How to Break Impasse in Negotiation

1. How to Break Impasse in Negotiation Chapter 7

2. How to Break Impasse in Negotiation Key Point： • 1、to learn to identify the causes of impasse in negotiation • 2、to build a correct attitude towards the impasse • 3、to know the strategies that may prevent a negotiation from falling into impasse

3. CASE This is a claim negotiation between Mr.Ren and a manager of Germany company. Chinese party asks a claim of 11million Marks, the German can only accept 3 million. The gap is large and this is a Marathone negotiation. To break the impasse, Mr. Ren suggests a trip to DaMing Temple in beautiful Yangzhou. “This is a temple to remember a great Buddhist monk in Tang Dynasty, he has been to Japan six times and blind for speading Buddha dharma for six times, his name is Jianzhen. Japanese and Chinese will never forget him.” Mr. Ren introduced. “Maybe you are interested why Janpanese have so much investment in China. That’s because Japanese are familiar with Chinese, and they know Chinese focus much on relations and friendship.”

4. CASE Then he smiled to tne Germany manager, “We have cooperated for many years, we are not only business partners, but also friends, aren’t we?” The Germany manager was moved. The car was drived to the meeting hall directly, and the negotiation goes on. “Let’s talk frank. How much could you compensate us? We Chinese pay much attention to friendship. We don’t want you lose your bowl for this claim. On the othe hand, please think for us, China is poor, we have to give compensation to 10,000 constructors because of the defect of the machines!..” Finally, the German compensated 8 million Marks. The Germany manager said although he gave the money, he felt comfortable.

5. How to Break Impasse in Negotiation Structure of the chapter • 7.1. Why does Impasse Arise? • 7.2 Conquer the Fear of Impasse • 7.3 Avoid provocation • 7.4 Don’t make things worse • 7.5 Other means of dispute handling

6. 7.1. Why does Impasse Arise? • 7.1.1 Causes of impasse • 7.1.2 How to handle impasse?

7. 7.1.1 Causes of impasse • Position conflicts • Coercion (强迫) • Communication barriers • Negotiators quality lack • Little ZOPA

8. Position conflicts • Two men were quarrelling in a library. One wants the window open and the other wants it closed. They bicker back and forth about how much to leave it open: a crack, halfway, three quarters of the way. No solution satisfies them both. The librarian enters. She asks why he wants the window open: “To get some fresh air.” She asks the other why he wants it closed: “To avoid the draft.” After thinking a minute, she opens wide a window in the next room, bringing in fresh air without a draft. • In this case, the two men were insisting on their own positions and no one was willing to give in. In the conflict, the more one insists, the less the other concesses. Actually the “real interest” has been ignored and to maintain the self “face”, no one is willing to give in, but tries to force the other to concess by strong will. Finally, it is not a negotiation, but “will contest”. • Thus, getting entangled in position conflicts is an ineffective negotiation form. The two parties ignore the real potential interest, and agreement is reluctant to make. Even more, the emotion of the two parties may be hurt, and negotiators may face big loss. While in fact, position conflicts is the most common impasse and one of the common mistake that negotiators make.

9. Coercion • Coercion is destructive to negotiation for it means unequal and unreasonable. It is adverse to the principle of “equlity” in negotiation. • Do you have impasse example because of coercion? (youth revolt) • In negotiation, impasse happens because the stronger party uses coercion is common. While, for the other party, sometimes, he has to maintain the nation’s or the enterprise’s honor besides economic benefits, so the more pressure he feels, the more decisive he is. Then the impasse forms and difficult to break.

10. Communication barriers

12. Types of communication • Verbal communication • Mainly refers to the language we use in our daily life, including spoken as well as written. • Nonverbal communication • People communicate via other means, such as spatial arrangement, temporal arrangement, Kinestics, etc. This type is called nonverbal.

13. What do the following mean? • Silence • Hand gestures • Net words: CUL, LOL, AFK, BBL, ASAP, F2F, IMO, JAM; GG, JJMM, 88, frog, dinosaur, cups,3q… • “我公司是中国二级企业，⋯⋯” • In communication, the Japanese always say “Hi, Hi…” • Game: transmission

14. Negotiator’s quality lack • Experience • Attitude and habit • Knowledge • Strategy and skill

15. Little ZOPA • You have attracted by a red car valued 100,000 Yuan. You have 80,000 only, and you are willing to pay 80,000 to buy a car at most. After bargaining, the seller could give 5% discount at most. No one makes mistakes here, this impasse could not be overcome for little ZOPA.

16. 7.1.2 How to handle impasse? • Recently two of my sons were squabbling over some apple pie, each insisting that he would have the larger slice. Neither would agree to an even split. So I suggested that one boy cut the pie any way he liked, and the other boy could choose the piece he wanted. This sounded fair to both of them, and they accepted. Each felt that he had gotten the square deal. Setting up an objective solution to Make both of the two parties feel fair

17. Another example • Have you watched the movie “Tokyo Trial”? • In July, 1945, Chinese judge Mei, Ruao was authorized to take part in Tokyo Trial. The seating became a problem. The president of the court is in the middle, and because of the big effect that US in WWII, there is no question that American judge will take the right seat next to the court president. Who would take the third seat that on the left of the court president rised serious conflicts among judges from other countries. • Judge Mei realized he is the representitive of China, for the country, he has to strive for the third seat. However, at that time, China is not strong enough, if there is no reasonabe and fair means, others could definitely refuse. And other judges faced the same problem, no on wants to concess. • Then, Judge Mei suggested: We could arrange the seating by the sequence of signing the Surrender Document. Facing the objective suggestion, no others could give a better solution. • Actually, the sequence is US, PRC, Soviet Union, Canada,… So Judge Mei was arranged the third.

18. 7.1.2 How to handle impasse? • There is an department trying to set up a shopping center in suburb. The place it favored was owned by Zhangqiao Government.The department offers 1million to open a shopping center, Zhangqiao Government asks for 2 million. After negotiation, the formor offers 1.2m at most, the latter asks 1.8 at least. The two parties face an impasse. • The government wants to sell more money and build a factory to solve the problem of unemployment because the farmers have to leave their ground. The department wants to save money on purchasing the ground, but enlarge the center. • To penetrate the surface, there is common interest. The government wants to solve unemployment and keep the society stable, while the department needs sellspersons for larger scale. They find a win-win solution quickly. • Program 1: Deal done by 1.2m, while the shopping center should provide a position for each family when it opens. • Program 2: Zhangqiao government becomes a shareholder by the ground. After the shopping center setting up, a part of it should be provided for farmers for business. Concerning the real interest

19. 7.1.2 How to handle impasse? • The example of Peace Talk between Egypt and Israel • At first, Israle announced to occupy SINAI Penninsula, while Egypt refused decisively. • What is the BATNA? • Benefits for Israle, Egypt and America: keep Sinai Penninsula as a non-military area. Finding constitutions: when one refers to a constitution Program which satisfies his own interest and considers the Other party’s interest, he holds the initiative of negotiation.

20. 7.1.2 How to handle impasse? Others • (1) Keeping it fluid • (2) Seeking easy escape routes • (3) Shifting the topic • (4) Adjournment strategy In negotiation we try to be sympathetic, sometimes the third party may help, and sometimes we could be “strong” to maintain indipendence and honor if necessary. Case of “Never teach a grandmother how to boil egg”. (you’d better, you must, I advice, if u…, We…,)

21. 7.2 Conquer the Fear of Impasse • Read the Case and try to analyze the situation according to what you have learnt • P191-192

22. 7.3 Avoid provocation • Some of these deadlocks are purely temporary, others can be permanent. • Why does impasse occur? • constitution of provocation

23. 7.4 Don’t make things worse • get the argument away from the why questions to the how questions • what to do and what not to do • Make things happen for you by asking open questions

24. 7.5 Other means of dispute handling • 7.5.1 Mediation • 7.5.2 Arbitration • 7.5.3 Litigation

25. Tips to break the deadlock • Go back to information gathering and build understanding to generate additional options. There may be an underlying issue that is not being addressed. • Try to discover the barriers to effective negotiating. Make a direct appeal to the other party. For instance, “Can you tell me why we are having so much trouble finding an acceptable solution?” • Agree not to agree for the time being. Create time to reflect on the problem and resume negotiations later. Ask if more information is needed. • Inform the other party of the consequence of failure to reach a negotiated solution. • See if the other party is willing to try out one of the proposed solution for a period of time. • Call in an outside party to act as a conciliator, a mediator or an arbitrator.

26. Summary • 1. In this chapter we mainly introduce the reason why an impasse appear and how to manage it. In fact, we should first of all to prevent it from happening; but if it comes, it’s not necessary to be excessively worried or even give up the negotiation. What we can do is to take useful steps to impel negotiation to continue. • 2. The main strategies of re-starting a negotiation include the following: avoiding, adjournment, litigate, arbitrage and so on. This chapter discusses how they are used under different situation.

27. Key words • 1. Impasse • 2. Adjournment • 3. Arbitrage