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With over twenty-five years of proven industry experience, the Negotiations Training Institute of America is the recognized leader in negotiations training, consulting and performance coaching. Through public open enrollment courses and private on-session training sessions, we have helped leading corporations, non-profit organizations and governmental agencies improve their ability to negotiate betteroutcomes for their constituencies. First-time negotiators as well as those with the greatest competitive drive and amount of first-hand experience and negotiations wisdom can benefit from our time-tested courses. Whether focusing on negotiating a contract with a vendor or jumping in to the often-stressful car buying process to deal with a dealership, our courses provide useful skills, proven techniques and various classroom role plays to help you become more aware of negotiations that you must face on a daily basis.
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Negotiation Training Course: Handling Extortion Attempts in Negotiating
Deal with your own personal needs and desires before you deal with a bribery situation.
Last month, in the second installment of this series, we dealt with certain logical, emotional and moral roadblocks that stop people from entering into negotiations with someone who has just demanded a bribe from them. Let’s assume that you have gotten over those hurdles and are now willing to risk negotiating in a public extortion situation. It is time for some attitude preparation.
Personal Attitude Preparation: You did not walk out in a huff and rattle of papers. You are still sitting at the table where the bribe demand has just swooped in for a smooth landing; and, as you listen, it sounds so like a regular commercial offer, with some impressive advantages for your company, and for you, too. You remember the training sessions about the importance of understanding other cultures. You remember the Negotiations trainer saying that if you don’t understand how the other party could even think of making a particular demand, then it may be a cultural difference or you need to draw on your empathy reserves. The government functionary is pleasant, has already set up a friendly rapport with you, and seems interested in you, your company, and in sharing a profitable long-term relationship. You have heard all about his family, and he knows where you live, and where your children go to high school and college.
And, now, he is creatively enlarging the win-win pie with improved payment terms, counter-guarantees, interesting bookkeeping and payment techniques, protection against detection and prosecution, and even against importation, labor and tax problems. You know that the representatives for three of your nastiest competitors are sitting in the waiting room, ready for their turns. You know that your product or your plan will serve the public better than theirs. You suspect that the government functionary is more interested in personal gain than in public good, and you know that he has arbitrary power, monopoly control, and little likelihood of getting caught or punished. Are you about to adjust your personal attitudes on the spot and turn toward the wrong moral compass bearing? Even long-time negotiators who know the sanctions imposed by local anti-bribery legislations or the FCPA, and who claim to understand the likelihood of an upcoming bribe demand, stumble at the last minute; at the last second.
Is the negotiation over a bribe-demand so different from other type of negotiation? Actually, with small but significant variations, negotiating with a high-level extortionist government functionary, contains most of the elements that you see in the most representative books on the subject. On the other hand, the bribe negotiation can seem so much like a commercial negotiation, and the negotiator on the other side can be so forthright, understanding, respectful and creative, that you forget that this is also a type of hostage negotiation, where you must reject the hostage-taker’s main demand at the same time that you are trying to create rapport. However, unlike in a hostage or barricade situation, this hostage-taker is not threatening anyone’s life (not yet, anyway). To the contrary, he is offering benefits and security to you and your company, and merely wants to negotiate the terms and conditions. In other words, here is a hostage-taker who is willing and able to satisfy your economic interests.
Honesty: The Semantic Problem –honor and truth-telling among thieves Can two “corrupt” negotiators use Negotiation principles to reach a win-win result? Yes. Can two “corrupt” parties negotiate to reach a mutually-satisfying result based on shared objective standards? Yes. Can two “corrupt” negotiators be completely honest with each other? Yes, it happens all the time (e.g., in private commercial negotiations between sales reps who offer kick-backs, and the corporate purchasing agents who accept them; or in a public bribery situation where the government functionary and the private sector negotiator create a long-term relationship that will satisfy the private negotiator’s and the private company’s interests in both the short and long run, and also satisfy the interests of the functionary and the corrupt hierarchy that is standing behind and protecting the functionary). Many corrupt negotiations, based on objective standards, deal with real economic and psychological interests rather than with unhelpful “positions”, and result in “bigger pies”. Many of these negotiations are honest (in the sense of the parties telling each other the truth about their respective interests and needs), and create strong long-lasting personal relationships. Alas, Principled Negotiation Theory also works when you cross over to the “dark side”. That is probably why Mr. Lincoln made the distinction between being “an honest lawyer” and being “a knave”. Knaves can be honest with each other in order to reach and carry out one or a series of illegal agreements that violate the public trust. Within this narrow focus, the only apparent difference between an “honest” negotiated agreement and a “corrupt” negotiated agreement is that the first is sometimes kept secret from some of the stake-holders, while the second is always kept secret.
Why personal preparation is so important prior to negotiating with extortionist functionaries. When you expect a bribe demand, then you will need a BATNA (Best Alternative To a Negotiated Agreement) at the point in the negotiation when you recognize that you cannot knock the other party’s ONLY important demand off the negotiating table, or negotiate its value down to zero.
As so many books on Negotiation tell us, your own need is your opponent’s leverage. In almost any commercial investment or bidding process, you are likely to spend between tens of thousands and a million or more dollars in valid preparation costs even before you sign a government contract. If you walk away from the bribe demand at this point, you will probably not recuperate those sunk costs. Extortionist government functionaries know by heart or smell the apparent needs of private enterprise and of private business negotiators. Especially at the middle and high ranges of government, extortionist functionaries are actively looking to establish long-term mutually-satisfying corrupt business relationships with their private-sector secret partners. “Successful” extortionist government functionaries are masters at making the private negotiator comfortable with the idea of paying the bribe; in tending to the negotiator’s personal and psychological needs and interests, in clearly explaining the overwhelming amount of leverage held by the functionary, and in convincing the negotiator that it is best for all concerned, even for the people of the country, to pay the bribe.
In later installments, we will discuss a number of techniques that you can use to counter and overcome public extortion demands; but the first technique is to respond immediately and unwaveringly to the other party’s initial position of “bribe = 1 + x”, with a clear and final counter-offer of “bribe = 0”. The success of this first technique starts with your personal preparation.
Preparing Yourself for Negotiating with an Extortionist Public Functionary In the spring of 2005, at a conference on the investigation that led to the conviction and imprisonment of Vladimiro Montesinos for corruption on a grand scale, one of the Peruvian attorneys who had run the investigation said that the most important thing she did to keep the right attitude during the long and at times dangerous investigation was to carry a signed letter of resignation with her at all times. Like Abraham Lincoln before her, this attorney from another land, time and culture, had decided at the beginning of the investigation that “if in your own judgment you cannot be an honest lawyer . . . choose some other occupation, rather than one in the choosing of which you do, in advance, consent to be a knave.”
Like that Peruvian attorney in the Montesano’s case, negotiators should carry a real or at least a mental letter of resignation whenever they face a public extortion situation. Those government bottle-neck moments, when extortion demands tend to swoop in, are not the time to consider the risks and benefits of bribing, or how to hide the bribe on the books, or the terms and conditions of the pay-out. Like that Peruvian attorney, you will need to reconsider your life and your REAL needs before you sign that letter. Then, when the bribe demand lands on the table, just remember to pat that resignation letter in your pocket, do a reality check and remember that you and your family will not starve if you lose this particular contract, or all your contracts with this government, or with any government, or, for that matter, with all the governments in the world.
Your personal preparation may be similar to the suicide negotiator’s need to pump up on the importance of life, before making introductions with the person out on the ledge. If you are not convinced beforehand about the importance of life, then you may get lost in a suicide negotiation. In the case of bribe demand,, you can get lost in the niceness of the other party and the respect they show you, the circumstantial reasonableness of their “requirements” and your apparent lack of bargaining leverage in a situation in which the other party has arbitrary decision-making power, monopoly control over what you want, the ability to make you wealthier, the apparent ability to protect you, a long waiting list of competitors who are willing to take your place, no apparent risk of sanction against the functionary, no personal investment on his side, and the functionary’s power to harm your company and perhaps you personally if you do not agree to pay the bribe. If you are still sitting at the table a couple of minutes after a bribe demand has been presented, then this kind of leverage is hard to resist, unless you have prepared your own attitude in advance. The lack of personal attitude preparation leads so many (who a moment before saw themselves as honest people) to fall into the trap and crawl out the other side, defensively saying to themselves –“when in Rome”, or “it’s going to help the people of this country in the end”, or “nobody is really hurt by this”, or “that is just how business is done here”, or “let’s face it, life is crud”, or “I really don’t understand what just happened, but since I am a good person, maybe it really wasn’t a bribe.”
Source: Bruce Horowitz Link
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Related: Negotiation Course