A632.4.5.RB - Deception in Negotiations

During the course of negotiations, people often misrepresent information to gain at least a temporary advantage. For example, a seller may fabricate existence of another interested buyer or a buyer may misrepresent the price and availability of an item from a different vendor. Reflect on deceptions in negotiations and describe four ways to evaluate information during negotiations. Relate an example of a recent negotiation in which you have been misled and one in which you may have overstated a claim.; define how far you would be willing to go to leverage your position.

Negotiation (similar to argumentation) comes into play when managers leaders need to influence those who actively disagree with them, e.g., new ideas, projects, processes, practices etc. The focus of argumentation is to create a foundation of superiority of one position over another, however, the focus of negotiation is to reach a conclusion that is acceptable to both sides. Negotiation process includes closed-loop communication to reach a decision when most people are in disagreement. A combination of both compatible and incompatible interests marks negotiation scenarios. Negotiators must have some common goal or they would not be negotiating. At least one or more issues must separate them or they wouldn't need to negotiate to reach a mutual agreement. For example, everyone (students) working in MSLD 632 class project group team probably wants a good grade of an A. However, some group members could prefer to spend their time relaxing or studying for other classes instead of meeting with the group or gathering documenting research. The amount of work each member does for the group then becomes a matter for negotiation. This negotiation process was documented on our group charter this week (Hackman and Johnson, 2013).

There are two negotiation climates: 1. cooperation, and 2. competition. There are huge differences between cooperative and competitive negotiation climates. Cooperation includes: open and honest communication, an emphasis on similarities, trusting with friendly attitudes, mutual problem solving and reduction of conflicting interests. Competition includes: very little communication with messages usually negative and misleading, an emphasis on differences, suspicion, hostility, one party wins over the other and escalation of conflict with negative emotions (Hackman and Johnson, 2013).  

The classical view, win-lose negotiating, suggests negotiations are frequently a form of a zero-sum game, i.e., whatever extent one party wins something, the other party loses. This is also known as distributive negotiating as resources are divided. Unfortunately, win-lose negotiations are common at many organizations. For example, it characterizes most bargaining involving material goods, such as the procurement of supplies or manufacturing raw materials. Win-lose negotiating can be seen at colleges and universities where each college attempts to negotiate the best operating budget for itself usually at the expense of other colleges (Ivancevich, Konopaske,  and Matteson, 2014).  

Win-win, or integrative, negotiating brings a different focus and perspective to the process. Unlike the zero-sum orientation in win-lose, win-win negotiating is a positive-sum approach which is where each party gains without a corresponding loss for the other party. This doesn't mean that everyone gets what they want which does not usually occur. It means that a mutual agreement has been achieved that leaves both parties better off than they were before the agreement. In order for conflict to be converted into a win-win situation, leaders managers need to accept the idea that conflict is useful and empower employees to actively engage in it. The win-win approach can be summarized by stating, "I want a solution which achieves your goals and my goals and is acceptable to both of us" (Ivancevich, Konopaske,  and Matteson, 2014). 

People are generally more comfortable telling lies of omission by not revealing information than lies of commission by actively misrepresenting information. Negotiators can misrepresent their interests and intentions: reservation prices, interests, intentions and material facts. Lies can also be told about oneself, about the target, about another person or about an object or event. Lies can also be a primary motivation to promote one's own interests or promote someone else's interest. Some lies can actually facilitate the communication process. During the negotiation process it is important to: establish trust, shift the frame, ask direct questions, listen carefully, pay attention to nonverbal cues, keep records and get things in writing (Hoch and Kunreuther, 2001).

I can improve my negotiation skills by becoming more aware of the styles and tactics of the other parties in negotiations. Most people, including myself are not very good at detecting deception and the best defense is to reduce the likelihood that people will use deception by developing trust and assurances to others that I will not use deception. E-mail and other information technologies can be used also to facilitate a less emotional approach, e.g.,  face-to-face confrontations etc.

References

Hackman, Michael Z. and Johnson, Craig E. (2013). Leadership: A Communication Perspective

(6th ed.). Long Grove, IL: Waveland Press, Inc.                               

Hoch, Stephen J., and Kunreuther, Howard C. (2001). Wharton on Making Decisions. Hoboken, New Jersey: John Wiley & Sons, Inc.

Ivancevich, John M., Konopaske, Robert, and Matteson, Michael T. (2014). Organizational Behavior & Management (10th ed.). New York, NY: McGraw-Hill.  

A632.3.4.RB - Reflections on Decision Making

Shoemaker and Russo discussed the hazards associated with "frame blindness" and how to guard against it.  Discuss three ways you can avoid "framing traps" and provide a detailed example of each from your life experience.  Could you have framed each situation differently? What did the exercise teach you about complex decision-making? What additional tools or "frames" would've helped you through the process? How much "risk" do you feel was in your recommendation? What did you learn about yourself through this exercise? 

According to Shoemaker and Russo (Hoch & Kunreuther, 2001), there are three ways there are three ways to manage frames, "frame blindness" and avoid "framing traps." Shoemaker and Russo state, "Managers can consciously control their frames, rather than to be controlled by them - and even use framing to their advantage." The three techniques are: 1. see the frame by conducting a frame audit, 2. identify and change inadequate frames, and 3. master techniques for reframing.

The first technique, see the frame by conducting a frame audit, includes starting with surfacing an organization's frame(s), understanding the frames of others and developing an appreciation along with continuous improvement (CI) of the new frames. A good tool to use for this is a visual representation, i.e., a picture, because as the philosophy states a picture is worth a thousand words. For example, when I lead and facilitate lean manufacturing kaizen events at work, it is important to include all the process stakeholders who own the process and will be impacted by the decision. Sometimes I do not include all the stakeholders due to oversight. A good visual tool to use is a SIPOC model (suppliers, inputs, process, outputs, customers) and a team charter (stakeholders, goals, objectives, problem statement etc). This also promotes collaboration, teaming, problem-solving and team decision making. The result of all this is that we all understand one another frames better along with a quality decision and outcome. 

The second technique is to identify and change inadequate frames. According to Shoemaker and Russo (Hoch & Kunreuther, 2001), "we must constantly challenge our own frames as to whether it is still effective and if there is a better way." Shoemaker and Russo go on to state that "poor results, surprises, inconsistencies, and difficulties communicating with others are indications of a weak frame." "Consider the possibility that your frame may be wrong or, at least, not perfect!"  (p. 147). Communication skills are probably the most important life skill. This includes, speaking, writing and listening. In the example above, it is so important to have open and closed-loop communication at kaizen events. If people are initially shy or tense about sharing ideas, have an icebreaker activity with introductions. It is also good to stimulate communication and sharing with food, e.g., coffee, donuts, etc. This also helps to develop team cohesiveness and bonding.    

The third technique is to master techniques of reframing. According to Shoemaker and Russo (Hoch & Kunreuther, 2001), "we need to develop the capacity to synthesize and create new frames." "There are several elements to this skill including challenging your frames and those of others, and on having a repertoire of frames to work with." One of the best books I have read and presentations I have seen on dvd is by Joel Barker author of "Paradigms." Barker states that the easy part is new paradigms, however, the hard part is removing the old ones from the mind. Some of Barker's quotes and philosophy include:

·        Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world.

·         When you drop any new idea in the pond of the world, you get a ripple effect. You have to be aware that you will be creating a cascade of change.

·         When most of us hear the phrase, 'survival of the fittest,' we assume it originated with Charles Darwin. It did not. The phrase doesn't exist anywhere in Darwin's first edition of 'Origin of the Species.'

·         Your successful past will block your visions of the future.

·         The past guarantees you nothing in the future if the rules change.
(Joel A. Barker Quotes, 2016)

Frames are related to paradigms and mental models but are less complete and held. However, these philosophies can be applied to reframing and change. Lesson learned is that we need to continually manage our frames to make better decisions.

This exercise taught me that complex issues usually cannot be solved with a single frame or by one person either. It is the responsibility of senior management leadership to develop an organizational culture (vision and operating guidelines principles) that promote collaboration, problem-solving and teaming (robust frames). This is where management differs from leadership. Managers operate within the boundaries existing frames and execute. Leaders engage and empower the organization for new ideas and ways of doing things. Above all, change is constant in today's global economy.

References

Hoch, Stephen J., and Kunreuther, Howard C. (2001). Wharton on Making Decisions. Hoboken, New Jersey: John Wiley & Sons, Inc.

Joel A. Barker Quotes (2016). Retrieved http://www.brainyquote.com/quotes/authors/j/joel_a_barker.html

A632.2.3.RB - Sheena Lyengar How to Make Choosing Easier

We all want customized experiences and products -- but when faced with 700 options, consumers freeze up. With fascinating new research, Sheena Iyengar demonstrated how businesses (and others) can improve the experience of choosing. Identify four of the methodologies Sheena Iyengar suggested as methods of helping us improve our experience in choosing. Discuss the implications of two of these methods in terms of your own decision-making as an individual and a member of an organization. How else can you improve your ability to decide?

Sheena Iyengar states that one of the biggest modern day choosing problems that we have is the choice overload problem. For example, the average American makes about 70 choices per day. The average CEO engages in about 139 tasks per week with each task made up of multiple sub-choices. 50 percent of their decisions are made in about 9 minutes or less. Only about 12 percent of the decisions CEOs made was an hour or more. There are three negative consequences and impacts of offering people more and more choices (choice overload): people are more likely to delay postpone choosing even when it goes against their best self-interests (engagement), they're more likely to make worse choices (decision-making), and they're more likely to choose things that make them less satisfied even when they do objectively better (satisfaction). 

The four methodologies that Sheena Iyengar identified as methods of helping us improve our experience in choosing are: cut, concretization, categorization and condition for complexity.

The first methodology is cut. The common phrase that "less is more" and is so applicable today. The initial reaction when people hear cut is panic. Cut shelf space and the number of options. However, when this is done the benefits are: an increase in sales, lowering of costs and an improvement in the choosing experience. For example, the average grocery store today offers about 45,000 products. Wal-Mart offers about 100,000 products. However, the ninth largest retailer, Aldi, offers only about 1,400 products and one kind of tomato sauce. Cut - eliminate the extraneous alternatives.  

The second methodology is concretization that is in order for people to understand differences between choices, they have to be able to understand the consequences for each choice, and that the consequences need to be felt in a vivid very concrete way. For example, people spend an average of 15 to 30 percent more when they use and ATM card or credit card versus cash. Why? Because it doesn't feel like real money. So making it feel more concrete can actually be a tool to save money. Concretize - make it real.

The third methodology is categorization. People can handle more categories versus choices. For example, at Barnes & Noble there are hundreds of magazines. If we take 600 magazines and divide them up into 10 categories (business, management, travel, history, etc). versus I show you 400 magazines with 20 categories, people will believe that there is more choice and better choosing experience if I gave you the 400 compared to 600. Why? Because the categories will tell them apart. Categorize - we can handle more categories and less choices.

The fourth methodology is the condition for complexity. People can actually handle a lot more information than they think, however, need to take it a little easier. Complexity has to be gradually increased. For example, when buying a new car there can be many different options and choosing (decisions) for each option, e.g., colors, engines, transmissions etc. Lesson learned is start off easy and learn to choose. Other lessons to learn include motivation and engagement. Get involved and active.

For my own decision-making as an individual and a member of an organization, concretization and categorization are applicable. For concretization, I have changed my paradigm of being an impulse buyer purchaser with a credit card with a focus on the reality of money. For a credit card, you can pay me now or later (with interest). This has saved me money too. At work, I make purchasing decisions with the focus that if I were the business owner, would I actually make the purchase? Does it make business sense and is there a business case for it? For categorization, I go to Barnes & Noble all the time especially for magazines including Harvard Business Review and MIT Sloan Management Review. In addition, I browse other categories including history and review World War II magazines. At work, I use affinity charts and diagrams to categorize ideas from kaizen continuous improvement events. This helps to create a visual representation of the ideas along with big picture functional and technical areas (tooling, design engineering, management, plant and facilities etc).

There are several other factors impacting choosing skills and ability, e.g., culture (both national and organizational), nature (genes and heredity), nurture (upbringing), religion, and heuristics (rules of thumb) along with paradigms (mental models and ways of thinking) and biases. Culture can emphasize individualism and or collectivism and can impact choice. Organizational culture focus is on vision and operating principles. Everyone has a brain that works operates differently including the unconscious automatic system and conscious reflective critical thinking system. The best is when they both work together (synergy). Everyone is brought up differently including religion.       

As far as improving my ability to decide, there are several standard process models including SWOT, DMAIC, Dr Deming's PDCA, Hersey-Blanchard Situational Leadership etc that are business industry standards for choosing. I use these techniques and have been very successful too because they are applicable for decision-making. I also have a mentor coach who I work with to share ideas, gain insights and provide direction. I am also a mentor to others (mentees) too.

References

Sheena Iyengar: How to make choosing easier (November 2011). TED Talks. Retrieved http://www.ted.com/talks/sheena_iyengar_choosing_what_to_choose 

A632.1.4.RB - Multistage Decision-Making

Chapter 3 of the Wharton text discussed the power of everyday reasoning in multistage decision-making. The text discussed the way that researchers solve multistage problems through the application of formulas that provide the most significant chance of success. Critically think about your own decision-making process and reflect on the process you use compared to the process outlined in the article. Would this improve your decision-making? What would the impact be on forward planning? How would you apply optimal dynamic decision analysis to predict future impact of today's decision?

Chapter 3 of the Wharton text, Bumbling Geniuses: The Power of Everyday Reasoning in Multistage Decision Making, Hoch and Kunreuth identify several techniques that researchers  use for problem solving and decision making. The first is the accumulation of knowledge in which our knowledge develops and accumulates over time including the ability to gather and research information (data) over time for decision making. The second technique is decision policies to define the general operating principles of the organization including the present to future. Researchers can use math based algorithms and formulas known as dynamic programming which is a multistage process for solving multistage decision problems. Dynamic programming is a powerful tool, however not all multistage decision problems can be solved using this. The main advantage of the application of algorithms and formulas is to provide the most significant chance of success and opportunity. Many successful organizations including Boeing and Lockheed Martin use the math formulas for strategic planning and decision making for new product developments, launches and strategy. The people that do this are degreed and trained in areas such as operations research, industrial and systems engineering and business administration, math and statistics. The end result is complete forward planning "When maximizing total utility over a horizon, decision makers are assumed to look ahead to all future periods and anticipate all possible choices and outcomes" (p. 44).  This is a good process to use at an organization level, however, most people do not have the knowledge, skill or ability at an individual level. In addition, most people don't plan more than one step beyond a current decision.         

I am a critical thinker for decision making because I am "actively learning and seeking out information" (p. 48) for problem solving and decision making (optimal learning). Optimal learning states, "Decision makers are assumed to fully utilize past information to update both current beliefs and future predictions" (p. 44). For example, in my position as an industrial engineer at Boeing, I use standard research based models including DMAIC and Deming's PDCA. DMAIC is a lean six sigma tool and process and refers to a facts and data-driven improvement cycle used for improving, optimizing and stabilizing business processes and designs (define, measure, analyze, improve and control). PDCA was developed by Dr. W. Edwards Deming, considered to be the founder and father of modern quality control. PDCA is a  four-step management method used in business for the control and continuous improvement of processes and products. To effectively use these tools, a problem statement along with goals objectives (and metrics) are needed for success. Data mining and simulation models are usually included with DMAIC and PDCA. In addition, I use SEE-I process for a method of clarification and understanding. It stands for State, Elaborate, Exemplify, and Illustrate. The decision making process varies depending on the organization, individual, complexity and impact of the issue. 

From a critical thinking perspective, some of the dangerous common biases and traps that could impact my decisions include: overconfidence, anchoring, groupthink, egocentrism, sunk cost and status quo. In overconfidence, I sometimes overestimate my skill level compared to others. Anchoring includes too much focus on a first vale and getting bogged down in the details with it. Groupthink focuses on consensus at the cost of potential courses of action. Egocentrism focuses too much on my point of view compared to how others will be impacted. I pay too much attention to historical costs and not the future. I prefer the current way of doing thing and not enough focus on change and the future aka status quo. So I need to focus on keeping an open mind and attitude along with awareness of  biases and paradigms that could impact my problem solving and decision making. These can impact myopia, i.e., nearsightedness and narrow-mindedness. In addition, heuristics which is any approach to problem solving, learning or discovery that uses a practical method or process for immediate goals, i.e., rule of thumb, educated guess, intuitive judgment and common sense.

References


Hoch, Stephen J., and Kunreuther, Howard C. (2001). Wharton on Making Decisions. Hoboken, New Jersey: John Wiley & Sons, Inc.