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CHAPTER 1
The Nature of Negotiation
Objectives
1. Understand the definition of negotiation, the key elements of a negotiation
process, and the distinct types of negotiation.
2. Explore how people use negotiation to manage different situations of
interdependence—that is, that they depend on each other for achieving
their goals.
3. Consider how negotiation fits within the broader perspective of processes
for managing conflict.
4. Gain an overview of the organization of this book and the content of its
chapters.
“That’s it! I’ve had it! This car is dead!” screamed Chang Yang, pounding on
the steering wheel and kicking the door shut on his 10-year-old Toysun
sedan. The car had refused to start again, and Chang was going to be late for
class (again)! Chang wasn’t doing well in that management class, and he
couldn’t afford to miss any more classes. Recognizing that it was finally time
to do something about the car, which had been having numerous mechanical
problems for the last three months, Chang decided he would trade the
Toysun in for another used car, one that would hopefully get him through
graduation. After classes that day, he got a ride to the nearby shopping area,
where there were several repair garages and used car lots. He knew almost
nothing about cars and didn’t think he needed to. All he needed was reliable
transportation to get him through the next 18 months.
A major international airline company is close to bankruptcy. The fear of
terrorism, a number of new “budget-fare” airlines, and rising costs for fuel
have all put the airline under massive economic pressure. The company
seeks $800 million in wage and benefit cuts from the pilots’ union, the third
round of cuts in two years, in order to head off the bankruptcy. Rebuffed by
the chief union negotiator for the pilots, the company seeks to go directly to
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the officers of the Air Line Pilots Association—the international union—to
discuss the cuts. If the pilots do not agree to concessions, it is unlikely that
other unions—flight attendants, mechanics, and so on—will agree, and
bankruptcy will be inevitable.
Janet and Jocelyn are roommates. They share a one-bedroom apartment in
a big city where they are both working. Janet, an accountant, has a solid job
with a good company, but she has decided that it is time to go back to school
to get her MBA. She has enrolled in Big City University’s evening MBA
program and is now taking classes. Jocelyn works for an advertising
company and is on the fast track. Her job not only requires a lot of travel but
also requires a lot of time socializing with clients. The problem is that
when Janet is not in evening class, she needs the apartment to read
and study and has to have quiet to get her work done. However, when
Jocelyn is at the apartment, she talks a lot on the phone, brings friends home
for dinner, and is either getting ready to go out for the evening or coming
back in very late (and noisily!). Janet has had enough of this disruption and
is about to confront Jocelyn.
A country’s government is in a financial crisis, created by a good oldfashioned “smackdown” between the newly re-elected president and the
legislature. The president insists that taxes must be raised to pay for ongoing
government services, particularly the taxes of the richest 1 to 2 percent of the
taxpayers. In contrast, a majority of the elected legislature, whose political
party favors the wealthy, insists that the president cut government spending
instead! Moreover, a group of the legislators have taken a public “pledge” to
not agree to any tax increases and fear losing their jobs in the next election if
they give in on their pledge. If the crisis is not resolved in a few days, a
financial doomsday is predicted.
Ashley Johnson is one of the most qualified recruits this year from a top25 ranked business school. She is delighted to have secured a second
interview with a major consumer goods company, which has invited her to
its headquarters city and put her up in a four-star hotel that is worldrenowned for its quality facilities and service. After getting in late the night
before due to flight delays, she wakes at 6:45 a.m. to get ready for a 7:30
a.m. breakfast meeting with the senior company recruiter. She steps into the
shower and grabs the water control knob to turn it, and the knob falls off in
her hand! There is no water in the shower and at all; apparently, repairmen
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started a repair job on the shower, turned all the water off somewhere, and
left the job unfinished. Ashley panics at the thought of how she is going to
deal with this crisis and look good for her breakfast meeting in 45 minutes.
Do these incidents look and sound familiar? These are all examples of
negotiation— negotiations that are about to happen, are in the process of
happening, or have happened in the past and created consequences for the
present. And they all serve as examples of the problems, issues, and
dynamics that we will address throughout this book.3