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Who Won?

Author(s):

Jim Mullen

November/December 2009, eSide Supply Management Vol. 2, No. 6

Assess negotiation outcomes using the Subjective Value Inventory.

For a number of years, I've taught a course on effective negotiation to business administration undergraduates. For them, a variety of negotiation role-play exercises have proven instrumental; it can be very difficult to grasp these concepts without some type of interactivity.

As I always tell my students, every negotiation provides an opportunity to learn. As such, debriefing these negotiation exercises is one of my primary teaching methodologies. At the end of the class, when we get together to discuss what we learned, one question inevitably arises: Who won?

Given our competitive human nature and personal need for achievement, it's easy to understand why the question comes up — but how, exactly, does a negotiator answer this question in actual practice?

The Classroom Versus the Real World

In the classroom, we start with distributive exercises, or zero-sum negotiation role-plays, wherein we can objectively determine a clear winner with regard to economic value. Unfortunately, when the class moves on to integrative exercises or interest-based negotiation role-plays, most students carry this one-dimensional view that the process is only about maximizing economic value.

Just like these students, even experienced negotiators can fall into the trap of fixating solely on the economic terms of the deal. While it's certainly an important piece of negotiation, the spirit of the deal — or the relationship between the parties at the conclusion of the negotiation — is equally important, yet often ignored.

In practice, most negotiations aren't one-shot deals, and reaching agreement isn't the finish line; rather, it's the point at which the real work begins because this is when the parties begin to do what they agreed upon. Additionally, it's no surprise that negotiators overlook the long-term, or implementational, side of the process, as many organizations reward the closing of the deal, not the carrying-it-out part of the equation.

When we negotiate, we all have a primal urge to win. This can cause us to think irrationally about negotiation outcomes. But, measuring our success in objective terms of the explicit agreement is irrational: The resulting psychological contract between the parties is every bit as important. This contract describes the shared beliefs, common perceptions and informal obligations between the parties. Unlike a formal written agreement, this implicit — or relational — contract defines the dynamics for the future relationship between the parties. After all, where's the long-term economic value if the negotiation process undermines the relationship?

The Subjective Value Inventory

Created by MIT researchers, the Subjective Value Inventory (SVI) — a 16-item questionnaire — provides negotiators with a framework to measure their performance in a negotiation with regard to the resulting psychological contract. The researchers concluded that most negotiators care not only about the economic aspects of the deal, but also about the process used to reach it.

To this end, the SVI is designed to measure a negotiator's perceptions along four basic dimensions: feelings about the instrumental outcome, feelings about themselves, feelings about the process and feelings about the relationship. These four dimensions, or categories, were narrowed down from a broad-based study of what people subjectively cared about at the conclusion of a negotiation. Here's a quick summary of how it works:

Feelings about the instrumental outcome — are related to the economic outcome, but go deeper than tangible results to include our psychological satisfaction with them.
Feelings about the self —; assess how we feel about our own behavior during the negotiation with regard to acting within our values system and upholding our principles.
Feelings about the process — measure our perceptions regarding fairness and the legitimacy of the negotiation process itself.
Feelings about the relationship — capture the mood or trust level between the parties regarding their future willingness to work together.

The total SVI score indicates — or more objectively measures — the negotiator's overall psychological fulfillment with the outcome, especially regarding the spirit of the deal.

At its heart, the SVI can help negotiators look at the big picture and move away from the one-dimensional view that every negotiation is solely about money or maximizing economic value. Integrating it into your routine will prove a strong predictor of both parties' willingness to work cooperatively together in the future.

A full, free version of the SVI, as well as related research, can be found online.

Jim Mullen is an associate professor of management at Elmira College in Elmira, New York. To contact this author, please send an e-mail to author@ism.ws.

For more articles and resources on effective negotiating, visit the ISM articles database.

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