1. How do relationships affect negotiation dynamics?
Negotiation is fundamentally a communication exercise between individuals. In many negotiations, the other person is the focal problem. The nature of the negotiator’s interaction and the relationship that ensues has a major impact on the negotiation process. Negotiation is often not a way to discuss an issue, but a way to learn more about the other party and increase interdependence. In some negotiations, relationship preservation is the negotiation goal, and parties may make concessions on substantive issues to preserve or enhance the relationship. As an example of the effect of relationship on negotiations, research indicates that communal-sharing relationships lead to greater empathy and cooperation in negotiations; better performance in decision-making and performance-coordination tasks; increased attention to the other party’s outcomes; reluctance to use coercive tactics; likelihood to share information; and greater likelihood of compromise and problem-solving approaches to negotiations. Negotiating within relationships may never end. Parties may defer negotiations over tough issues in order to start on the right foot. Issues on which parties truly disagree may never go away. Attempting to anticipate the future and negotiate everything up front is often impossible.
There are three common types of relationship in negotiation include: business-only, friendship-only, and multiplex relationships that involve both.
• Business-Only Negotiations – Negotiation in business-only relationships are unique in that expectations for the relationship are limited and easily defined. A common practice in business negotiations is “market pricing “. This is a method of putting value on things in which everything is reduced to a single value or utility metric that allows for the comparison of many qualitatively and quantitatively diverse factors. Market pricing is difficult in a blended or friend-only relationship. A notable difficulty in a business negotiation is the requirement to quickly establish trust in a situation where there is little knowledge or previous interactions. Further, business relationships often have status and rank issues associated with them.
• Friend-Only Negotiations – Friend-only negotiations are plagued by numerous attributes that make them more difficult. Generally, people are uncomfortable negotiating with friends. Part of this discomfort is due to cultural and exchange norms. Cultural norms drive use to take care of the people we love and are close to, respond to their needs, and not “keep track” of who has provided what in the relationship. “Exchange norms” concern the giving and taking of benefits and resources. The result is that friends are often less competitive with each other. The problem is that friendship may also block individuals from achieving high-level integrative agreements. Friends have a tendency to gravitate toward equality rules or equity rules in resolving a conflict. A phenomenon known as the “abilene paradox” is when friendship leads to the mismanagement of agreement.
• Mixed Negotiations – A relationship between parties that is both personal (e.g., friends or family) and business related is commonly known as an “embedded relationships.” Relationships that emanate from ingrained habits of past social interactions are known as “sticky ties”. There is much higher potential for emotions, internal value conflict, and a lack of creativity or innovation.