Module 2

SEVEN Elements of Principled Negotiation

According to Fisher and Ury, (1981) there are seven essential elements” of
principled negotiation as:

1. Interests
2. People
3. Alternatives
4. Options
5. Criteria/legitimacy
6. Commitments
7. Communication

Interests: According to Fisher and Ury, the first step in principled negotiations is to
identify the interests involved in an issue area as opposed to dealing with positions
of the negotiating parties. This distinction is an important one in the integrative
school. Positions represent the stated stances and objectives of the negotiating
parties and are the focus of distributive bargaining whereas interests are the
underlying reasons that explain people’s positions.

Integrative approaches maintain that to negotiate efficiently negotiators should go

beyond positions and seek to satisfy true underlying interests. In so doing,
negotiators can approach issues of mutual concern with greater creativity,
understanding and flexibility. Interests may be harder to identify than positions and
may be unspoken or even hidden behind a party’s stated demand or position. Often
parties may not have carefully defined their own underlying interests in a particular
issue for themselves. To better understand the differences between interests and
positions. See the Example Box below:

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 Separating interests from positions

Coming to understand another party’s interests may not always be so

straightforward. A party may have a reason to want to intentionally conceal their
underlying interest in a particular subject matter, or their interests may be difficult
to decipher simply because they may be multiple. When the parties involved are not
individuals but groups of individuals, the complexities increase even more. In these
situations, parties may have to divine not only the groups’ interests but also interests
of individual members.

People: Another element of integrative strategies involves People. In Getting to Yes,

Fisher and Ury argue that parties in a dispute often forget that the other side consists
of people who, just like themselves, are subject to the human frailties such as
emotions, potentials for misunderstandings and mistaken assumptions. Another rule
for the principled negotiator is therefore to separate the people from the problem.
This means finding a way for solving a problem without getting distracted by
personal elements, and coming to an agreement in a manner that will preserve the
relationship.

The better the relationship, the more cooperation each side will get from the other,
the more information can be shared comfortably, and the higher the prospects for
arriving at a win- win solution. To help build relationships, Fisher and Ury
recommend considering the use of tactics that can help negotiators to get to know
the other party. This may include finding ways to meet informally, arriving early to
chat or staying on after formal negotiations end [see negative emotions].
Negotiators should also remain aware of important tactics and considerations that
help negotiators to feel as though they can emerge from the negotiation with self-
respect, and the good opinion of others. This may mean taking steps to make sure
that neither party is forced to long face or appear personally compromised as a
consequence of having accommodated the other party’s demands. Saving face can
be the key to negotiations that have reached a stalemate or to situations where
negotiations have not

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started. It may involve offering gestures that give an opponent a way to justify a
change in their own position, perhaps before an interested constituency.

On the other hand, negotiators should be aware that protecting against loss of face
should not become so central to the process that it swamps the importance of the
tangible issues at stake, or generates intense conflicts that can delay or prevent
progress toward agreement.

Honesty and Trust. Negotiators should never underestimate the importance of

Honesty and Trust in negotiations. It is critical. The perception negotiators have of
each other is a crucial factor influencing the fluidity of negotiations. Being
respectful, diplomatic and maintaining one’s credibility is essential to creating
positive personal relationships and preventing negative emotions that can result in a
return to distributive tactics. This is sometimes easier said than done; trust in
relationships is slow to build and easy to destroy.

Honouring commitments is one way that parties build trust, and thus serves as
another essential element of negotiations.

Alternatives: In order to set realistic goals, negotiators must start by considering

certain fundamental questions: where will each side be if no agreement is reached?
What alternative solutions are available for meeting your goals if you cannot count
on the cooperation of the other side?

As seen earlier, attention to alternatives is an important feature of distributive as

well as of integrative-based approaches. However, in contrast to the emphasis that
is placed on concepts such as reservation points and bottom lines in positional
approaches to bargaining, integrative approaches tend to take a slightly more
nuanced view of the role of alternatives in negotiation.

It is crucial for both parties to know their Best Alternative to a Negotiated

Agreement (BATNA) both before and throughout all stages of a negotiation. By its
nature, a bottom line can be inflexible and onerous. It can prevent creative thinking
and lock parties into positions that may prevent them from coming to a favorable
solution.

A BATNA provides negotiators with a measure of flexibility that is lacking from a

bottom line. Unlike bottom lines, BATNA’s change when negotiators perceive a
change in their alternatives. When negotiations are viewed in terms of BATNAs, as
opposed to positions or bottom lines, the negotiation can continue even when figures
are rejected because negotiators are freer to continue to explore additional possible
solutions. Moreover, because negotiation is viewed as a joint decision-making
process in the integrative approach, there is always a possibility of either side
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reconsidering their position in mid-stream and deciding to pursue a different course
than originally planned. Negotiators who fail to evaluate (and re-evaluate) their
alternatives to an agreement both before and during the process may therefore also
be in danger of rushing to an agreement without having fully considered their or the
other party’s alternatives, leading one side to end up with a deal that should have
been rejected.

BATNAs can be an important source of power or strength in a negotiation. A more

‘powerful’ party with a weaker BATNA will need to come to a negotiated agreement
more than its rival.

Negotiators need to assess and develop their BATNAs before and during a
negotiation. To do so, parties begin by making a list of the alternatives available if
an agreement is not reached. Negotiators should also take the time to understand and
anticipate the BATNAs of the other side, consider the options available given the
two sets of BATNAs, develop a plan for implementing them and then choose the
best of these developed alternatives.

Knowing your BATNA provides you with “a measure for agreements that will
protect you against both accepting an agreement you should reject and rejecting an
agreement you should accept”. In short, it is good to consider your limitations
beforehand but a good negotiator will not let his limitations inhibit his imagination
and the ability to recognize fruitful opportunities.

Options: Once parties have begun to build relationships and to exchange

information in order to gain a clearer understanding of the interests at stake, the
parties should turn to the task of generating options. In negotiations, options are
possible solutions to a problem shared by two or more parties.

In integrative bargaining, options represent possible ways of meeting as many of

both parties’ interests as possible. As the story of the orange reveals, when two
people (or two companies or two nations) get locked into solutions or habitual
patterns of thinking, they easily become blinded to the possibilities that a little
creative thinking might reveal. Because the process of identifying options, or
possible solutions to a problem, promotes creative thinking and expands problem-
solving capabilities, it is as critical to the negotiation process as identifying
underlying interests. Generating options through techniques such as brainstorming
—a technique which involves inviting all parties to list any idea that comes to mind
without criticizing or dismissing those ideas - helps to encourage creative thinking
about a problem and increases the chances that the parties involved will formulate a
“win-win” solution.

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Criteria/Legitimacy: When bargaining over positions, negotiators create a
situation in which one side must concede his original claim in order for the
negotiations to succeed. Positional bargaining is bargaining in which two sides lock
into incompatible positions. According to Fisher and Ury, this can lead to a contest
of wills, bitterness, and deadlock. They maintain that when negotiations are
approached in this way, even when a deal is made, it may come at a high cost. For
example, positional bargainers may finally arrive at a solution that appears to “split
the difference” between their two positions, even though a more rationally
composed solution would have suited both parties interests better. Lastly,
agreements that are concluded in this manner may prove tenuous to implement if
parties later conclude that the agreement called for a solution without legitimacy.
The authors maintain that there is a better way to approach the negotiation process.
This involves invoking objective criteria as part of the negotiation process.

Consider the following example. In a dispute over pricing of an environmentally

friendly fertilizer substance produced in one country, a country interested in
importing the fertilizer clings to the position that it should pay no more than 5 euro
per pound of the substance. Meanwhile, the producing country may cling with equal
commitment to the position that it should export the substance at 10 euro per pound.
How will this difference in positions be overcome? Though the position of each
party may be clear, what is unclear is the basis for their respective price demands.
In the course of negotiations, arguments will be more meaningful and solutions,
more acceptable, if they do not appear to be arbitrary. See the Example Box below:

Let’s eat cake!

In negotiations, joint decision-making is a process that increases the perceived

fairness of the negotiations, improves satisfaction with outcomes, promotes positive
relations between parties, enhances the legitimacy with which agreements are
viewed, and helps to create a willingness to abide by the commitments made. By
framing negotiations as a decision making process based upon objective criteria,
negotiators free themselves and the other side from needing to cling to a position
stubbornly in order not to appear (or feel) weak or disingenuous. Whether

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negotiators chose fair standards or fair procedures, the essential point, according to
the theory of principled negotiation, is to jointly frame a sound basis for logical
decision making that both adds value to the process, and ensures that parties can
look back on the negotiated solution as a legitimate solution. Moreover, negotiations
conducted in this manner become more efficient. Rather than spending their time
attacking one another’s positions, negotiators can focus their energies on analysis
and problem solving and stand a greater chance of crafting agreements that parties
will view as legitimate as time goes on.

Commitments: A negotiated settlement is only enduring if all parties honor the

commitments that they make. Of course, those that fail to follow through on their
promises stand to suffer a loss of integrity, be subject to the resentment of the other
side, and risk that their partner in the negotiations (and possibly others outside of
the deal as well if word of their reputation escapes) will refuse to deal with them in
the future. No party to a negotiation should intentionally create commitments that
they do not intend to honor. During the negotiating process, parties should think
carefully about the kind of commitments they should be prepared to make. Are they
capable of honouring them?

How broad should commitments be? When will each party be expected to make
good on their promises? One way to build trust is to create a commitment structure
that can be implemented in stages. Parties may be more willing to make a deal with
an opponent when there is an opportunity to demonstrate that each side is honouring
their commitments along the way. Once trust is broken, how can parties recover?

Gestures are one way through which a party who has lost integrity with another party
due to past bad-faith actions may begin to compensate for earlier grievances. For
example, a party who failed to make payment on a contractual obligation may need
to offer advance payment on a new contract in order to convince a poorly treated
trading partner that they are worth doing business with in the future.

Communication: Negotiation is only possible through communication. In fact,

feeling ‘heard’ is also a key interest for both sides in a negotiation. Good
communication can change attitudes, prevent, or overcome deadlock and
misunderstandings and help to improve relationships. Moreover, good
communication skills are essential to cogently relay your message, and to
thoroughly understand the message of the other side .

In addition, integrative approaches stress the importance of sharing information as

a means of uncovering interests and of helping parties to explore common problems
or threats. Still, negotiators are frequently hampered in their roles by common
communicational errors or inefficiencies. For example parties may concentrate only
on their own responses and forget to listen to what the other side is saying. Listening
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provides important information about the other side and demonstrates that you are
being attentive to the other side’s thoughts, and respectful of their concerns.

To improve communication skills, It is recommended active listening. This means

listening “not to phrase a response, but to understand [the other party] as they see
themselves”.

Asking questions, paraphrasing without necessarily agreeing, and constantly

acknowledging what is or is not said are good ways to demonstrate that you are
listening actively (Wondwosen, 2006).

Misunderstandings can be especially prevalent when different languages or cultures

are involved. Let’s see the following example of the kinds of problems that can
arise in multilingual encounters:

In the end, negotiation is a process that can be approached in many ways. No matter
what strategy you choose, success lies in how well you prepared. The key to
negotiating a beneficial outcome is the negotiators’ ability to consider all the
elements of the situation carefully and to identify and think through the options. At
the same time, negotiators must be able to keep events in perspective and be as fair
and honest as circumstance allows. Because a common ground or interest has
brought the parties to the negotiating table, a negotiator can benefit by trying to
capitalize on this common ground. By looking at the other side as a partner rather
than an opponent and by working together, negotiators have an opportunity to craft
a solution that will be beneficial to both sides.

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