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Explore negotiation types, strategies, and internal/external factors impacting outcomes. Understand key terms and bargaining approaches. Enhance your negotiation skills today!
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Learning Outcomes • After the lecture the student should: • Discuss and explain the term negotiation • List and discuss the various types of negotiations • Identify the various internal and external factors impacting negotiations • Discuss and explain various negotiating strategies and tactics • Explain and discuss the negotiating process
Key vocabulary • Negotiation- process whereby parties with differing wants and objectives reach mutually agreed outcome based on compromise • Consultation-seeking for ideas/opinions • Coerce-compel/force without regard for individual wish • Tactics-manoeuvres to achieve an aim • Compromise-settlement of dispute by concession/ midway between different things
Introduction • Negotiation –central process of collective bargaining and dispute resolution • Should be granted special attention in labour relations • A daily reality in every relationship • Everyone is always in a negotiation • With education and training one can become a better negotiator • A complex process with many forces coming into play
Introduction • Communication, power, strategy, brinkmanship and bluff are important components of a negotiator’s tactics • Specific economic conditions, as well as industrial and environmental settings have an impact on outcomes • Simple negotiation immutable /unchanging rule: all negotiators ask for more than they expect to get, and offer less than they know they will have to give.
Definition -negotiation • Coming together of parties in the employment relationship in order to try to resolve their differences and reach a mutually acceptable outcome. • Negotiation occurs when parties differ on desired outcome • Neither party has right or ability to unilaterally enforce this outcome on other • Mutually acceptable solutions sought (no matter how far away from real wishes)
Definition • In consultation management retains right to make final decision • ‘’management prerogative’’ – or ‘’the right to manage’’- means managers’ unfettered ability to determine what happens in the workplace • Once the matter becomes negotiable then this unquestionable unchallenged power falls away • This is a fundamental challenge that unions pose to employers • This is what unions disputes are all about • Once it is conceded that a matter is negotiable it remains so - one of unwritten rules of fair bargaining .
Definition • *One of unwritten rules of fair bargaining is whatever is set by negotiation may only be changed by negotiation (What does that mean?)
Four approaches to negotiating (Katz & Kochan, 2000: 176-178) • Distributive bargaining • Integrative bargaining • Intra-organisational bargaining • Attitudinal structuring • Chamberlain and Kuhn came up with collaborative and conjunctive collective bargaining • Recently Fisher and Ury of Harvard Negotiation Project coined terms ‘’Principled negotiation’’ and ‘’interest bargaining.’’
Distributive bargaining • Typified in win-lose interaction • One party makes a gain at the expense of the other • Negotiation associated with division of scarce resources • A wage for employees must be a loss of profits for the employer • Adversarial by nature, each party seeks to protect its share of the pie or increase the share • This takes place at the expense of other party • Distributive bargaining seen as a negative process
Integrative bargaining • Parties try to get a mutually beneficial outcome • This is a win-win situation • Parties seek to make the pie bigger rather squabble over each other’s share • Experience shows that even if the pie is made bigger there is always a fight of who gets the larger slice of the enhanced pie.
Intra-organisational bargaining • Refers to the process of establishing consensus within each party to the negotiating table • Different interest groups within each constituency want their positions represented • Hence it is important that common ground is found before negotiations • This is the process of mandate getting in labour negotiations • Union needs to obtain instructions from members it represents to preferred outcomes and limits to which negotiators should go
Attitudinal structuring and building relationships • Name given to the conduct each party will display either in a tacit or deliberate fashion to condition the other party to be more accepting of their own position • The process is complex, involves the study and understanding of human behaviours • While other negotiators do it instinctively, not all understand precisely the process involved.
Attitudinal structuring and building relationships • Attitudes in labour relations are shaped and structured due to the fact that the relationship is enduring • Once they have reached an agreement, the parties know that they have to co-exist for the life of the agreement, may meet to negotiate other agreements • For above reasons no party uses extreme power tactics and fail to make concessions.
Attitudinal structuring and building relationships • Part of focus of this process is to build a relationship • Although a relationship is built, the union and management need not share common vision • Where negotiating teams build rapport, it facilitates the negotiations. • Where parties build a credible relationship possibility integrated bargaining is enhanced , & chances of a win-win outcome are higher.
Conjunctive and collaborative bargaining (Chamberlain and Kuhn) • Cooperative bargaining is analogous to integrative bargaining • The most distinction lies in their recognition of the real dynamics of collective bargaining • Integrative bargaining implies parties share a common goal, are able to negotiate in an environment with a degree of comfort & that the end result is mutually desirable
Conjunctive and collaborative bargaining • The observed reality for Chamberlain and Kuhn was that management and unions did not share a common ideology, purpose or goal • Conjunctive bargaining describes situation where the parties realise they have different goals, & they would never share them, but understand that the only way to get more of what they want , is to allow the other party to get more of what it wants
Conjunctive and collaborative bargaining • Most experienced negotiators realise that this is closer to reality • Trying to win an ideological debate with a socialist union organiser on how beneficial capitalism is to his members is a futile exercise.
Fisher and Ury-Getting to Yes • They described positional and interest bargaining • Their approach begins with understanding the opponent’s case • Positional bargaining typically win-lose in nature
Fisher and Ury • Each party takes up a position, and proceeds to defend it from the other party’s attack, while at the same time attacking the other party’s position, which in turn is protected vigorously. These attacks turn into ‘’attack –defend spiral’’, where the stronger the attack, the greater the resistance , and vice versa.
Fisher and Ury • Fisher and Ury discovered that parties to a negotiation took positions to protect their interests • Fisher and Ury concluded that it would be profitable to identify the other party’s interests and then jointly develop possible solutions- moving away from traditional negotiating without hijacking the opponent’s belief system
Internal factors that impact on negotiations • Bargaining power • Negotiations are about concessions and movement • Concession –movement of previously held or stated position • Determinant of movement is bargaining power
Internal factors that impact on negotiation • Amount of bargaining power held by a party determines ability to win concessions or shifts in position from their bargaining partner, as well as the extent of resisting pressure
Bargaining Power • It is metaphysical in nature (based on abstract reasoning) • If you are unable to persuade your bargaining partner that you have it, even if you do not, it is of value to you. Similarly, if you have bargaining power, but you are unable to convince your opponent of its nature and extent, then it is of little use to you.
Bargaining Power • Large part of manoeuvring and exchanges in run up the opening stages, are about demonstration and establishment of bargaining power • Bargaining power is ethereal (delicate) in nature and come and goes – it is dynamic • Power dynamics can change during negotiations leaving a party stranded high and dry.
Bargaining Power • Power – defined as having the ability or means to influence someone, or to induce a shift in a previously held position • The employment relationship hinges on a balance of power • Each party has the means to exert sufficient influence to swing this balance in their favour
Bargaining power • Employers as providers of work opportunities and wages wield power by threatening to withhold work, and by controlling and manipulating financial resources, thereby limiting the amount available from which to pay the workforce.
Bargaining Power • Employees can exert pressure by threatening collectively to withhold their labour, affecting production processes and profitability of company. • Negotiators to be well aware of their potential and their ability to influence the opposition
Different kinds of power negotiators can have • Legitimate power • Directly linked to position held in the company • Power is a function of status of individual • Ability to influence others is derived from status/position
Different kinds of negotiating power • Legitimate power may be respected or not by the opposition • Including someone with legitimate power might be taken as a way to intimidate other party.
Referent power • Attributed to strength of character • Also the degree to which one is revered/admired • Such power gives one ability to positively influence people through strength of personality
Expert Power • Derived from one’s knowledge of specific discipline (expertise) e.g. Financial Director, Marketing, IT etc. • Skills and knowledge place them in position to make critical decisions regarding the organisation-they have information power • LA provides for this by conferring the right to access to information to unions • Employees at the coalface are also privy to information that management is unaware of.
Coercive Power • An individual’s ability to threaten, cajole or coerce someone into conforming is evidence of coercive power • Experienced negotiators avoid coercion power , it can hasten breakdown in negotiations and lead to industrial action • The best way to apply it is to put in questions form, ‘’Have you considered the impact of your wage proposal on job security?’’
Reward Power • Stems from individual’s ability to provide rewards for desired outcomes • Rewards include monetary and non-monetary • Negotiators to avoid indicating approval of particular points made by the opposition • They concede vital ground by nodding, or verbally agreeing
Reward Power • Also they should repeat the mantra “Do not take my silence as approval.’’ • Negotiators switch between these powers depending on tone and context of proceedings
External factors that impact on negotiations • There are several of these external factors • Important to understand these • Have knowledge of particular conditions obtaining at time of conditions • These factors are; • Economic climate • Socio-political conditions, and • technology
Economic climate • The following have an impact on negotiations: • Inflation • Economic growth rates • Comparative levels of wage settlements • Macro-economic policies
Political conditions • During apartheid employers deemed more aligned to the apartheid regime and so negotiations had politics of ‘’struggle’’ elements • Where there are labour or social govts., organised labour has close links with the governing party • There also tends to be a sympathetic environment for trade unions
Political conditions • There is a correlation between incidence of industrial action and the political stability of a country • This is measured by elections and the run up to them
Political conditions • Labour and labour policies are contentious issues and will impact on the negotiating environment • If governments are hostile to unions, employees are emboldened in approach • Political considerations determine government’s labour policy which explains degree of union power, which explains how unions are assisted by labour legislation-there can be legislation which is union hostile.
Technology • Workers may feel threatened by technology • Ill prepared employees can be made redundant, they are substituted • Irony is that technology makes organisation more flexible , more productive and enhance its internal and external capabilities
Technology • Employees need to be empowered to be equipped with necessary skills • In negotiation both approaches to introduction of new technology need to be considered before formulating a position.
Bargaining in good faith • Collective bargaining not in a vacuum • Labour relationships continue on daily basis • Experiences of one of these negotiations becomes part of common history that influences attitudes and perceptions of the parties to each other
Bargaining in good faith • To this end the relationship between the two parties is an important determinant of the nature of their relationship, and explains why successful negotiators take cognisant of this in their approach to conducting negotiations
Bargaining in good faith • Bargaining in good faith determines whether or not the bargaining experience will be relatively more positive or not • Duty to bargain not enforceable by the LA • Courts endorsed the notion of good faith bargaining • Refusal to bargain, or bargaining in bad faith became an unfair labour practice
Characteristics of good faith bargaining • Open-mindedness on part of participants • Willingness to genuinely consider positions put forward • Where possible reach an agreement • No party to show pre-determined approach • Parties to be prepared to shift positions and reach compromise • However, duty to bargain in good faith does not translate to duty to agree.
Some unwritten rules in negotiation • That which is set by negotiation, can only be changed by negotiation • Representatives should not be bypassed • Information that is once accepted as being so may not later be denied, e.g. silence being taken as agreement. • Agreement on an issue once reached may not be retracted, unless clearly contingent
Unwritten rules in negotiation • Parties engage through a chief negotiator on each side. Neither party owns the process • Normal conventions of polite interaction should prevail • Conflict is not personalised • Off -the – record interactions remain just that-confidences are never breached • Keep-talking as long as parties around the table are seeking agreement • Be willing to move.
Arguments used in collective bargaining • Affordability • Comparability • Cost of living • Productivity • Public policy
