BARGAINING IMPASSE

 

WHAT IS BARGAINING IMPASSE

Impasse is a deadlock or stalemate in bargaining declared by one or both parties to the negotiation (Raei, et al., 2017). Impasse occurs when differences of matters to be included in the agreement remain so substantial and prolonged that further negotiation would be futile (Zumbolo, 2018). Any one party in the negotiating table would declare impasse when there are no alternative proposals to promote the bargaining process (Dezső & Loewenstein, 2019).

A major unresolved puzzle facing the social sciences is the cause of impasse in negotiations (Church, et al., 2020) and the consequences of impasse are evident in the amount of private and public resources spent on civil litigation, the costs of labor unrest, the psychic and financial grazes of domestic conflict, and in clashes between religious, ethnic and regional groups (Hippel & Hoeppner, 2019). Impasses not only pernicious, but somewhat paradoxical since negotiations typically unfold over long periods of time, offering ample opportunities for interaction between the parties (Zumbolo, 2018).

Bargainers possess private information about factors such as their alternatives to negotiated agreements and costs to delay, causing the bargainers to be mutually uncertain about the other side's reservation value (Friedenberg, 2019). Uncertainty produces impasse because bargainers use costly delays to signal to the other party about their own reservation value. However, this supposition is explanation for impasse is difficult to test because satisfactory measures of uncertainty are rare (Essa, et al., 2018).

CAUSES OF BARGAINING IMPASSE

A major cause of bargaining impasse is the tendency for parties to arrive at judgments that reflect a self-serving bias to conflate what is fair with what benefits and such self-serving assessments of fairness can impede negotiations and promote impasse in at least three ways (McAuliffe , 2017).

~ First, if negotiators estimate the value of the alternatives to negotiated settlements in self-serving ways, this could rule out any chance of settlement by eliminating the contract (Pinkey, et al., 2019).

~ Second, if disputants believe that their notion of fairness is impartial and shared by both sides, then they will interpret the other party's aggressive bargaining not as an attempt to get what they perceive of as fair, but as a cynical and exploitative attempt to gain an unfair strategic advantage (Malik, et al., 2018).

~ Third, negotiators are strongly averse to settling even slightly below the point they view as fair (Keough, 2017).

The bias is also present when bargainers have incentives to evaluate the situation impartially, which implies that the bias does not appear to be deliberate or strategic (Hippel & Hoeppner, 2019).

NEGOTIATING THROUGH IMPASSE

Participants perceive that they are no longer able to find effective solutions, impasse is a normal phase of any conflict resolution or negotiation process, even though often perceived as a threat or a demand, impasse can be an opportunity for new insights and collaborative solutions (Yu, et al., 2017).

~ Naming the impasse and embracing the opportunity is not immoral but uncomfortable, yet important because element of the expression of the conflict and identifying impasse concerns ultimately help participants go beyond initial positions (Hall-Baker, 2017).

~ Respecting the variety of needs and renewal of commitment to ground rules while helping the interest-based concerns can use the triangle of needs to shift focus to more constructive areas of inquiry (Poon, 2018).

~ Exploring alternatives to a negotiated agreement and carving out a realistic negotiating space is very important to arrive at a final decision (Cotter & Henley, 2017). Therefore, respect the silence while allowing time to process, slow down the process and avail structured breaks so that the results of negotiations will be fruitful (Miettinen, et al., 2020).

Figure 1: International solidarity has the power to reform the Banking Industry

Source: (UNIGlobal, 2017)

The above figure shows the financial workers from the United States and Australia are standing together to curb big banks’ abuses of employees and customers (UNIGlobal, 2017).

In brief, when a solution is not visible for a proper negotiation, people in the table of negotiation tend to drag the main points of conflict for no reason, availing unwanted time, merely to delay the process towards a final agreement. The delaying of periodic Collective Agreements without a major point of discussion is clearly visible in the Banking Industry thereby reducing the moral and making the employees violent to select alternatives in winning the employee rights (Dubal, 2017).

References

Church, B. K., Dai, N. T., Xi Kuang & Liu, X., 2020. The Role of Auditor Narcissism in Auditor‐Client Negotiations: Evidence from China. Contemporary Accounting Research , 37(3), pp. 1756-1787.

Cotter, M. J. & Henley, J. A., 2017. Gender Contrasts in Negotiation Impasse Rates. Management (18544223), 12(1).

Dezső, L. & Loewenstein, G., 2019. Self-serving invocations of shared and asymmetric history in negotiations. European Economic Review, Volume 120, p. 103309.

Dubal, V. B., 2017. Winning the Battle, Losing the War. Impact of Misclassification Mitigation in the Gig Economy, p. 739.

Essa, S. A., Dekker, H. C. & Groot, T. L., 2018. Your gain my pain? The effects of accounting information in uncertain negotiations. Management Accounting Research, Volume 41, pp. 20-42.

Friedenberg, A., 2019. Bargaining Under Strategic Uncertainty: The Role of Second‐Order Optimism. Econometrica, 87(6), pp. 1835-1865.

Hall-Baker, T., 2017. Conflict, Knowledge, and Collective Bargaining in Public Education. s.l.:Michael Vassilakopoulos.

Hippel, S. & Hoeppner, S., 2019. Biased judgements of fairness in bargaining: A replication in the laboratory. International Review of Law and Economics, Volume 58, pp. 63-74.

Hippel, S. & Hoeppner, S., 2019. Biased judgements of fairness in bargaining: A replication in the laboratory. International Review of Law and Economics, Volume 58, pp. 63-74.

Keough, C. M., 2017. Negotiation and bargaining. Organizational Communication, pp. 1-10.

Malik, S., Mihm, B., Mihm, M. & Timme, F., 2018. Aggressive Posturing and Strategic Gender Effects in Bilateral Bargaining.

McAuliffe , P., 2017. Transitional opportunity? How peace negotiations and power-sharing impede root cause approaches. In: Transformative Transitional Justice and the Malleability of Post-Conflict States. Cheltenham Glos: Edward Elgar Publishing.

Miettinen, T., Ropponen, O. & Sääskilahti, P., 2020. Prospect Theory, Fairness, and the Escalation of Conflict at a Negotiation Impasse. The Scandinavian Journal of Economics.

Pinkey, R. L., Conlon, D. E., Sleesman, D. J. & Vandelle, D., 2019. The power of planthom alternatives in negotiation. Organizational Behaviour and Human Decision Process, Volume 151, pp. 34-48.

Poon, K., 2018. The Impasse Over Constitutional Reform. In: Negotiating Democracy in Hong Kong. Cham: Palgrave Macmillan, pp. 3-19.

Raei, E., Nikoo, M. R. & Pourshahabi, S., 2017. A multi-objective simulation-optimization model for in situ bioremediation of groundwater contamination: application of bargaining theory. Journal of Hydrology, Volume 551, pp. 407-422.

UNIGlobal, 2017. uniglobalunion. [Online]Available at:https://www.uniglobalunion.org/news/international-solidarity-has-power-reform-banking-industry
[Accessed 03 12 2020].

Yu, S., van Ierland, E. C., Weikard, H. P. & Zhu, X., 2017. Nash bargaining solutions for international climate agreements under different sets of bargaining weights. International Environmental Agreements: Politics, Law and Economics, 17(5), pp. 709-729.

Zumbolo, A., 2018. The Acceleration and Decline of Discord. Collective Bargaining Impasses in New York State, Volume 36, p. 163.