CONFIDENTIAL

BUS356 Business
Negotiation
Seminar 4: The Role of Perception,
Cognition, Emotion, and
Communication in Negotiation
ADMIN. NOTE: SUSS Policy –
Use of Generative AI Tools

2
 We should be Smart & “LAZY.”
Lazy as in always seeking BETTER WAYS TO IMPROVE.

IMPLEMENT CBF (Cheaper, Better and Faster)

to IMPROVE.

I shall be OPEN to alternative ideas.

I KNOW WHERE TO ADJUST MY STRATEGIES TO ACHIEVE MORE!

 Learning From Your OWN Assignment & From Others.
Extract the principles / rules for MUCH MORE SUCCESS.

❑ Examine marks allocated.

❑ Address key words. Not in draft.

❑ Write in a direct manner, one paragraph, one point, followed by

substantiation in SAME paragraph.
 Learning From Your OWN Assignment & From Others.
Extract the principles / rules for
Much, MUCH, MUCH MORE SUCCESS.
❑ ANSWER Q PART BY PART.

❑ KEY WORDS IN YOUR ANSWERS?

❑ MAXIMUM THEORY & EVIDENCE?

❑ INTRODUCTION AND CONCLUSION NEEDED?

❑ MAXED OUT YOUR WORD COUNT?

Commitment? Video barely audible. I cannot believe I failed. I am
withdrawing for X reasons. I submitted to the wrong link. I googled for
answers, it has always worked before.
 I COMMIT to

APPLY Learning to ALL Subjects & SCORE!

I MAKE THINGS HAPPEN!

 RECAP LEARNING FROM DB CONTRIBUTORS

L: Planning and Strategising. Step 10: Present the issues to the other side: substance and
process. How to be more persuasive. When and How to communicate the offer?

The ways can help to close the deal.

Any chance to anchor and frame to fit into listeners’ needs? Raise understanding and trust.

Application. I once sat in on Friend A’s insurance talk because he was new to the job and needed to
clock in a certain number of clients monthly. I am a visual learner, hence, graphs and diagrams
would help me to understand better. However, he did not know that and began telling me
numbers, percentages and statistical values. I was confused and did not understand as much.

However, Friend B, more patient and less aggressive with numbers, began charting up graphs
and using pie charts and diagrams (a good drawer as well), which helped me understand the
product. Therefore, I would be more willing to buy from Friend B than from Friend A.
 WHY DO THEY POST?

L: Informational Power in Negotiations

Application.

If I am selling / negotiating a sale of a chair to an elderly couple, what matters to them is how
safe the chair is (goal?). Hence, I would emphasise the safety designs and anti-fall functions.

If I sell the same chair to a cost-conscious couple [substantive goal), I would offer
alternatives that are slightly less value for money to make the chair I am selling more
appealing.

Practise active listening can find out what are the real concerns and needs of those wanting
to buy the chair is.

The execution of the negotiations is different based on the different goals/needs of the
customer.
 REFLECTING & POSTING ON DB HAS REWARDS.

• Learning 1: 10 Step Learning Process. Successful negotiation requires proper planning and
strategising. Structured approach for results.

• Without proper planning, a negotiator may enter discussions unprepared, increasing the
likelihood of making unfavourable concessions or failing to secure a beneficial deal.

• Application.
I will apply this learning by carefully preparing before any negotiation, whether in a business
context, such as discussing project responsibilities, or in a personal situation, such as
negotiating a rental agreement.

• Specifically, I will focus on setting clear goals, understanding my alternatives (BATNA), and
researching the other party’s objectives. This structured approach will help me remain composed
and make well-informed decisions rather than reacting emotionally during negotiations
 REFLECTING & POSTING ON DB HAS REWARDS.

Learning. Jalan Bingsu activity. I was the buyer and had to negotiate with the seller.

• What I took away was the importance of information in a negotiation and

concealment.

• For the seller, effective concealment of information and selective revealment of information
is important to have an advantage during a negotiation.

• On the other hand, for buyers, it is important to ask more questions to fish out any additional
information the seller is keeping for himself.

• Application: Learning will be very important for me in the future when I go for numerous job
interviews. During the interviews, I can ask many questions to the interviewer so that I can gain
advantage in the interview and potentially ask for concessions if needed.

•
 REFLECTING & POSTING ON DB HAS REWARDS.

Learning: Power can be gathered in various ways, such as through informational sources or contextual power.

Application: Before entering a negotiation, I typically gather power from sources like information or the context of
the situation to use as leverage for achieving my preferred outcome.

However, I also need to learn how to leverage other sources of power, like my
personality, approach, and beliefs.

Another key way to gain power is through relationships, where interdependence

plays a role—by helping the other party, I can move closer to my desired
outcome, and they, in turn, can benefit. This creates a sense of collaboration
rather than conflict.
 PRACTICAL APPLICATION WITH IMMEDIATE CONSEQUENCES

Application:

• Negotiating with more powerful parties. Be flexible and have a clear understanding of my position.

• Power dynamics often unbalanced.

• However, by avoiding an all-or-nothing approach and diversifying my options, I can create leverage that helps
shift the balance in my favor. I can apply this by not solely committing to one supplier.

• Enhance my own position—showcasing the strong performance of the business, highlighting customer
loyalty, and demonstrating industry knowledge—I’ll be able to increase my influence and show that I’m a
valuable partner to work with.

• Setting constraints, like a strict budget, will also help me stay firm in negotiations without giving in to pressure.

• Accurate data, such as market price benchmarks, can be a powerful tool in backing up my position.

• Asking thoughtful questions will also uncover valuable insights to manage the negotiation process.
 REFLECTING & POSTING ON DB HAS REWARDS.

Application: Apply sources of power.

• For informational power, I could use it when purchasing a car in the future.

• For personality power, my strong communication skills could help me persuade teammates to adopt
my proposed methods, ensuring that group assignments completed efficiently and smoothly.

• As for positional power which I have already been applying, my role as a team leader in university
assignments allows me to delegate tasks effectively. By assigning responsibilities early, I help ensure
that everyone starts working promptly, leading to timely submissions.

• When it comes to relationship power, having a good rapport with the person I am negotiating with may
increase my chances of securing more favourable terms in a deal.

• Lastly, contextual power can be advantageous when I am aware of external circumstances. For
instance, if a property owner is in a hurry to sell their flat, I can leverage this urgency to negotiate a better
price.
 REFLECTING & POSTING ON DB HAS REWARDS.
L: I learnt about goals, strategy, power in negotiation and the 10-step planning process.

• Differentiate between strategy and tactics.

• 10-Step Planning Process. Knowing your limits and determining a Resistance Point stood out to me
most. Setting the right limit would decide when you should stop negotiations because any settlement
beyond this point is unacceptable. Yet placing a resistance point too high would drive buyers away.

• Stood out most. A negotiator will have referent power over the other party if there is deep respect and
admiration of the negotiator’s character, personality or attributes. Under the sales context, we can also
gain a second connection via referrals which also strengthens the first relationship.

• Power is an intangible aspect in negotiations, but it holds a foothold that can swing the negotiation either way.
This is a very useful soft skill to acquire even at home, school, the workplace, or even church.
 REFLECTING & POSTING ON DB HAS REWARDS.
Learning: Interest
Interests in business negotiations refer to the underlying needs, concerns, or motivations that
drive each party's behavior and influence their decision-making process. These interests can vary
widely depending on the individuals involved, their roles, and the context of the negotiation. There are
substantive interest, process-based interest, relationship interest, and principle.

Application: I am interested in opening a small bakery business in the future

Substantive interest :
These are the tangible, material goals or outcomes that each party seeks to achieve through the
negotiation. Substantive interests often relate to specific issues such as price, quantity, quality, delivery
timelines, or terms of the agreement. For example, in a supplier-buyer negotiation, substantive
interests may include securing a favorable price, ensuring timely delivery, or obtaining a certain
level of product quality.
 REFLECTING & POSTING ON DB HAS REWARDS.
Process-based interest:
Process interests focus on how the negotiation itself is conducted rather than the specific
outcomes. This includes preferences for the negotiation process, such as the format of meetings,
the use of certain communication channels, or the involvement of third-party mediators. Can be
about concerns about fairness, transparency, and the decision-making procedures used during the
negotiation.

I will decide how to conduct negotiations with my stakeholders. Whether through face-to-face
meetings or video calls to facilitate open communication and build rapport with the supplier.

I will express a process interest in clearly defining roles, responsibilities, and expectations to
ensure mutual understanding and alignment throughout the partnership.
 REFLECTING HAS REWARDS.
Relationship interest:
Relationship interests. Building trust, rapport, and goodwill can be important objectives.
Relationship interests may involve myself demonstrating respect, empathy, and understanding
toward the other party's perspectives. Foster a cooperative and collaborative environment.

Principle Interests: Refer to principles of fairness, integrity, honesty, or social responsibility

that guide negotiations. Reflect the desire to uphold certain moral or ethical standards
throughout the negotiation process and ensure that the outcomes align with these values.

As a small business owner, I may prioritize environmental sustainability or labor rights in its
negotiations with suppliers or partners. This could involve selecting suppliers who use eco-
friendly manufacturing processes, minimize waste, and reduce carbon emissions.
 Work has its OWN REWARDS.

Learning: Identifying and Addressing Underlying Interests in Conflicts

Often, conflicts stem from underlying interests and needs that are not
being met. Helps to achieve a lasting resolution to conflicts, rather than
just a temporary fix.
Application:
I will strive to dig deeper into the root causes of disagreements by engaging
in open and honest dialogue. If a conflict arises with a team member over
project responsibilities, I will look beyond the immediate issue to
understand their underlying concerns, such as the need for recognition
or a fair distribution of work.
Recharge point
 Learn why people behave the way they do.

Our actions are guided by how we perceive, analyse (cognition), feel (emotion)

about the other party, situation, our own interests and positions.

Learning Outcome for SU4

1.Examine the role of perception and framing in negotiation.

2.Discuss the effect of cognitive biases, moods, and emotions during negotiation

1.
3.Evaluate and improve the communication process
 Perception, Cognition, and Emotion

Each time a negotiator acts, reacts or makes a decision –

• information is taken in (perception),
Perception • information is processed (cognition), and
• is mixed with the negotiator’s own feelings
(emotions).

Negotiation is thus guided by the negotiator’s own

perception, cognition, and emotions.

Perception : Four Perceptual Distortions Emotion : Positive & Negative Emotions

Cognition : Framing & Cognitive Biases

Perceptual Distortions
Perception is defined as the process by which an individual
connects to and makes sense of the external environment.

• Selective and subjective experience leads to errors in

perception – perceptual distortions.
The result is an inaccurate or incomplete
picture of the reality.

• Stereotyping
• Halo Effects
• Selective Perception
• Projection

Illustrator unknown - From Augusta Stevenson,

Children's Classics in Dramatic Form, Houghton
Mifflin (Boston),
 Extra Notes: Perception, Cognition, and Emotion

• Perception is the process by which individuals connect to the environment. We connect and
make sense of our environment. Impossible to process all information! We have mental
short cuts. We are selective! We perceive.

• The perceiver’s current state of mind and the impact of earlier communications will also
influence this process.
• Negotiators approach each situation guided by their perception of past situations, attitudes
and behaviors.
• What influences how a person understands and assigns meaning to the messages?
Current state of mind. What influences this? Perception!

• In negotiation, the goal is to perceive and understand accurately other parties’

messages.
 Extra Note: Perception, Cognition, and Emotion

• In negotiation, the goal is to perceive and understand accurately other parties’ messages. It
is not easy to do so. WHY?

• Perceivers’ limited and subjective experience leads to biases and errors in perception.
STORY. No-one saw the elephant. Each of the 5 people touched different parts of the
elephant. Based on limited and selective perceptions, they each perceived the elephant very
differently.

• You see, the negotiator’s own needs and personal experience may cause him or her to have
preconceived notions about the other party. BE ON GUARD OF PERCEPTION ERRORS.
Perception

Where is the triangle?

Is it outside the cube or inside the cube?
Perception

Where is the triangle?

Is it outside the cube or inside the cube?

Some of us will see the triangle on

the inside.

The brain develops two equally plausible hypotheses and is unable to decide between them.
“People of Asian descent …
“are good at math” “work hard,” “follow rules”
“are competent, but cold”
and “never complain”

https://beestar.org/news/news090720.jsp

Princeton University psychologist Susan

Fiske and her collaborators published
a series of articles examining
stereotyping, prejudice and
discrimination.
https://www.cmu.edu/news/stories/archives/2019/july/us-first-in- https://psycnet.apa.org/record/2007-05059-005
https://www.pewresearch.org/social-trends/2012/06/19/the-
math-competiton.html
rise-of-asian-americans/
 Extra Notes: Stereotype is Generalisation Based on Limited Info.

Example “People of Asian descent …

• Stereotyping is an inaccurate or incomplete picture of the reality.
• In fact, such generalization and stereotype may sometimes be dangerous – as a
subsequent slide will show There are many racial stereotypes. Sometimes, they seem
positive and innocent. In the US, there are many stereotypes reported in the media about
people of Asian descent. Stereotype that people of Asian descent are good at math. The
math teams representing US at major international competitions are commonly dominated by
Asian students.
• Sometimes, data presented help reinforce stereotypes. For example, Asian people are
hardworking and they follow rules and competent. These stereotypes are also
confirmed by researchers.
• Do you agree with above stereotypes? Hands up, how many of us are good at math?
https://www.washingtonpost.com/politics/2020/04/06/asians-are-stereotyped-competent-cold-heres-how-that-increases-backlash-
coronavirus-pandemic/
Perceptual Distortion - Stereotyping

You are of
Asian descent

People of Asian descent

are good at math.

You must be
good at math.
 Extra Note: Perceptual Distortion – Stereotyping
• Stereotyping is a common distortion. Occurs when we zero in on a single or limited piece of
perceptual info. about the other person (e.g. age, gender, race or nationality).

• Using only this one information - we then proceed to categorise or classify that person into a
particular social or demographic group. We assign group’s attributes to that person.

• The mental shortcut is to assign the group’s attribute to this other person. So, we “perceive” that
this person has this particular group’s attribute.

• However, do we have any factual basis to support our conclusion? Can we say for sure that every
member of this group will have such an attribute?

• Stereotypes are hard to overcome. Be mindful of perceptual error.

 https://www.washingtonpost.com/politics/2020/04/06/asians-are-stereotyped-competent-cold-heres-how-that-increases-backlash-
coronavirus-pandemic/

The stereotypical image of Asians and Asian Americans as competent and lacking warmth, therefore, alongside
the idea they are to blame for the virus, means they are the group most likely to be targeted for the ongoing
pandemic. They are perceived as competent enough to disrupt society’s existing order; the perception
that they lack warmth — which can be heightened by wearing a mask, something many East Asian and
Asian American people feel is culturally appropriate — can prompt those who are already biased to
perceive them as hostile and respond with anger and harm.
 Gender Stereotype

. A gender stereotype is harmful when

it limits women’s and men’s capacity
to develop their personal abilities,
pursue their professional careers and/or
make choices about their lives.
Click here to play video.

A 2021 video titled Gift To Our Next Generation by the Ministry of Social and Family Development featured
different children reacting to household chores and caregiving duties at home based on their parents'
behavior at home. This video highlights the ripple effects of parents' behaviour on their children and the
importance of role modelling for future generations. https://www.straitstimes.com/singapore/mindset-shifts-needed-to-overcome-gender-
stereotypes-white-paper
 Halo Effects
• In addition to stereotyping, there is halo effects which is similar to
stereotyping in that there is generalization.

• Occurs when we pick one attribute of the other person (e.g. appearance
or first impression). We then generalise that this person will also
possess other attributes which we associate with the attribute we picked on.

• Association is based on our own prior experience.

• Like Stereotypes, halo effects may be positive or negative.

 RECAP Perceptual Distortions

Perception is defined as the process by which an individual connects

to and makes sense of the external environment.

• Selective and subjective experience leads to errors in

perception – perceptual distortions.
The result is an inaccurate or incomplete picture
of the reality.

• Stereotyping
• Halo Effects
• Selective Perception
• Projection

Illustrator unknown - From Augusta Stevenson,

Children's Classics in Dramatic Form, Houghton
Mifflin (Boston),
Perceptual Distortions: Example of 3. Selective Perception.

• Selective perception occurs when we isolate certain information about another

person to reinforce our opinion of this person. We will then filter out information that
contradicts our view. Selective perception reinforces stereotypes and halo effects.

• Blind men and an elephant. Each will be selective about info. presented and will
perceive the elephant differently. SP occurs when we isolate certain information
about another person to reinforce our opinion of this person. We will then filter out
information that contradicts our view..

• Such selectiveness and subjective experience will lead to errors in perceptions

resulting in perceptual distortions. Negotiators can get an inaccurate or incomplete
picture of reality.
 Perceptual Distortions: 4. Projection

• Projection occurs when we project our own characteristics or feelings

on the other person. We assume that the other person feels or will respond
in the same way.
In a social experiment, Joshua Bell, one of the world’s most renowned violinists, was asked to
pose as a street performer at a subway station in New York, US. Bell wore a baseball cap and
jeans, and played with his $3-million violin. Would people stop and listen?

Source : https://medium.com/swlh/changing-perceptions-with-design-717c030654e

Only seven people of the 1,097 passersby stopped during the entire 45 minute
performance. Bell collected notes and coins from passersby totaling $32.17.
When questioned after, most of the commuters said that they didn’t even notice the violinist,
and were regretful when informed of what they had missed.

https://medium.com/swlh/changing-perceptions-with-design-717c030654e
https://www.washingtonpost.com/lifestyle/magazine/pearls-before-breakfast-can-one-of-the-
nations-great-musicians-cut-through-the-fog-of-a-dc-rush-hour-lets-find-
out/2014/09/23/8a6d46da-4331-11e4-b47c-f5889e061e5f_story.html
 Extra Note: In Summary, We Learnt
• Perception is a process by which we connect and make sense of our environment.
Impossible to process all information! We have mental short cuts. We are selective!

• The negotiator’s (perceiver’s) (1) current state of mind and (2) negotiator’s own needs and
personal experience (earlier communications with the other party) may cause him or her to have
preconceived notions about the other party. Perceivers’ limited and subjective experience
leads to biases and errors in perception.

• Example. Noone saw the elephant. Each person touched different parts of the elephant. Based
on limited and selective perceptions. Perceived elephant very differently.
 EXTRA NOTES:

• Stereotyping rely on single piece of info (age, gender, race, nationality) to generalize.

• Halo Effects (Generalisation. He smiled. Therefore…Halo rely on one attribute, e.g. appearances
of group membership, first impression, to generalize the person has other attributes too which we
associate with the attribute we picked on. Association is based on our own prior experience.)

• Selective Perception (Once a liar, always a liar). This occurs when we isolate certain information
about another person to reinforce our opinion of this person. We will then filter out information that
contradicts our view. Selective perception reinforces stereotypes and halo effects.

• Projection (I am frustrated, you must be too). Occurs when we project our own characteristics or
feelings on the other person. We assume the other person will feel or respond the same way.

Recharge Point Next

 Recharge point

Cognition – Framing Next

Read the following at normal speed. Do not skim or skip.
A newspaper is better than a magazine. A seashore is a better place than the
street. At first, it is better to run than to walk. You may have to try it several
times. It takes some skill but it is easy to learn. Even young children can enjoy
it. Once successful, complications are minimal. Birds seldom get too close.
Rain, however, soaks in very fast. Too many people doing the same thing can
cause problems. One needs lots of space. If there are no complications, it can
be very peaceful. A rock will serve as an anchor. If things break loose from it,
you will not get a second chance.
(Source: On Being Certain: Believing You are Right When You’re Not. Robert Burton, MD)

Is this a disjointed paragraph?

 Now, think of a kite. Visualise a kite and read the paragraph again.
Read the following at normal speed. Do not skim or skip.
A newspaper is better than a magazine. A seashore is a better place than the street. At first,
it is better to run than to walk. You may have to try it several times. It takes some skill but it
is easy to learn. Even young children can enjoy it. Once successful, complications are
minimal. Birds seldom get too close. Rain, however, soaks in very fast. Too many people
doing the same thing can cause problems. One needs lots of space. If there are no
complications, it can be very peaceful. A rock will serve as an anchor. If things break loose
from it, you will not get a second chance. (Source: On Being Certain: Believing You are
Right When You’re Not. Robert Burton, MD)
Is this still a disjointed paragraph? Once context properly provided, information
appears more coherent and relevant. But in negotiation, we may carelessly ignore or
discount information just because it may not appear relevant to us at that point.
 Cognition - Framing
• Cognition is about how a negotiator processes
information in order to make decisions about
strategy and tactics.

• A frame is a subjective mechanism used to evaluate

and make sense of a given situation. Framing helps a
Photo by Food Photographer David Fedulov on Unsplash person define the situation in terms that make
sense to him. He will see the situation through the
frame adopted.
 Cognition - Framing

• People frame people, events and processes

DIFFERENTLY because of their diff. background,
experiences, expectations and needs. 1.An extrovert
sees a great party. An introvert sees a scary,
intimidating crowd. 2. Some rich people who were
poor before always feel poor and a strong need to
acquire riches.
Photo by Food Photographer David Fedulov on Unsplash

• Different frames evoke different cognitive and

emotional response.
 Extra notes
• How parties frame and define an issue is a clear and strong reflection of what
they think is impt, e.g. their expectations, preferences, procedures they use to
argue;
• Frames allow parties to begin to develop a shared common definition of the
issues and a process to resolve them.
• Negotiators can use more than 1 frame. Can use interests, rights, power
frames.
• Frames emerge and converge as parties talk more about their preferences and
priorities.
• Expert negotiators understand the dynamics to control the framing
process.
Extra notes: THE ABILITY TO FRAME ISSUES CORRECTLY
AND TO REFRAME IS CRITICAL

Reframing can take place as more information

and better communication takes place.

CONTROL THE FORMULATION OF THE RIGHT FRAME

Mismatch of frames between negotiators will generate conflict and
lead to misunderstanding or even stalemate.

Some frames will lead to more integrative approaches

and some tend to lead to more distributive approaches.
 Read details in the Study Guide: 7 Types of Frames

3. Aspiration
2. Outcome
1. Substantive Broader set of interests and
Specific Outcome. Can lead
Key Issue of conflict. needs. Integrative
to distributive outcomes.
outcomes.

4. Process 5. Identity 666. Characterisation

How the negotiation How to distinguish self Defining the other parties.

should be managed. from others. Shaped by past

experiences.

7. Loss-Gain
VIEW TRANSACTION IN
Risk or reward of outcomes.
 Extra Notes: A negotiator may use different types of frames when framing the dispute.
• A negotiator who adopts a substantive frame see the negotiation in terms of what the conflict is about. Has
a particular disposition of key issues in negotiation.
• If a negotiator’s predisposition is about getting a specific outcome, he will likely adopt an outcome frame. A
negotiator with a strong outcome frame will emphasize on self-interest and be less concerned for the other
party. A negotiator using an outcome frame is more likely to engage in distributive win-lose negotiations. Get
the outcomes at all costs!
• A negotiator who adopts a process frame is more concerned about how the parties go about resolving or
managing their disputes. Less concern about issues.
• Aspiration frame used by integrative negotiators. Pre-disposed to satisfy broader set of interests/needs
for a bigger win-win.
• Identity frames. Distinguish themselves from others. I am a land owner.
• Characterisation frame. How party define other parties. Shaped by past experiences.
• Loss-gain, risk or reward frame. How parties define risk/reward associated with certain outcomes. E.g.
Buyer can view transaction in loss terms (costs of purchase) or in gain terms (value of item).
EXTRA NOTES: Recap. ABILITY TO FRAME ISSUES CORRECTLY AND
TO REFRAME IS CRITICAL

Reframing can take place as more information and better communication takes place.

CONTROL THE FORMULATION OF THE RIGHT FRAME

Mismatch of frames between negotiators will generate conflict and lead to misunderstanding
or even stalemate. Some frames will lead to more integrative approaches and some tend to
lead to more distributive approaches.
• Example. Aspiration frame can lead to integrative agreements.
• Example. If there is a strong preference for certain specific outcomes, it may lead to
more conflict and distributive outcomes or no agreement.
Extra Notes: HOW FRAMES WORK
Negotiators can use more than 1 frame.

1st Example of 2. Land developer discussing golf course conflict can use the
following:
-Golf course (substantive frame);
-Preferences on how land should be used (outcome);
-How much input farmers can have determining what happens to his property (procedural);
-Does he view them favourably? (characterisation frame).

Different frames lead to very different discussions between negotiating parties as

the way you approach a problem also influences how the other party
responds.
Extra Notes: HOW FRAMES WORK
Chinese people use relational bargaining frame.
They solicit support of powerful people to endorse legitimacy.

• WHY? Chinese people view people in context of larger groups.

• Peaceful co-existence is valued.

• They abide by roles in relationship network.

• Give face. Ensures fulfillment of obligations.

 Class Activity How to frame this?
Framing
A land developer wants to tear down a row of 1930s Peranakan
shop-houses and build a 20-storey building. A major anchor tenant
is expected to be a KTV and casino operator.

1. Based on a substantive frame, what is the issue?

2. What other frames are relevant, when the land developer is

negotiating with:
- owners of these shop-houses who want a higher price;
- his architect;
Photo by Amos Lee on Unsplash
- heritage conservation groups; and
- families living in the neighbourhood?
 Class 1. Substantive Framing: Tearing down old shophouses and building mega
Activity building i.e. (issue: redevelopment) – he is a land developer, after all.
2. Owners of Shophouses: Loss-Gain Frame as the more payment the owners
want, the less profit to the developer. Process framing – how do we go about
discussing amount of compensation payable to shop house owners – legal
process, land valuation, bank financing, relocation etc…
3. Architect: Outcome Frame – what will the mega building look like, how to
design to accommodate a KTV and casino operator.
4. Heritage conservation groups: These groups will adopt “Identity”
Frameand see themselves as a social grouping promoting preservation of
culture
5. Families in the neighbourhood: The families will adopt “characterization”
frame (how you see the other party) and see the developer as merely
interested in commerciality.
Photo by Amos Lee on Unsplash
 Class Activity
How to frame this?

If you are an owner of one of these shop-houses who is

negotiating with the developer for a price.
Another way of framing issues

Interests

Rights

Power
Photo by Amos Lee on Unsplash
 EXTRA NOTES: ANOTHER APPROACH TO FRAMING. If Conflict, you can use IRP Frame
• Interests. Know the interests of the other party.
• Rights. Negotiator may be concerned over who is right, correct or what is fair? Negotiators
may take turns to give in.
• Power. Negotiators using this frame assesses who is the stronger negotiating party. This
stronger party can then impose extra costs, expertise, or legitimate authority over the other
party.
• Parties have a CHOICE how they choose to approach negotiations in terms of IRP.
• RECAP. Different frames lead to very different discussion between parties as the way you
approach a problem likely influences how the other party responds.
Framing the interests in terms of :
• Interest: To understand why the developer is offering the compensation as they stand.
• Rights: To understand the objective criteria for setting compensation (tenure of land – leasehold or
freehold, development charges etc).
• Power: To threaten compensation proceedings/actions.
Class Activity How to frame this?

You went to the car repair shop to fix some problems with the engine.
You were shocked when you received a bill for $6,500.

How can you frame the issue regarding the repair cost?

Interests

Rights

Power
Photo by Amos Lee on Unsplash
 Framing the interests in terms of :
• Interest : To understand why the repair shop is charging this amount. I will
go back again. You have the right to charge me a fair price for good work. I
pay!

• Rights : To understand the objective criteria for costing the repair (engine
part price, etc). I know they use hours worked to charge.

• Power : To threaten to complain to consumer body eg CASE. I tell my

friends. I ask lawyer for help.
 Recharge point

Next, Cognition Biases

 Actual Research conducted on 2 groups.

Group 1 was asked these questions: Group 2 was asked these questions:

Q1. Is the height of the tallest redwood Q1. Is the height of the tallest redwood
tree more or less than 1,200 ft? tree more or less than 180 ft?

Q2. How tall is the tallest redwood tree? Q2. How tall is the tallest redwood tree?

Their average answer for Q2: 844 Their average answer for Q2: 282
ft. ft.

WHY? Learning?
 Extra notes

Learning? Common cognitive bias : Anchoring.

Parties become anchored to the opening positions & the
range revolves around the anchor.

This is why we spend much time

refining and discussing our opening positions before going into negotiations.

Q. Would you be the first to open negotiations with a price or

would you wait for the other party to open negotiations with a price?
 Anchoring READ STUDY GUIDE: Cognitive Biases
Irrational and
escalation of adjustment
commitment
When processing information, a
Myth that all
issues are Law of negotiator may make a systemic
fixed-pie small
numbers error.
Availability
of Endowment
information effect
In other words, the “processor”
Self-
Over- serving
confidence biases
is not perfect and has a
Tendency to tendency to make the same
Winner’s ignore
curse others’
cognitions
error.
Framing of Reactive
issue and devaluatio
problem n
These errors are collectively
labeled cognitive biases.
 Class
Activity Examples of cognitive bias in such a situation?
Squeeze developer as it is a gain for me! If you are an owner of one of these shop-houses who is
negotiating with the developer for a price.

Irrational Anchoring and

escalation of adjustment
commitment
Myth that all
issues are Law of small
fixed-pie numbers
Availability of Endowment
information effect
Over- Self-serving
confidence biases
Tendency to
Winner’s
ignore others’
curse
cognitions
Framing of
Photo by Amos Lee on Unsplash
issue and Reactive
problem devaluation
 Class Activity
What may be some examples of cognitive bias in such a situation?

If you are an owner of one of these shop-houses who is

negotiating with the developer for a price.

Every cent I can squeeze out of

the developer is a gain for me !

Myth that
all issues I dealt with a
are fixed- Law of developer once
small
pie
numbers before – they only
care about
money, never
I shouldn’t have about culture!
made the first move Winner’s
– the developer just curse
agreed to my asking
Photo by Amos Lee on Unsplash
price without
bargaining. It must
be too low.
Next, Emotions
 Emotion and Its Role.

• Flexible in problem-solving.

• Likely to use integrative approaches. More concession-making and

trust building. Higher chances of settlement.

• Want to negotiate again.

• Likely to use competitive approaches. Increase risk of retaliation

and conflict escalation.

• Less satisfaction.

• Adverse to negotiation.

At times, positive emotions may lead to negative outcomes.

 What is Communicated during negotiation?

• Should you communicate your BATNA? How to do it effectively?

• Be careful about communicating information about outcome,

especially if you are going to negotiate again.

• Social accounts such as mitigating, exonerating or reframing

circumstances to the other side to manage outcome.

• Communicate about the negotiation process itself to build

rapport or ease tension.
 What is Communicated during negotiation?

At its core, negotiation is a form of interpersonal communication.

Many messages are being communicated during the entire

negotiation process.

Messages that convey a negotiator’s

❑ Offers, Counter- offer,
offers, Motives
❑ Alternatives counter-offer
❑ Outcomes and motives are the most important.
❑ Social Accounts
❑ Negotiation Process
 What is Communicated during negotiation?
RECAP. At its core, negotiation is a form of interpersonal communication.
Many messages are being communicated during the entire negotiation
process.

• Be careful about communicating information about outcome,

especially if you are going to negotiate again.

❑ Offers, Counter-
offers, Motives • Social accounts. Such as mitigating, exonerating or reframing
❑ Alternatives
circumstances to the other side to manage outcome.
❑ Outcomes
❑ Social Accounts
❑ Negotiation
Process • Communicate about the negotiation process itself to build rapport or
ease tension. SMILE. NODD. REINFORCE.
EXTRA NOTES. Textbook. Table 7.1 What is Communicated During
Negotiations?

Category of Communications and WHY IT IS IMPT.?

• +Offers and counter-offers convey negotiator’s motives and preferences. They

influence the actions of the other party.

• +Information about alternatives. Strong alternatives confer a strategic advantage, but

only if the other party is aware of those alternatives.
 What is Communicated during negotiation?
• Should you communicate your BATNA? How to do it effectively? Negotiate only as
long as there is a chance of an agreement that is better than your BATNA and the
other party’s;

• Calculate your BATNA accurately. Do not guess.

• Use BATNA discussions as an opportunity to learn more about interests and

brainstorm options. Find out other party’s BATNA. Do homework and test it. Are they
over-estimating?

• Disclose your BATNA if your BATNA is stronger or better than the other party.
• Avoid threats and beware of risks of playing “chicken”.
 5-10 minutes Class Activity.

Looks like you’re going to land that job at Amazon! You are at the meeting with
Amazon’s HR Director and he’s just asked you : “ What is your current salary?
What is your salary expectation? ”

• Your current salary : $42,000 per year

• You decide you will not accept anything lower than $36,000 per year.

What will you tell him?

Image: Flaticon.com
 Class Activity

To Tell or
Not to tell ? ❑ Yes
❑ No

What will you tell him?

Image: Flaticon.com
 Class Activity Do not tell? Linkedin Article : Why you shouldn't
disclose your current salary when looking for a
new job?

To Tell or ❑ Yes This question offers no benefit to the potential

Not to tell ? ❑ No employee except to make him/her look like a
cooperative person.
Employers also do no need to know the answer
What will you tell him? as they already have a salary scale for the job.

Glassdoor Article: 9 Things to Never Say in a Salary Negotiation

Answering this question by disclosing numbers can make it very
difficult to negotiate effectively later on because it can box the
candidate in. Once they disclose current or desired salary, the
Image: Flaticon.com
offers they get are very likely to be tied to those numbers.
Class Activity CNA Commentary: Employers who lowball jobseekers based on last-drawn
salaries are shooting themselves in the foot

To Tell or ❑ Yes MOM: Josephine Teo said in Parliament on June 4, 2021 that
Not to tell ? ❑ No there are no rules stating that jobseekers must declare
their last-drawn salaries. in reality, while there are no such
rules, about 95 per cent of employers, local and
What will you tell him? international firms, routinely ask for candidates’ last-drawn
salaries

https://www.channelnewsasia.com/commentary/employers-ask-past-last-drawn-salary-how-to-deal-job-
application-722921

https://www.linkedin.com/pulse/why-you-shouldnt-disclose-your-current-salary-when-looking-barker
LinkedIn Article : Some US states have in fact passed laws prohibiting employer from questioning about
salary history. The theory is that this type of question reinforces pay inequalities

https://www.glassdoor.com/blog/9-things-to-never-say-in-a-salary-negotiation/
Image: Flaticon.com
Class Activity What is your BATNA?

Image: Flaticon.com

• Your current annual salary is $42K ($3.5K/mth).

• Amazon now makes you an offer at $54K ($4.5K) wants you to start work on 3 Jan
next year. (KIV: This exercise is to help students work out a BATNA.

Q: Is Amazon’s offer of $54K better than the student’s BATNA?

• Your existing employer just announced a special year end bonus for all employees – 3 months’
bonus to be paid with the January salary next year! The bonus will not be pro-rated so anyone
who leaves the company or serves notice any time before 31 Jan next year is not entitled.
• Your supervisor has informed you that she is very happy with your performance so far and will put
you up for consideration to be promoted to senior executive. There will only be two candidates
for promotion so you have a 50% chance. If promoted, you will get a monthly increment of
$400 starting from Jan next year. Should this chance be included in your BATNA?
Class Activity What is your BATNA?

• Calculation of BATNA is not an exact science and sometimes there is

BATNA ~ Salary if
no magic formula. It is to provide some indication of when to exit a
remain with
negotiation. Existing employer

• Amazon’s offer is worse. The bonus can be considered as having $42,000 (Current
Salary ) + $10,500
already been earned because it is for performance in the current year.
(Earned Bonus)
The timing of payment is merely a mechanism for employers to = $52,500 (i.e., $4,375
per month)
stabilise headcount. It should therefore be included.
• For chance of promotion – more confident candidates can include Add 50% chance of
a 50% chance (i.e. adding $200 to current salary). Adding the bonus (3 promotion = $4,375 +
$200 = $4,575
months) and $200 probable monthly increment will give a BATNA of
$54,900 (i.e. $4,575/mth)
 2. Non-verbal is important.
Example: Is it difficult to say “No”? NO .
Refusals
Indonesia : An Indonesian’s preoccupation
Japan: As indirect communicators, Japanese people
often avoid direct refusals or negative responses.
with saving face and politeness can

When refusing, they may show hesitation before replying mean that they will be reluctant to give a
with an ambiguous response. E.g., a Japanese person flat “no” or negative response, even
may respond to a request with “Kento-shimasu” meaning ‘I when they do not agree with you.
will consider it’, even if he does not intend to consider Focus on hints of hesitation. Listen closely
the proposal. to what they say, but also pay careful
This website offers very comprehensive cultural tips. attention to what they don’t say and
Under the tab “Communication” – there are very useful
information regarding verbal and non-verbal
double check understandings to clarify
communication. Instructors can select the country they meaning
wish to explore with students to access and discuss the
information provided. Source : https://culturalatlas.sbs.com.au/
 How people Communicate?

• Language operates at two levels during negotiation:

o Logical level – What is said and heard?

o Pragmatic level – How it is said and received?

Communication during negotiation is frequently a

combination of both. Not just what is said and how it is said
but also how the message is perceived.

• Non-verbal acts or cues or attending behaviour used to connect

with the other party. E.g., make eye contact, adjust body position,
or non-verbal encouragement or discouragement.
❑ Characteristics of Language
• When choosing channels – the key variable is social bandwidth
❑ Non-Verbal Communication
– i.e. the ability to convey subtle social and relational cues, from
❑ Selection of Channel
sender to receiver, beyond the literal text of the message itself.
 Extra Notes: People negotiate through a variety of communication media.

• Phone Writing. Email. Instant messaging. Text messaging.

• There is evidence that negotiation through written channels is more likely to

end in impasse than negotiation that occurs face to face or by phone.

• Negotiators using email need to work harder to build rapport.

Above from the textbook.

 New Topic: 3 Ways to Improve Communication

Use of Questions Listening Role Reversal

• Ask good questions. • Passive listening. • Assume the other party’s

• Use of manageable and • Acknowledgment. position.
unmanageable • Active listening. • Actively argue for the
questions. other party.
• Avoid breakdown or
impasse.
 Ask good questions.

You are working on a group project with Wei and

three others. So far, Wei has been late with his
deliverables and it has caused some delay. You ???
need him to complete his portion of the project by
this Friday so that your group will not miss the
submission deadline.

You want to know if Wei can meet his deadline by

this Friday.

How would you ask him about this?

• Closed Questions. “Will you get finish your portion of the project by this
Friday?” is a most direct question to ask. However, this is a closed question
because is only a “yes” or “no” response. It does not acknowledge your
concern or even Wei’s contribution or effort. It may make things worse if Wei
decides to say “maybe” or “I’ll try my best” or something along those lines.

• Open Questions that will help address their concern about Wei delivering on
time. For e.g. “What do you need to meet the deadline by this Friday?” This
is open question. It asks for more information and is even offering assistance
and support. It asks for more than a one-word reply — it seeks valuable input. If
Wei has been late with his deliverables. This is a fact which can be
communicated. To set the context. What is important is to avoid passing
judgment.
 You Have Achieved!

Discipline Always Brings Results!