The interest of measure

Lax

Interests: The Measure of Negotiation

PEOPLE NEGOTIATE to further their interests.

ln part negotiators often focus on interests, but conceive of them too narrowly; we will argue for a more expansive conception. But be cause interests often conflict simply listing them without under­standing their tradcoffs js a bit like writing out a recipe without in­cluding ihe proportions. Negotiators need ways to assess the relative importance of their various interests; we will try to clarify the logic of assessing tradeoff's.

As hard as .it rnay be to sort out one's own interests, understand­ing how others see theirs-their subjective cheme of value are perceived through their peculiar psychological filters-can be extraordinarily difficult. Obviously suggesting a stretch in the other person's shoes'' Is good advice;  equally  obviously,  it is only  a starting point. ln this chapter, we will try to go further.

An  Expansive Conception of a Negotiation Interests

In evaluating the interests at stake a typikal negotiator might focus on commodities that can be bought and sold or on concrete terms thut can be writen into  contract or treaty. And negotiators definitely have such interests: the demand desperately wants compensation; a sales manager cares intensely about prices, profit margins, return on investment, and his own compensation. Managers may derive value from seeing their particular product sweep the market or furthering some vision of the public interest.

Throughout this chapter, we assume that a negotiator wants to do well for himself. Of course, "doing well" is only measured with respect to the things he cares about, whether out of direct self-interest or concerns for others' welfare. Thus for a negotiator to do "better" need not imply that he presses for more money or a bigger share. Rather, it means advancing the totality of his interests, which may in­clude money and other tangibles but also fairness,  the well-being of his counterparts, and the collegiality of the process.

We could reduce our money interest to obtain a fair solution in a friendly process. Especially in business negotiations, however, a common misconception is that one's counterpart's interests extend only to the bottom line.

1. Our most important goal is to do a good job. We don't have a specific growth target but what we want to do is make a contribution. Not just a "me too" thing, but to develop technically superior products.
2. Another goal is to earn our way, to grow from our own resources.
3. A third goal is to make this an interesting and satisfactory place to work.
4. The fourth goal is to make a profit.

• Negotiators' interests can go beyond  the  obvious  and  tangible; take the simple pleasure one derives from being treated with respect, even in a one-time  encounter. Self-esteem and ''face" are often latent interests; moves that cause loss of face or self-esteem can threaten the whole negotiation or at least make the obvious and tangible interests relatively less important.
• Fisher and Ury argue that a nego­tiator should seek to be known as reaching agreements only by means of "objective" principles; once achieved, among other effects, such a principal" reputation may reduce the need to haggle.
• Beyond  such  concerns  about  reputation,  relationship,  and  process, negotiators often care about subtle aspects of precedent.
• Strategic interests are often at stake for managers. By this, we refer to the aligment of a particular decision with the manager's long term personal  institutional strategy.
• Through her actions in one negotiation, a manager may have an
• interest in reduCing the cost of later encounters and in affecting their outcomes.
• Comparing obvious, "bottom line" interests with "others''­ reputation, precedent, relationships.
• Some interests are latent in most negotiators. Negotiator self­ esteem and "face" are typically at stake. Tactics such as take-it-or­ leave-it offers, forced linkages, commitment moves, threats, and preemptive moves are likely to induce loss of face if a negotiator attributes concessions to his weakness and his counterpart's strength. The newly included interests can sometimes swamp the ones previ­ously felt to be at stake and begin a destructive cycle of hostile moves as the conflict escalates. Such moves are less likely to induce such a reaction if the negotiator can attribute his concessions instead to forces beyond the control of the negotiating parties.

•        ln  short,  interests  include  anything  that  the  negotiator  cares about  any concerns that are evoked by the issues discussed. Clarifying interests, however, can sometimes be difficult. We have often found that two distinctions can help.

        INTERESTS, ISSUES, AND POSITIONS

• Negotiators seek to reach agreement on specific positions on a specific set of issues.
• Interests.  Of course,  many different sets or issues may  reflect  the same interests: a country might seek to serve its interest  in mineral development through  negotiations with the same company over is­sues as varied.
• Conceivably, the country's interest could be equally satisfied by different terms on each of these alternative issues. The issue at hand, however may be only a proxy  for imperfectly related interests.
• Many negotiators retard creativity by failing to distinguish the issues  under  discussion  from  their  underlying  interests.  When  the issues under discussion poorly match the interests at stake modificaions of the issues sometimes enable all parties to satisfy their interests  better.  
• Fisher and Ury to propose a general rule: Focus on interests, not positions!.
• While we think that negotiators should always keep the distinction clearly in mind focusing exclusively on interests may not always be wise. when the parties have deep and conflicting ideological differences. In such cases, the negotiations should focus on the issues or a much narrower set of interests-not the full set of underlying interests.
• Thus interests should be distinguished from issues and positions.  Focusing on interests can help one develop a better understanding of mutual problems and invent creative solutions. But  such a focus may not always be desirable when for example, underlying interests are  opposed or when a focus on  particular  issues or posi­tions provides leverage. Whatever the focus; however, interests mea­sure the value of any position  or agreement.

INTRINSIC AND INSTRUMENTAL INTERESTS

• It should be clear that negotiators may have many kinds of inter­ests: in money and financial security, in a particular conception of  the public interest, in the quality of products, in enhancing a reputation as a skilled bargainer in maintaining a working relationship, in precedents and so on.
• However one distinction-between intrinsic and instrumental interests-can provide an economical way to capture some important qualities of interests, call negotiatorst attention to often-overlooked  sometimes subtle interests,  and lead to improved agreements.

1. Interest in an issue is instrumental: if favorable terms on the issue are valued because of their effect on subsequent dealings.  
2. interest in an issue is intrinsic if one values favorable terms of settle­ment on the issue independent of any subsequent dealings.

• Such interests need not have any obvious or agreed upon economic value.

Most issues affect both intrinsic and instrumental interests.

«Process •• Interests-Intrinsic and Instrumental        

• Analysts often assume that negotiators evaluate agreements by measuring the value obtained from the outcome. Yet, negotiators may care about the process of bargaining as well. Even with no prospect of further interac­tion, some would prefer a negotiated outcome reached by pleasant, cooperative discussion to the same outcome reached by abusive, threat-filled dealings.

• Others might derive value from a process that gives them the satisfied feeling of having extracted some­ thing from their opponents. Either way, negotiators can have intrinsic interests in the character of the negotiation process itself.

• Beyond such intrinsic valuation, an unpleasant  process can dramatically affect future dealings; the supplier who is berated and threatened may be unresponsive when his later cooperation would help. Indeed, negotiators often have strong instrumental interests in building trust  and confidence early in the negotiation  process in or their future dealings.

Interests In Principles: Intrinsic and Instrumental        

• Negotiators may discover shared norms or principles relevant to their bargaining problem. Such norms may include  "equal division", more complex distributive judgments, historical or ethical rationales, objetive or accepted standard, as well as notion a that simply seem "fair" or are represented as such. Acting in accord with such a norm or principle may be of intrinsic interest to one or more parties.

• Even when none of the parties derives intrinsic value from acting in accord with a particular principle, it may still guide agreement. Principles and simple notions often serve as focal points for choosing one settlement within the range of possible outcomes. Equal division of windfall may seem so irresistibly natural to the partners in a small firm that they would scarcely consider over negotiation over who should get more.

• The principles that guide agreement in the first of many related disputes may set a powerful precedent. Thus, negotiators may work. Thus negotiator may work hard to settle the first dispute on the basis of principles that they believe will yield favorable outcomes in subsequent disputes. They may take a loss with respect to intrinsic interests in the firts negotiation in order to satisfy their instrument interest in the principles used guide the agreement.

Relationship lnterests-Intrinsic and Instrumental

• Negotiators often stress the value of their relationships; this  interest  sometimes achieves an almost transcendent status.
• For example, Fisher and Ury say that every negotiator has two interests:
• in the sub­stance and in the relationships. Many negotiators derive intrinsic value from developing or furthering a pleasant relationship. Moreover when repeated dealings are likely most negotiators perceive the instrumental value of developing an effective working relationship. After studying hundreds of managers in many settings, John Kotter sensibly conduded that:
• Good working relationships  based  on some combination  of  respect,  admiration,   perceived   need,   obligation,   and   friendship   are   a   critical source of power  in  helping  to get  things  done.  Without  these  relationships, even the best possible idea could be  rejected or resisted in an envi­ronment   where   diversity   breeds  suspicion   and  interdependence   preeludes giving orders to most of the relevant  players.  
• Furthermore ..  since these  relationships   serve  as  important   information   channels,   without them  one  may  never  be  able to  estabish  the  information  one  need  to operate effectively.

• In short with many less tangible interests such as process rela­tionships, or fairness, a negotiator should ask why they are valued. Distinguishing between their instrumental and intrinsic components can help, But even with these components sorted out, how can a ne­ gotiator go about assessing their relative importance'?  what logic guides setting priorities among conflicting interests?

:(I) in the substance of the issue (her division needed to count. absolutely on future ad de­ partment  reservations)  and  

(2) in  the procedure  set for raising a whole range of similar matters she wanted to bc:>lster the use of es.. tabUshed poHcies), Con,;crn with both types of precedent abounds in organizations and clsewl'lere,

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