Posts Tagged ‘multiparty negotiations’

Multiparty Negotiations

Thursday, September 30th, 2010

A very typical multiparty negotiation in high-tech is the cross-functional team, where representatives of different departments meet together as a task force to achieve a common goal. There are several key challenges that can arise in multiparty negotiations. The first is to understand who are the parties involved in the negotiation and whether all of the affected parties will be present at the table. It is also helpful to understand the relationships between the different parties (that is, who may form coalitions with each other, who may have had poor relationships in the past, and so forth) and how these relationships may affect the negotiation. When the negotiations with multiple parties are done sequentially rather than having everyone at the table, linkage effects (that is, how each agreement affects subsequent agreements) must be considered. Multiparty negotiations take more time than dyadic negotiations, and those involved may have different timetables for achieving outcomes. It is very important to understand the different parties’ issues, interests, and goals and formulate a strategy for each of the parties (see Brett 1991 for review). Negotiators should consider the following strategies when negotiating within a team whether cross-functional or in preparation for negotiating with another party.


A facilitator helps keep the negotiation on track by focusing discussion, encouraging the quieter people (who may hold vital information) to speak, helping to tone down overly aggressive group members, summarizing for the poor listeners, and moving the group toward agreement. The facilitator should set the vision of what the negotiation process will look like—preparing the team for what to expect in order to gain acceptance for the process (which may be new to them). The facilitator should have the parties introduce themselves, their functional area, and discuss the agenda and time line for a negotiated agreement. Ground rules such as not criticizing before all ideas are on the table, one person speaking at a time, and no personal attacks, can help manage  the process. The facilitator should also introduce the concepts of superordinate goal, no agreement alternative, visual matrix, and decision rule (see the following).  The facilitator should be a neutral party, but if it is not possible, then effective facilitators who are also party to the negotiation should clarify their dual role in the process and let the other participants know when they are acting as facilitator or participant. Beware that facilitators who also negotiate may unconsciously bias the discussion in a way that favors their viewpoint by allowing those who have similar views to have more airtime or cutting off those who disagree with them.

Superordinate goals:

The team should agree upon a “superordinate” or joint goal before negotiating the issues of concern. Reminding the team of their superordinate goal helps refocus them from their own self-interests to the interests of the team. When a team member appears to be withholding information or is not considering others’ information, reminding that person of the team goal can help him make a concession while saving face (for example, suggesting that “I’m sacrificing for the group”).

No-agreement alternatives:

The no-agreement alternative is the team BATNA (best alternative to a negotiated agreement). What will happen if the team does not reach an agreement? Who benefits from no agreement occurring? For example, whereas R & D may be compensated for innovative designs that would necessitate a costly change, Production may be compensated by keeping costs down and would benefit by no changes being made to the existing product. The no-agreement alternative may be favorable to some, but not to others, and this should be openly discussed as a team. If an agreement does not seem to be forthcoming because some individuals are more concerned about their own interests, reminding the group of the no-agreement alternative (if the alternative is bleak for everyone) can help encourage concession making.

Visual Matrices:

Cross-functional teams go awry when they allow team members to state a position or get bogged down in opinions. Once a position is made visible (as on a board), it is very difficult to move negotiators off the position because they have become publicly committed to it.  The facilitator should avoid having team members take a position and instead try to gather the facts about the issue of discussion to add information to a matrix. Separating facts from opinions can help to reduce the emotional element of the negotiation (opinions can be emotion laden) leading to rational problem-solving-based negotiation.  Gathering the facts may be expedited through e-mail collection and then presented to the team for discussion.

The matrix helps clarify the issues that are to be negotiated and the facts on which each party has based her position (the position not being recorded). It is much easier for negotiators to change their position if they can see that it may have been based on faulty assumptions or no concrete evidence. Unlike other negotiations, where interests are a focal discussion point, meeting the personal interests of each team member can lead to a poor decision for the company (for example, decisions become a series of compromises based on self-interests and not on the company’s best interests). Team members are more quickly able to reach a mutually satisfactory agreement the sooner the facilitator can put a fact-based package solution on the table to discuss.

Decision Rule:

How the team decides to reach an agreement can have a great impact on the implementation and success of the negotiated outcome. A majority vote inherently leaves people out who may then feel less committed to follow through with the settlement and may purposefully sabotage it. Majority votes can be swayed easily by strong coalitions that may not represent the best interests of the company (Thompson et al. 1988). Unanimous or consensus votes involve joint problem solving because all members’ ideas must be considered. Group members will be more committed and are usually more satisfied with a consensus-based process because they feel that they were heard (Brett 1991). Issue-by-issue voting in a team environment will encourage coalition formation and may lead to unsound agreements.