Negotiation & ADR

Prof. John Barkai William S. Richardson School of Law University of Hawaii

Negotiation & ADR are Professional and Personal Skills

Handling of Problems

Western - American

Asian
designed by Liu Young

www2.hawaii.edu/~barkai

Google: John Barkai

Dragon Naturally Speaking Premium edition - $145 Amazon Academic pricing $100 Various microphone options

Not everyone can be a great chef

Not everyone can be a great chef

But, everyone can learn to cook

Even a sheet of paper has two sides

Japanese Proverb

Every coin has two sides

Proverb

Perspective
View

Ive got it again Larry. An eerie feeling like there is something on top of the bed.

"Then it's agreed. Watson, Smith, Teller, and Wilson go to Heaven; Jones, Paducci, and Horner go to Hell; and Fenton and Miller go to arbitration.

This course will .

After taking this course

A recent student said

After taking this course

My girl friend is like a changed woman

After taking this course

My girl friend is like a changed woman

(because she thinks I'm a changed man)

Common Forms of Dispute Resolutions

Negotiation:
Mediation - Conciliation: Arbitration:
Discussion for the purpose of settling differences. A neutral third party assists the parties to reach a negotiated settlement but has no power to decide the issues in dispute. A neutral third party is given the power to decide the issues in conflict. The arbitrator decides after hearing arguments and reviewing evidence. Evidence is presented to a judge or jury for a decision under formal rules of law and procedure

Trial in Court:

ADR
Alternative Dispute Resolution

HOW DO YOU SAY ADR?

Country / Language
Cambodia Hong Kong India Hindi Oriya Indonesia Japan Korea Malaysia Pohnpei Micronesia Philippines China Singapore

Negotiation
Ka cho cha Tam Pun Samvad Muleiba Negosiasi Kosho Hyoepsang Rundingan Paronogorong pene Negosasyan - Tawad (bargain) Tan Pan English or Mandarin

Mediation
Agna Kandal Tin Teng Madhyastha Madhyasti Penengah Chotei Joongjae Perantaraan Kamwahu Pagbatiin Tiao Jie English or Mandarin

Sri Lanka
Taiwan Thailand Vietnam

Samuthiya
Tam Pan Jeraja Dam Phan

Samatha Mandalaya
Tawa Shay Klaiklea Hoa Giai

Compiles by Professor John Barkai and students from the University of Hawaiis JEMBA Program (Japan Focused Executive MBA) and JAIMS (Japan American Institute for Management Science) Intercultural Negotiations class.

How many lawsuits are filed in the U.S. each year?

Guess!

Over

106 Million Cases

Filed in Federal and State Courts in 2010
Source: Examining the Work of State Courts, 2010
http://www.ncsconline.org/d_research/csp/CSP_Main_Page.html A 2% decrease over prior year

104 Million

State Court Cases

2 Million Federal Court Cases

104 Million U.S. State Court Cases

56 20 19 6 2 Traffic Criminal Civil Domestic Juvenile

Source: Examining the Work of State Courts, 2010

Hawaii Civil Cases 7,013 Filed 4,007 Terminated

Circuit Court 2011-2012

How many jury trials?

Guess!

15 Jury Trials
53 Non-Jury Trials Circuit Court Civil Cases in Hawaii 2011-2012

Jury Trials 1 Contract Trials 12 Tort Trials 3 Other Trials

Circuit Court Civil Cases in Hawaii 2011-2012

Hawaii Court Statistics

Civil Jury Trials

15 6 14 12 17 12 10 16

2012 2011 2010 2009 2008 2007 2006 2005

161 Jury Trials 58 Non-Jury Trials

Circuit Court Criminal Cases in Hawaii 2011-2012

Criminal cases are terminated in Hawaii by jury trial

0.4

terminated in Hawaii by jury trial 2011-2012

Civil Cases

Circuit Court

3% Jury Trials
in U.S.

161 Jury Trials 58 Non-Jury Trials

Circuit Court Criminal Cases in Hawaii 2011-2012
Of 3575 cases terminated 4.5% by Jury; 1.6% Non-jury

>5

Criminal cases are terminated in Hawaii by jury trial

Trial Rates: 0.8% District Court 13% Small Claims

2010-2011

3% Jury Trials
in U.S.
Vanishing Trials Federal Court 1962-2002 12% to 2%

Total Trials
450 400 350 300 250 200 150 100 50 0

All Civil Contracts Torts

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

Vanishing Trials Hawaii Circuit Court 1964-2010

2009

Percentage of Jury Trials 1964-2010

6.0 5.0 4.0 3.0 2.0 1.0 0.0
19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10

All Civil Contracts Torts

Hawaii Circuit Court 1978-2010

What is the appropriate amount of Conflict?

Conflict

Conflict

Conflict

Conflict

In one of our concert grand pianos, 243 taut strings exert a pull of 40,000 pounds on an iron frame. It is proof that out of great tension may come great harmony. Theodore E. Steinway

CONFLICT IS LIKE WATER: Too much causes damage to people and property Too little creates a dry, barren landscape devoid of life and color.
- Designing Conflict Management Systems - Cathy Costantino & Christina Sickles Merchant

All polishing is achieved by friction

- Mary Parker Follett

Who has the Power?

Information is Power

The easiest way to improve your negotiation skills is to

A__ M___ Q________!

Ask More Questions

Expand the pie

Two Key Ideas about Negotiation & ADR

1) Focus on Interests not positions

2) Improve the Communication

(information & temperature)

Positions Interests

Positions
WHAT?
Proposed Solutions

Interests
WHY?
Are WHY you want the positions

Mommy Daddy
(oranges)

Juice Rinds

Some Common Interests We Have

Acceptance Fulfilment Accountability Independence Achievement Knowledge
Opportunity for Input

Autonomy Privacy Belonging Recognition Clarity Acknowledgment Responsibility Love Commitment Affection Respect Nurturance Competency Appreciation

Relaxation Consistency Satisfaction Efficiency Safety Fairness Security

Freedom from Fear

Trust Understanding Validation

Interests Goals Needs Dreams Desires

Same bed, different dreams

Iceberg Theory Below the line issues Huge & invisible Purposely hidden Out of awareness

Advantages and Disadvantages of Cooperation and Competition

And notice, gentlemen, this years model has twenty per cent more trunk space.

You can't always get what you want but if you try sometimes you might find you get what you need
The Rolling Stones

U.S. Declaration of Independence

53 CA 32 TX 29 NY

1 AL DE MT ND SD VT WY Constitution

The Camp David Accords September, 1978 Framework for the Conclusion of a Peace Treaty between Egypt and Israel
The following matters are agreed between the parties: - the full exercise of Egyptian sovereignty - the withdrawal of Israeli armed forces from the Sinai; - the use of airfields for civilian purposes only, and - stationing of Forces No more than one division of Egyptian armed forces [permitted]

Only United Nations forces and civil police equipped with light weapons to perform normal police functions will be stationed within an area lying west of the international border and the Gulf of Aqaba, varying in width from 20 km. (12 miles) to 40 km. (24 miles).
[limited border armed forces]

The Camp David Accords

For the Government of the Arab Republic of Egypt: Muhammed Anwar al-Sadat For the Government of Israel: Menachem Begin Witnessed by: Jimmy Carter, President of the United States of America

GETTING TO YES
Separate People from Problem Interests not Positions Invent Options Objective Criteria BATNA
http://mediationadvocacy.com/Getting%20to%20Yes.pdf

BATNA
Best Alternative To a Negotiated Agreement

YOUR BATNA TELLS YOU WHEN TO WALK

NOT WHEN TO SIGN

Tolanski Curve Illusion

Conflicting Interests

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Substance

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Substance Economic considerations Political considerations

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Substance Economic considerations Political considerations External considerations Internal considerations

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Economic considerations External considerations Immediate future Substance Political considerations Internal considerations More distant future

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Economic considerations External considerations Immediate future Tangible results Substance Political considerations Internal considerations More distant future The relationship

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Economic considerations External considerations Immediate future Tangible results Progress, change Substance Political considerations Internal considerations More distant future The relationship Respect for tradition

Examples of Complementary Interests

One party might care Other party might more about: care more about:
Form, appearance Economic considerations External considerations Immediate future Tangible results Progress, change Precedent Substance Political considerations Internal considerations More distant future The relationship Respect for tradition This case

Cuban Missile Crisis 1962

OK Mr. President, lets talk.

Cuban Missile Crisis

1962. The U.S. placed nuclear missiles in the U.K., Italy, and Turkey with the capability to strike Moscow. The Soviet Union began to build missiles bases in Cuba for ballistic nuclear missiles with the ability to strike most of the continental United States. The U.S. is considering the following options: pressure diplomatically the Soviet Union to remove the missiles, attack the missile bases by air, set up a naval blockade of Cuba, invade Cuba. Cuba and the Soviet Union, who supplied the missiles, claim that Cuba has a right to protect itself from a potential U.S. attack.

A. Positions

B. Possible interests

Cuban Missile Crisis Positions

U.S. Soviet Union

No
missiles in Cuba.

Yes
Missiles can be in Cuba.

Cuban Missile Crisis

Possible Interests
U.S. - Security - protect the U.S. from easy, first strike missile attack - prevent the Soviet Union from placing nuclear weapons close to the U.S. - -maintain image as a world superpower Soviet Union -prevent U.S. attack of Soviet Union - prevent U.S. invasion of Cuba support other Communist nations, - maintain image as a world power

Cuban Missiles Resolution

Publicly, the Soviets dismantled their offensive weapons in Cuba and return them to the Soviet Union, subject to UN verification, in exchange for a U.S. public declaration and agreement to never invade Cuba. Secretly, the U.S. agreed that it would dismantle all U.S.-built Thor and Jupiter IRBMs deployed in Europe and Turkey.

Power Imbalances

Smart Bargaining: Doing Business with the Japanese

Graham & Sano
Japan External Trade Organization's (JETRO)

Cuckoo Strategies

Sengoku period battle

15th century warring states period in Japan

Cuckoo Strategies
Nakanunara, koroshiteshimae, hototogisu (If the cuckoo does not sing, kill it.) by Nobunaga Oda (ruthless) Nakanunara, nakashitemiseyou, hototogisu (If the cuckoo does not sing, coax it.) by Hideyoshi Toyotomi (creative) Nakanunara, nakumadematou, hototogisu (If the cuckoo does not sing, wait for it.) by Leyasu Tokugawa(patient)

36 Chinese Strategies
Applied to Negotiations

PREPARING AND PLANNING

If I had six hours to chop down a tree, I'd spend the first hour sharpening the ax.
Abraham Lincoln

Planning

Planning on roaming the neighborhood with your buddies again?

Cuckoo Strategies

Sengoku period battle

15th century warring states period in Japan

Cuckoo Strategies
Nakanunara, koroshiteshimae, hototogisu (If the cuckoo does not sing, kill it.) by Nobunaga Oda (ruthless) Nakanunara, nakashitemiseyou, hototogisu (If the cuckoo does not sing, coax it.) by Hideyoshi Toyotomi (creative) Nakanunara, nakumadematou, hototogisu (If the cuckoo does not sing, wait for it.) by Leyasu Tokugawa(patient)

They would never reveal every fact, because successful negotiation does not hinge on full disclosure.

1 minute audio clip

Distributive Negotiation
Competitive Win-Lose Zero-Sum

The Pie

Buyers = as low as possible Sellers = as high as possible Long term relationship not important Claiming as much value as possible in the negotiation

Integrative Negotiation
Cooperative Win-Win Expanding the possibilities

The Pie

Buyers and Sellers work together to get more Long term relationship is important

The value of the relationship

Creating Value in negotiation

Positive Bargaining Zone

Sellers Bargaining Range

Positive Bargaining Zone

Buyers Bargaining Range

$5

$10

$15

$20 ST, Sellers Target Point

BR, Buyers Resistance Point SR, Sellers Resistance Point BT, Buyers Target Point

Negative Bargaining Zone

Sellers Bargaining Range

Negative Bargaining Zone

Buyers Bargaining Range

$5

$10

$15

$20 ST, Sellers Target Point

SR, Sellers Resistance Point BR, Buyers Resistance Point BT, Buyers Target Point

Sally Swansong

101 Ways to get a bigger piece of the Pie

It is not (always, or even often) about the money

BEFORE THE NEGOTIATION

Prepare. Prepare. Prepare. Know your BATNA Focus on interests, not positions Know your interests Prioritize your interests Improve your BATNA before the negotiation starts Improve your BATNA during the negotiation

BEFORE THE NEGOTIATION

Set a high goal for yourself Estimate their BATNA Estimate their interests Estimate the ZOPA (zone of possible agreement) Talk with others who have negotiated with them

AT THE TABLE 1

Develop a relationship before talking money Recognize their negotiating style Don't narrow your negotiations to one issue Don't quickly accept the first offer even if you think it's fair. If you agree in haste, you may repent at leisure Ask lots and lots of questions Active listen

AT THE TABLE 2

Pace them Make the first offer to anchor (if you have enough info) Start with an extreme, but not outrageous offer If they make the first offer, ignore any extreme offer and anchor your offer in a favorable position Justify all offers and concessions

AT THE TABLE 3

Take a seat to your advantage (not detriment) Wait for TOP to finish before responding Hint at, or disclose your BATNA, to improve their offer Mislead them about your BATNA Determine their interests Ask. Estimate based upon available info. Assume and ask Qs to confirm Be willing to make the first concession Don't make multiple, unilateral concessions Concede slowly Concede in small steps Make you concessions 1/2 of what you would naturally do

AT THE TABLE 4
"That sounds a little high (low)." - to induce concessions Don't be in a hurry to make the deal Ask for an "extra." Nibble Don't take it personally Frame issues as "gains" for them, not losses Use silence Consider if they have a hidden agenda Keep the emotional temperature low

AT THE TABLE 5

Have limited authority Think about the long term Is it worth serious negotiating on this one? Don't appear desperate for the deal Invent options for mutual gain Seek objective criteria Act confident and informed "Split the difference" only when it is to your advantage Flinch

AT THE TABLE 6

Offer contingent concessions Don't act like you "won" or you won't next time Don't underestimate your offer Be willing to walk away (at least for a while) Be willing to suggest mediation Make a larger concession than you thought necessary Most psychological principles suggest your offer is too extreme Over optimistic, Selective perception, Do not reject their offer based because of reactive devaluation

TIPS FOR NEGOTIATING WITH A COMPETITIVE NEGOTIATOR Flinch. Take time out. Remember your BATNA! Get another opinion.

Ask "how" they will negotiate.

If they don't know what "win-win" means, they won't be negotiating that way. Avoid multiple concessions if your concessions are not matched by their concessions. Recognize "dirty tricks" and comment on them immediately.

TO IMPROVE YOUR NEGOTIATIONS:

Think in terms of interests

Classify the type of negotiation: Deal or Dispute Distributional or Integrative Expand the pie Use a planning chart Investigate the opposing negotiator Consider both strategy and tactics

Set high goals for yourself

Practice before you negotiate Determine your BATNA

TO IMPROVE YOUR NEGOTIATIONS:

Ask lots of questions Separate the people from the problem Generate alternatives by brainstorming Frame your proposals as a gain to them

Flinch when you hear a high demand

Protect your facts when necessary
Be willing to make concessions, but only if they do too

TIPS FOR NEGOTIATING WITH A COMPETITIVE NEGOTIATOR Flinch. Take time out. Remember your BATNA! Get another opinion.

Ask "how" they will negotiate.

If they don't know what "win-win" means, they won't be negotiating that way. Avoid multiple concessions if your concessions are not matched by their concessions. Recognize "dirty tricks" and comment on them immediately.