NEGOTIATION STRATEGY

Three Keys to Navigating Multiparty Negotiations

Group negotiations offer many opportunities to create value—if you can manage their greater complexity.
BY ELIZABETH A. MANNIX

M ULTIPARTY NEGOTIATIONS —in which more than two people

are bargaining on behalf of themselves or others—cre-
ate many opportunities to generate value. As the number of
For any multiparty negotiation, begin your matrix by
listing the names of the negotiation parties (including
yourself) in rows. When the VP for legal affairs showed up
people at the table increases, so does the potential to make unexpectedly, Jesse added him to the matrix. Next, list the
wise tradeoffs across multiple issues. But group negotia- negotiation issues as columns. Jesse knew that length of
tions are also highly complex. Three or more individuals training, content, and in-house training versus outsourc-
may have more difficulty integrating and maximizing their ing would be major issues. But during the negotiation, the
interests than a pair of negotiators would. sales VP argued that training should take place on week-
Consider the situation faced by Jesse, the human ends, and the legal VP expressed his view that after the
resources VP for a consumer products firm, who joined a training program the data should be destroyed. Jesse sim-
task force responsible for creating a new leadership devel- ply added these issues to her matrix.
opment and functional training program. The task force, Next, prioritize issues for each party at the table. Before the
which included VPs representing finance, sales, market- negotiation begins, rank the issues of importance to you and
ing, IT, and production, was charged with setting the con- then estimate how each negotiator would rank them. Jesse
tent, sourcing, and length of the training program. cared most about the content of the training program, fol-
Jesse had certain goals for the training program, and she lowed by keeping it in-house, and, finally, program length.
knew that the other VPs would have priorities of their own. She estimated how others would rank these and other issues.
Clearly, substantial negotiation would be needed to reach Finally, assign points to each issue to create a payoff sys-
agreement. What bargaining process would optimize out- tem that will help you make comparisons across issues.
comes for each individual and for the company as a whole? Jesse decided that content was worth 200 points to her,
Most negotiation advice focuses on dyads, or one-on-one keeping it in-house 100 points, and program length 75
bargaining. When more than two people are negotiating, spe- points. You can also allocate points for different levels
cial guidance is needed. In particular, negotiators in a group within each issue. Jesse allocated 200 points for entirely
must devote greater attention to managing (1) information, managerial content, 50 points for entirely functional con-
(2) alliances, and (3) decision rules. Using Jesse’s negotiation tent, and 150 points if the content was both managerial and
as a model, I’ll show you how to use the latest research in these functional. Jesse also estimated how other players would
areas to improve group negotiations in your workplace. weight issues. When unsure of how many points to assign,
she waited until during the negotiation to do so.
1. Managing information One temptation in a multiparty negotiation is to impose
In a multiparty negotiation, you need to manage the myriad a strict agenda in which issues are discussed sequentially.
information coming from each party and integrate it with Agendas are commonly viewed as a useful tool for setting
your own interests. To manage this complexity, create a pay- the boundaries and timing of a meeting. But professors
off matrix of parties and interests before talks begin. During Max Bazerman of Harvard Business School and Leigh
the actual bargaining session, you can update the matrix on Thompson of Northwestern’s Kellogg School of Manage-
a computerized spreadsheet. The table on the next page ment and I found that groups that considered issues simul-
shows what Jesse’s matrix looked like before her meeting. taneously rather than sequentially reached more optimal
Using such a spreadsheet may initially seem cumber- agreements of higher total value. If Jesse’s group consid-
some. Once they try it, however, my negotiation students ered length, timing, and content of the training program at
find it to be a valuable tool for managing a continual flow once, beneficial tradeoffs would become apparent. The
of information. Indeed, the strength of real-time analysis sales VP might overcome his adamant opposition to a five-
has been demonstrated by researchers such as Howard day workweek training program if the group agreed to
Raiffa of Harvard Business School and Kathleen Eisen- hold shorter weekday sessions that included both func-
hardt of Stanford University. tional and managerial content.

Copyright © 2006 by Harvard Business School Publishing Corporation. All rights reserved. 3
Navigating Multiparty Negotiations (continued)
2. Managing alliances not have to work together in the future.
A tendency in multiparty negotiations, especially among My research also shows that groups that begin with an
low-power parties, is to look for alliances in the hope of overall goal of working together to reach the most optimal
protecting oneself from being overlooked. Jesse might be agreement for everyone are more likely to reach an inclu-
tempted to form an alliance with the finance, IT, and pro- sive final decision and to distribute as many resources as
duction VPs, all of whom, like her, favor a five-day work- possible. Groups that begin by talking together rather than
week training program. caucusing are more likely to avoid forming exclusionary
Such a move could result in severe consequences. coalitions. In addition, groups that acknowledge fairness
Alliances tend to be unstable and often lead to agreements and entitlement rules, such as the principles of equity,
that are destructive to the overall group or organization. equality, and need, are also more likely to include everyone
Because coalitions allow some group members to force in the final outcome.
their preferences on others, they promote inefficient solu- To obtain the best agreement for all, begin your meeting
tions and a competitive atmosphere that can harm future by focusing on what unites the group: your primary goal.
negotiations. In my own research, I’ve found that a large In Jesse’s case, she should stress the goal of maximizing the
power imbalance motivates players to form counterpro- leadership and promotion potential of the firm’s young
ductive coalitions and that competitiveness and coalition employees. She also should emphasize long-term con-
formation increase when group members know they will cerns, cooperation rather than competition, and group

JESSE’S PAYOFF MATRIX

Negotiation Issues

Prenegotiation Added during talks

Parties Content Sourcing Length Timing Data retention

HR (Jesse) Functional 50 All in-house 100 2 days 15 Weekdays Keep data

Managerial 200 50/50 75 3 days 35 Weekends Destroy data
Mix 150 All outsourced 0 5 days 75

Finance Functional 200 All in-house 25 2 days 0 Weekdays Keep data

Managerial 0 50/50 100 3 days 25 Weekends Destroy data
Mix 100 All outsourced 150 5 days 75

Sales Functional 100 All in-house 25 2 days 200 Weekdays 0 Keep data
Managerial 50 50/50 50 3 days 100 Weekends 75 Destroy data
Mix 150 All outsourced 5 days 0

Marketing Functional 100 All in-house 2 days Weekdays Keep data

Managerial 200 50/50 3 days Weekends Destroy data
Mix 150 All outsourced 5 days

IT Functional 0 All in-house 0 2 days 15 Weekdays Keep data

Managerial 150 50/50 75 3 days 25 Weekends Destroy data
Mix 100 All outsourced 200 5 days 50

Production Functional All in-house 2 days 50 Weekdays Keep data

Managerial 50/50 3 days 100 Weekends Destroy data
Mix All outsourced 5 days 200

Legal Functional All in-house 2 days Weekdays Keep data 0

Managerial 50/50 3 days Weekends Destroy data 200
Mix All outsourced 5 days

Bold: VP’s highest priority Underlined: VP’s second-highest priority Italicized: VP’s lowest priority
Plain text: Unknown priority Gray: Added during the negotiation

4 Negotiation February 2006

Navigating Multiparty Negotiations (continued)
discussions rather than caucuses. Whenever one member ENHANCING YOUR POWER IN
raises his constituency’s needs, these should be integrated MULTIPARTY NEGOTIATION
with the needs and interests of other group members.
The presence of multiple players and issues creates
3. Managing decision rules special opportunities to enhance your own power,
When more than two parties negotiate, they must agree on including:
a decision rule—a formal method of determining the final 1. Preparing a payoff matrix. Preparation is a
outcome. Majority rule and unanimity are the most com- source of power in any negotiation. In particular,
mon methods of social choice in Western society. it’s hard to be adequately prepared for a multi-
Yet Max Bazerman, Leigh Thompson, and I have found party, multi-issue negotiation without a payoff
majority rule to be a problematic decision rule in multi- matrix. While creating a matrix takes time, it will
party, multi-issue negotiations. First, majority rule fails to give you leverage over opponents who have not
recognize the strengths of individual preferences; the vote planned ahead.
of someone who cares very much about an issue carries the 2. Listening to complete the matrix. No matter
same weight as the vote of someone whose opinion on that how well you prepare, there’s always new infor-
issue is much weaker. In addition, majority rule can mask mation to obtain during the negotiation. Listen-
opportunities for group members to discover one ing closely is especially important when you have
another’s priorities, thereby preventing tradeoffs across numerous parties at the table. Absorbing what
issues. Finally, majority rule may exclude entirely the others say will help you complete your payoff
desires of some participants from the final decision. These matrix and understand possible alliances or
individuals are likely to be less committed to the final tradeoffs that may emerge.
agreement. If the sales VP in Jesse’s negotiation were
3. An overarching goal. Your power will be
excluded from the decision on training-program length,
enhanced if you bridge the interests of all parties
for instance, the sales team might fail to show up for the
by focusing on a single, superordinate goal. This
training. It’s not unusual for subgroups to defect from the
can be an exceptionally difficult task as the num-
agreement after the fact.
ber of parties to a negotiation increases. Yet just
In our research, groups instructed to reach a unanimous
as organizations with strong cultures use shared
agreement achieved more integrative outcomes of higher
values to bring them together, so can a group of
overall gain than did groups using majority rule. Groups
negotiators.
using unanimous rule also distributed resources more equally
than did groups operating under majority rule, which may
have prompted greater satisfaction with and commitment to none of the strategies I’ve outlined is easy, together they are
the agreement, as well as stronger future relationships. likely to inspire creative, lasting agreements. ✧
Of course, groups are not always able to reach unanimous
agreements. Without a fallback decision rule, they can risk Elizabeth A. Mannix is a professor of management and organizations at
becoming deadlocked. Rather than opting for simple major- the Johnson Graduate School of Management and director of the
ity rule, groups may be better off striving for consensus, such Institute for the Social Sciences at Cornell University. Her research
as a two-thirds majority with no strong dissenters. and teaching focuses on negotiation in teams; the performance of
diverse groups, coalitions, and alliances; and knowledge sharing in
Successful multiparty negotiation requires a great deal
teams. She can be reached at negotiation@hbsp.harvard.edu.
of preparation, as well as hard work at the table. While

Negotiation February 2006 5