The Processes of International Negotiation Project Network Newsletter 16/2001, pp. 7-8

Book Reviews: Business Negotiations in Practice and Theory

Shell, G. Richard, Bargaining for Advantage: Negotiation Strategies for Reasonable People. New York: Penguin, 1999. ISBN 0 14 02.8191 6 paper.

Thompson, Leigh, The Mind and Heart of the Negotiator. Upper Saddle River, NJ, USA: Prentice Hall, 2001. ISBN 0-13-0017964-7 paper.

Reviewed by I. William Zartman

Books for the businessperson on how to negotiate are almost a dime a dozen (but the real price is negotiable). Generally, they are Books of Proverbs, sententious and often contradictory pieces of wisdom about what to do, with little sense of when to do it and no theory to tie it all together. The better among them do have some theory of negotiation, that is, a generalized notion of its dynamics.

To Richard Shell, who teaches negotiation at the Wharton School of the University of Pennsylvania, negotiation is composed of situation and style, but its dynamics depend on the negotiators’ security points (what they get without negotiation), which are the source of leverage. The situations involve the four combinations of stakes and relationships: balanced concerns, where both the relationship and the stakes are important; relationships, where stakes are nonconflictual; transactions, where stakes outweigh relationships; and coordination, where stakes and relationships are low. The styles vary in number, but the most important are the compromiser, the competitor, and the problem-solver, all self-determined, with greater emphasis on the first two types. As in the better social psychological analyses, the appropriate tactic is recommended on the basis of the other’s personality style (assuming that one’s own personality style is open to recommendations).

The moving part in this machinery is provided by leverage, intelligently discussed and variously defined as deriving from “the balance of needs and fears” (p. 92) or “who has the most to lose?” (pp. 105, 175). This provides the key to the Negotiator’s Dilemma: “As your leverage goes down, your need to soften your approach rises. And as your leverage rises your need to accommodate goes down—regardless of the situation you are in [and regardless of your personality style]” (p. 175). Leverage also derives from the ability to supply and to remove items the other side needs or wants. This is a conservative conceptualization, since it refers to losses rather than gains and hence encourages risk-averse behavior.

The book further divides negotiation into four phases, with a heavy emphasis on diagnosis, which in turn underscores the need for the negotiator to know his or her situation, style, and security point.

Unfortunately, it is all concession/convergence analysis, missing the notion of a formula and reframing, which is the basis of a fully integrative understanding of the process.

To Leigh Thompson, who teaches negotiation at the Kellogg Graduate School of Management at Northwestern University, the essential categorization is between the two types of negotiation: distributive or concession/convergence and integrative or win-win. The two are also linked to two important normative concepts, the first associated with fairness and justice and the ways of achieving it in its different meanings, and the second related t o a long treatment of trust and the ways of building and repairing it.

Again, the moving part of the machinery is provided in part by power, whose most important source is the security point or best alternative to a negotiated agreement (BATNA). The security point is not simply an element that gives a party its bottom line, but also a base for creativity in expanding the pie. A BATNA can be improved (and an opponent’s BATNA weakened) as part of the negotiation dynamics. Power is also expressed through tactics of persuasion as well as through appropriate tactics for structural situations of symmetry and asymmetry.

But the work also presents another component of dynamics related to its emphasis on integrative negotiations, that of creativity. Thompson heavily emphasizes the need for an array of measures to expand the pie, so that it then may be cut more easily to the satisfaction of all the parties. The work recognizes the epistemological—and therefore also practical—problem with creativity, that it has no single theoretical dimension. Creativity is a release from unidimensional constraints, a challenge to “think outside the box,” an invitation to trial and solution through trial and error, the result of a mental model of negotiation as problem solving, which Thompson—like Shell—identifies as the least common.

The problem with integrative bargaining is that it is much less amenable to theoretical formulations than concession/convergence thinking. The latter involves tactics along a battleline, which moves back and forth across the terrain of outcomes, whereas the former involves tricks to stimulate invention, reframing the stakes and adding new elements and dimensions. Both types are necessary, especially since much of business negotiation involves preestablished elements of trade. Reframing and expansion of the stakes are always possible; and integrative bargaining may be illegitimate when stakes (like the return of hostage airmen) are fixed or simply confusing to an opponent used to thinking only in terms of concessions.

But for that very reason the message of integrative negotiation is so important. Thompson declares that most people are ineffective negotiators precisely because they remain locked into fixed stakes and are unwilling or unable to work for broader, more creative outcomes. Shell’s message is more limited and analytical: negotiations are ineffective when the parties mismatch their styles and their situations.

Both books are rich in their understanding and advice; Shell’s in particular is full of illustrative anecdotes. They cover much of the same terrain and both cover it well. But their understanding of negotiation differs somewhat, producing different results.