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CHOOSING NEGOTIATION STRATEGY ACCORDING TO PURPOSE: A LIVING SYSTEMS ANALYSIS

Lane Tracy
Ohio University
Athens, OH 45701 USA

Living systems often must act together in a coordinated way. One of the principle means of achieving coordination between or among living systems is negotiation. The goal of negotiation is to formulate or amend a set of instructions that will govern certain joint or reciprocal acts of the systems. Successful negotiation generates or modifies an agreed system of behavior. The negotiation process varies depending on whether an agreed system already exists as well as on the complexity of the intended agreement. Negotiations may be directed at (1) devising a set of instructions for joint or reciprocal action, (2) creating a new living system, (3) modifying the template of an existing living system, or (4) dissolving an existing system. In this paper these four distinct purposes of negotiation are linked to preferred negotiation strategies, particularly competition or collaboration. Living systems theory is employed as a framework for the analysis. Thus, the conclusions apply to negotiations between and among individuals, groups, organizations, communities, societies, and supranational systems, including cross-level negotiations.

Keywords: Living systems, negotiation, strategy, purpose, agreed system

INTRODUCTION

Negotiation has come to be treated as a generic process. Early studies of negotiation were carried out in a variety of different disciplines and in specific contexts such as labor relations, international diplomacy, and conflict resolution. More recently negotiation has become a discipline in itself. In the past two decades many books have been published and courses have been taught about the negotiation process per se, often with little consideration of the varying purposes to which the process is put (e.g., Bacharach & Lawler 1981; Breslin & Rubin 1991; Fisher, Ury, & Patton 1991; Pruitt 1981.)

There is much to be gained from combining the various disciplinary approaches to negotiation, comparing the process across a variety of contexts, and developing a generic science of negotiation. Yet something may be lost as well. This paper is intended to suggest that the negotiation process varies significantly depending on the nature of the intended agreement and on whether the negotiations are conducted within an existing system. Thus we can learn much about preferred negotiation strategy from considering the goals or purposes of negotiation as well as the context in which the negotiation occurs.

Defining Factors

Regardless of the context of the discussion, negotiation is usually defined in terms of such factors as mutual interdependence between two or more parties which have both common and conflicting interests; a belief by the parties that they can benefit from some form of joint or reciprocal action; and a process of communication intended to lead to agreement on the terms or rules of that action. For instance, Walton and McKersie (1965, 3) defined labor negotiations as a form of social negotiations, which consist of "the deliberate interaction of two or more complex social units which are attempting to define or redefine the terms of their interdependence." Lax and Sebenius (1986, 11) defined negotiation in a manager's context as "a process of potentially opportunistic interactions by which two or more parties, with some apparent conflict, seek to do better through jointly decided action than they could otherwise."

Other elements that are often introduced into the discussion of negotiation are bargaining power, trust, winning and losing, and strategy. Bacharach and Lawler (1981), for instance, argue that many conceptual models of bargaining are deficient because they fail to consider the issue of relative power of the parties. Yet the importance of power depends greatly on the interests and intentions of the parties. If those interests lead to a collaborative form of negotiation, then bargaining power is subordinated to problem solving and trust becomes an important consideration. Many authors do not even mention trust as a factor in negotiation, yet at a minimum the parties must trust each other to carry out the terms of any resulting agreement.

Determinants Of Strategy

Winning (i.e., maximizing one's own outcomes) was the major focus of early economic and game-theory models of negotiation (Harsanyi 1977). Yet modern theorists often concern themselves with how negotiation can lead to maximizing outcomes for both (or all) parties (Fisher, Ury, & Patton 1991; Gray 1989; Lax & Sebenius 1986). This has led to recognition of two distinct major strategies of negotiation: a competitive strategy aimed at maximizing one's own outcome and a collaborative strategy aimed at maximizing the joint outcome. Other strategies sometimes considered are subordination, avoidance, and a mixture of competition and collaboration (Walton & McKersie 1965).

One variable that has received considerable attention as a determinant of negotiation strategy is concern (or lack of it) for the outcomes of the other party or parties (Filley 1975; Rahim 1983; Ruble & Thomas 1976; Thomas 1976). Assuming that a party is concerned about its own outcomes, it will likely negotiate competitively if it is not concerned about the other's outcomes, but is more likely to employ a collaborative strategy if it is concerned about the other. Often this is expressed normatively; negotiators should negotiate collaboratively if they are concerned for both (or all) parties' outcomes. Collaborative negotiation is seen as the strategy most likely to satisfy the interests of all parties.

A variable with similar properties is concern for the continuing relationship between the negotiating parties (Savage, Blair, & Sorenson 1989). Indeed, concern for the continuing relationship tends to lead to concern for the other's outcomes, as dissatisfaction of the other party is likely to complicate the future relationship. Thus, if a negotiator is concerned about both the substantive outcome of the negotiation (i.e., the agreement) and the future relationship between the parties, the preferred strategy is collaboration. Since collaboration tends to work well only when both parties choose that strategy, however, soft competition may be preferred when the other party chooses not to collaborate.

There has been a steady increase in the number of factors studied in negotiation, the approaches taken in research and theory, and the application of new techniques to real-world problems. This paper will put forth an additional theoretical approach, one that may help to bring some order to the proliferation of strategies and fields of application.

A LIVING SYSTEMS APPROACH

Negotiation occurs at and between several levels of living systems. Many animal organisms engage in tacit negotiation concerning territory, mating preferences, and the like. Yet human systems display the greatest variety of forms, tactics, and strategies of negotiation. Individual persons, groups, organizations, communities, and nations all negotiate with each other. The literature on negotiation reflects this broad spectrum of levels. Negotiation between individuals and groups is studied by psychologists, sociologists, and communication experts. Negotiation between organizations is the focus of study in industrial relations and business, whereas political scientists are most interested in negotiation between communities and nations. Game theory and economics furnish a more abstract, theoretical approach that is applicable at many levels.

Living systems theory is a body of knowledge concerning the common properties of cells, organs, organisms, groups, organizations, communities, societies, and supranational systems (Miller 1978; Miller & Miller 1992). Human systems (i.e., people and their institutions) constitute a subset of living systems. Living systems theory is useful for analyzing phenomena, such as negotiation, that occur at and between the various levels of human systems.

Approaching the negotiation process from the living systems perspective, Tracy (1995, 41) defined negotiation as "a motivated process of information exchange between, among, or within living systems with the goal of reaching agreement about certain joint or reciprocal acts." These acts constitute a behavioral system that is regulated by the agreement. Tracy called this behavioral system the agreed system, and the agreement itself is the template or set of instructions for that system.

The template concept is very powerful. Every living system must have a template from the beginning of its existence (Miller, 1978, 18). The templates of cells, organs, and organisms are found in their genes, whereas the templates or charters of social systems are recorded in the form of language and/or behavior. In either case the template consists of instructions for the development, structure, and processes of the system. The template of an organization, for instance, usually resides in its charter, policies, procedures, and shared culture.

Purposes Of Negotiation

Negotiation is employed by living systems for various purposes. These purposes may be classified as: (1) to generate instructions for joint or reciprocal behavior of the parties themselves, (2) to create a template for a new social system, (3) to amend the template of one or more existing systems, or (4) to develop instructions for dissolving a system. Examples of the first purpose would include negotiations to establish the terms of a purchase, to assign tasks in a group, to choose joint activities, or to arrange a cease-fire between warring nations. Creation of a template for a new system occurs in pre-marital negotiations, or when business firms develop the charter of a joint business venture, or when nations jointly define the structure and powers of an international regulatory body. Negotiations to amend an existing template would include renegotiation of a long-term business contract, periodic revision of a labor contract, debate on proposals for the amendment of legislation, revision of international trade agreements, or management of a conflict between coworkers. Negotiation to dissolve a system is exemplified by wrangling over the terms of divorce or dissolution of a partnership, labor-management consultation on treatment of workers in a closing factory, and negotiations on the breakup of a nation such as the Soviet Union or Czechoslovakia. Note that examples of all four purposes of negotiation exist at and between all levels of human systems.

The result of each of these various purposes and levels of negotiation is an agreed system of behaviors. The negotiating parties are the authors of the agreed system. The agreed system may be temporary or lasting. For example, a sales agreement may create a very temporary agreed system that lasts only long enough to complete the exchange of goods and money, or it may set up a system of regular deliveries and payments extending over many years. The agreed system may be dependent on the continuing participation of the parties or independent of them. For instance, negotiation of a joint venture may create an organization that is tightly controlled by the founders or is largely self-governing. The agreed system may also be a modification of an existing system of which the negotiating parties are members, and negotiations may result in amending the template of the existing system. Or the agreed system may consist of acts aimed at dissolving an existing system completely.

Some agreed systems are living systems, while others are not. That is, some negotiations create a template for a new living system or modify the template of one or more existing living systems, whereas other negotiations merely set instructions for joint or reciprocal behavior by the negotiating parties. In general, if the agreed system is an entity that is able to make its own decisions and implement them, even if it requires the cooperation of the author systems to do so, it is a living system. When the agreed system is simply a set of instructions to be carried out verbatim, it is not a living system.

Classification Of Negotiations

The differing natures of the agreed systems that result from negotiation suggest a categorization of negotiations into four distinct cases, according to the kind of agreed system that is desired. Negotiations may be directed at (1) devising a set of instructions for joint or reciprocal action, (2) creating a new living system, (3) modifying the template of an existing living system, or (4) dissolving an existing system. The dimensions that define these four cases are (1) whether an agreed system already exists and (2) the complexity and/or longevity of the agreed system. Figure 1 shows the relationship of dimensions to cases.

Figure 1. Dimensions of Agreed Systems

Let us now consider the relationship between the goals of negotiation and the strategies employed in reaching them. For each of the four types of agreed system we will form an hypothesis as to which strategy would be most effective.

Creating Instructions for Joint or Reciprocal Behavior

Bargaining is often employed to set the terms of an exchange of resources, such as offering money for a used car, trading stock for an interest in a business firm, or swapping prisoners of war. Such negotiations usually create a very temporary agreed system, one that lasts only long enough for the exchange to occur. Nevertheless, the agreement does create a template of instructions for joint or reciprocal behavior by the author systems. The agreed behavior is carried out by components (e.g., salespersons and purchasing agents, or perhaps attorneys) from the negotiating parties, acting in accordance with the agreement. The executors of the agreement see themselves as acting for their respective systems, rather than for a newly-created joint entity.

Some forms of exchange do require a continuing agreed system. A purchasing contract for a steady supply of goods over a period of months or years, for instance, requires some sort of system to implement and monitor the exchange. It is usually not the negotiators who carry out these continuing processes of the agreed system. Rather, other agents of the author systems administer the agreement. The agreement must therefore specify how these agents will carry out their roles. In performing their contractual roles these agents are acting temporarily or intermittently as executors for the agreed system, but they also continue to represent their respective employers.

A purchasing contract for a steady supply of goods is a simple example of this type of relationship, since it involves continued cooperation between the parties for the benefit of both of them. More complex examples include labor contracts, service contracts between business firms, waste disposal agreements among communities, and treaties among nations for mutual defense, arms reduction, pollution control, and sharing of natural resources. In each case a decider subsystem, such as a network of union and management representatives, a joint committee, or an inspection group, is set up to govern the ongoing behavior of the agreed system. Yet the agreed system cannot exist independent of the author systems. Instead, it relies on the services of components and subsystems from the contractual parties, acting temporarily or intermittently under the agreed template, yet continuing to regard themselves as representatives of the parties.

One of the most complex kinds of negotiation falling into this category is the writing of an initial labor agreement. Labor negotiations are aimed at creating the template for a system of joint and reciprocal labor-management behavior. The negotiations must deal with a large number of governance matters as well as the bread-and-butter issues of wages, hours, and conditions of employment. Negotiators on both sides must represent a wide variety of views and interests, often in an atmosphere of mutual hostility and distrust. The agreements reached are intended to remain in effect for years, perhaps decades. Yet the parties are not ready to cede decision-making authority to a new entity; instead they try to specify precise instructions for a wide variety of situations.

In general, negotiations to generate instructions for joint or reciprocal behavior do not assume any special prior relationship or atmosphere of trust between the negotiating parties. The issues are typically few and simple, such that full instructions can be created in advance, or else the parties are unwilling to delegate independent decision-making authority to the agreed system. Such conditions are not generally conducive to a collaborative strategy of negotiation. Thus, Hypothesis 1 is that competitive strategy is more likely than collaborative strategy to be effective in the negotiation of instructions for joint or reciprocal behavior of the negotiating parties. Effectiveness in this instance would be measured by how well the agreed system of behavior serves the interests of the respective author systems. If the relationship is considered important, because the agreed system is long-lasting or future negotiations are expected, a soft form of competitive bargaining may be used.

Creating a New Social System

The transition from negotiation of a set of instructions for joint or reciprocal behavior to creation of a new living system occurs when it is necessary to give decision-making capability to the agreed system. If the agreed system is able to make and implement decisions for itself, and the components of the decider subsystem regard themselves as acting for the agreed system rather than for one of the author systems, the agreed system becomes a living system in its own right. The goals of the negotiation process that produces such a system shift from specification of a fixed set of behaviors to development of structures and processes coupled with agreement on a set of values or principles that will guide the decision making of the new system.

A newly created human social system may be very large and complex or relatively small and simple. For example, it may be as large as a new nation or as small as a dyadic work group. It may also be relatively short-lived, like a task force, or potentially immortal like a university or religious organization. Yet even a simple, temporary living system must have the capability to act independently. It may be influenced by its author systems through the setting of processes and values, but it cannot be completely controlled by them.

Examples of new living systems created by means of negotiation include partnerships, joint ventures, business mergers, communities created by merger or annexation, constitutional nations such as the United States, and supranational systems such as the European Union and the United Nations. In the employment sphere examples of creation of such systems would include founding of a cooperative or worker-owned business, development of a credit union, and formation of a labor federation. The intent of negotiations in each of these cases is to agree upon the template or charter of a new system that is intended to be relatively large, complex, long-lived, and at least somewhat independent of the negotiating parties.

A business partnership is structurally and legally similar to a marriage. A partnership creates an organization that, like a family, has its own interests and may survive the withdrawal or death of a partner. Negotiations to create a partnership might focus on issues such as the division of labor and of profits, the capital contributions of the partners, the nature of the business, how it will be conducted, and the terms for eventual dissolution of the partnership.

Joint venture negotiations tend to be very complex, involving questions such as how much authority will be delegated to the agreed system, how much technology transfer will occur, how much and what sort of capital each partner will contribute, what sorts of personnel may be transferred from each parent organization, how rapidly the joint venture is expected to grow, what it is expected to do for the author systems, and under what conditions it might be terminated. In many cases the joint venture is given very substantial scope for independent decision making, simply because the partners are unwilling or unable to manage it closely themselves. Eventually, the joint venture may be sold or spun off as an independent firm. Thus, the charter for a joint venture must encompass a great variety of issues.

Business mergers and acquisitions, as well as labor union mergers, are unique in that one or more of the author systems dissolves or subsumes itself in the agreed system. An acquisition is similar to the mating rite of certain insects, in which the female eats the male after copulation. There seems to be no biological reproductive parallel for a merger, where only the agreed system survives and the parent organizations cease to exist as independent systems. In some cases, however, the parents continue as living organizations within an organizational suprasystem. For instance, merged companies may continue as semi-independent divisions under a new corporate umbrella.

A major issue in merger negotiations is likely to be the status of continuing employees. Thorny issues such as seniority rights, blending of pay systems, reassignment, continuation of union representation, and severance pay may become part of the negotiations. Union mergers may involve blending different systems of governance, seniority rights, pension or insurance plans, and so forth.

Writing the charter for a worker-owned enterprise or a credit union is a complex undertaking. There are typically too many parties involved for all of them to be directly involved in the negotiations. Representatives must be used but, as in most labor negotiations, the interests of their constituents are many and varied. Furthermore, all of the issues involved in putting together any viable business organization are present--issues of mission, capitalization, policies, procedures, decision making authority, compensation, and distribution of profits, to name a few. Unlike the typical labor-management negotiation, however, the common interests tend to predominate over the conflicting interests, so that the author systems are willing to create a relatively independent new system.

In some cases the negotiation to create a new system is tacit. For instance, employees tend to form work groups on a trial and error basis, discovering their joint interests through behavior more than through discussion. Nevertheless, customs and rules of behavior develop and become part of the template for the group.

Negotiation strategy for the creation of a complex, independent or semi-independent new system should logically be collaborative. A great deal of creativity is needed in such negotiations, if the new system is to be successful, and collaborative strategy demands creativity (Lax & Sebenius, 1986). The template for such a new living system must be complex and synergistic. Even if the author systems hold many incompatible ideas about what the new system should be like, they must sublimate some of their own interests to those of their creation. If they do not do so, the new system is likely not to be viable and the negotiations will have been an exercise in futility.

We must recognize, however, that in some cases, such as a hostile merger or the writing of an initial labor contract, the parties may lack the levels of mutual trust and respect that are normally required for collaborative negotiation. The parties may adopt competitive strategies that produce a far less than optimal template for the new system. Furthermore, extensive use of a neutral third party may be required to reach any agreement at all.

Based on the forgoing analysis we offer Hypothesis 2: Collaborative strategy is more effective than competitive strategy in negotiating the charter of a new living system. Effectiveness would be measured by the viability and efficiency of the new system, as well as by such indices as growth, profitability, and client satisfaction.

Modifying the Template of an Existing System

Negotiation to modify an existing system occurs generally in the context of conflict management. Conflict is found within human living systems. Miller defined conflict as a strain that occurs when a living system is directed to respond to two or more commands "that are incompatible--because they cannot be done simultaneously or because doing one makes it impossible later to do the other" (1978, 39). The sources of incompatible commands may be internal or external to the system. Thus, an individual may suffer conflict between competing internal values, between incompatible external role demands, or between an internal value and an external role demand (Kahn, Wolfe, Quinn, & Snoek 1964).

Conflict may appear to occur between systems, as when two managers fight over resources. However, the conflict can always be analyzed from the point of view of a suprasystem (i.e., a system to which the participants belong). Labor conflict, for instance, may be analyzed as conflict within the enterprise or between two organizations, the company and the union.

We are familiar with the experience of conflict at a personal level, as when a manager's expectations differ from our own. Yet a group or organization may also experience conflict when the desires of its members are thwarted by external demands. An example would be the strain that occurs within a work group when task demands are incompatible with group norms. Likewise, a strain may be felt in an organization when disagreement arises between component groups or between an individual member and a group. Thus, the behavior of a work group in responding to task demands may create conflict within the organization between the group and its supervisor or between different work groups. The point is that conflict may always be seen and analyzed as occurring within a living system.

Living systems act purposefully to relieve strains. When negotiation is employed to resolve or manage conflict within a system, the desired result is an agreement that focuses on how the disputing parties will behave in the future in order to avoid or minimize the strain of conflict. For example, a dispute between departments over budget money may lead to a redistribution of money and responsibilities, or to revision of the company’s budgeting procedures. In this case the system is the company and the result is an amended set of company policies and procedures.

Conflict management occurs in the decider subsystem of a living system. The decider subsystem is "the executive subsystem which receives information inputs from all other subsystems and transmits to them information outputs that control the entire system" (Miller, 1978, 67). The decider subsystem of an organization, for instance, would consist of the echelons of the command hierarchy plus any artifacts, such as computers and phone lines, that might be used to control operations.

Negotiation between components or echelons of the decider subsystem manages conflict by amending the template of the system or of one or more of the disputants. This can be seen, for instance, in negotiations to resolve a conflict between two departments of a firm. The charter, policies, procedures, and culture of the firm presumably already specify role behaviors for these departments. Yet negotiation may be necessary to clarify or amend the template so that departmental behavior can blend into the system more easily. Tasks may be redefined, rewards may be modified, and joint goals may be emphasized in the agreement in order to reduce the conflict. Alternatively, one or both of the departments may agree to change their own values, policies, and procedures in order to reduce the incompatibility. In the extreme case one or both departments might be restructured and warring members reassigned or fired.

Negotiation for conflict management has certain features not found in the other types of negotiation. One feature is that there is a well-defined system within which the bargaining may be carried out. That system may be able to resolve the conflict through the exercise of authority, as when a supervisor redefines the tasks of bickering subordinates so that they no longer perceive incompatible demands. Or the system may act as mediator or arbitrator of the dispute. For example, there may be a dispute resolution process such as a grievance procedure built into the organization, or an impartial member of the organization may offer to mediate for the good of the organization.

One reason for having such a built-in procedure is that the conflict is often between parties at different levels, such as an individual worker and "the system" or a supervisor and subordinate. In such cases the inequality in bargaining power might make it impossible to employ negotiation to manage the dispute without the assistance and encouragement of a formal organizational process.

The whole system suffers from a conflict, even if only two members or components are experiencing incompatibility. In some ways, then, negotiation for conflict management is more urgent than other types of negotiation. Furthermore, it can be assumed that the disputing parties share many objectives as members or components of a higher-level system, and that a long-term solution is desirable. Thus, some form of collaborative negotiation is particularly appropriate for conflict management in most cases, time permitting (Gray, 1989; Lax & Sebenius, 1986). Hypothesis 3a is that collaborative strategy is more effective than competitive strategy in negotiating to modify the template of an existing living system. Effectiveness would be measured by the continued viability of the system and continued or improved ability of the system to serve its constituents.

A different set of circumstances prevails, however, when the system being altered is not a living system but simply a set of instructions for joint or reciprocal behavior, as in negotiations for extension of a purchasing contract. In that case there may be no existing provision for settling conflicts and no ongoing commitment of the disputing parties as components of a single system. On the other hand the agreed system may have produced benefits for the author systems and adjustment or extension of the agreed system may be necessary for continued enjoyment of those benefits.

Negotiation to modify an agreed system for joint or reciprocal behavior is likely to be less competitive than the bargaining that originally created the system. Yet the circumstances may neither require the creativity nor provide the level of trust for employment of a fully collaborative strategy. The situation seems to call for what Savage et al. (1989) have termed soft competition or principled collaboration. Thus, Hypothesis 3b is that a soft competitive strategy or a principled collaborative strategy is more effective than a hard competitive or trustingly collaborative strategy in modifying the template of an existing agreed system of joint or reciprocal behavior. Effectiveness in this case is measured by continued ability of the agreed system to deliver benefits to the author systems.

Setting Terms of Dissolution

Dissolution of an existing system is also subject to negotiation. For instance, the intended result of bargaining may be an agreement on terms of divorce or the ending of a partnership. In the case of dissolution the temporary agreed system deals with details such as the transfer of assets of the dissolved system.

Competitive strategy and tactics are generally considered appropriate for producing the sort of agreed system required for a dissolution. There may be no expectation of a continuing relationship or common interests beyond the present transaction. If there were such an expectation, negotiations would be likely to focus on modifying the system (Case 3) rather than dissolving it. The issues, though they may be numerous or complex, are not likely to require much creativity. What they do require is a willingness to compromise which may be absent. There may also be difficulties in communication caused by a history of misunderstanding or rancor between the parties. Thus, the services of a mediator are likely to be needed. This leads to Hypothesis 4: Mediated competitive strategy is more effective than collaborative strategy or unmediated competitive strategy in negotiating the dissolution of an agreed system. Effectiveness is measured by quickness in reaching and implementing a settlement that is satisfactory to the parties and leaves no loose ends.

SUMMARY

The essential purpose of negotiation is to create or modify the template of an agreed system, which is either a living system or a set of joint or reciprocal acts of the author systems. In conflict management and dissolution of a system the agreed system and its template already exist. The problem for negotiators in conflict management is to reduce incompatibilities by amending the template of the system and/or its conflicting subsystems. In other cases there is no existing agreed system and the task of negotiation is to create a template for one. The new agreed system may be independent of its authors or it may be dependent on their continued participation. The template may be very simple and the agreed system short-lived, as in the case of a one-time exchange of goods or services or dissolution of a system. Or the template may be complex and the agreed system long-lived, as in the negotiation of a labor contract.

These considerations led to the categorization of negotiations into four types, depending on the kind of agreed system that is desired as a result. The relationships between these four types and the preferred strategy of negotiation are summarized in Table 1.

Purpose of Negotiation Range of Issues Duration of Agreement Effective strategy of Negotiation
Create agreed system of joint or reciprocal acts Simple to moderate Short to medium Competitive--hard for short-term agreement, soft for longer term
Create new living system Moderate to complex Medium to long term Collaborative
Modify existing system (conflict management) Simple to moderate Long-term desirable Collaborative if existing system is living, soft competitive if not
Dissolve existing agreed system Simple to moderate Short-term Competitive, often with mediation

Table 1. Characteristics of Four Types of Negotiation

Note that this categorization of types of negotiations does not directly deal with questions of winning and losing. The definition of winning varies from type to type, as the purpose of negotiation varies. When the purpose is to manage conflict, winning translates into reduction of stress in the system. For a simple exchange or dissolution, winning for each party may have the traditional economic meaning of maximum utility.

In the case of a continuing relationship, however, the measurement of economic utility must be modified by additional factors such as the value of the continuing relationship and/or the time value of economic benefits. Finally, when the purpose is to create a new system, success is generally measured in terms of the viability of that system and perhaps its ability to reward its creators.

Studies of the negotiation process should recognize that the process has a purpose or desired end result. The nature of that purpose will (or should) affect the process. This paper has attempted to outline the expected effects of purpose on process, and to categorize negotiations accordingly so that the process can be studied in greater detail.

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