Multiparty Negotiations

Cite this article as:"Multiparty Negotiations," in The Business Professor, updated October 22, 2017, last accessed July 4, 2020,

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What are multi-party negotiations and how do they affect the negotiation process?

A multi-party negotiation consists of a group of three or more individuals, each representing his or her own interests, who attempt to resolve perceived differences of interest or work together to achieve a collective objective. Types of multi-party negotiations involve teams, coalitions, constituencies, agencies, and intergroup relationships. The differences between two-party negotiations and multiparty negotiations, which make multiparty negotiations more complex, challenging, and difficult to manage, are as follows:

  • Number of Parties – Multiparty negotiations have more negotiators at the table.
  • Informational and Computational Complexity – With multiparty negotiations there are more issues, more perspectives on issues and more total information are introduced.
  • Social Complexity – The social environment changes from a one-on-one dialogue to a small-group discussion. As a result, all the dynamics of small groups begin to affect the way the negotiators behave. How the process evolves may depend on the motivational orientation of the parties toward each other. Social pressures may develop for the group to act cohesively, yet the members are in conflict with each other and cannot be cohesive unless they can find an acceptable solution.
  • Procedural Complexity – More complex than two-party negotiations in that the process they have to follow is more complicated.
  • Logistical Complexity – Physical distance can affect how much the parties trust each other, the ways they interpret unclear or ambiguous behavior of the other parties, and the willingness to continue negotiation with each other as a conflict resolution strategy. This distance—whether physical or psychological—seems to affect how parties make sense of and interpret what others are doing and whether “signals” are interpreted as indications of cooperative or competitive behavior.
  • Strategic Complexity – In a group negotiation, complexity increases significantly. The negotiator must consider the strategies of all the other parties at the table and decide whether to deal with each of them separately or as a group. The actual process of dealing with each of them usually evolves into a series of one-on-one negotiations, which can have several consequences. First, these exchanges are subject to the surveillance and audience dynamics. Second, negotiators who have some way to control the number of parties at the table may begin to act strategically, using this control to serve their objectives. Third, negotiators can explicitly engage in coalition building as a way to marshal support.

Key challenges of multiparty negotiations include:

  • Formulating Trade-offs
    • Circular Logrolling – In group negotiations, trade-offs that require each group member to offer another member a concession on one issue, while receiving a concession from another group on a different issue.
    • Reciprocal Trade-offs – A trade-off fashioned between two parties where each gives up one thing in exchange for making gains on another issue.
  • Voting and Majority Rule – A voting principle providing that a majority (usually constituted by 50 percent plus one) of an organized group will have the power to make decisions binding on the whole group. Problems with voting and majority rule include:
    • Condorcet paradox – A result of group voting that demonstrates that the winners of majority rule elections change as a function of the order in which alternatives are voted upon.
    • Impossibility theorem – A theorem stating that the derivation of group preference from individual preference is indeterminate if certain conditions prevail.
    • Strategic Voting and Misrepresentation – A situation in which a negotiator misrepresents his or her true preferences so as to gain advantage over the other party.
    • Consensus AgreementsConsensus decision-making is a group decision-making process in which group members develop, and agree to support a decision in the best interest of the whole. Consensus may be defined professionally as an acceptable resolution, one that can be supported, even if not the “favourite” of each individual.
  • Communication breakdowns
    • Private caucusing – These are side meetings between individuals (rather than the whole group) to discuss interests or procedures in the negotiation. This private meetings cause of breakdown in communication among the non-caucusing individuals.
    • Biased interpretation – When individual heuristics or predispositions affect the interpretation of information in a manner not common to the other negotiators.
    • Perspective-taking failures (the curse of knowledge) – The tendency for people who are privy to information and knowledge that they know others do not possess to act as if others are indeed aware of it (even when it is impossible for the receiver to have this knowledge).
    • Indirect speech acts – Ways in which people ask others to perform tasks or acts that require extra cognitive steps on the part of the listener in order to understand the communicator’s intention.
    • Multiple audience problem – The difficulty that arises when a sender needs to communicate with a certain recipient in the presence of another person (or people) who should not be able to understand the message.

Key tactics to employ (or practices to avoid) for multiparty negotiations include:

  • Counterparty awareness – Know who will be at the table
  • Manage information and systematize proposal making – This will avoid tunnel vision, which is the tendency for people in group negotiations to underestimate the number of feasible options and alternatives available.
  • Use brainstorming wisely (brainwriting) – A brainstorming session in which group members write their ideas individually at the same time.
  • Develop and assign process roles – Strive for equal participation
  • Persistence – Stay at the table
  • Allow for some points of agreement, even if only on process
  • Dividing the Pie – Avoid the “equal shares” bias
  • Avoid the agreement bias – When negotiators focus on reaching common ground with the other party and are reluctant to accept differences of interest, even when such acceptance might create options for joint gain.
  • Avoid sequential bargaining – When you discuss one issue at a time.

How does one manage the various stages of a multiparty negotiation?

The Pre-negotiation Stage is the first stage of a multi-party negotiation. It is characterized by a lot of informal contact among the parties. The parties must make numerous decisions during this stage including:

  • Participants – The parties must agree on who is going to be invited to the talks.
  • Coalitions – Coalitions may exist before negotiations begin. In some cases, the negotiations will seek to form or organize a coalition in anticipation of the meeting of all the parties.
  • Defining group member roles – Once participants are identified and coalitions formed, the participants will begin assuming and assigning roles in the negotiation. Three types of roles that members might play include:
    • Task Role – This role moves the group along toward a decision or conclusion;
    • Relationship Role – This role manages and sustains good relationships between group members; and
    • Self-oriented Role – This role serves to bring attention to the individual group member and is often at the expense of group effectiveness.
  • Understanding the costs and consequences of no agreement – In multiparty negotiations, the perceptual biases that negotiators are prone to, are likely to affect negotiators by inflating their sense of power and ability to win. This may lead them to believe that the no-agreement alternative is much better than it really is.
  • Learning the issues and constructing an agenda – There are many reasons why an agenda can be an effective decision aid. It establishes the issues that will be discussed. Depending on how the issues are worded, it can also define how each issue is discussed and the order of discussion. It can be used to introduce process issues as well as substantive issues, simply by including them. It can assign time limits to various items, thereby indicating the importance of the different issues.

The Formal Negotiation Stage concerns managing the group process and outcome, including:

  • Agenda – Appoint an appropriate chair and structure the agenda.
  • Information – Ensure a diversity of information and perspectives. Ensure consideration of all the available information. Bazerman, Mannix, and Thompson (1988) reviewed several group decision-making and brainstorming techniques that are frequently used to achieve this objective.
    • The Delphi technique – a moderator structures an initial questionnaire and sends it out to all parties, asking for input.
    • Brainstorming – parties are instructed to define a problem and then to generate as many solutions as possible without criticizing any of them.
    • Nominal group technique – typically follows brainstorming.
  • Manage conflict effectively – groups must generate many ideas and approaches to a problem—which usually creates conflict—while not allowing that conflict to either disrupt the information flow or create personal animosity. Manz, Neck, Mancuso, and Manz (1997) suggest key process steps that a chair can implement to assure having an effective, amicable disagreement on a team:
    • Collect your thoughts and composure before speaking.
    • Try to understand the other person’s position.
    • Try to think of ways that you both can win.
    • Consider how important this issue is to you.
    • Remember that you will probably have to work together with these people in the future.
  • Review and manage the decision rules – the parties also need to manage the decision rules—that is, the way the group will decide what to do (Brett, 1991).
  • Strive for a first agreement – consensus or the best quality solution, negotiators should not strive to achieve it all at once.
  • Manage problem team members – Manz et. al (1997) suggest the following tactics for dealing with problem team members:
    • Be specific about the problem behavior—offer clear, specific examples.
    • Phrase the problem as one that is affecting the entire team, rather than just you.
    • Focus on behaviors the other can control.
    • Wait to give constructive criticism until the individual can truly hear and accept it.
    • Keep feedback professional. Use a civil tone and describe the offending behavior and its impact specifically.
    • Make sure the other has heard and understood your comments.
  • Manage Group Norms – Group norms can undermine an effective discussion in the following ways:
    • Unwillingness to tolerate conflicting points of view and perspectives.
    • Side conversations.
    • No means for defusing an emotionally charged discussion.
    • Coming to a meeting unprepared.

The Agreement Stage of a negotiation is when the parties must select among the alternatives on the table, develop an action plan, implement the selected plan, and then evaluate the process and outcomes. Generally, the lead or chair of the negotiation can take the following steps to facilitate the process:

  • Move the group toward selecting one or more of the options.
  • Shape and draft the tentative agreement.
  • Discuss whatever implementation and follow-up or next steps need to occur.
  • Thank the group for their participation, their hard work, and their efforts.
  • Organize and facilitate the postmortem.

What are coalitions and how do they affect negotiations?

Coalitions are a (sub)group of two or more individuals who join together in using their resources to affect the outcome of a decision in a mixed-motive situation. Some key challenges to negotiating as a coalition include:

  • Optimal coalition size
  • Trust and temptation in coalitions
    • Status quo bias – A tendency in decision making and negotiation to prefer current circumstances over proposed new ones.
    • Coalitional integrity – The tendency for parties to remain loyal to a coalition, even when they can obtain more resources outside of that coalition.
  • Dividing the pie
    • Getting out of the vicious circle
      • The core solution
      • The Shapley model and pivotal power – A principle in which people expect others to hold views of the world similar to their own.
      • Raiffa’s hybrid model
    • Tips for low-power players

Some tactics generally understood to maximize the effectiveness of a coalition include:

  • Making contacts early – Early coalitions are able to more effectively align resource allocation and interests.
  • Seeking verbal commitments – Seeking verbal commitments to a cause or plan of action increases the likelihood of success by aligning interests and minimizing the likelihood of defection.
  • Avoiding bias – Coalitions are generally built around a commonality of understanding. Using unbiased-appearing rationale to divide the pie. This can avoid alienating coalition members based upon principle.
  • Sharing all relevant information – Coalitions are built upon mutual understanding. Sharing all information relevant to all parties interests and objectives will aid in this understanding.
  • Focusing on interests, not positions – Focusing on positions creates a confrontational environment. This can reduce cooperation and lead to purely competitive tactics. As such, it becomes more difficult to reach integrative results.
  • Testing assumptions and inferences – Validating key assumptions about one’s position can help individuals more fully understand and articulate their position. It can also aid the development of a common understanding between coalition members.
  • Seeking consensus – Try to make certain there is consensus among members about intent and procedural objectives and in decision making. Try to avoid disagreeing openly with any member of the group.
  • Explaining one’s self – It can be highly beneficial to explain the reasons behind one’s actions and statements. It builds upon the commonality of understanding necessary for effective coalitions. Be as specific as possible and use examples to aid in understanding. It may be advantageous to make statements that invite questions and comments. You may also want to engage in open self critique.
  • Seeking participation – The leader of the coalition should seek to have all members participate in all phases of the process. This often requires considerable organization and checks to make certain all parties are heard and considered.
  • Handling conflict – Jointly design ways to test disagreements and solutions. This may include developing a path or process for discussing undiscussable issues.
  • Avoiding distraction – There are any number of distractions that can derail a negotiation involving a coalition. Try to keep the discussion focused. This may mean not stirring up side controversies or making personal attacks that otherwise distract the group.

What is a principal-agent relationship and how does it affect a negotiation?

Advantages of agents include:

    • Substantive knowledge – Principal’s often identify agents who have a level of knowledge or expertise in the subject matter of the agency. Such expertise generally results in higher level of proficiency in the negotiation.
    • Networks and special influence – Principals often seek out agents who have an existing network that will aid in the negotiation. The agent’s network allows her to exercise additional influence on the negotiation or the other party.
    • Emotional detachment – Agents are less emotionally involved in the outcome of the negotiation. Emotion can often compromise logic and lead irrational decision making.
    • Ratification – The principal can review the actions of the agent after the fact. If desirable, the principal can unilaterally accept any actions taken by the agent that are outside of her express authority.
    • Face-saving – Mistakes or missteps by an agent can be disclaimed by the principal. This layer of separation may allow the principal to save face in the event of an unfortunate outcome.
    • The disadvantages of agents includes:
    • Shrinking ZOPA – The agent will generally receive some form of compensation or remuneration for their services. This syphons away value from what is at stake in the underlying negotiation. Also, an agent may not have the unilateral authority to adjust target or reservation points. As such, the zone of potential agreement is reduced.
    • Incompatible incentive structure – Often, principal-agent relationships are structured where the agent’s incentives conflict with the interests of the principal. That is, the agent will receive greater benefit by reaching a resolution that is not in the best interest of the principal.
    • Communication distortion and message tuning – This concerns the way in which senders tailor communication of messages to fit specific recipients. The agent may not fully understand the principal’s objectives. Further, the method in which an agent delivers a message during negotiations may not fully align with the principal’s message.
    • Loss of control – Employing an agent vests a level of authority to act on behalf of the principal. Any actions by the agent within her authority bind the principal. As such, the principal loses a level of control over the negotiation.
    • Agreement at any cost – Agents may have the perverse incentive reach an agreement at any cost. When the function and objective of the agent is to reach an agreement with the other party, the agent may be unduly set on reaching an agreement rather than pursuing a more beneficial BATNA.

The tactics for effectively working with agents, include:

    • Shopping around – All agents are not created the same. Find an agent that demonstrate the above-referenced benefits without identifiable disadvantages.
    • Understanding Power – Knowing your BATNA before meeting with your agent. This will help you in delineating the authority and objectives of the agent. You may need to fully convey this to the agent when acting on your behalf. In other instances, you may need to convey your interests to your agent without giving away your BATNA. This reserves your power as the ultimate decision maker in the relationship.
    • Capitalizing on the agent’s expertise – If the agent has a level of expertise, it is important to put this knowledge or skill to work. Be careful not to set limits on the agent that diminish the utility of these attributes.
    • Capitalizing on agent’s network – Always attempt to tap into your agent’s sources of information. This is one of the greatest benefits that the agent brings to the relationship.
    • Discussing ratification – Explain to your agent the limits of their authority. Let her know the extent of your willingness to ratify her actions if beyond the scope of her authority.
    • Using your agent to help save face – An agent creates a layer of personal interaction between parties. As such, the principal can use this level of separation to avoid accepting responsibility for loss in the event of an undesired outcome.
    • Using your agent to buffer emotions – Parties to a negotiation often get emotionally charged when interacting with the other party. The presence of emotion can lead to irrational decisions and actions. An agent is generally emotionally attached and can remain objective in such situations.

What is a constituent relationship and how does it affect negotiation?

Constituent, the party whom the principal represents, is ostensibly on the “same side” as a principal, but exerts independent influence on the outcome through the principal. The challenges for constituent relationships include:

  • Identification – Often it is difficult to identify individuals in a constituent group. Constituents may have any number of interests; yet, there is one or more salient interests that align constituents behind the principal.
  • Accountability – In a group negotiation, the relationship that the principal negotiator shares with her constituents requires decision-making vigilance, evaluation apprehension, and face-saving by the principal. The principal must act in a way to unite constituents around her actions and decisions. Diffusion of responsibility is the tendency for each individual to feel less responsible and become less likely to act than if he or she were alone.
  • Conflicts of interest – A principal must avoid conflicts of interest with constituents who have a wide variety of interests. This can be very difficult and, in some cases, impossible given the context of the negotiation.

Tactics for improving constituent relationships include:

  • Communication – Communicate with your constituents.
  • Diverse Views – Do not expect homogeneity of constituent views.
  • Education – Educate your constituents on your role and your limitations.
  • Forward thinking – Help your constituents do horizon thinking, type of thinking that involves making projections about future outcomes.

What are team negotiations and how do they affect the negotiation process?

Presence of at least one team at the bargaining table increases the incidence of integrative agreements

  • Team Effect – In negotiation, the tendency for parties represented by a bargaining team to reach more integrative settlements.
  • Team Efficacy effect – The collective perception held by individuals and/or members of a team that their efforts, decisions, and products are superior, more valued, and more worthwhile than an individual’s efforts, decisions, and products.
  • Team Halo effect – Refers to the fact that teams tend not to be blamed for their failures, as much as individuals do, holding constant the nature of the failure.

Challenges that negotiating teams face include:

  • Selecting your teammates – Criteria for selecting teammates might include: negotiation expertise, technical expertise, interpersonal skills. How many team members is also a consideration.
  • Communication on the team (information pooling) – In group interaction, the strategy of collecting information from all members in a systematic fashion.
  • Team cohesion – The strength of positive relations in a group, the sum of pressures acting to keep individuals in a group, and the result of all forces acting on members to remain in a group. Common-identity groups are groups composed of members who are attracted to the group for what it represents. Common-bond groups are groups composed of members who are attracted to the group because of the particular members in the group.
  • Information processing (common information bias) – The tendency of members of a group to share and discuss only the information that is common to all members, as opposed to unique information.

Tactics for improving team negotiations include:

  • Goal and Strategy alignment – Make certain that all members of the team understand the interests and objectives at stake in the negotiation.
  • Prepare together – Preparing for a negotiation is crucial for effectiveness. When multiple individuals will play a part in the negotiation, they should all prepare together. This will ensure alignment of interests, strategy, and tactics. It will also make certain that all parties understand the constraints of the negotiation.
  • Assess accountability – If all members are going to take part in a negotiation, assign roles and make certain individuals are accountable for each.

What are intergroup negotiations, and how do they affect a negotiation?

Intergroup negotiation is where parties identify with their organization and interact with the other party in terms of his or her membership in other organizations. Challenges of intergroup negotiations include:

  • Stereotyping – This is a bias in which one team assumes that all individuals in a group think or will act in conformity with a preconceived notion.
  • Changing identities – Groups are often not static. New members may join and existing members may leave. It is important to address new members in the same manner as old.
  • In-group bias – Positive evaluations of one’s own group relative to an out-group; and downward social comparison – downward social comparison. Situations in which people compare themselves to someone (or a group) who is less fortunate, able, accomplished, or lower in status.
  • Extremism and naïve realism A principle in which people expect others to hold views of the world similar to their own.

Tactics for optimizing intergroup negotiations include:

  • Conflict separation – Separate conflict of interest from symbolic conflict. The GRIT model (Graduated and Reciprocal Initiative in Tension Reduction) – Unilateral conciliatory actions designed to de-escalate a conflict.
  • Common Identity – Search for common identity between groups.
  • Seek Diverse Input – Avoid the out-group homogeneity bias.

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