What is Negotiation?
In simplest terms, negotiation is a discussion between two or more disputants who are trying to work out a solution to their problem. This interpersonal or inter-group process can occur at a personal level, as well as at a corporate or international (diplomatic) level. Negotiations typically take place because the parties wish to create something new that neither could do on his or her own, or to resolve a problem or dispute between them1. The parties acknowledge that there is some conflict of interest between them and think they can use some form of influence to get a better deal, rather than simply taking what the other side will voluntarily give them. They prefer to search for agreement rather than fight openly, give in, or break off contact.2
When parties negotiate, they usually expect give and take3. While they have interlocking goals that they cannot accomplish independently, they usually do not want or need exactly the same thing. This interdependence can be either be win-lose or win-win in nature, and the type of negotiation that is appropriate will vary accordingly. The disputants will either attempt to force the other side to comply with their demands, to modify the opposing position and move toward compromise, or to invent a solution that meets the objectives of all sides4. The nature of their interdependence will have a major impact on the nature of their relationship, the way negotiations are conducted, and the outcomes of these negotiations.
Mutual adjustment is one of the key causes of the changes that occur during a negotiation. Both parties know that they can influence the other's outcomes and that the other side can influence theirs5. The effective negotiator attempts to understand how people will adjust and readjust their positions during negotiations, based on what the other party does and is expected to do. The parties have to exchange information and make an effort to influence each other. As negotiations evolve, each side proposes changes to the other party's position and makes changes to its own. This process of give-and-take and making concessions is necessary if a settlement is to be reached6. If one party makes several proposals that are rejected, and the other party makes no alternate proposal, the first party may break off negotiations. Parties typically will not want to concede too much if they do not sense that those with whom they are negotiating are willing to compromise7.
The parties must work toward a solution that takes into account each person's requirements and hopefully optimizes the outcomes for both. As they try to find their way toward agreement, the parties focus on interests, issues, and positions, and use cooperative and/or competitive processes to come to an agreement8.
NEGOTIATION STRATEGIES
Negotiation success can be measured in different ways. Focusing on substance, negotiations may be called successful when they produce a mutually beneficial agreement at lower cost that an alternative forum, and when that agreement is implemented. Focusing on process, a successful negotiation would be one which was fair, efficient in terms of time and money, involved in all the relevant stakeholders, consistent with applicable regulations, and did not establish limiting precedents for third-parties. Focusing on relations, successful negotiations are those in which the parties maintain civil relations of mutual recognition and respect, and improve their joint problem-solving abilities. Generally the substantive measure tends to dominate.
One key negotiating strategy is to focus on interests rather than positions. A party's interests are the reasons they have for holding a particular position on an issue. Negotiations based on positions tend to devolve into contests of will. They are less successful by any measure. Incompatible positions may be backed by compatible interests, and so negotiating on interests is more likely to produce fair, mutually beneficial outcomes without generating added hostility. In addition to separating interests from positions, it is helpful to generate a wide range of possible solutions before trying to come to a decision. It is also helpful for the parties to agree on the criteria by which possible solutions will be evaluated before actually setting down to evaluate the proposals.
Negotiating strategies may be integrative (win-win) or distributional (zero-sum). Negotiating on interests is often integrative. The goal is to make the parties' interests compatible, so that both sides can win that is, reach an agreement that satisfies their needs. While integrative negotiation strategies are preferable, they are not always possible. Sometimes parties' interests really are opposed, as when both sides want a larger share of a fixed resource. In these cases distributional negotiations, which seek to distribute the costs and benefits fairly, are necessary. Sometimes disputes which appear to be zero-sum can be reframed so that an integrative approach is possible. One way to do this is to find creative ways to increase or use the apparently "fixed" resource. Another way is to reinterpret the parties' interests to make them compatible, or to find more basic interests which are compatible.
Approaches to Negotiation
Fisher,R.,Ury,W.,Patton,B. make several overlapping distinctions about approaches to negotiation. They distinguish between positional bargaining, which is competitive, and interest-based bargaining or principled negotiation, which is primarily cooperative. But they also make the distinction between soft, hard, and principled negotiation, the latter of which is neither soft, nor hard, but based on cooperative principles which look out for oneself as well as one's opponent9.
However distinctions were also made between competitive and cooperative approaches. The most important factors that determine whether an individual will approach a conflict cooperatively or competitively are the nature of the dispute and the goals each side seeks to achieve. Often the two sides' goals are linked together, or interdependent. The parties' interaction will be shaped by whether this interdependence is positive or negative10.
Goals with positive interdependence are tied together in such a way that the chance of one side attaining its' goal is increased by the other side's attaining its goal. Positively interdependent goals normally result in cooperative approaches to negotiation, because any participant can "attain his goal if, and only if, the others with whom he is linked can attain their goals.
On the other hand, negative interdependence means the chance of one side attaining its goal is decreased by the other's success. Negatively interdependent goals force competitive situations, because the only way for one side to achieve its goals and "win" is for the other side to "lose."11
Fisher,R.,Ury.,W.,Patton,B.also argue that almost any dispute can be resolved with interest-based bargaining (i.e., a cooperative approach), other theorists believe the two approaches should be used together. Some for example, argue that negotiations typically involve "creating" and "claiming" value. First, the negotiators work cooperatively to create value (that is, "enlarge the pie,") but then they must use competitive processes to claim value (that is, "divide up the pie")12.
However, a tension exists between creating and claiming value. This is because the competitive strategies used to claim value tend to undermine cooperation, while a cooperative approach makes one vulnerable to competitive bargaining tactics. The tension that exists between cooperation and competition in negotiation is known as "The Negotiator's Dilemma”
If both sides cooperate, they will both have good outcomes.
If one cooperates and the other competes, the co-operator will get a terrible outcome and the competitor will get a great outcome.
If both compete, they will both have mediocre outcomes.
In the face of uncertainty about what strategy the other side will adopt, each side's best choice is to compete.
However, if they both compete, both sides end up worse off13.
In real life, parties can communicate and commit themselves to a cooperative approach. They can also adopt norms of fair and cooperative behaviour and focus on their future relationship. This fosters a cooperative approach between both parties and helps them to find joint gains.
In real life, parties can communicate and commit themselves to a cooperative approach. They can also adopt norms of fair and cooperative behaviour and focus on their future relationship. This fosters a cooperative approach between both parties and helps them to find joint gains.
From the above discussion, we are able to understand that effective strategy and planning are the most important critical factors for achieving negotiation objective.However, proper attention should be directed at addressing basic causes of failure in strategic and systematic in negotiation. In the long run, with effective planning, and target setting, most negotiators can and will achieve their objective.
Endnotes
1.Fisher,R.,Ury,W.,Patton,B. 1991.
2.Ibid.
3.Ibid.
4.Anderson,K.1995.
5.Wheeler 2000.
6.Robin and Brown,1995.
7.Anderson,k.1995.
8.Ibid.
9.Ibid.
10.Fisher,R.,Ury,W.,Patton,B.1991.
11.Ibid.
12.Ibid.
13.Ibid.
In simplest terms, negotiation is a discussion between two or more disputants who are trying to work out a solution to their problem. This interpersonal or inter-group process can occur at a personal level, as well as at a corporate or international (diplomatic) level. Negotiations typically take place because the parties wish to create something new that neither could do on his or her own, or to resolve a problem or dispute between them1. The parties acknowledge that there is some conflict of interest between them and think they can use some form of influence to get a better deal, rather than simply taking what the other side will voluntarily give them. They prefer to search for agreement rather than fight openly, give in, or break off contact.2
When parties negotiate, they usually expect give and take3. While they have interlocking goals that they cannot accomplish independently, they usually do not want or need exactly the same thing. This interdependence can be either be win-lose or win-win in nature, and the type of negotiation that is appropriate will vary accordingly. The disputants will either attempt to force the other side to comply with their demands, to modify the opposing position and move toward compromise, or to invent a solution that meets the objectives of all sides4. The nature of their interdependence will have a major impact on the nature of their relationship, the way negotiations are conducted, and the outcomes of these negotiations.
Mutual adjustment is one of the key causes of the changes that occur during a negotiation. Both parties know that they can influence the other's outcomes and that the other side can influence theirs5. The effective negotiator attempts to understand how people will adjust and readjust their positions during negotiations, based on what the other party does and is expected to do. The parties have to exchange information and make an effort to influence each other. As negotiations evolve, each side proposes changes to the other party's position and makes changes to its own. This process of give-and-take and making concessions is necessary if a settlement is to be reached6. If one party makes several proposals that are rejected, and the other party makes no alternate proposal, the first party may break off negotiations. Parties typically will not want to concede too much if they do not sense that those with whom they are negotiating are willing to compromise7.
The parties must work toward a solution that takes into account each person's requirements and hopefully optimizes the outcomes for both. As they try to find their way toward agreement, the parties focus on interests, issues, and positions, and use cooperative and/or competitive processes to come to an agreement8.
NEGOTIATION STRATEGIES
Negotiation success can be measured in different ways. Focusing on substance, negotiations may be called successful when they produce a mutually beneficial agreement at lower cost that an alternative forum, and when that agreement is implemented. Focusing on process, a successful negotiation would be one which was fair, efficient in terms of time and money, involved in all the relevant stakeholders, consistent with applicable regulations, and did not establish limiting precedents for third-parties. Focusing on relations, successful negotiations are those in which the parties maintain civil relations of mutual recognition and respect, and improve their joint problem-solving abilities. Generally the substantive measure tends to dominate.
One key negotiating strategy is to focus on interests rather than positions. A party's interests are the reasons they have for holding a particular position on an issue. Negotiations based on positions tend to devolve into contests of will. They are less successful by any measure. Incompatible positions may be backed by compatible interests, and so negotiating on interests is more likely to produce fair, mutually beneficial outcomes without generating added hostility. In addition to separating interests from positions, it is helpful to generate a wide range of possible solutions before trying to come to a decision. It is also helpful for the parties to agree on the criteria by which possible solutions will be evaluated before actually setting down to evaluate the proposals.
Negotiating strategies may be integrative (win-win) or distributional (zero-sum). Negotiating on interests is often integrative. The goal is to make the parties' interests compatible, so that both sides can win that is, reach an agreement that satisfies their needs. While integrative negotiation strategies are preferable, they are not always possible. Sometimes parties' interests really are opposed, as when both sides want a larger share of a fixed resource. In these cases distributional negotiations, which seek to distribute the costs and benefits fairly, are necessary. Sometimes disputes which appear to be zero-sum can be reframed so that an integrative approach is possible. One way to do this is to find creative ways to increase or use the apparently "fixed" resource. Another way is to reinterpret the parties' interests to make them compatible, or to find more basic interests which are compatible.
Approaches to Negotiation
Fisher,R.,Ury,W.,Patton,B. make several overlapping distinctions about approaches to negotiation. They distinguish between positional bargaining, which is competitive, and interest-based bargaining or principled negotiation, which is primarily cooperative. But they also make the distinction between soft, hard, and principled negotiation, the latter of which is neither soft, nor hard, but based on cooperative principles which look out for oneself as well as one's opponent9.
However distinctions were also made between competitive and cooperative approaches. The most important factors that determine whether an individual will approach a conflict cooperatively or competitively are the nature of the dispute and the goals each side seeks to achieve. Often the two sides' goals are linked together, or interdependent. The parties' interaction will be shaped by whether this interdependence is positive or negative10.
Goals with positive interdependence are tied together in such a way that the chance of one side attaining its' goal is increased by the other side's attaining its goal. Positively interdependent goals normally result in cooperative approaches to negotiation, because any participant can "attain his goal if, and only if, the others with whom he is linked can attain their goals.
On the other hand, negative interdependence means the chance of one side attaining its goal is decreased by the other's success. Negatively interdependent goals force competitive situations, because the only way for one side to achieve its goals and "win" is for the other side to "lose."11
Fisher,R.,Ury.,W.,Patton,B.also argue that almost any dispute can be resolved with interest-based bargaining (i.e., a cooperative approach), other theorists believe the two approaches should be used together. Some for example, argue that negotiations typically involve "creating" and "claiming" value. First, the negotiators work cooperatively to create value (that is, "enlarge the pie,") but then they must use competitive processes to claim value (that is, "divide up the pie")12.
However, a tension exists between creating and claiming value. This is because the competitive strategies used to claim value tend to undermine cooperation, while a cooperative approach makes one vulnerable to competitive bargaining tactics. The tension that exists between cooperation and competition in negotiation is known as "The Negotiator's Dilemma”
If both sides cooperate, they will both have good outcomes.
If one cooperates and the other competes, the co-operator will get a terrible outcome and the competitor will get a great outcome.
If both compete, they will both have mediocre outcomes.
In the face of uncertainty about what strategy the other side will adopt, each side's best choice is to compete.
However, if they both compete, both sides end up worse off13.
In real life, parties can communicate and commit themselves to a cooperative approach. They can also adopt norms of fair and cooperative behaviour and focus on their future relationship. This fosters a cooperative approach between both parties and helps them to find joint gains.
In real life, parties can communicate and commit themselves to a cooperative approach. They can also adopt norms of fair and cooperative behaviour and focus on their future relationship. This fosters a cooperative approach between both parties and helps them to find joint gains.
From the above discussion, we are able to understand that effective strategy and planning are the most important critical factors for achieving negotiation objective.However, proper attention should be directed at addressing basic causes of failure in strategic and systematic in negotiation. In the long run, with effective planning, and target setting, most negotiators can and will achieve their objective.
Endnotes
1.Fisher,R.,Ury,W.,Patton,B. 1991.
2.Ibid.
3.Ibid.
4.Anderson,K.1995.
5.Wheeler 2000.
6.Robin and Brown,1995.
7.Anderson,k.1995.
8.Ibid.
9.Ibid.
10.Fisher,R.,Ury,W.,Patton,B.1991.
11.Ibid.
12.Ibid.
13.Ibid.
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