Defining Negotiation

 NEGOTIATION 

Negotiation is the process of discussing each individual’s position on a topic and attempting to reach a solution that benefits both parties. We often step in and negotiate when a conflict is taking place, but conflict doesn’t have to exist for there to be an opportunity for negotiation. It can be a discussion of an exchange of goods and services.

All negotiations share four common characteristics:

·       The parties involved are somehow interdependent

·       The parties are each looking to achieve the best possible result in the interaction for themselves

·       The parties are motivated and capable of influencing one another

·       The parties believe they can reach an agreement

If these conditions don’t exist, neither can a negotiation. The parties have to be interdependent—whether they are experiencing a conflict at work or want to do business with one another. Each has an interest in achieving the best possible result. The parties are motivated and capable of influencing one another, like a union bargaining for better working conditions. 

THE SIX STAGES OF NEGOTIATION

Preparation and Planning

In the preparation and planning stage, you (as a party in the negotiation) need to determine and clarify your own goals in the negotiation. This is a time when you take a moment to define and truly understand the terms and conditions of the exchange and the nature of the conflict. What do you want to walk away with?

You should also take this moment to anticipate the same for the other party. What are their goals in this negotiation? What will they ask for? Do they have any hidden agendas that may come as a surprise to you? What might they settle for, and how does that differ from the outcome you’re hoping for?

This is a time to develop a strategy for the negotiation. We’ll talk more about strategies in the next section.

Definition of Ground Rules

After the planning and strategy development stage is complete, it’s time to work with the other party to define the ground rules and procedures for the negotiation. This is the time when you and the other party will come to an agreement on questions like

·           Who will do the negotiating—will we do it personally or invite a third party?

·           Where will the negotiation take place?

·           Will there be time constraints placed on this negotiation process?

·           Will there be any limits to the negotiation?

·           If an agreement can’t be reached, will there be any specific process to handle that?

Usually, it’s during this phase that the parties exchange their initial positions.

Clarification and Justification

Once initial positions have been exchanged, the clarification and justification stage can begin. Both you and the other party will explain, clarify, bolster and justify your original position or demands. For you, this is an opportunity to educate the other side on your position and gain further understanding about the other party and how they feel about their side. You might each take the opportunity to explain how you arrived at your current position, and include any supporting documentation. Each party might take this opportunity to review the strategy they planned for the negotiation to determine if it’s still an appropriate approach.

This doesn’t need to be—and should not be—confrontational, though in some negotiations that are hard to avoid. But if tempers are high moving into this portion of the negotiation process, then those emotions will start to come to a head here. You need to manage those emotions so serious bargaining can begin.

Bargaining and Problem Solving

This is the essence of the negotiation process, where the give and take begins.

You and the other party will use various negotiation strategies to achieve the goals established during the preparation and planning process. You will use all the information you gathered during the preparation and planning process to present your argument and strengthen your position or even change your position if the other party’s argument is sound and makes sense.

The communication skills of active listening and feedback serve the parties of a negotiation well. It’s also important to stick to the issues and allow for an objective discussion to occur. Emotions should be kept under control. Eventually, both parties should come to an agreement.

Closure and Implementation

Once an agreement has been met, this is the stage in which procedures need to be developed to implement and monitor the terms of the agreement. They put all of the information into a format that’s acceptable to both parties, and they formalize it.

RULES

1.    Separate the people from the problem. This describes the way the parties should interact with each other throughout the negotiation process. Negotiators are only people, and they have personal interests in their positions. If Party A attacks the position of Party B, it can feel as though he or she is attacking Party B personally. If parties can go into a negotiation committed to clear communication and do their best to acknowledge the emotions that are attached to the negotiation process, there will be a better chance for an amicable resolution.

2.    Focus on interests, not positions. This is an aspect to be considered throughout the negotiation process, starting with planning and preparation and revisited in clarification and justification. A party’s position is something he has decided upon. His interests are the reason why he’s made that particular decision. Each party should attempt to explain their interests clearly and have a full understanding of the other party’s interests.

3.    Invent options for mutual gain. It’s during this stage, that falls within the bargaining discussion part of the process, that parties should get together and try to generate as many possible options for resolution. Parties can focus on shared interests to generate as many win-win solutions as they can during the brainstorming sessions. Once all possible solutions are exhausted, evaluation of those proposed solutions can begin.

4.    Insist on using objective criteria. Using objective criteria can keep the discussion polite and the relationship preserved during the negotiation process. This objective criterion can be introduced during the ground rules stage, or at any point thereafter, and parties should agree to its use. Objective criteria can be statistics, past legal judgments, professional standards, or other data that is legitimate and practical.

5.    Understand your “BATNA.” The BATNA – the best alternative to a negotiated agreement – is the most advantageous course of action a party can take if negotiations fail and an agreement can’t be made. A party should never accept a negotiated deal that leaves him or her worse off than his BATNA. The BATNA is a leverage point in negotiations, and without a clear idea of BATNA, a party is negotiating blindly.

ELEMENTS

1.    Interests. Are “the fundamental drivers of negotiation,” according to Patton—our basic needs, wants, and motivations. Often hidden and unspoken, our interests nonetheless guide what we do and say. Experienced negotiators probe their counterparts’ stated positions to better understand their underlying interests.

2.    Legitimacy. The quest for a legitimate, or fair, deal drives many of our decisions in negotiations. If you feel the other party is taking advantage of you, you are likely to reject their offer, even if it would leave you objectively better off. To succeed in negotiation, we need to put forth proposals that others will view as legitimate and fair.

3.    Relationships. Whether you have an ongoing connection with a counterpart or don’t think you’ll ever see her again, you need to effectively manage your relationship as your negotiation unfolds. Relationship dynamics become all the more important when you have an ongoing connection: future business, your reputation, and your relationships with others may hang in the balance. You can strengthen the relationship by building rapport and meeting your own high ethical standards throughout the process.

4.    Alternatives and BATNA. Even as we take part in negotiations, we are aware of our alternatives away from the table—what we will do if the current deal doesn’t pan out. According to Getting to Yes, negotiation preparation should include an analysis of your BATNA or best alternative to a negotiated agreement. For example, a job candidate may determine that she will start applying to grad schools if a particular job negotiation falls apart.

5.    Options. In negotiations, options refer to any available choices parties might consider to satisfy their interests, including conditions, contingencies, and trades. Because options tend to capitalize on parties’ similarities and differences, they can create value in negotiation and improve parties’ satisfaction, according to Patton.

6.    Commitments. In negotiations, a commitment can be defined as an agreement, demand, offer, or promise made by one or more parties. A commitment can range from an agreement to meet at a particular time and place to a formal proposal to a signed contract.

7.    Communication. Whether you are negotiating online, via phone, or in person, you will take part in a communication process with the other party or parties. The success of your negotiation can hinge on your communication choices, such as whether you threaten or acquiesce, brainstorm jointly or make firm demands, make silent assumptions about interests or ask questions to probe them more deeply.