Module 4 – Negotiation
What is negotiation?
Negotiation has been defined as any form of direct or indirect communication
whereby parties who have opposing interests discuss the form of any joint action
which they might take to manage and ultimately resolve the dispute between
them.
Characteristics of negotiation
Voluntary
Bilateral or multilateral
Non- adjudicative
Informal
Flexible
Types or different styles or approaches to negotiation
Collaborative (Win-Win) Negotiation or Integrative
It aims to find a solution where all parties benefit.
The focus is on mutual gain, problem-solving, and maintaining positive
relationships.
most commonly used in family law, business partnerships, or situations where
long-term cooperation is desired.
Emphasis on cooperation and understanding.
Both parties’ needs and interests are addressed.
Creative solutions are sought that satisfy both parties.
• Eg: In a divorce settlement, both parties might work together to agree on child
custody arrangements and asset division that reflect their shared interests in the
well-being of their children and financial stability.
Competitive (Win-Lose) Negotiation
In this style, one party seeks to maximize its own benefit, often at the expense
of the other party.
It is an adversarial approach, and is typically used when there is no room for
compromise, or where a party has significant power over the other.
This style is prevalent in litigation, particularly in situations like commercial
disputes or personal injury claims.
One side aims to “win” and dominate the negotiation.
Often involves a hard bargaining stance.
Little or no compromise.
Example: A plaintiff in a personal injury case seeking maximum damages from
the defendant’s insurance company, with both parties rigidly holding to their
positions.
Compromising Negotiation
In compromising negotiations, each party gives up something to reach a middle
ground.
This style is often employed when both sides have equally strong positions but
want to avoid prolonged conflict.
It’s common in settlement negotiations where both parties are keen to resolve the
issue but can’t achieve their ideal outcome.
Both parties make concessions to reach a resolution.
Neither side achieves their full goals but the dispute is resolved quickly.
Often used when the negotiation time is limited.
Eg: In a contract dispute, the parties may agree to reduce the payment terms or
extend deadlines, each side giving up something to finalize the deal.
Phases of negotiation
There are around seven recognised phases of negotiation, these are
1. Planning and fact-finding phase
2. Opening phase
3. Discussion phase
4. Proposal phase
5. Bargaining phase
6. Closing phase
7. After Decision phase
(1) Planning and fact-finding phase:
This initial phase includes finding of facts and information related to the other
party and fact.
It involves identification of matters and issues that could be raised during the
process of negotiation.
Set negotiating objective
The issues and matters that are recognized shall be prioritized for both the parties.
This process also helps in estimation of other side’s priorities.
(2) Opening phase: An opportunity is provided in this phase to give a direction to
the process of discussion which helps in gaining control over the discussion.
In this phase, simple language should be used and the questions asked by the
parties must be answered carefully.
(a) Use polite language and take questions from the parties and answer them gently.
(b) The fact that reputation is matters to a great extent in many cultures must be
remembered.
(c) Any such act or speech that might embarrass the other party must be avoided
Criticism or use of strong language that might have an effect of humiliation on the
other party must always be avoided.
(3) Discussion phase: In this phase both the parties are allowed to present their case
with no interruption. It is important to ask questions so as to comprehend the
interests of the other party. Listening to the other party is very pertinent at this stage.
(4) Proposal phase: This phase involves making of offers and proposals for a
conclusion.
(5) Bargaining phase: The proposals and offers made by the other part must be
perused and see if it is compatible. If not, options for making the proposal more
effective for a mutual gain can be given. Common interest of the parties must be kept
in mind.
(6) Closing phase: At this stage the decision or the conclusion that is reached must
be summarized and explained to both the parties to avoid future disputes.
(7) Agreement – After coming to a conclusion, an agreement is made according to
the decided solution of the dispute and ten signed by the parties to the negotiations.
(8) Implementation – After signing the agreement, parties need to implement and
operate according to the agreement.
Qualities of negotiator
Communication Skills
Good negotiators are adept at both speaking and listening.
They can clearly convey their points, actively listen to others, and ask insightful
questions to uncover underlying interests
A positive attitude
It is the attitude to want the deal and to do everything possible to negotiate and
get the deal in favour.
Efficient listening
Effective listening help in better communication and negotiation in the best
possible way.
Being attentive and noting parties point and listening to the party to know what
they want for business and profits as well as good will is of extreme importance.
Problem-Solving Ability
Negotiators excel at identifying the core issues of a dispute and devising creative
solutions that address the underlying interests and concerns of all parties.
Flexibility
Negotiators are adaptable and open to exploring different options and
compromises.
They can pivot their strategies when necessary to find common ground.
Respect
One has to respect the other party also he must bear in mind that they are also for
the business and want to earn profit and will negotiate only when they are getting
something.
Knowledge and Planning:
• It plays an important role, knowledge for the issue helps the negotiator to plan
how much he can negotiate on the particular issue.
• Knowledge for other similar deals also helps to leave the deal at the correct time.
Patience:
• Every detail should be analysed properly with great precaution.
• One has to give time to the other party also and let them decide as we want to
grab the deal and also want deals in the future also a mutual understanding has to
be established so that none of the party is at loss.
Emotional Intelligence
• Recognizing, understanding, and managing one's emotions, as well as those of
others.
• Helps in handling high-pressure situations and making decisions that maintain
harmony.
Key powers of negotiation under ADR
Autonomy
Parties have the autonomy to make decisions about the resolution of their dispute.
Negotiation empowers parties to shape the outcome based on their interests and
preferences
Decision-Making Authority
In negotiation, parties have the authority to make decisions regarding the terms of the
settlement. They decide what they are willing to offer and accept, considering their
goals and priorities
Creative Problem-Solving
Negotiation allows parties to explore creative and flexible solutions that may not be
available through formal litigation. Parties can come up with innovative ways to
address their concerns
Control Over Process
Parties have control over the negotiation process itself. They can decide when and
where to engage in negotiations, the issues they want to address, and the pace at
which they proceed.
Ability to Explore Interests
Negotiation enables parties to uncover and communicate their underlying interests,
needs, and concerns. This promotes better understanding and helps identify potential
areas of agreement
Leverage and Bargaining Power
Parties have the power to leverage their positions and exercise bargaining power to
influence the other party's decisions. This power dynamic can influence the terms of
the settlement.