The Nature of Negotiation

1. Introduction to Negotiation
Negotiation is a communication process between two or more parties aiming to resolve
opposing interests. It's a social process where interdependent individuals or groups with
conflicting interests decide how to allocate resources or collaborate in the future. This
interaction can occur through various channels like face-to-face, phone, mail, or digital
communication.

Negotiation is driven by interdependence, where parties possess something the other needs
(e.g., knowledge, skills, resources). It's fundamentally a process of settlement through mutual
give and take, applicable in both business and personal contexts.

2. Characteristics of a Negotiation Situation

Several common characteristics define negotiation situations:

Two or More Parties: Negotiations involve at least two individuals, groups, or organizations.
Conflict of Interest: Parties have opposing desires or needs, meaning what one party wants is
not necessarily what the other wants.
Perceived Need for Influence: Parties negotiate because they believe they can influence the
outcome to achieve a better deal than what might be voluntarily offered.
Preference for Agreement over Conflict: Parties generally prefer to reach an agreement rather
than resort to open conflict or external authorities.
Absence of a Fixed System: Negotiation often occurs when no established rules or
procedures exist, or when parties choose to operate outside of them to create their own
solutions.
Potential for Creative Solutions: Truly creative negotiations can lead to solutions that satisfy
all parties' objectives.
Management of Tangibles and Intangibles: Successful negotiation involves resolving
concrete issues (tangibles like price, land, money) and addressing underlying psychological
motivations (intangibles).

Intangibles in Negotiation

Intangibles are underlying psychological motivations that influence parties. Examples include:

The need to "win" or avoid losing.

The desire to appear competent or strong to those represented.
The need to seem fair, honorable, or protect one's reputation.
The importance of maintaining a good relationship and trust with the other party.

Intangibles are often rooted in personal values and emotions and significantly impact
negotiation processes and outcomes by influencing perceptions of fairness and
appropriateness.
3. Objectives of Negotiation
Key objectives in negotiation include:

Obtaining Specified Quality: Ensuring the quality of goods or services meets design or user
requirements.
Achieving a Fair and Reasonable Price: Negotiating a price that is considered equitable for
the desired quality.
Ensuring Timely Performance: Securing timely delivery or completion of contractual
obligations.
Controlling Contract Performance: Negotiating controls to ensure compliance with quality,
quantity, delivery, and service terms, especially for important contracts.
Fair Allocation or Division of Resources: Distributing resources equitably among parties.
Developing Sound Relationships: Establishing and maintaining strong, continuing
relationships with competent suppliers, potentially leading to long-term partnerships.

4. Skills of a Negotiator
Effective negotiators possess a range of skills:

Communication: Clearly expressing oneself verbally and nonverbally, understanding

nonverbal cues, and adapting communication styles to the listener.
Active Listening: Fully concentrating on, understanding, responding to, and remembering
what is said, paying attention to specific details.
Emotional Intelligence: The ability to manage one's own emotions and recognize and
understand the emotions of others.
Expectation Management: Setting realistic goals and being prepared to adjust expectations if
an agreement seems unlikely.
Patience: Taking the time to thoroughly assess situations and make well-considered
decisions.
Adaptability: Quickly adjusting plans and strategies as negotiation dynamics change.
Persuasion: Influencing and encouraging others to consider one's perspective or proposals.
Planning: Strategizing to define desired outcomes and how they will be achieved.
Integrity: Maintaining strong ethical and moral principles, fostering trust through honesty and
respect.
Relationship Building: Establishing rapport by communicating goals and understanding the
other party's needs, promoting collaboration.
Problem-Solving: Identifying issues and developing effective solutions.
Decision-Making: Acting decisively after careful consideration of options.

5. Interdependence and Mutual Adjustment

5.1 Interdependence

Interdependence exists when parties need each other to achieve their goals. Their goals are
interlocking, requiring coordination and collaboration. Relationships can be:
 Independent: Parties can meet their own needs without assistance.
Dependent: Parties rely on others for what they need and must accommodate the provider's
terms.
Interdependent: Parties have interlocking goals and the potential to influence each other. This
is common in complex projects where individuals lack all necessary skills or time to succeed
alone.

5.2 Mutual Adjustment

When parties are interdependent, they must find ways to resolve differences. They recognize
their mutual influence on each other's outcomes. Negotiation is a dynamic process involving
mutual adjustment, where parties clarify and share information about their desired outcomes.

Concessions are often made based on two dilemmas:

Dilemma of Honesty: Deciding how much truth to reveal to the other party.
Dilemma of Trust: Deciding how much to believe of what the other party says.

6. Value Claiming and Value Creation

The structure of interdependence influences negotiation strategies.

Distributive Bargaining (Value Claiming): Occurs in distributive situations where parties are
motivated to win and claim the largest share of a fixed resource. Strategies are typically win-
lose, focusing on maximizing one's own gain.
Integrative Negotiation (Value Creation): Involves win-win strategies aimed at finding
solutions where both parties can achieve their goals. The purpose is to create value by
exploiting differences in interests, judgments, risk tolerance, time preferences, etc.

Example of Value Creation: Wedding Planning

A wedding planner aims to create value by adjusting times and locations to satisfy both families
and ensure guests have a positive experience, maximizing overall satisfaction.

7. Conflict and Conflict Management

Conflict is a sharp disagreement or opposition of interests, ideas, or goals, often arising from
divergent needs or misperceptions. Negotiation is a key tool for resolving conflict effectively.

Levels of Conflict
1. Intrapersonal Conflict: Occurs within an individual (e.g., wanting ice cream but knowing it's
unhealthy; feeling angry at a boss but fearing reprisal).
2. Interpersonal Conflict: Occurs between two individuals (e.g., between co-workers, spouses, or
 neighbors).
3. Intra-group Conflict: Occurs within a group (e.g., among team members, within families or
classes). It affects a group's ability to make decisions and work productively.
4. Intergroup Conflict: Occurs between groups (e.g., between organizations, ethnic groups, or
nations). This is complex due to the large number of people involved.

7.1 Conflict Management: The Dual Concerns Model

The dual concerns model posits that conflict management strategies are based on two
independent concerns:

Concern about Own Outcomes: How much an individual cares about achieving their own
goals (horizontal dimension, assertiveness).
Concern about Other's Outcomes: How much an individual cares about the other party
achieving their goals (vertical dimension, cooperativeness).

These concerns can range from low to high. The model identifies five major strategies:

1. Contending (Competing/Dominating): High concern for own outcomes, low concern for the
other's. Pursues own goals strongly, aiming to persuade the other to yield. Tactics include
threats and intimidation.
2. Yielding (Accommodating/Obliging): Low concern for own outcomes, high concern for the
other's. Lowers one's own aspirations to let the other party "win."
3. Inaction (Avoiding): Low concern for both own and the other's outcomes. Involves withdrawal,
passivity, or doing nothing.
4. Problem Solving (Collaborating/Integrating): High concern for both own and the other's
outcomes. Parties actively work to maximize their joint outcome.
5. Compromising: Moderate effort to pursue one's own outcomes and moderate effort to help
the other party achieve theirs. It can be seen as a less intense form of problem-solving or a
mutual yielding.