Negotiation: What Should A Mediator Know?

Mediation is the facilitation of negotiation. Subsequent to this author’s basic mediation training supplemental work was taken in divorce mediation, workplace violence, small claims applications, and civil harassment. But nowhere in all this was negotiation explained. Fortunately negotiation is explained in several mediation texts, Moore (2003), McCorkle (2005), Bush & Folger (2005). Based on these texts and this author’s experience, several aspects of negotiation are discussed along with how they might be of use to the practicing mediator.

Negotiation, sometimes called bargaining, is an occasion where two or more parties engage in discussion to reach agreement on issues that are keeping them apart. This definition resembles that of mediation, as it should, because mediation is a subset of negotiation, i.e., there can be no mediation without negotiation. Negotiation is a mixed-motive situation where the parties are motivated to cooperate and be creative, but also each is motivated to compete to claim a lion’s share of the payoff. To do this the parties try to establish their relative power in the situation; this resulting perception of power will, in large part, influence the settlement. The topics of “essential preconditions,” “bargaining range,” “structure,” “tactics,” and “negotiation styles” are discussed to help the mediator understand negotiation. Finally, some applications of these topics to mediation are offered. Note: In this essay, the terms, “negotiation” and “bargaining” will be used interchangeably.

Essential Preconditions

Three pre-conditions are required for negotiation to work: good faith, viability, and early abandonment of the sham. Good faith is a willingness by the parties to make the process work by making concessions to each other. Concession-making, in the form of offers, is the stuff of negotiation. Viability is the ability of each party, in the end, to make good on its offers. A sham is an exaggerated claim of power used to demand unreasonable concessions from the other party. For the negotiation process to work, the parties must negotiate in good faith by making concessions to each other, be able to make good on their offers, and be willing to abandon their respective sham positions early in the process. In addition, negotiation is governed by the mini-max principle, i.e., even though both parties expect to gain something, each is motivated to minimize its losses and maximize its gains.

Negotiation Styles

There are two basic styles of negotiation: competitive and cooperative. A party offering few or no concessions toward settlement is said to be a competitive (or hard) negotiator. As in most competitive situations opponents are reluctant to share information that might make them vulnerable to each other. Often competitive parties will merely give the impression of making concessions in order to meet the “good faith” requirement. A common saying among negotiators is, “…you need to have a dancer on your team.” A “dancer” is a team member who talks a lot but makes no concessions. Prolonged hard bargaining is considered bad faith negotiation and will ultimately destroy the process.

Cooperative negotiation occurs when both parties listen to each other, learn about and try to meet each other’s needs. Cooperative (or soft) negotiation can result in a compromised gain for both parties. This is not to suggest that the gains will be equal, nor is it to suggest that the parties become altruistic toward each other. The mini-max principle suggests that the parties are consistently interested in maximizing their gains. Note: Either of these styles, if used exclusively, can be problematic. Experienced negotiators are adept at both and apply them artistically.

The Bargaining Range

The bargaining range is the realm of potential outcomes. Three terms are relevant: sham position, maximum disposition and minimum disposition. As indicated, the sham is an extreme outer limit usually articulated during the onset of negotiation where boisterous displays of hostility are not uncommon and truth telling is not expected. Experienced parties do not take each other’s shams seriously; only a naïve and uninformed party would accept the other’s sham. The term, “maximum disposition” represents the best outcome a party would hope to achieve through negotiation. This is the upper limit of the realistic bargaining outcomes; each party strives to achieve a settlement close to his/her maximum disposition. The term, “minimum disposition” refers to the bottom line. It is the least favorable position a party will accept before opting out of negotiation. It is a party’s resistance point. This is not fixed but rather varies as a function of a party’s perceived power in the situation. The party with the most power will expect to keep his/her minimum disposition close to his/her maximum disposition. A step beyond the minimum disposition is the BATNA (i.e., a party’s Best Alternative To a Negotiated Agreement)–it is an outcome a party might expect following an impasse.

Much of negotiation interaction is designed for each participant to determine the opposing party’s minimum disposition. To the extent the parties’ minimum dispositions overlap, a positive settlement range exists containing the potential settlement. Should the minimum dispositions fail to meet, a negative settlement range exists resulting in a stalemate causing the parties to consider 3rd party intervention (e.g., mediation) or defer to their respective BATNAs.

These concepts can be easily seen from a simple distributive negotiation over the price of a used car. The sham position is the advertised price which the seller does not expect to receive unless the buyer is naïve and uninformed. The seller’s maximum disposition is a desirable price should the buyer really want the car and can find no fault with it. The minimum disposition is the price below which the seller will not go. One could expect to hear, “I’d give my car to the charity before I’d let it go for less than that.” (see Figure 1).

Figure 1 NEGOTIATING FOR A 1990 ACURA

Seller:
SHAM asking price $2,000 (in ad)
MAX hope for $1,700
MIN must have $1,500

Buyer:
MIN won’t pay more than $1,600
MAX expect to pay $1,500
SHAM make offer $1,200

The auction offers another slant on maximum and minimum dispositions. The auction is a situation in which the seller tests the minimum dispositions of interested buyers. The bidder (buyer) who is willing to adjust his/her minimum disposition most favorably to the seller wins the auction. The seller often protects his/her minimum disposition by establishing a “reserve,” a price at which the bidding must begin.

Structure

Traditional negotiation seems to follow three sequential patterns: early expression of sham positions, problem solving and testing of resolve, and finalizing the agreement. As mentioned earlier, negotiation usually starts out with bombastic expressions of sham positions. Experienced negotiators know the sham phase is merely ritualistic and will usually assure that is be short lived.

Once the shams are dispensed with, the realistic settlement range is investigated for potential solutions while the parties simultaneously establish power and test each other’s resolve. This phase occupies the bulk of the interaction during which the parties face a dilemma–they must cooperate to explore solutions, yet they are motivated to be less than open about their needs. This is because, in a negotiation, each party “needs” what its power base will allow it to get. Although this phase is exemplified by bluster and the use of power tactics, isolated moments of cooperation (i.e., soft spots) can be observed. Each party will, occasionally, consider the other’s needs in order to make its offers more attractive. It is in this phase that old fashioned horse trading occurs. Tentative concessions, tentative language, and agreements-in-principle are discussed and settlement momentum is achieved. Often parties try to “sweeten the deal” through additional minor concessions. After the parties have sufficiently tested each other and the relative power has been established and power tactics subside, overt cooperation occurs and an agreement is articulated. Efforts to rebuild the relationship may be observed toward the negotiation’s end.

Tactics

As suggested earlier, parties interact in ways to shield their needs and influence each other’s perceptions of the power distribution. This is done using tactics. Although numerous tactics exist, five are addressed here: the threat, the stall, party-initiated caucus, feigning inflexibility, and the flinch.

• The Threat. A threat is an “or else” proposition. For instance, unless the other makes a specific concession, a threatening party might indicate a need to “rethink” his/her participation. The threat would be to withdraw and deny the other the benefits of a negotiated outcome. Threats are usually vague in order to allow for retreat, because if a threat is carried out it is likely to lead to an impasse or destroy the negotiation altogether.
• The Stall. One who stalls uses time pressure to lessen the power of the other. For example, if a seller knows a buyer needs a car by the end of the day, the seller might be reluctant to make concessions and, instead, offer small-talk, waste time, call for breaks, etc., knowing the buyer’s deadline is likely to cause unwise concessions merely to close the deal. This author heard of a party surreptitiously investigating an opponent’s departure plans (hotel check-out time, flight plans, etc.) to learn of any self-imposed deadline. Such knowledge would encourage stalling to extract a major concession from the “departing” party.
• Party-initiated caucus. This is a team tactic. After a team member offers a concession another negotiator will call a team caucus implying the member made an error. This tactic is intended to add value to the concession which later could be traded for one of value to the team.
• Feign inflexibility. This tactic is used to test the resolve of the other side. When a concession is requested a party will claim the need for outside approval when, in reality, the negotiator has authority to make the concession. If the opponent accepts the feigned inflexibility, information is garnered about the other’s perception of his/her power in the situation.
• The flinch. The flinch is a nonverbal indicator of pain or surprise. Should one party request a particular concession, a negotiator might flinch to give the perception that the concession is one of great cost. This was observed while watching negotiators representing a university management and a cafeteria workers’ union. They were negotiating the allotment of clock time for the cafeteria workers to don their uniforms. The concession was made with considerable groaning and displays of pain. The university’s concession was brought up later when it demanded a reciprocal concession from the union.

Applying Negotiation Principles to Mediation

At this point, the reader may be thinking that these principles of negotiation, although interesting, hardly apply to his/her small claims, civil harassment, or community mediation cases. One might say, “My clients are untrained as negotiators and are unaware of these tactics.” This author agrees, but untrained clients, like trained negotiators, still experience the simultaneous pressures to cooperate and compete, i.e., to share information and to conceal information. Like the professional, the untrained party will shade the truth and misrepresent an opponent’s arguments in an attempt to gain a power advantage. Use of the sham by the untrained persons is not uncommon. Observe asking prices in used automobile ads. Do untrained sellers really expect to receive their asking prices?

How can a practicing mediator benefit from knowledge of negotiation? Several responses are offered:

• The mediator with knowledge of negotiation can be more patient and self-controlled. Knowledge of the sham will promote patience with a party’s apparent aggressive behavior. A mediator who is aware of negotiator tactics will be less startled when they are used. The mini-max principle might suggest that the mediator could expect to observe devious behavior from both parties throughout the process. Although negotiators may use the flinch as a tactic, a mediator should never flinch. As a neutral, the mediator should not express personal opinions during the case.
• The aware mediator will be understanding of the negotiators’ pressures. Aware mediators will respect the parties’ tactics as necessary considering the mixed motives each negotiator experiences. The mediator will realize that negotiators, because of the mini-max principle, will continue to challenge each other even while being cooperative. In short, the aware mediator will avoid ignorantly trampling on the delicate negotiation process.
• The mediator should know at what point he/she entered the process. The mediator who is aware of negotiation structure can understand at what point the impasse occurred. Perhaps an early sham statement was taken seriously by one of the parties. In caucus, the mediator could explain to the other the need to abandon his/her sham. Possibly, the negotiation stalled because one party with an inflated sense of power maintained a consistent competitive negotiation style expecting concessions of the other but offering only minor concessions or “dancing” in return. Negotiation needs to mature and the mediator must allow that to occur. Finally, an aware mediator will realize that a tactic (e.g., a threat) used in an early phase may be harmless but that same tactic used later might devastate the negotiation. Hearing a strong threat in a latter phase might cause the mediator (in caucus) to serve as an “agent of reality” and speak frankly to the threatening party.
• The mediator may need to orient disputants. Occasionally, the mediator will need to inform the disputants that they are the negotiators and are empowered with responsibilities to make the process work. In one’s opening statement, the pre-conditions of good faith (i.e., concession-making) and the ability to deliver as promised (i.e., viability) can be explained as essential to negotiation success.
• The mediator who understands negotiation can maintain perspective. The mediator with knowledge of negotiation will show respect for the process. He/she will realize that negotiation is the dominant process and mediation is but a subset, i.e., the facilitation of negotiation. This can generate a degree of mediator humility which might make the mediator more amenable to the tactic of a team initiated caucus rather than feeling only the mediator can call a caucus.
• A mediator who understands negotiation can claim to be professionally trained. Professionally trained persons have knowledge beyond their immediate concerns. Just as a junior high algebra teacher should have knowledge of calculus, the mediator should have knowledge of negotiation. This provides background and wisdom. On occasion mediators may be called upon by professional negotiators. Their subtle use of tactics should be understood and tolerated by the mediator. The unaware mediator may incorrectly interfere with the artistic plying of the negotiators’ tools and damage his/her credibility.

This essay recognizes the importance of negotiation vis-à-vis mediation. It explains various aspects of negotiation and argues that mediators should be trained in the principles of negotiation. Understanding negotiation will ultimately influence a mediator’s choices and, enhance his/her credibility and effectiveness.

Post Script. If negotiation was not developed in your mediation training and this article has stimulated interest, you might read Fisher & Ury’s book, Getting to Yes, or the negotiation sections in the books in the bibliography. Additionally, you might check for negotiation courses in the Business or Speech Communication departments at a local college or university.

Bibliography

Bush, R.A.B., & Folger, J.P. (2005). The promise of mediation: The transformative approach to conflict. San Francisco: Jossey-Bass.

Fisher, R., Ury, W., & Patton, B. (1991). Getting to yes: Negotiating agreement without giving in. 2nd ed. New York: Penguin Books.

McCorkle, S., & Reese, M.J. (2005). Mediation theory and practice. Boston: Allyn & Bacon. Moore, C. W. (2003). The mediation process: Practical strategies for resolving conflict. San Francisco, CA: Jossey-Bass.

                       

Norman R. Page

Norman Page is a volunteer mediator through the Institute for Conflict Management, a subsidiary of St. Vincent de Paul, Santa Ana, California.  He mediates community, small claims and civil harassment disputes.  Dr. Page is professor of Human Communication at California State University, Fullerton where he teaches mediation. MORE >