Role of Creativity in Negotiations

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


What role does creativity play in negotiations?

Successful negotiation requires a great deal of creativity and problem solving. Creativity is an ability to ideate upon and come up with approaches or solutions to the issues or conflicts at the heart of the negotiation. Creative aspects of negotiation are often ignored or downplayed by negotiators, who fixate on the competitive aspect (fixed-pie perception). Creativity is chiefly important in the development of strategies (plans and objectives) and tactics. Some creative approaches to developing a negotiation strategies and tactics include:

• Incubation – This is one step in a process of problem solving (Preparation, Incubation, Illumination, and Verification). In this stage we do not actively address the conflict or dispute in question; rather, this period allows for unconscious processing of the situation. Basically, it allows an individual to internalize the situation at hand in order free up the ability to later ideate and effectuate resolutions.
• Creativity templates – These templates allow for a rational approach to problem-solving. For example, a rational model might include: understanding the problem, devising a plan, carrying out the plan, and looking back. Another understood template model might focus upon fluency, flexibility, and originality in addressing a situation. Fluency is the ability to generate many solutions to a conflict. Flexibility is the ability to change approaches to a problem. Originality is the ability to generate unusual and unique solutions.
• Brainstorming – This is a technique used to stimulate creativity in groups, in which the goal is to increase the quality and quantity of group ideas by encouraging free exchange and by removing criticism.
• Convergent versus divergent thinking – “Convergent thinking” is a method that proceeds towards a single answer. “Divergent thinking” is a method of thinking about a problem that moves outward from the problem in many possible directions and involves thinking without boundaries, flexibility of categories, and originality of thought.
• Psychological Flow – Applying deductive and inductive reasoning approaches. Deductive reasoning is the process of drawing logical conclusions from given information. People violate rules of logic on a regular basis by focusing on the conclusion and not the logic. This is also a tendency toward “confirmation bias”, which regards the practices of seeking or giving notice only to information that confirms or reaffirms one’s beliefs or understanding. In negotiation, confirmation bias causes individuals to discount or fail to recognize information (social or situations) that is relevant to the negotiation process. Deductive reasoning focuses upon cognitive consistency. “Inductive reasoning” is the process of hypothesis testing or trial and error from given information. It tends to be more focused on convincing or persuading others.
Creative negotiations tactics to implement a given strategy might include the following:

• Fractionating – Breaking problems into solvable parts. This process allows for integrative possibilities – expanding the pie by adding additional interests and novel combinations of those interests. It also helps with “problem representation” – defining, rather than solving, a problem. This process is critical in the search for differences in a negotiation that will lead to creative trade-offs.
• Finding differences: A creative negotiator searches for manners of aligning and realigning interests. Being able to align issues is important in fostering the ability to trade off independent issues.

• Bridging – This is a type of integrative solution in which a new option is created that satisfies both parties’ vital interests. The approach requires an understanding of the counterparty’s interests and a conscious avoidance of positional bargaining.

• Cost cutting – A tactic to make the other party feel whole by reducing their costs.

• Nonspecific compensation – An agreement where one negotiator receives what she wants, and the other is compensated (or paid) by some method that was initially outside the bounds of negotiation.

• Structuring contingencies – Contingency contracts are agreements wherein negotiators make bets based upon their differences in beliefs, forecasts, risk profiles, and interests. To be effective, contingency contracts require:

⁃ Continuity – Some degree of continued interaction between parties.
⁃ Enforceability – The terms of the agreement are enforceable upon the realization of a contingency.
⁃ Clarity and measurability – The determination of the contingency is readily achievable.

• Seeking feedback – This process includes seeking input from those involved in the negotiation regarding their perception or understanding of the process and outcomes.

Several biggest threats to creativity include:

• Inert knowledge problem – Inert knowledge concerns the inaccessibility of knowledge in one’s own mind because of initial encoding. It is marked by a dissociation between what is most accessible in our memories and what is most useful in problem solving and reasoning. In business, it concerns the limitations on the ability of managers to transfer knowledge from one context to another. “Transfer” is the ability to apply a strategy or idea learned in one situation to solve a problem in a different, but relevant, situation. Transfer can be further divided as follows:

⁃ “Surface-level transfer” is when a person attempts to transfer a solution from one context to a superficially similar one.

⁃ “Deep-level transfer” is when a person applies solutions and strategies that have meaningful similarities, rather than superficial ones.

Decreasing inert knowledge problem involves making an explicit comparison between two or more relevant cases.

• Availability heuristic (bias) – This is the principle stating that the more prevalent a group or category is judged to be, the easier it is for people to bring instances of this group or category to mind. A related concept is “false consensus effect”, which is the belief that others are more similar to ourselves in attitudes and behaviors than is actually the case.

• Representativeness – This is a heuristic based on stereotypes. Stereotyping is a phenomenon where, the more a person looks like the stereotype of a member of a certain group, the more we are inclined to categorize them as belonging to that group. Related concepts are base-rate and gambler’s fallacy.

⁃ “Base rate fallacy” is the tendency for people to discount perfectly valid information and instead rely on a single data point.

⁃ “Gambler’s fallacy” is the tendency for people to believe that a routine occurrence will even out. The error comes when they believe that a specific situation will occur because of these evening out when, in reality, all occurrences are independent.
• Unwarranted causation – This is the tendency to attribute an outcome to a particular factor, when that factor is not the driving force or even related to the outcome. A related concept is “belief perseverance”, which is the tendency of people to continue to believe that something is true even when it is revealed to be false or has been disproved. This comes from individuals wanted a cause and effect to be true based upon other factors or influences.
• Illusory Correlation – The tendency to see invalid correlations between events. This tendency is closely related to that of defensive attributions.

⁃ “Defensive attributions” enable observers to deal with perceived inequities and maintain belief in a “just world”. A just world belief is that everything will work out alright because of Karma.

⁃ “Blaming-the-victim attributions” are a related concept. This is the tendency to develop unwarranted, negative impressions of others who suffer misfortunes. This tendency is to enable observers to deal with the perceived inequities in others’ lives and maintain belief that the world is just.
• Hindsight bias – Human tendency to be able to determine the process from an outcome, but unable to determine an outcome from the process or situation. A related concept is “creeping determinism”, in which we believe that outcome of a situation to be the natural and unavoidable consequences of the situation.
• Functional fixedness – When we focus on known methods to solve and problem, but we are unable to employ other readily available problem-solving methods. A related concept is “set effect” (or negative transfer), which concerns how past experience can limit our ability to develop or employ new or alternative strategies.
• Selective attention – The inability or unwillingness of an individual to see things holistically. Instead, the individual focuses on pieces of the situations that lead to a particular position or conclusion.
• Overconfidence effect – Exaggerated confidence in one’s knowledge or ability or probability of a positive outcome.

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