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Designing Negotiation Parties

By Melissa J. Anderson

According to a new Harvard Business School working paper, negotiation outcomes can be affected by who’s negotiating and why – of course, that doesn’t sound surprising. But what is surprising is the way in which organizations can be impacted by these differences.

The report, “Negotiation Processes As Sources of (And Solutions To) Interorganizational Conflict,” studied negotiations carried out in three different manners: between individuals negotiating with one another for themselves, between individuals negotiating with one another as agents for a larger organization, and by groups negotiating with one another for their organizations.

The researchers, Elizabeth Long Lingo, Vanderbilt University; Colin Fisher, Boston University; and Kathleen L. McGinn, Harvard University, explain, “…negotiations are often conceptualized as a means of managing or resolving conflict. But, while the process of negotiation may be a solution to conflict in some cases, it may be a source of conflict in others.”

The relationships between individuals, negotiation partners, and whether they were representing another actor created differing conflicts and benefits. According to the researchers, within organizations, this can create varying constraints. Understanding these constraints can lead to better negotiation within companies, leading to more effective and engaged employees.

Who’s Negotiating

Based on a study of over 100 negotiators, the report authors explained that negotiators adapt different techniques or improvisations throughout a negotiating session. They explain:

“Just as jazz musicians’ improvisations are guided by the melody, harmony, and rhythm of a song, negotiators co-create the interaction through an interdependent process of active response to the emergent constraints and opportunities of the unfolding interaction (Balachandra et al. 2005). To do so, negotiators must simultaneously structure their interaction and then improvise within the structure that they co-create.”

The complexity (and room for conflict) associated with a negotiation increases with the number of individuals and motivations involved. On the other hand, more players means an increased field of information to draw from and succeed in the negotiation as well as more roles and relationships that can be utilized toward success.

The researchers found that individuals negotiating for themselves usually had more positive interactions and conclusions. They write, “While individuals were constrained by their limited information processing capability, they faced neither the confusion and information complexity facing teams, nor the conflicting allegiances facing agents.”

The result was “more equal payoffs without sacrificing joint gain and relatively high levels of trust.”

On the other hand, negotiations between agents were less positive – often involving asymmetric improvisations and a decrease in trust between parties. This reflected “the dual constraints of agents attempting to work within their teams’ expectations, while also attempting to develop the relational connection that one-on- one, face-to-face interaction elicits,” write the researchers. This style of negotiation also did not gain from the breadth of information and diverse experience that group negotiators benefit from.

Finally, team negotiations were characterized by complexity, simply due to the increased numbers of individuals involved. But it also increased the number of available improvisations. Additionally, the researchers explain, “Negotiations between teams were likely to draw on multiple perceptions, working styles, and approaches. In some negotiations, team members adopted differentiated social or task-related roles as needed in the negotiation.”

This enabled teams to avoid the level of conflict present in agent negotiations. Finally, negotiators benefited from the ability to draw up on the knowledge and experience of their team mates.

Negotiating in the Organization

Within the organization, leaders are often competing for scarce resources like time, budgets, or talent, which places them in frequent negotiation circumstances. The report authors explain:

“Organizational features introduce constraints and open up possibilities in negotiations. Situating negotiations within organizations demands attention to factors such as the organization’s coordination structures, decision rights, formal and informal roles, and the extent of specialization or generalization among those involved in the negotiations (Barley 1991).”

Companies can decrease inter-silo conflict or friction by getting an understanding the negotiation dynamics that underlie varying situations, and training leaders on effective skills for navigating them. The researchers add, “Considering these features when designing and carrying out negotiations may enable organizations to guide the interactions so that they are a solution to, rather than a source of, conflict.”

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