Negotiation

Creating Value in Negotiation

Negotiating about several issues at the same time can have interesting advantages. A famous story is told by a pioneering scholar of negotiation, Mary [Page 1148]Parker Follett, about two sisters quarreling over an orange, who end up splitting the orange in two equal parts. One sister squeezes her part, throws away the peel, and drinks the juice. The other squeezes her half, throws away the juice, and grates the peel to flavor a cake she is baking. Had these sisters talked about their interests they could have reached a mutually more beneficial agreement (the entire peel to one sister, all the juice to the other) than they reached by quarreling over one single issue—the orange.

Another illustration of the benefits of discussing multiple issues comes from the Camp David negotiations between Israel and Egypt in 1977. Since the Yom Kippur war in 1973, Israel had occupied the Sinai Desert, which Egypt wanted back. Instead of dividing the desert in more or less equal parts, it was decided that Egypt would get back the desert to satisfy its historical claims and restore its reputation in the Arab world. But, critically, Egypt would keep the desert demilitarized so that Israel's need for security was satisfied. Both parties thus achieved a better deal by talking about reputation as well as about security, rather than focusing on the single surface issue of who gets what part of the Sinai Desert.

Agreements that take advantage of the fact that the various issues involved in a conflict may not be equally important to all parties are called integrative agreements. In integrative agreements, parties concede on issues that are unimportant to oneself but important to the other (e.g., the peel, reputation among Arab neighbors) but stand fast on issues that are important to oneself but unimportant to the other (e.g., juice, security). Compared with simple “split-the-difference” compromises or victory-to-one settlements, studies have shown that integrative agreements tend to be relatively stable, create positive feelings of satisfaction and pride, and install a sense of self-efficacy, allowing parties to approach later negotiations in a more optimistic, problem-solving oriented manner. In addition, parties are more committed to their part of the bargain and more motivated to honor their promises. Integrative agreements create more value to both parties than any other type of agreement. This in turn fosters stability, harmony, and sometimes even economic prosperity; failure to reach (integrative) agreements may create frustration and conflict, distrust and weakened social ties, and may hurt economic progress. In the long run, failure to agree and continue conflict may lead to relationship dissolution (e.g., divorce, employees leaving an organization).

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