Mediation facilitated negotiation

Mediation facilitated negotiation. That being the case, it is impossible to draw any hard-and-fast boundary-line between the two disciplines. They are siblings – much more so, in fact, than mediation and arbitration. Indeed, the gap between mediation and arbitration is immense: though both are ‘voluntary’ and therefore categorised as ‘alternative dispute-resolution’ (ADR), the criterion of voluntariness applies to face-to-face negotiation as well, bilateral or multilateral. But whereas both mediation and negotiation are ordered towards settlement by the parties, arbitration simply in virtue of its structure already approximates traditional judicial processes: a third party makes a binding decision on the parties reached through the application of rules of law. In contrast, neither of these two aspects characterise either negotiation or mediation. Thus, our thinking-habit that automatically associates arbitration and mediation, whilst leaving traditional negotiation out of the picture, is inherently flawed. Mediators misunderstand their own discipline if they allow it to be conceptually situated within the penumbra of legal practice (though, needless to say, a great many mediators also happen to be lawyers).

With that in mind, it should be clear that mediators cannot afford to regard negotiation-theory as terra incognita. Whilst low-level, structurally straightforward mediations such as neighbourhood boundary-disputes may not present any ‘theoretical’ challenges, the situation changes when the conflicts become weightier and more complex. International multilateral disputes, whether political or commercial in character, throw up issues such as coalition-formation, issue-linkage and side-deals, not to mention the transactional difficulties that arise from linguistic and cultural diversity. Not only that, but individual disputes are more likely to be approached by both parties with a view to their overarching strategic needs. Mid- to long-term factors thus have a correspondingly greater impact on the parties’ calculations, whilst internal power-politics are also more likely to impact the trajectory of the dispute. When mediation ventures into these deep waters, a solid grounding in negotiation-theory becomes indispensable.

There is a vast literature out there that mediators can delve into. But for a one-volume ‘textbook’ in the theory of international negotiation, aspiring mediators could do far worse than to take a look at Ho-Won Jeong’s International Negotiation: Process and Strategies (2016). For those already familiar with the academic study of dispute-resolution, Ho-Won Jeong is a familiar name. Professor of Conflict Analysis and Resolution at George Mason University, Jeong established himself with Peacebuilding in Postconflict Societies (2005), and has since kept up a steady output comprising both textbooks and edited collections. As its title suggests, International Negotiation is focussed on one part of the overall conflict-resolution spectrum. But precisely because Jeong’s own research encompasses the full breadth of peacemaking, his approach is particularly suitable for mediation-practitioners looking to enrich their understanding of negotiation-theory.

International Negotiation is divided neatly into three parts: ‘Strategic Analysis’, focussing on game-theory; ‘Negotiation Process, Behaviour and Context’, which works through the concrete institutional and situational parameters in which negotiation is carried out; and finally ‘Extensions and variants’, which treats both mediation as well as the complexities of multilateral negotiations. Jeong is indeed aware of the transformative power of mediation, and recognises that a textbook on negotiation-theory cannot be complete without treating it: “Bilateral interaction can be altered by the intervention of an intermediary whose role ranges from mere support for a communication process, to the facilitation of discussion, to the formulation of proposals and even to the manipulation of bargaining outcomes” (p. 17).

Whilst there is no substitute for engaging with the whole book, it may be difficult for students or practicing mediators to find the time to read through cover-to-cover. A concise precis of each part will help both cohorts identify where they should concentrate their attention. For now, we will limit ourselves to a survey of Jeong’s introductory discussion, which will set the stage for the three in-depth articles to come.

Given how ubiquitous negotiation is in human affairs, it may seem difficult at first to justify spending any time ‘theorising’ about it. After all, most negotiators throughout history have enjoyed gotten along perfectly well without any textbooks or accreditations! The answer, in short, is that negotiations can fail. When they do, the results can be catastrophic. Thus, the first thing negotiation-theorists must understand is multiplicity of factors influencing the course of a negotiation, which need to be taken into account when striving to ensure success: “Various characteristic of each negotiation differ by decision-making systems of actors, issue characteristics (e.g. the environment, trade and security, which have different prospects for coordinative actions) as well as the dynamics of mutual interactions. Each party may face variant external-system constraints as well as dissimilar abilities to cope with a spectrum of challenges to meeting their own objectives” (p. 4).

The second point emphasised by Jeong is that to understand how successful outcomes often depend on recognising what an acceptable degree of failure is for the parties involved. It is naïve to suppose that there is a win-win solution for every dispute: or better, that such a solution must necessarily be symmetrical. Rather, an outcome that favours one party over the other may be better than a failure to reach settlement: hence “a bargaining problem is understood in the context of how two or more agents should cooperate when non-cooperation leads to an inefficient suboptimal outcome.” Note the language here: success involves avoiding an ‘inefficient suboptimal outcome’. Thus, Jeong wants us to be realists. The ‘best’ result will often be the ‘least bad’ result, seen from the perspective of each of the parties. Learning how to identify that solution is what negotiation-theory equips us to do.

Now, that is not to say that ‘win-win’ solutions are impossible. Jeong introduces the terminology of ‘integrative’ and ‘distributive’ approaches to help us grasp a more nuanced concept of what ‘win-win’ looks like in practice. Integrative approaches pursue gains for all parties by enlarging the benefits on the table, e.g. increased profit to be shared between capital and labour after a growth in productivity (p. 9). Here, value-creation leads to absolute gains for all, even if the relative gains are not equal. Again, ‘win-win’ does not imply symmetry. But even more fundamentally, value-creation itself does not eliminate competition, since integration is inevitably followed by a return to the question of distribution: even if all sides acknowledge that relative gains will not be equal, the degree of one-sidedness in the negotiation-solution is still something to be fought over. Indeed, from our own experience we know that parties are most likely to display intransigence precisely when their object is damage-limitation (the result of ‘loss-aversion bias’). So ‘growing the pie’ is not an answer in itself, even when the fact of unequal distribution is already recognised by the parties as inevitable. Jeong’s summary: “As integrative and distributive strategies become interdependent components within a single negotiation, there is a latent tension between value-claiming and value creation within a process of conflict and cooperation.”

In addition to this binary, Jeong introduces the categories of ‘aspiration-point’ and ‘reservation-point’ to describe the upper- and lower- boundaries of each party’s bargaining-range (p 10). Clearly, the aspiration-point represent each party’s most desired outcome. Conversely, at the reservation-point the party will prefer to exercise ‘outside options’: agreement is no longer advantageous, and a rational actor will never take less than what can be gained by acting unilaterally. (Some readers may recognise William Ury’s concept of the BATNA – ‘the Best Alternative To a Negotiated Agreement’ – but Jeong prefers his language of ‘outside-option’.) When concessions are made within a bargaining-range that is ‘linear’, i.e. fixed between two reservation-points, then settlement will be distributive. The size of the pie is fixed, both sides must obtain a minimum slice or else they walk. As Jeong points out, in practice this is likely to produce stalemate even if an optimal solution could in principle be found, the reason being that each party may not know the other’s reservation-point clearly and so be unable to evaluate whether the provisional settlement is weighted towards that party. Haggling could resolve the stalemate, in that it will reveal who is willing to concede more in view of the cost of haggling for each party, e.g. due to time-pressures. However, where the costs of haggling are negligible, the informational asymmetry with regard to the other part’s true reservation-point – in contrast with their ‘negotiating-position’ – will easily lead to deadlock.

A further point that is particularly relevant for mediators may seem obvious, but is easy to lose sight of: namely, that negotiation is not simply interaction, but rather a process of interaction, and the process shapes how the interaction unfolds. In particular, it affects how mutual interests can be identified and issues can be ‘packaged’. Mediators would do well to remember that as negotiation-facilitators their most powerful tool is process-design. This is all the more important in view of the fact that the approaches needed to generate effective issue-linkage will change over the life-cycle of the negotiation, since progress from competitive to cooperative interaction is not linear (p. 13). Mediators must anticipate recurrent cycles of deadlock and breakthrough, and indeed a certain amount of ‘backsliding’ may occur as previously agreed-upon trade-offs come to be reconsidered in light of new points of contention. Progress is a spiral, not a straight line.

Good process-design, which can be thought of as a way of analysing the soundness of the negotiation-framework at the macro-level, must necessarily be complemented by micro-level analysis, i.e. the immediate circumstances surrounding negotiator-interaction. An obvious example would be location, which in our time obviously raises the issue of ‘online’ dispute-resolution and its relative (dis-)advantages compared to traditional face-to-face talks. (A focus on the ‘human’ dimension could be seen as an integral part of process-design, but Jeong clearly associates the latter with the overarching ‘format’.) But this dual ‘macro-micro’ focus must also be complemented by an awareness that ‘external’ negotiations have to be synchronised with ‘internal’: each side has to contend with its own stakeholders. This can lead to what is termed ‘boundary-role conflict’: as occupiers of a ‘boundary-role’ between their side’s stakeholders and the other side’s representatives, negotiators have to engage in conflict-management in relation to their own side at the same time as implementing a coherent and, ideally, optimised negotiation-strategy. In this connection, Jeong points that since Robert Putnam’s work in ‘80s negotiation has increasingly come to be seen not only as a strategic game, but also as a social process reflecting institutional and systemic constraints. In other words, parties to a negotiation are constrained by (at least) communication-channels and power-dependencies in relation to their stakeholders.

To understand what this overarching view of the negotiation-process means for mediators, we should return to the idea that Jeong put forward at the outset, namely the sheer number of forces that negotiators have to contend with in order to negotiate successfully. By having a clear grasp of what causes negotiations to fail, mediators put themselves in the strongest possible situation to help them succeed. In broad terms, Jeong identifies three potentially disruptive forces in the hunt for the optimal negotiation-solution: “In complex models, negotiators face many more difficulties in developing coherent strategies owing not only to limited information about the other party’s goals and strategies but also to constraints arising from competing priorities and division within their own party, as well as the need for adjustment to the changing internal and external environment of negotiation” (p. 15). To break down this condensed statement, the three disruptive forces are:

• informational asymmetries in relation to the other parties’ goals, in particular their reservation-point (and, as we shall see, the parties’ preferential ordering of goals);

• lack of internal cohesion and consensus-commanding objectives, which can severely affect a party’s ability to implement an effective negotiation-strategy; and

• challenges thrown up by circumstances exogenous to the negotiation-process itself, whether systemic or episodic in character.

Of these, the latter is of course the most difficult to deal with, and in a sense escapes the purview of negotiation-theory: we can plan for unknown unknowns. In relation to the first two factors, it is clear where mediators can make a difference. As we continue to work through International Negotiation: Process and Strategies, both of these issues will resurface regularly. But of the two, the role of information-asymmetries in generating suboptimal outcomes will figure particularly prominently in Part I, on game-theory – to which we turn our attention next.