What is negotiation? - Introduction to negotiation

Negotiation is a method by which people resolve differences. It is a process by which a compromise or agreement is reached while avoiding arguments and disputes.

When disagreements arise, it's understandable that people aim to achieve the best possible outcome for their position (or perhaps an organization they represent). However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.

Specific forms of negotiation are used in many situations: international business, the legal system, government, labor disputes or internal relations as examples. However, general negotiation skills can be acquired and applied in a wide range of activities. Negotiation skills can be very useful in resolving differences that arise between you and others.

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Negotiation stages

To achieve a desirable outcome, it may be useful to follow a structured approach to negotiation. For example, in a work situation, it may be necessary to organize a meeting at which all parties concerned can get together.

The negotiation process involves the following stages:

1. preparation
2. Discussion
3. Clarifying objectives
4. Negotiating for a win-win outcome
5. Agreement
6. Implementation of an action plan.

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1. Preparation

Before any negotiations take place, a decision needs to be made as to when and where a meeting will be held to discuss the problem, and who will attend. Setting a time limit can also help prevent disagreements from persisting.

This step involves ensuring that all the relevant facts of the situation are known in order to clarify their own position. In the working example above, this would include knowing your organization's "rules", who receives help, when help is not deemed appropriate, and the reasons for such refusals. Your organization may have policies you can refer to in preparation for negotiation.

Doing the preparation before discussing the disagreement will help avoid further conflicts and waste unnecessary time during the meeting.

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2. Discussion

During this stage, the individuals or members of each side present the case as they see it, i.e. their understanding of the situation.

Key skills in this stage include questioning, listening and clarify.

Sometimes it's useful to take notes during the discussion stage to record all the points made in case clarification is needed. Listening is extremely important, because in the event of disagreement, it's easy to make the mistake of saying too much and listening too little. Each side should have an equal opportunity to present its case.

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3. Clarify objectives

From the discussion, the objectives, interests and viewpoints of both sides of the disagreement should be clarified.

It is useful to list these factors in order of priority. With this clarification, it is often possible to identify or establish common ground. Clarification is an essential part of the negotiation process, without which there is likely to be misunderstandings that can cause problems and obstacles to achieving a beneficial outcome.

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4. Negotiate towards a win-win outcome

This stage focuses on what is known as a "win-win" outcome, where both parties feel that they have gained something positive through the negotiation process, and both parties feel that their point of view has been taken into consideration.

A win-win result is usually the best outcome. Although this is not always possible, through negotiation it should be the ultimate goal.

Suggestions for alternative strategies and commitments should be considered at this stage. Commitments are often positive alternatives that can bring more benefits to all parties involved than holding the original positions.

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5. Agreement

An agreement can be reached once the views and interests of both parties have been understood.

It's essential that everyone involved keeps an open mind if an acceptable solution is to be reached. Any agreement must be perfectly clear, so that both parties know what has been decided.

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6. Implementation of an action plan

Since the agreement, a course of action must be taken to implement the decision.

See our pages: Strategic thinking and Action plan for more information.

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Breach of agreement

If the negotiation process is interrupted and an agreement cannot be reached, a new meeting must be rescheduled. This prevents all parties from being drawn into heated discussions or arguments, which not only wastes time but can also damage future relations.

At the next meeting, the negotiation steps should be repeated. Any new ideas or interests should be taken into account, and the situation reviewed. At this stage, it may also be useful to look for alternative solutions and/or bring another person into the mediation.

See our page in Mediation skills for more information.

Informal negotiation

There are times when it's necessary to negotiate more informally. In such cases, when a difference of opinion arises, it may not be possible or appropriate to go through the formally established steps.

However, remembering the key points of the formal negotiation stages can be very useful in a variety of informal situations.

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In any negotiation, the following three elements are important and can affect the final outcome:

1. Attitudes
2. Knowledge
3. Personal skills

Attitudes

All negotiations are strongly influenced by the attitudes underlying the process itself, e.g. attitudes to the issues and personalities involved in the particular case, or attitudes related to the need for personal recognition.

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Knowledge

The more you know about the issues in question, the more you can participate in the negotiation process. In other words, good preparation is essential.

Do your homework and gather as much information as you can about the problems.

In addition, the way in which problems are negotiated needs to be understood, as negotiation will require different methods in different situations.

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