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Having tried to use the Greek crisis as leverage for a change in the terms of their bailout deal, Ireland are now looking to the UK for support by renegotiating their bailout interest rates with them (article here).

Ireland does have some extra bargaining power in negotiating with the UK that it doesn’t have with the rest of the EU. The proximity with the UK and the wide range of close governmental ties gives Ireland some “Network” bargaining power – special access to a powerful network. Ireland also has some niche marketing power with the UK by dint of being such a significant trading partner.

The UK can ill afford Ireland to default on its loans and this reassurance need can be exploited by the Irish – who can blame them for trying to make the most of this during the Queen’s visit. However the UK rate of interest is pretty close to the average EU rate of interest being charged to Ireland. So, whilst it’s plausible that Ireland may squeeze a minor interest rate cut out of the UK, it’s unlikely that the UK rate will be dropped below the EU rate, which will probably mean that the EU is not put under serious pressure to reduce its own rates to Ireland at the moment.

It was inevitable that whichever coalition partner lost out in the AV vote would be put under pressure by its members and MP’s to take a tougher line with the other. From the Lib Dem point of view, a number of members must be questioning whether the coalition is now worthwhile. They are perceived to have made some unpalatable compromises in order to join and maintain the coalition, and now the prospect of voting reform, which was their holy grail, has been removed.

From a deal making point of view though the difficulty for the Lib Dems is “what is their BATNA” – their Best Alternative to a Negotiated Agreement? If they leave the coalition and cause an election now at their current low ebb they may well be penalised at the polls. Is that a better alternative than sticking it out, in the hope that the economy improves and they finally get some credit with electors for the improvement? I would expect the Lib Dems to pursue the latter option, but be noisier about disagreements such as this one on overseas aid, so as to try and create some ideological distance from their coalition partners going forward…

Following on from the successful takeover of Warner Music by Access Industries, It is rumoured that its owner Len Blavatnik may be interested in buying EMI as well and merging the two majors.

From a deal-making point of view with the EU, the competition issues are much less decisive than they would have been 5 years ago owing to the weakened position of Warners and EMI as Majors. So, the fear for the EU of making a “wrong” decision (a reassurance negotiating need) would be much less.

The other issue about the merger is whether it would make much difference to either of them in practice. The Majors may well continue to be in a position where they simply manage decline unless they are prepared to liberate and expand the digital market by granting many more licenses (see last week’s report on copyright reform from Lord Hargreaves which made just such a point and urged the creation of a digital rights exchange to speed up licensing).

So, President Obama has endorsed the Palestinians’ demand for their future state to be based on the borders that existed before the 1967 Middle East war. Will this move us any closer to a negotiated agreement? Unfortunately, I fear not.

As I’ve said before, all efforts regarding Israel and Palestine should be aimed at getting both parties in a state of mind where they are willing to do a deal. Until that point, debates about whether to do a deal based on pre-1967 borders or any other proposed compromise are irrelevant. I don’t know why the US can’t see this, and insist on orchestrating processes and proposals which won’t get anywhere. Israeli’s and Palestinians have to get to a point where they feel that peace is better than war.

So, all efforts should go in to demonstrating that the benefits of peace for them and their children outweigh the benefits of being at war. Those benefits include stability, less violence, economic prosperity, educational progress and acclaim for sorting out a historic deal. What would stop the US funding economic co-operation between Israeli’s and Palestinians for example? As the history of the EU shows, peace can more easily be based on the prospect of economic progress than territorial deals.

In 1918 the Versailles treaty tried to impose territorial and other restrictions on Germany and within 20 years the world was at war again. In 1948 the first step in setting up the EU was a trade agreement – a European coal and steel deal. The EU has prospered based on its trade ever since and the desire to preserve that benefit has encouraged the Western European nations to maintain peace among themselves for nearly […]

It’s not difficult to see the negotiating motivation for HMV offloading Waterstones (see article here). They are in “survival” mode as deal makers, suffering repeated profit warnings and severe contractions in the markets for CD’s and DVD’s. Selling Waterstones buys them some time to restructure their debt and search for alternative options to arrest the decline in sales or build new product ranges (eg technology products).

It’s less obvious what the motivation might be for Alexander Mamut. Physical book sales are at the beginning of the same sort of cycle as music has been through, where mass digitisation creates pirated sales, or drives sales online to generally cheaper outlets like Amazon. In this context a labour intensive, physical offering via the High Street, with all the attendant costs of retail space and distribution, looks like a bit of struggle going forward – anyone remember when Zavi bought the Virgin music retail shops a few years ago in similar circumstances? Zavi went bust not long afterwards.

Maybe Alexander Mamut is one of those negotiators who relishes achievement, and has a high need to do innovative and groundbreaking deals – in which case acquiring a physical books chain to turn round in the teeth of irreversible market decline should suit him nicely….

Don’t fall into the trap of always using your favourite behaviour type in negotiations – it is important to select the right negotiating style for the right occasion. This includes situations where your decision is to “compromise”, which is the desired style in the book “Getting to Yes” by Roger Fisher and William Ury.

Even here you can use a variety of styles to achieve your outcome. You can use “push” behaviours such as stating expectations or using incentives and pressures. You can use “Pull” behaviours such as listening, exploring and focusing on common ground. You can use “join” behaviours such as visualising and describing positive outcomes for both parties. Or you can use “parting” behaviours such as “recessing” and “adjourning”.

All of these behaviours have their place in a strategy of compromise. Different styles suit different stages of the negotiation. (Generally “push” is more useful later in the deal and “pull” is more useful earlier on). Equally different styles can suit different people you are dealing with. No use relying on a “push” behaviour like “proposing with reasons” for example, if the person on the other side leads with their heart rather than their head. So, even if your chosen style is “compromise” there is more than one behavioural style you can use to achieve it…

Written in response to this article (insidearm.com)

The 3 way negotiation between BP, its JV partner AAR and Rosneft over Arctic exploration rights seems to have taken an unexpected turn. Negotiations are apparently over after BP failed to meet a “deadline” imposed by Rosneft. It would seem that both Rosneft and AAR have been using high pressure tactics here. AAR initially resorted to Court action to stop the deal as a backdrop to their negotiating stance. Now Rosneft’s deadline pressure is a classic “tough guy” tactic.

Pressure tactics are usually the preserve of “users” in negotiation – those who seek to gain an advantage solely for themselves and not for the other side. The best tactic to deal with these people is to stand up to them and make their behaviour the issue – otherwise they will keep doing it.

So, BP may have made the right call in refusing to respond to deadline pressure from Rosneft. This now puts the pressure back on Rosneft. If they stick to their deadline they will have to find a new partner to negotiate with. If they don’t stick to their deadline and resume the negotiation with BP, then they will have shown that their ultimatum was just a tactic and their negotiation credibility with BP will be much weaker going forward.

It was timely for the Prime Minister of Pakistan to visit China last week (see article here) as an alliance with a partner of this kind potentially gives Pakistan extra “scale” or “weight” in its discussions with the US, and these are recognised sources of bargaining power.

However, on closer scrutiny this development probably makes little difference to US/Pakistan relations. The Pakistan government has “security” negotiating needs with the US – fulfilled by large supplies of cash and other resources. It also has a constant domestic negotiation going on with its own radicalised Islamic population where it also has “security” needs – hence its ambivalent attitude to the war on terror.

China has an interest in friendly relations with Pakistan, but it is unlikely to want to supplant the US as a major supplier of cash and other resources. Equally, China, with a large Muslim population of its own which it wants to control, is unlikely to be any more in favour of Pakistan’s semi-tolerant attitude to extremists than the US is.

If, as a result of this, the US does not feel that there is any real threat that Pakistan could ever substitute China for its relationship with the US in its international dealings, then the US is unlikely to feel too anxious or threatened about a one-off visit by the Pakistan Prime Minister to China.

The successful negotiations in California between the Health Services and the fast food chains (see article here) is a good example of how “visualisation” behaviour can help people “join” together in a negotiation. The parents of those committed to fast food could visualise how a healthy regime would benefit future generations of their kids, and the fast food chains could visualise an opportunity to capture more (currently healthy eating) customers, as well as, no doubt scoring points for social responsibility. The article calls this “inventive negotiation”.

Once you can see that both parties want to join then it’s possible to find “coinage” on both sides to cement the deal. “Coinage” is a low value concession from one side that meets a high value need on the other. So, it doesn’t cost a fast food outlet much to provide apples and milk as an alternative, because either way they are still going to sell something to customers (whether it’s fast or healthy food). Equally the fast food families had nothing to lose by joining in with the scheme since all they were agreeing to do was visit fast food outlets they wanted to go to anyway.

Joining behaviour is great in some cases, but can only work where it’s genuinely possible to visualise and paint a picture of future outcomes that encourages people to “join”. That is not possible in every negotiation, and sometimes the parties resent moves to “join”, particularly if they are suggested too early in the process or there are some bitter feelings dividing the parties. So, it was a great tactic here and can be a very helpful tactic often, but won’t always work….

It was interesting to observe President Obama’s recent visit to the UK and what this tells us about the UK-US alliance.

The US holds most of the bargaining aces in any dealings with the UK. It has greater scale, numbers, market power and network power. The UK potential aces are mainly available to the US as well (expertise, information and personal power). Oddly the UK probably has some imputed “authority” power from its history and its traditions (the Queen, Parliament, etc.). No surprise then to see the UK working that source of power jolly hard whilst Obama was here.

One problem in dealing with Obama though is that mainly he doesn’t seem to like striking deals. He makes engaging statements and exudes good will, but he seems to like keeping options open rather than making commitments. This may be why he was unwilling to be drawn on issues where the UK would have liked more commitment from him – for example Libya, and Budget deficit management. This may partly explain Obama’s popularity – he never disenfranchises anybody. It makes it harder though if, like the UK, you want to get deals out of him and you don’t hold many aces.

In response to article here (bbc.co.uk)