What is Negotiation?

What
is Negotiation?

A: There are two principle negotiation theories and strategic approaches
to negotiation:

competitive or positional negotiation; and integrative or problem-solving or
interest-based negotiation.

Distinguish Strategic Approach from Personality

While
there may be some correlation between negotiation approaches and personality
style, the two do not necessarily go together. For example, a competitive negotiator
may be very “pleasant” to work with in terms of demeanor, but utilize extremely
competitive tactics. In fact, a negotiator’s pleasantries may themselves be
part of an overall manipulative approach! A problem-solving negotiator may,
on the other hand, be rather ornery in terms of their personality, yet effectively
utilize interest-based, problem-solving strategies in negotiation.

The Best Negotiators Will Have Both Sets of Skills

It is also important to appreciate that the most effective negotiators will
have a wide array of negotiation skills, both competitive and problem-solving,
and will effectively mix and match these approaches depending upon what the
negotiator believes will work best with a particular “negotiating partner” depending
on the specific issue being negotiated and depending on the nature of the overall
negotiating relationship (one-time transaction or continuing relations).

Strategies
to Create Value and Claim Value

Another
view of negotiation is that certain strategies and behaviors are intended to
“create value” (integrative approaches) whereas other strategies and behaviors
are intended to “claim value” (be that by competition or principle).

Dispute
Negotiation and Transactional Negotiation

Also
notice that negotiations may be divided into two types:

  • dispute negotiation, focused on resolving past facts; and
  • transaction
    negotiation, focused on reaching agreement for the future.

While
it is often helpful to appreciate this difference between dispute negotiation
and transaction negotiation, it is also beneficial to appreciate that many negotiation
situations involve the resolution of both past issues as well as planning future
relations.

The Competitive Approach

Competitive
negotiation strategy is, essentially, a manipulative approach designed to intimidate
the other party to lose confidence in their own case and to accept the competitor’s
demands. This approach is characterized by the following:

  • High opening demands;
  • Threats,
    Tension and Pressure;
  • Stretching
    the facts;
  • Sticking
    to positions;
  • Being
    tight lipped;
  • Want
    to outdo, outmaneuver the other side; and
  • Want
    clear victory.

When
a competitive negotiator is asked how they will know that they have reached
a good agreement, they may reply that the agreement is “better than fair.”

Assumptions
of the Competitive Approach

  • There
    are certain assumptions, a world view really, that lie behind the competitive
    approach to negotiation. This “distributive” world view includes the following
    assumptions: Negotiation is the division of limited resources;
  • One
    side’s gain is the other’s side’s loss; and
  • A
    deal today will not materially affect choices available tomorrow.

Risks
of the Competitive Approach

While
competitive negotiation tactics are often effective in “claiming” already defined
value, there are also certain risks to competitive negotiation. Foremost among
these risks are damage to the negotiating relationship and a lessened overall
likelihood of reaching agreement. Here is a list of the disadvantages of the
competitive style:

  • Confrontation leads to rigidity;
  • There
    is limited analysis of merits of dispute and relevant criteria for resolving
    issues;There is limited development of solution alternatives;
  • It
    is hard to predict the outcome of the competitive approach or control the
    process;
  • Competitors
    are generally blind to joint gains;
  • Competitors
    threaten their future relations; and
  • Competitors
    are more likely to have impasse and increased costs.

The
Integrative Approach

The
integrative, collaborative or problem-solving approach to negotiation has been
described as “enlightened self-interest,” rather than the “egocentric variety.”
This approach consists of joint problem-solving, where gains are not necessarily
viewed as at the expense of the other party.

Assumptions
of the Integrative Approach

As
one might expect, there is a different world view behind the integrative approach
to negotiation. The primary assumptions of the integrative approach are the
following:

  • Some
    common interests exist between parties;
  • Negotiation
    is benefited by a full discussion of each participant’s perspective and interests;
    and
  • We
    live in an integrated and complex world and our problems can be best resolved
    through application of our best intelligence and creativity.

Risks of the Integrative Approach

Risks of the integrative approach are based upon the common sense observation
that “it takes two to collaborate.” If one party is unwilling to participate
in integrative, problem solving negotiation, the more collaborative negotiator
may be at risk in the following ways:

  • The
    negotiator will be forced to either “give in” or adopt a competitive stance;
  • The
    negotiator may experience a failure if they do not reach agreement; and
  • The
    negotiator is somewhat at risk in honestly disclosing information if that
    is not reciprocated.

Principled Negotiation

In
their book, Getting to Yes, Fisher and Ury set forth their concept of “Principled
Negotiation.” Here is a brief summary of the main points of principled negotiation:


Separate the People from the Problem

Fisher
and Ury suggest that we are all people first — that there are always substantive
and relational issues in negotiation and mediation. The authors describe means
of dealing with relational issues, including considering each party’s perception
(for example by reversing roles); seeking to make negotiation proposals consistent
with the other party’s interests; making emotions explicit and legitimate; and
through active listening.

Focus
on Interests, Not Positions

Positions
may be thought of as one dimensional points in a space of infinite possible
solutions. Positions are symbolic representations of a participant’s underlying
interests. To find out interests, you may ask questions like: “What is motivating
you here?” “What are you trying to satisfy” or “What would you like to accomplish?”
You may also ask: “If you had what you are asking for (your position), what
would that experientially get you – what interests would that satisfy?”

In
negotiation, there are multiple, shared, compatible, and conflicting interests.
Identifying shared and compatible interests as “common ground” or “points of
agreement” is helpful in establishing a foundation for additional negotiation
discussions. Principles can often be extrapolated from “points of agreement”
to resolve other issues. Also note that focusing on interests tends to direct
the discussion to the present and future, and away from the difficulties of
the past. If we have learned anything about the past, it is that “we can not
change it.” The past may help us to identify problems needing solution, but,
other than that, it does not tend to yield the best solutions for the future.

Invent
Options for Mutual Gain

Before
seeking to reach agreement on solutions for the future, Fisher and Ury suggest
that multiple solution options be developed prior to evaluation of those options.
The typical way of doing this is called brainstorming. In brainstorming, the
parties, with or without the mediator’s participation, generate many possible
solution before deciding which of those best fulfill the parties’ joint interests.
In developing options, parties look for mutual gains.

Select
from Among Options by Using Objective Criteria

Using objective criteria (standards independent of the will of any party) is
where the label “principled negotiation” comes from. Fisher and Ury suggest
that solution selection be done according to concepts, standards or principles
that the parties believe in and are not under the control of any single party.
Fisher and Ury recommend that selections be based upon such objective criteria
as precedent, tradition, a course of dealing, outside recommendations, or the
flip of a coin.

What
if They are More Powerful? – Developing a BATNA

In the event that the other party has some negotiating advantage, Fisher and
Ury suggest that the answer is to improve the quality of your “best alternative
to a negotiated agreement” (your BATNA). For example, if you are negotiating
for a job and want to make a case for a higher wage, you improve your negotiating
power by having another job offer available, or at least as a possibility.

What
if They Won’t Play or Use Dirty Tricks?

Fisher and Ury’s answer to the resistant competitive negotiator is to “insist”
on principled negotiation in a way that is most acceptable to the competitor.
The principled negotiator might ask about the competitor’s concerns, show he
or she understands these concerns, and, in return, ask the competitor to recognize
all concerns. Following the exploration of all interests, Fisher and Ury suggest
inducing the competitive negotiator to brainstorm options and to think in terms
of objective criteria for decision-making. Another way of thinking about encouraging
principled or integrative bargaining is to think in terms of matching, pacing,
leading and modeling. To get a negotiator to shift orientations, it is critical
that they first experience themselves as fully heard in terms of content, intensity
and emotion. By so matching and pacing with a negotiator (asking a few clarifying
questions), the negotiator will become more open to your lead and modeling of
productive means of negotiating. Negotiation Power

Negotiation
power

can be defined as “the ability of the negotiator to influence the behavior of
another. Commentators have observed a variety of aspects and qualities of negotiation
power. It is important for the mediator to take note of these various aspects
and qualities of negotiating power as a means of assisting each negotiating
party to be at his or her best in representing his or her interests in mediation.
Here are a number of aspects and qualities of negotiating power that have been
identified:

  • Negotiating
    power is relative between the parties;
  • Negotiating
    power changes over time;
  • Negotiating
    power is always limited;
  • Negotiating
    power can be either real or apparent;
  • The
    exercise of negotiation power has both benefits and costs;
  • Negotiating
    power relates to the ability to punish or benefit;
  • Negotiating
    power is enhanced by legal support, personal knowledge, skill, resources and
    hard work;
  • Negotiating
    power is increased by the ability to endure uncertainty and by commitment;
  • Negotiating
    power is enhanced by a good negotiating relationship;
  • Negotiating
    power depends on the perceived BATNA; and
  • Negotiating
    power exists to the extent that it is accepted

Overall Problem-Solving Negotiation Structure

As an overall model for effective problem-solving negotiation, please consider
the following:

  • Informed Consent as to Process (the process is always negotiable)
  • Sharing
    Perspectives
    (separate relational issues from substantive issues. Discuss
    both, just separately.)
  • Remember the Common Ground (common interests, interdependence and easy
    points of agreement)

  • Establish a Problem-Solving Agenda

    (questions seeking solutions: “How can we best . . .?” or “What is the best
    way for us to . . .?”)
  • Identify
    Desired Information and Documentation Clarify Desired Outcomes, Interests
    and Positive Intentions Develop Options
    (develop options based upon outcomes,
    interests and positive intentions)
  • Select from
    Options
    (Easy agreements and package deals)
  • Integration and Finalization (Any possible improvement? What else
    needs to be done?)

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Q:
What is Online Negotiation?

A: When we have been harmed or when things have not gone as planned, there is commonly frustration, anger and despair. Few of us enjoy negotiations under these circumstances. Most would prefer to avoid the situation or have someone else handle it. But now there are online opportunities to work these situations
out economically, swiftly and in comfort and safety. OnlineResolution.com and Mediate.com have teamed together to offer online negotiators state of the art Resolution Room technology that is now available at www.ResolutionRoom.com

Agreements
are negotiated through the Internet everyday, some worth millions of dollars,
others effecting important relationships. E-mail, web discussions, and soon
audio and video communications offer undeniable convenience and economy. The
Internet reduces friction in commerce and negotiations. People agree on exchanges
and reach agreements for the future. The
whole purpose of the Resolution Room is to assist people to be at their best
in these exchanges and reaching agreements.

The
Resolution Room offers a number of facilitative tools that can improve any negotiation.
The tools include problem-solving agenda development, thoughtful joint and caucus
discussion opportunities, structure, solution development, voting and consensus
determination. Each participant has, among other things, an opportunity to share
their perspective and to get what they want to say “off of their chest.” Participants
are assisted to develop capable “problem solving statements.” Following the
identification of a problem-solving agenda, each participant has the opportunity
to share their interests, desired outcomes and proposals. Proposals can be edited
and responded to at any time. You are also assisted to keep track of your points
of agreement. If you would like to further consider Online Resolution’s Resolution
Room technology for online negotiation, please contact OnlineResolution.com
at www.ResolutionRoom.com

                        author

Managing Editor

Mediate.com In business since 1996, Mediate.com is the world’s leading mediation and dispute resolution website with over 7 million annual site visitors.  Mediate.com serves as a bridge between professionals offering dispute resolution services and individuals and businesses needing those services. Mediate.com was awarded the 2010 American Bar Association Institutional Problem Solver of… MORE >

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