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NEGOTIATION: A LITERATURE REVIEW

Negotiation: A Literature Review of Theories, Practice, Problems and Cultural Influences

Solomon Akinlua

Horizons University

DBA 661 Multicultural Management

Gordana Dobrijevic, Ph.D.

4/1/2020
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NEGOTIATION: A LITERATURE REVIEW
Negotiation: A Literature Review of Theories, Practice, Problems and Cultural Influences

Negotiation is a part of our everyday life, but only a few are aware that certain

conversations are really negotiations (“Principles and Tactics of Negotiation,” 2007). The ability

to recognize that a negotiation is on, can make the difference between reaching a goal and failure

(“Principles and Tactics of Negotiation,” 2007). The job seeker who is asked to interview for a

new job will have to consciously negotiate with the employers to get the best possible offer. A

business man will have to negotiate to get the best terms in a business deal. Negotiation is so far

reaching that even couples enter into a prenuptial agreement which is negotiated in the interest of

both parties. Negotiation is however, an academic and professional discipline with a great deal of

research interest. The following paragraphs will attempt to do a literature review of relevant

literature on the subject matter.

Defining Negotiation

Zohar (2015) defines negotiation as finding a resolution to conflicts between people and

groups and sharing resources in such a way that a win-win situation is achieved. According to De

Dreu (2014) negotiation involves resolving conflicts of interest between two or more parties, this

resolution is achieved through persistent communication. Negotiation is a tool that can be used to

create a good relationship with others (Stevens et al., 2018). McGuire (2004) describes

negotiation as a life skill which helps to reach a compromise in situations where there are

polarized interests. Vetschera (2013) defined negotiation as a process which results in a

collective choice between two or more conflicting and independent parties. All the definitions

paraphrased above have two keywords common to them. These keywords are conflict and

resolution. Negotiation is a tool for conflict resolution and indeed is geared towards reaching a

compromise between parties who have conflicting interests.

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NEGOTIATION: A LITERATURE REVIEW
Theories and Practices of Negotiation

Murray (1986) described theory as a map which gives details of the geographical

dimensions of an area of study, thereby defining relevant issues in a comprehensive manner. A

lot of research has gone into developing a generalized thinking about negotiation. Negotiation is

both a science and an art, it cannot be limited only to theories without practical application

(Spector, 2007). Friedland (1990) advocated for a consistent dialogue between theorists and

practitioners. This is even so as theorist and practitioners easily switch places due to over

specialization (Friedland, 1990). Essentially, the negotiation theory is developed for practice and

practice can inform new theories to be tested empirically (Ebner & Parlamis, 2017). The theory

and practice of negotiation has seen over 50 years of research and development (Ebner &

Parlamis, 2017). Menkel-Meadow (2009) chronicled the development of negotiation theory and

practice since the early 80’s; the early concepts and processes include interest-based bargaining

and mediation. This early development of theory also included empirical analysis of these

concepts (Menkel-Meadow, 2009).

Interest based bargaining or principled negotiation is a way of dealing with differences

that exist between individual, groups or organizations in such a way that conflict is minimized

(Shapiro, 2011). According to Shapiro (2011) the major components of this theory were

developed at the Harvard Negotiation Project in 1991. Principled negotiation provides

negotiators with a veritable option in dealing with the negotiator’s dilemma; negotiators are

usually faced with the option of either cooperating or competing with their opponents (Shapiro,

2011).

Modelling negotiation avails researchers the opportunity to carry out a meta-analysis of

the negotiation process and to indicate the very practical nature of negotiation theory. Halpert,
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NEGOTIATION: A LITERATURE REVIEW
Stuhlmacher, Crenshaw, Litcher, and Bortel (2010) developed a hypothesized model which

tested the relationship between seven variables, these variables included: relationship between

negotiators, negotiator goals, expected cooperation, cooperation behavior, negotiator profit,

satisfaction with the negotiator and perceptions of the other party. The model was developed to

identify three outcomes: profit, negotiator satisfaction and negotiator perceptions of bargaining

(Stuhlmacher et al., 2010). Negotiator profit refers to the absolute amount of the settlement

reached by the negotiator; this variable has attracted a lot of research interest (Stuhlmacher et al.,

2010). Negotiator perceptions however refer to subjective opinions of the other negotiator’s

attitudes (Stuhlmacher et al., 2010). The result of the modelling suggests that there is a direct

relationship between goals and profit, a prior relationship between negotiators also enhanced the

process (Stuhlmacher et al., 2010).

The best alternative to a negotiated agreement (BATNA) is a concept that is very popular

and useful in theory and practice of negotiation (Sebenius, 2017). Practitioners think a BATNA

can significantly raise the bargaining power of a practitioner (Sebenius, 2017). The BATNA is

mostly relevant where each party to the negotiation prefer its BATNA to the negotiated deal, this

means that the attractiveness of a party’s BATNA can significantly influence the acceptance of a

negotiated deal (Sebenius, 2017). The major challenge with the characterization of the BATNA

is the idea notion that this best alternative is arrived at without the input of the other party

(Sebenius, 2017). Letting an opponent know during a negotiation that there is an existing

alternative which does not require a deal might have negative implications, this is applicable to

domestic and organizational negotiations alike (Sebenius, 2017). So, the existence of BATNA

may not necessarily increase a party’s bargaining power, negotiators are becoming more diverse

and ruthless (Sebenius, 2017).

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NEGOTIATION: A LITERATURE REVIEW
Negotiation is a tool for managing organizational conflict (Keough, 2017).

Communication is also the primary way through negotiation is done, hence there is a

communicative perspective to negotiation (Keough, 2017). The communicative perspective

refers to how context influences interaction and how interaction leads to context (Keough, 2017).

The more popular approaches to the communicative perspective to negotiation are the effects

approach and the key components approach (Keough, 2017). The effects approach assigns a

variable status to communication, as a variable, it has the capacity to impact negotiated outcomes

(Keough, 2017). The cultural model or multicultural model of negotiation fits within the

mediating effects model which is a variable under the effects approach (Keough, 2017). The key

components approach however views negotiation from the standpoint of the traditional

conceptualization of communication elements, encoding and decoding (Keough, 2017).

Negotiation Strategy

Negotiation strategy involves planning to address the dual aspects of negotiation which

are collaboration and competition (Sollish & Semanik, 2015). This means the strategy will

address aspects that the parties agree an and those they disagree on (Sollish & Semanik, 2015).

For a strategy to be effective, the opinions and needs of both parties must be laid bare on the

negotiation table (Sollish & Semanik, 2015). An effective negotiator must clearly determine

which of the broad possible outcomes will be acceptable to create an effective plan.

For businesses, a lot of issues come to the table during a negotiation. These include:

price, payment terms, deliverables, service levels, quality, support, warranties, risk assumption,

and insurance among others (Sollish & Semanik, 2015). Having identified these, a plan is then

used to develop a comprehensive course of action (Sollish & Semanik, 2015). Essentially, a
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NEGOTIATION: A LITERATURE REVIEW
negotiation strategy can define a strategic objective, consider the available options and provide

multiple alternative courses of action.

Inherent Problems Found in the Negotiation Process

Negotiations can hit a brick wall because of substance, emotions, personalities and

situations (“Problems in Negotiations,” 2013). Meerts (2015) identified violence, complexity,

actors and bureaucracy as the four challenges facing international negotiation. However, even

when the best of the variables mentioned earlier are present, it is not always possible to get the

desired outcome (Alavoine, 2012). This is because negotiation involves making strategic choices

(Alavoine, 2012). The real problem in the negotiation process occurs when negotiators confuse

an unpredictable outcome with the objectives of the negotiation and thereby develop a wrong

strategy which leads to failure (Alavoine, 2012). In negotiation, parties can elect to either

cooperate or compete (Alavoine, 2012). These two poles also have strategic options, and these

are accommodation strategies or confrontational strategies, these two cannot be wielded

simultaneously (Alavoine, 2012). The use of these strategies will determine the direction of

negotiation.

Culture and Negotiation

Globalization has made it imperative that negotiations will happen within a multicultural

context; this makes culture an important factor in this kind of negotiation process (Liu, 2015).

Several years of research has shown that most writers study the impact of culture on negotiation

from two implicit models: how does culture influence negotiation tactics and outcome and the

interaction between culture and outcomes (Liu, 2015). However, a third model which focuses on

how culture induced motives and emotions affects negotiation seems have gained prominence

because it recognizes the psychological effect of culture on the negotiation process (Liu, 2015).
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NEGOTIATION: A LITERATURE REVIEW
Kong and Yao (2019) argue that trust plays a crucial role in negotiations between two

parties who have different cultural backgrounds, indeed the cultural context adds more

complexity to the already complex process of negotiation. It is difficult to trust parties from the

same culture, it is even, more difficult to trust someone from a different culture entirely (Kong &

Yao, 2019). Culture will always matter in a negotiation (Kong & Yao, 2019). The cultural

assumptions individuals bring into a negotiation can go a long way in determining the

expectations and the outcomes (Kong & Yao, 2019).

Rees and Kopelman (2019) describe how culture influences emotions in a negotiation

process. Rationality is so many times influenced by cultural backgrounds, this means what is

rational to someone from one culture may not be rational to someone from a different culture

(Rees & Kopelman, 2019). Rees and Kopelman (2019) advocate that culture should be both a

dependent and independent variable in future research bothering on culture and negotiation

because of how it shapes human emotions.

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References

Alavoine, C. (2012). You Can’t Always Get What You Want: Strategic Issues in

Negotiation. Procedia - Social and Behavioral Sciences, 58, 665–672.

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De Dreu, C. K. W. (2014). Negotiating Deals and Settling Conflict Can Create Value for Both

Sides. Policy Insights from the Behavioral and Brain Sciences, 1(1), 156–163.

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Ebner, N., & Parlamis, J. (2017). Weaving Together Theory, Research, Practice, and Teaching:

A Four-dimensional Approach to Negotiation and Conflict Management

Work. Negotiation and Conflict Management Research, 10(4), 245–251.

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Friedland, N. (1990). Negotiation Theory and Practice: A Critique of Katz and

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Halpert, J. A., Stuhlmacher, A. F., Crenshaw, J. L., Litcher, C. D., & Bortel, R. (2010). Paths to

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Keough, C. M. (2017). Negotiation and Bargaining. The International Encyclopedia of

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Liu, M. (2015). Cultural Differences in Bargaining and Negotiation. The International

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McGuire, R. (2004). Negotiation: An Important Life Skill. The Pharmaceutical Journal, 273.

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