Negotiation is an essential part of the
every-day business life. It can take place at any time and in any place.
Negotiation is a kind of meeting, but contrary to the latter it may be held in
some unexpected and uncomfortable place such as the street or on the stairs.
There are several definitions of
negotiation. It is said to be “the process for resolving conflict between two
or more parties whereby both or all modify their demands to achieve a mutually
acceptable compromise”. Thus, it is “the process of changing both parties’
views of their ideal outcome into an attainable outcome”.
The need of negotiation arises when we are
not fully in control of events. Negotiations take place to handle mutual
differences or conflict of:
interests(wages, hours, work conditions,
prices: seller vs buyer)
rights(different interpretations of an
The aim of a negotiation is to come to an
agreement which is acceptable to both sides, and to preserve the overall
relationships. While specific issues are to be negotiated, common interest are
yet still to be maintained. Negotiations do not mean “war”. Negotiators can
still be friends and partners.
2. The negotiation
The situations of negotiation can be shown
diagrammatically in terms of ideals and limits.
The limit may be the limit of negotiator’s
authority, such as a minimum (e.g. price) acceptable. If there is overlap it is
possible to settle. The final position within the bargaining area, where
settlement takes place, depends on the negotiators’ relative strength and
The aim of the negotiator is to achieve a
result, i.e. to find a solution, within the bargaining area. However, it is
possible that both parties set limits which do not provide overlap. In this
case the negotiators have to move their limits, otherwise the negotiation will
be broken down.
HIM No deal
Too much overlap
The opposite case is also possible. When one is careless and
settles for less than he could. In this case the limit of the opposite side
should be found and the ideal should be revised.
Limit Ideal Revised Ideal
3. The approach
There are four main stages of negotiation:
Preparing objectives, information, strategy
Discussing (argue) and signalling willingness to move
Propose and bargain
Close and agree
While preparing to the negotiation it is important not only to
prepare supporting arguments but also to define objectives. Objectives should
be realistic and attainable and have certain priorities. It is also necessary
to investigate the opponent’s plans and priorities, which can be rather
The objectives should be classified basically as follows:
LikeIdeal but least important
Intend Achievable, a range of possibilities
Must The real limit
OF NO DEAL
The general strategy for negotiation is to have a negotiating team
of three people, who will also be involved in the preparation.
LeaderThe person who will do the talking and conduct the
SummariserThe person who will ask questions and summarise for
ObserverThe person not involved in the actual negotiations, whose
role is to watch, listen and record
80 % of the negotiating time is spent arguing. If it equals 100 %
the negotiation will break down. There are two kinds of arguing:
Reasonable and constructiveDebates, discussions
Unreasonable and destructiveEmotional quarrels
The opponent may try to divert you by escaping into destructive
behaviour. In this case, your behaviour should be not to interrupt, but to
listen and control your feelings. Even if the battle is won, the war can be
A negotiator should be constructive in arguments and try to get information
by asking open questions or even leading questions. One thing should be tackled
at a time and the opponent should be made justify his case item by item.
It is important to be non-committal and to state only ideals at
first. Later, the information about the negotiator’s position can be given, and
later alternative proposals can be made. Sometimes it is necessary to challenge
the opponent, so that he demonstrates his strengths.
Negotiation means movement. It may be that both parties move on
one issue. It may be that each moves on different issue. The motive forces are
SanctionsThe penalty of not agreeing
IncentivesThe benefits of agreeing.
In both cases, the parties seek to protect their self-interests.
They will show willingness to move by sending signals.
To signal is not to show weakness. But if both parties wait for
the other to signal, the result will be deadlock.
The opponent’s signals will show his willingness to move. So one
should listen, recognise his signals and interpret them, looking for the
qualified words which are evidence of willingness to move.
Another very important point of negotiations is proposing and
bargaining. Proposals should be realistic in order not to cause argument and
deadlock. The language of the proposal signals one’s firmness. Weak language
such as “we hope…, we like…, we prefer…” should be avoided. Instead, a phrase
“we propose…” is appropriate.
The final step in a negotiation is closing and agreeing. There are
two aspects to it:
When to close
How to close
The first is the most difficult moment to recognise. There is a
Closing too earlyMore concessions from the opponent could have
Closing too lateThe opponents squeezed excessive concessions.
The aim of closing is to get the
opposition to stop bargaining and to make an agreement. The final thing to do
is to write down the agreement and agree what is written down. It is necessary
to do this before leaving the negotiating table.
4. Characteristics of an
What characteristics should one have to be an effective
negotiator. The first and the most important characteristics, from the
standpoint of many executives and managers of large corporations, is
preparation and planning skills.
The other very important characteristics are:
Knowledge of subject matter being negotiated
Ability to think clearly and rapidly under pressure and
Ability to express thoughts verbally
Judgement and general intelligence
Ability to persuade others
In spite of the existence of negotiating
theories, it is frequently difficult to apply theoretical and conceptual
knowledge in a practical situation. In order to be a good negotiator, one should
have negotiation skills as well as a theoretical knowledge. But without a
practical experience it is hard to negotiate effectively.
Interpersonal skills are very important in the negotiation, but
what can help a negotiating party while thinking what to do is not an
elaborated theory, but rather is it a simple analysis and intuition.