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
I’ve 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:
– Discussion for the purpose of settling differences.
• Mediation - Conciliation:
– A neutral third party assists the parties to reach a
negotiated settlement but has no power to decide the
issues in dispute.
• Arbitration:
– A neutral third party is given the power to decide the
issues in conflict. The arbitrator decides after hearing
arguments and reviewing evidence.
• Trial in Court:
– Evidence is presented to a judge or jury for a decision
under formal rules of law and procedure
ADR
Alternative
Dispute
Resolution
HOW DO YOU SAY “ADR”?
Country / Language
Negotiation
Mediation
Cambodia
Ka cho cha
Agna Kandal
Hong Kong
Tam Pun
Tin Teng
India Hindi
Oriya
Samvad
Muleiba
Madhyastha
Madhyasti
Indonesia
Negosiasi
Penengah
Japan
Kosho
Chotei
Korea
Hyoepsang
Joongjae
Malaysia
Rundingan
Perantaraan
Pohnpei Micronesia
Paronogorong pene
Kamwahu
Philippines
Negosasyan
- Tawad (bargain)
Pagbatiin
China
Tan Pan
Tiao Jie
Singapore
English or Mandarin
English or Mandarin
Sri Lanka
Samuthiya
Samatha Mandalaya
Taiwan
Tam Pan
Tawa Shay
Thailand
Jeraja
Klaiklea
Vietnam
Dam Phan
Hoa Giai
Compiles by Professor John Barkai and students from the University of Hawaii’s 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
5
%
Criminal cases are
terminated in Hawaii
by jury trial
0.4
%
Circuit Court
Civil Cases
terminated in Hawaii
by jury trial
2011-2012
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
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
1967
1964
Torts
Vanishing Trials – Hawaii Circuit Court – 1964-2010
Percentage of Jury Trials 1964-2010
6.0
5.0
4.0
3.0
2.0
1.0
0.0
All Civil
Contracts
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
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 year’s
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, let’s 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
Yes
missiles in Cuba.
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
Seller’s Bargaining Range
Positive Bargaining Zone
Buyer’s Bargaining Range
$5
$10
$15
$20
ST, Seller’s Target Point
BR, Buyer’s Resistance Point
SR, Seller’s Resistance Point
BT, Buyer’s Target Point
Negative Bargaining Zone
Seller’s Bargaining Range
Negative Bargaining Zone
Buyer’s Bargaining Range
$5
$10
$15
$20
ST, Seller’s Target Point
SR, Seller’s Resistance Point
BR, Buyer’s Resistance Point
BT, Buyer’s 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.
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