Leadership & Management: Negotiations

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Sharpen Your Negotiation Skills

Everyone negotiates, but few negotiate well. Here is a collection of Working Knowledge articles and faculty working papers that detail some of the the skills needed to negotiate successfully. Read More

Teaching The Deal

In his Negotiation and Deals courses, Kevin Mohan uses his VC experience to teach students that showing emotion, asking questions, and understanding your own strengths and weaknesses can be key to a successful agreement. Open for comment; 2 Comments posted.

The Role of Emotions in Effective Negotiations

HBS Senior Lecturer Andy Wasynczuk, a former negotiator for the New England Patriots, explores the sometimes intense role that emotions can play in negotiations. Open for comment; 19 Comments posted.

Handshaking Promotes Cooperative Dealmaking

A simple handshake can have large consequences for a negotiation. In this paper the authors suggest that handshakes before negotiations—or the lack thereof—serve as subtle but critical indicators of negotiators' social motives. In particular, handshakes signal willingness to act cooperatively during negotiations. The authors propose and show through experiments that handshakes increase cooperative behaviors at the bargaining table and, as a result, influence outcomes in both integrative and distributive negotiations. Integrative negotiations are those in which parties' interests are neither completely opposed nor completely compatible, allowing negotiators to mutually benefit by making efficient trades. In contrast, distributive or "zero-sum" negotiations—in which the parties' interests are completely opposed—are characterized by a different set of strategies such as appearing firm and even lying about one's interests. Overall, these results contribute to research and scholarship on social motives. The work also has practical implications for the importance of building rapport in negotiation and conflicts more generally. Read More

Better Deals Through Level II Strategies: Advance Your Interests by Helping to Solve Their Internal Problems

While most of us focus on our own interests in negotiation, our counterparts are more likely to say "yes" to a proposal if it meets their interests. Frequently, their interests entail satisfying, or at least not annoying, their "behind the table" constituencies. These may include a boss, board, investor group, spouse, client, union membership, community group, NGO, political party, or the US Senate that must ratify the treaty that negotiators prepare on behalf of the President. The author of this paper argues that a potent barrier to success in negotiation is often the prospect that your or the other side's constituents will reject the deal. While most negotiators are highly sensitive to their own constituencies, they tend to pay far less attention to the other side's constituents: "that's their problem. Let them solve it." Yet one low-cost way for negotiators to advance their own interests can be help the other side solve its internal constituency problems—in a manner consistent with each both side's interests. Sophisticated negotiators have been amazingly inventive in coming up with practical and highly valuable approaches to this often‐unexplored challenge. This paper develops and illustrates several such approaches. Read More

Excerpt: ‘The Art of Negotiation’

Great jazz musicians are a model for negotiators, says Michael Wheeler in his new book, The Art of Negotiation: How to Improvise Agreement in a Chaotic World. Creativity at the bargaining table starts with disruption of familiar routines and old assumptions. Open for comment; 0 Comments posted.

Better Deals Through Level II Strategies: Advance Your Interests by Helping to Solve Their Internal Problems

While most of us focus on our own interests in negotiation, our counterparts are more likely to say "yes" to a proposal if it meets their interests. Frequently, their interests entail satisfying, or at least not annoying, their "behind the table" constituencies. These may include a boss, board, investor group, spouse, client, union membership, community group, NGO, political party, or the United States Senate that must ratify the treaty that negotiators prepare on behalf of the President. The author of this paper argues that a potent barrier to success in negotiation is often the prospect that your or the other side's constituents will reject the deal. While most negotiators are highly sensitive to their own constituencies, they tend to pay far less attention to the other side's constituents: "that's their problem. Let them solve it." Yet one low-cost way for negotiators to advance their own interests can be help the other side solve its internal constituency problems-in a manner consistent with each both side's interests. Sophisticated negotiators have been amazingly inventive in coming up with practical and highly valuable approaches to this often‐unexplored challenge. This paper develops and illustrates several such approaches. Read More

Negotiation and All That Jazz

In his new book The Art of Negotiation, Michael Wheeler throws away the script to examine how master negotiators really get what they want. Open for comment; 2 Comments posted.

How to Spot a Liar

Key linguistic cues can help reveal dishonesty during business negotiations, whether it's a flat-out lie or a deliberate omission of key information, according to research by Lyn M. Van Swol, Michael T. Braun, and Deepak Malhotra. Closed for comment; 55 Comments posted.

Level II Negotiations: Helping the Other Side Meet Its ‘Behind the Table’ Challenges

Many situations make it important to productively synchronize "internal" with "external" negotiations. In fact, much research to date has focused on how each side can best manage its internal opposition to agreements negotiated "at the table." Often implicit in this research is the view that each side's leadership is best positioned to manage its own internal conflicts. Traditionally, a negotiator does this by 1) pressing for deal terms that will meet its internal objections, and 2) effectively "selling" the agreement to its key constituencies. However, James Sebenius argues that to achieve your own goals in negotiation it is also vital to understand all the ways in which you can help the other side with the its "behind-the-table" barriers (and vice versa). Independent of any altruistic motives, helping them to solve "their internal negotiation problem" is often the best way to get them to say yes to an agreement that is in your interest. To do this, negotiators should explicitly probe the full set of the other party's interests including the other side's interest in dealing effectively with its internal, behind-the-table challenges and conflicts. This requires you to deeply probe the context in which they are enmeshed: the web of favorable and opposing constituencies as well as their relationships, perceptions, sensitivities, and substantive interests. By way of a number of challenging case examples, this paper details a number of ways to develop this fuller understanding and to act effectively on it. Read More

Negotiation Processes As Sources of (And Solutions To) Interorganizational Conflict

Negotiations are often conceptualized as a means of managing or resolving conflict. Yet just as the process of negotiation may be a solution to conflict in some cases, it may be a source of conflict in others. This paper examines how contextual features within organizations affect negotiation processes and outcomes, and how these processes in turn become a source of or solution to interorganizational conflict. The authors argue that principals, agents, and teams face different sets of constraints and opportunities in negotiations. It is thus important to understand the link between unfolding interactions (the subject of considerable negotiation process research) and more macro features of organizations, such as formalization of roles, culture, or party representation. Read More

Communicating Frames in Negotiations

Economists examining bargaining behavior and outcomes often disregard the complex role of communication, restrict interaction to offers and counteroffers, or study the mere presence of communication while ignoring or constraining its content. This paper asks: How and why does talk sometimes make bargaining more cooperative and other times make bargaining more competitive? The answer may depend on examining what is being communicated about the underlying purpose of the interaction. Kathleen L. McGinn and Markus Noth argue that the content of communication frames the bargaining situation and thus can help predict bargaining behavior and final agreements. Read More

The Art of Haggling

When teaching negotiation skills, many educators now focus almost exclusively on an interest-based approach in which both parties openly collaborate to find a mutually satisfying solution. Michael Wheeler argues that it's important for students to realize that there's also a time and place for old-school haggling. Closed for comment; 16 Comments posted.

When Performance Trumps Gender Bias: Joint versus Separate Evaluation

Gender-based discrimination in hiring, promotion, and job assignments is difficult to overcome. This paper suggests a new intervention aimed at avoiding biased assessments: an "evaluation nudge," in which employees are evaluated jointly rather than separately regarding their future performance. While joint evaluation is common for most hiring decisions, especially at the lower levels, it is rarely used when job assignments and promotions are being considered. The research shows that a joint-evaluation mode succeeds in helping employers choose based on past performance, irrespective of an employee's gender and the implicit stereotypes the employer may hold. While it is not always feasible to bundle promotion decisions and explicitly compare candidates, the research suggests that, whenever possible, joint evaluation would increase both efficiency and equality. Findings have implications for organizations that want to decrease the likelihood that hiring, promotion, and job-assignment decisions will be based on irrelevant criteria triggered by stereotypes. Read More

Gender and Competition: What Companies Need to Know

Do women shy away from competition and thus hurt their careers? New research by Harvard's Kathleen L. McGinn, Iris Bohnet, and Pinar Fletcher suggests the answer is not black and white, and that employers need to understand the "genderness" of their work. Open for comment; 5 Comments posted.

Non-competes Push Talent Away

California is among several states where non-compete agreements are essentially illegal. Is it a coincidence that so many inventors flock to Silicon Valley? New research by Lee Fleming, Matt Marx, and Jasjit Singh investigates whether there is a "brain drain" of talented engineers and scientists who leave states that allow non-competes and move to states that don't. Open for comment; 8 Comments posted.

Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans

Companies generally pay their sales staff with some combination of salary, commissions, and bonuses for meeting quotas-with sales force costs averaging about 10 percent of sales revenue in the United States. This paper aims to gain insight into the most effective way to design a compensation plan, concentrating on whether bonuses boost sales productivity and whether they should be awarded quarterly or annually. Research, focusing on the sales force of a large office supply company, was conducted by Harvard Business School professor Thomas Steenburgh and Doug J. Chung and K. Sudhir of the Yale School of Management. Read More

The Job Market for New Economists: A Market Design Perspective

How should the most appropriate employers and job candidates find each other? Newly minted economists typically send applications to an average of 80 potential employers, and as a result, many employers receive hundreds of applications. It is extremely time-consuming to sort through all the applications, and as the process unfolds, there is a risk of coordination failure, in which employers and candidates who would be well-suited do not manage to create a match. In this paper, HBS professors Peter A. Coles and Alvin E. Roth and colleagues provide an overview of the market for new PhD economists and describe new mechanisms to improve the matching process. They conclude by discussing the emergence of platforms for transmitting job market information, and other design issues that may arise in the market for new economists. Read More

Sharpening Your Skills: Successful Negotiation

Can you out-negotiate Wal-Mart? Can women overcome gender stereotypes to win equitable pay? Recent research from Harvard Business School looks at important factors to consider before sitting down at the bargaining table. Read More

Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions

Reserve prices may have an important impact on search advertising marketplaces. But the effect of reserve prices can be opaque, particularly because it is not always straightforward to compare "before" and "after" conditions. HBS professor Benjamin G. Edelman and Yahoo's Michael Schwarz use a pair of mathematical models to predict responses to reserve prices and understand which advertisers end up paying more. Read More

Walking the Talk in Multiparty Bargaining: An Experimental Investigation

Talk can unite, but it can also divide. In multiparty bargaining, communication can focus parties on a fair distribution of resources, but it can also focus parties on a competitive distribution of resources. As HBS professor Kathleen L. McGinn and coauthors Katherine L. Milkman and Markus Nöth show through experiments, at the onset of interaction the dominant logic in discussions—be it fairness or competition—strongly influences the equality of payoffs even in complex, full-information multiparty bargaining. Increases in the relative frequency of talk about fairness are associated with payoffs closer to an equal split. Talk about competitive reasoning has the opposite effect, driving payoffs away from an equal division, though these effects are less consistent than fairness talk effects. The researchers' results add critical insights to our understanding of the role of communication in multiparty bargaining. Read More

The New Deal: Negotiauctions

Whether negotiating to purchase a company or a house, dealmaking is becoming more complex. Harvard Business School professor Guhan Subramanian sees a new form arising, part negotiation, part auction. Call it the negotiauction. Here's how to play the game. Read More

A Decision-Making Perspective to Negotiation: A Review of the Past and a Look into the Future

The art and science of negotiation has evolved greatly over the past three decades, thanks to advances in the social sciences in collaboration with other disciplines and in tandem with the practical application of new ideas. In this paper, HBS doctoral student Chia-Jung Tsay and professor Max H. Bazerman review the recent past and highlight promising trends for the future of negotiation research. In the early 1980s, Cambridge, Massachusetts, was a hot spot on the negotiations front, as scholars from different disciplines began interacting in the exploration of exciting new concepts. The field took a big leap forward with the creation of the Program on Negotiation, an interdisciplinary, multicollege research center based at Harvard University. At the same time, Roger Fisher and William Ury's popular book Getting to Yes (1981) had a pronounced impact on how practitioners think about negotiations. On a more scholarly front, a related, yet profoundly different change began with the publication of HBS professor emeritus Howard Raiffa's book The Art and Science of Negotiation (1982), which for years to come transformed how researchers would think about and conduct empirical research. Read More

Gender in Job Negotiations: A Two-Level Game

The traditional division of labor between the sexes—women managing the private realm and men the public—continues to have an indirect influence on job negotiation outcomes through links between private realm and public realm negotiations. Women's negotiations at work are often constrained by agreements in negotiations at home. There still remains a significant "unexplained" difference in male and female compensation that, according to research in the past several years, cannot be accounted for by gender differences in work commitment, education, and experience, or other considerations such as unionization. The literature on gender in negotiation may offer insights with regard to how negotiation contributes to or could help diminish gender differences in compensation. Bowles and McGinn review two bodies of literature on gender in negotiation—one from psychology and organizational behavior on candidate-employer negotiations, and another from economics and sociology on household bargaining over chores and child care. Read More

Negotiating with Wal-Mart

What happens when you encounter a company with a great deal of power, like Wal-Mart, that is also the ultimate non-negotiable partner? A series of Harvard Business School cases by James Sebenius and Ellen Knebel explore successful deal-making strategies. From the HBS Alumni Bulletin. Read More

Unconventional Insights for Managing Stakeholder Trust

Most organizations understand the need to manage stakeholder trust. The bad news: Most organizations don't really understand how to manage the difficult job effectively. However, for those companies wishing to reap the benefits of improved cooperation with suppliers, increased motivation and productivity among employees, enhanced loyalty among customers, and higher levels of support from investors, managing stakeholder trust is a prudent, if not critical investment. Trust management may require an appreciation for some unconventional insights regarding the appropriate investment of resources. Stakeholders differ in regard to the kinds and degrees of vulnerability they face; what they need to believe before they will trust also differs. Would-be trust managers will be wise to consider these varying needs and to anticipate the tradeoffs that exist in strengthening relationships with specific stakeholders. Read More

Psychological Influence in Negotiation: An Introduction Long Overdue

This paper attempts to encourage a better dialogue between research on social influence and on negotiation. It provides an overview of the literature on both areas, and identifies opportunities for creating more effective and useful research. First, HBS professors Deepak Malhotra and Max Bazerman identify those elements of psychological influence that do not require the influencer to change the economic or structural aspects of the bargaining situation in order to persuade the target. Second, they review prior research on behavioral decision-making in negotiation to identify those ideas that may be relevant to influence in negotiation. Third, they provide a framework for thinking about how to leverage behavioral decision research to wield influence in negotiation. Fourth, they consider how targets of influence might defend against these tactics. Fifth, because psychological influence is, by definition, aimed at achieving one's own ends through the strategic manipulation of another's judgment, they consider the ethical issues surrounding its application in negotiation. Read More

Dealing with the ‘Irrational’ Negotiator

"Negotiators who are quick to label the other party 'irrational' do so at great potential cost to themselves," say HBS professors Deepak Malhotra and Max H. Bazerman. Their new book, Negotiation Genius, combines expertise in psychology with practical examples to show how anyone can improve dealmaking skills. In this excerpt, Malhotra and Bazerman describe what to do when the other party's behavior does not make sense. Read More

Sharpening Your Skills: Negotiation

A new HBS Working Knowledge feature called Sharpening Your Skills debuts on the topic of negotiation. Sharpening Your Skills collects together past articles to offer readers practical advice around a specific business management topic. Let us know what you think! Read More

Five Steps to Better Family Negotiations

Family relationships are complicated, even more so when your uncle, mother, or daughter is your business partner. Harvard Business School's John A. Davis and Deepak Malhotra outline 5 ways to analyze and improve dealmaking and dispute resolution while protecting family ties. As they write, family negotiations are difficult yet also contain built-in advantages. Read More

Negotiating in Three Dimensions

"Negotiation is increasingly a way of life for effective managers," say HBS professor James Sebenius and colleague David Lax. Their new book, 3-D Negotiation, describes how you can shape important deals through tactics, deal design, and set-up, and why three dimensions are more powerful than one. Here's a Q&A and book excerpt. Read More

Negotiating When the Rules Suddenly Change

Following the adoption of a collective bargaining agreement in 2005, National Hockey League GMs had one month to absorb the new rules and put a team together. How to best negotiate in an uncertain environment? Michael Wheeler advises looking to military science for winning strategies. Read More

When Not to Trust Your Gut

Most of us trust our intuition more than we should, especially when the pressure is on in negotiations. Professors Max Bazerman and Deepak Malhotra on negotiating more rationally. From Negotiation. Read More

Four Strategies for Making Concessions

"Concessions are often necessary in negotiation," says HBS professor Deepak Malhotra. "But they often go unappreciated and unreciprocated." Here he explains four strategies for building good will and reciprocity. From Negotiation. Read More

When Rights of First Refusal Are a Bad Deal

Contracts that include a right of first refusal usually benefit the holder of that right. But not always. New research by professor Alvin E. Roth and colleague Brit Grosskopf explains when it's wise to say no. Read More

When Gender Changes the Negotiation

Gender is not a good predictor of negotiation performance, but ambiguous situations can trigger different behaviors by men and women. Here is how to neutralize the differences and reduce inequities. From Negotiation. Read More

Maximizing Joint Gains: Transaction Utility Within and Between Groups

Win-win deals are more easily described than carried out. Earlier studies have shown that when people don't know the gender or social category of their negotiating partner, they are happy to make a profit even if their partner earns a greater profit. Four new studies looked at how gender or other social contexts influence the way people cut a deal. Read More

Making Credibility Your Strongest Asset

Dealmakers often forget the power of a good reputation. In this article from Negotiation, HBS professor Michael Wheeler tells why having a storehouse of credibility will put you head and shoulders above the competition. Read More

What Perceived Power Brings to Negotiations

What role does "perceived power" play in negotiations? For one thing, it may help all the parties take away a win at the table. Professor Kathleen McGinn discusses new research done with Princeton’s Rebecca Wolf. Read More

How to Choose the Best Deal

Weighing different options can seem as difficult as comparing apples and oranges. The first step is to find the equalizer—then proceed from there, writes HBS professor Michael Wheeler in this article from Negotiation. Read More

The Potential Downside of Win-Win

You and your negotiating partner may reach a wonderful agreement for both parties, but have you forgotten people who aren't at the bargaining table, such as your consumers? HBS Professor Max H. Bazerman reflects in this article from Negotiation. Read More

Six Steps for Making Your Threat Credible

It damages your reputation, your company, and the deal if you make empty threats in negotiation. In this article from Negotiation, HBS professor Deepak Malhotra explains six steps for powerful follow-through. Read More

A Better Way to Negotiate: Backward

"When you map a negotiation backward, you envision your preferred outcome and think in reverse about how to get there," says Harvard Business School professor and negotiation specialist James K. Sebenius. From Negotiation. Read More

Becoming an Ethical Negotiator

Think you negotiate fairly? Harvard Business School professor Michael Wheeler and colleague Carrie Menkel-Meadow have co-edited a new book, What’s Fair: Ethics for Negotiators. Here’s a Q&A. Read More

Six Ways to Build Trust in Negotiations

All negotiations involve risk. That’s why establishing trust at the bargaining table is crucial. Professor Deepak Malhotra presents strategies to build trustworthiness. From Negotiation. Read More

Negotiation and All That Jazz

Negotiation is improvisational—demanding quick, informed responses and decisions. Professor Kathleen L. McGinn lays out the score in this article from Negotiation. Read More

Is That Really Your Best Offer?

In this article from Negotiation, HBS professor Michael Wheeler describes six "tells" of the bargaining table. Read More

Negotiating Challenges for Women Leaders

When negotiating compensation, women often sell themselves short. Some practical advice on claiming the power to lead in this interview with HBS professor Kathleen L. McGinn and Harvard's Hannah Riley Bowles. Read More

The Ingredients of a Deal Disaster

A deal can unravel quickly if it doesn’t embody the mutual understanding—the social contract—behind the words on paper. The risk factors surrounding negotiation are detailed in this Harvard Business Review excerpt, co-authored by HBS professor James K. Sebenius. Read More

Breakthrough Negotiation: Don’t Leave It On the Table

Ponder this. Businesses are constantly involved in negotiations but rarely develop these skills in their leaders. Harvard Business School professor Michael Watkins explains the secrets of powerful negotiators. PLUS: Book excerpt. Read More

The Negotiator’s Secret: More Than Merely Effective

What turns merely effective negotiators into all-out expert negotiators? The ability to overcome six common mistakes, according to HBS professor James K. Sebenius. In this excerpt from the Harvard Business Review, he describes one of the most glaring. Read More

The Emerging Art of Negotiation

A negotiation is rarely open-and-shut, but research is starting to reveal a number of ways that this complicated and often-volatile process might go a lot better for all concerned. HBS Professor Kathleen L. Valley, HBS Senior Research Fellow Max H. Bazerman and two colleagues point the way toward a new understanding of the psychology of negotiation. Read More

Building Bridges: New Dimensions in Negotiation

How does a master negotiator negotiate? HBS Professor James Sebenius, founder of the school's Negotiation Unit, frames options in such a way that "what you choose in your perceived interest is, in fact, what I want." How does he accomplish this? Through what he calls "three-dimensional negotiation:" persuasion at the bargaining table; delving into the deeper interests that underlie the parties' positions; and a studied determination of whether to take the deal on the table or to walk away. Read More