different…and maybe the “history”…

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 © 2004 The New Yorker Collection from cartoonbank.com. All Rights Reserved.

Negotiation Bibliography
GETTING TO YES: NEGOTIATING AGREEMENT WITHOUT GIVING IN.
Roger Fisher & Willian Ury.
PENGUIN BOOKS. New York
1983

GETTING READY TO NEGOTIATE: THE GETTING TO YES WORKBOOK.

Roger Fisher, Danny Ertel.
PENGUIN BOOKS. New York
1995.

NEGOCIACIÓN 2000 - LA COLECCIÓN DE CONFLICT MANAGEMENT.

Danny Ertel.
MCGRAWHILL
1996.

NEGOCIACIÓN: RESOLUCIÓN DE PROBLEMAS Y CREACIÓN DE VALOR.

Juan Roure.
BIBLIOTECA IESE DE GESTIÓN DE EMPRESAS
1997.

NEGOCIACIÓN Y RESOLUCIÓN DE CONFLICTOS

Varios Autores... HARVARD BUSINESS REVIEW – DEUSTO
2001.

NEGOCIACIÓN - HARVARD BUSINESS ESSENTIALS.

Varios Autores.
HARVARD BUSINESS SCHOOL PUBLISHING CO. DEUSTO
2004.

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