Recently, SHAW Mediation was proud to host a Masterclass with Laurence Boulle, focusing on Mediating Mainly about Money. As Mediators, we understand that mediation has its theoretical framework in interest-based, mutual gains and problem-solving decision-making. A significant portion of mediation involves positional bargaining over money. This often takes place in joint sessions, through shuttle negotiation, or through a combination of joint and separate meetings, through different communication methods, and with or without the involvement of professional advisers.
Mediators can add value in any form of negotiation and their tool-boxes have a varied supply of knowledge, skills and techniques. This is a reminder that while money might be the primary focus of hard bargaining there are other needs and interests in play – from saving face to avoiding perceived loss.
The Masterclass was a huge success and we’d love to share with you some of the key points from the day. We would like to acknowledge Professor Laurence Boulle and his knowledge on the day.
The term ‘hard bargaining’, aka ‘positional’, ‘distributive’, ‘adversarial’ and ‘traditional’ negotiation’, refers to situations in which parties in dispute move through a series of incremental concessions from their initial (ambit) claims to a point of compromise, or to no agreement at all.
Hard bargaining can also be conducted in the mediation context. However, this changes the character of the mediation from that promoted in training courses and mediator standards such as the NMAS, which focus on an interest-based problem-solving model.
Positional bargaining is associated with settlement mediation in which mediators encourage parties to reach a point of understanding and offer somewhere between their positional claims through various forms of persuasion, doubt creation and insight, without any significant emphasis on the process of decision-making.
Numbers in Hard Bargaining
Hard bargaining revolves around three every-day concepts identified by Professor Boulle and seldom considered in the literature on negotiation, mediation and decision-making. The first concept is numbers, the second is money and the third is a combination of the first two, namely amounts of money or the dollars.
In some contexts, the only significance of numbers is to indicate whether one amount is bigger or small than another. Statistics are used extensively for this purpose, in relation to demography, the economy, workplace performance, and mediator success rates. Parties in hard bargaining measure outcomes in terms of numbers. However, in some contexts numbers might not be entirely ‘rational’ in the perceptions of some persons, particularly cross-culturally.
Money in Hard Bargaining
Hard bargaining usually involves money, which economists claim is the ultimately fungible product, more so than water or EVOO. One dollar is always the same as another dollar. Or is it?
While money is what parties claim in hard bargaining, it is not what necessarily satisfies them. In other words, money is a position which is thought to satisfy underlying needs and interests.
Dollars in Hard Bargaining
Dollars brings together numbers and money. Dollars might seem absolute but they are always relative, the human brain always compares, sometimes unconsciously. Studies also show that the ‘dollar talk’ causes the brain to become defensive and risk averse. This raises the question of how negotiators can use ‘proxies’ for dollars to avoid some of these implications.
Mediating issues that arise concerning finances is a wise move (as opposed to heading straight to court) as it saves you both time and money. Instead of relying on a court or solicitors to debate outcomes, mediation cuts through the hurt and anger and assists you to resolve the issues yourselves. Mediation could bring about agreement in weeks or months rather than years. Secondly, an agreement made between yourselves is more likely to be kept rather than one forced upon you and it will focus on the future rather than the past, allowing you both to reach a compromise which is considered just and appropriate.