When was the last time that you negotiated something?

If you have purchased a home or a car you may have negotiated the price. Perhaps you negotiated with a colleague about getting your assignments completed. How about the deal you cut with a family member? And let's not forget how you resolved differences with your neighbour.

Most of us negotiate a lot more than we may think!

In this lesson we will address our working definition of negotiation, and examine some of the different approaches to negotiation.

Defining Negotiation

Negotiation is a process centered on a discussion that is intended to produce an agreement. In its simplest form, it could be considered to be about power as the parties work to achieve their own interests. Negotiating involves issues of ego, leveraging, saving face, being right, and compromise.

Negotiation often leads to compromises, where both sides make concessions to get as close as they can to exactly what they want. At other times, no concessions may be available and a power struggle may go on for a long time. When negotiation is not effective, there are other options, such as bringing in a mediator, which can help both sides speak to one another and move towards a resolution instead of resolving nothing.

Whether you are someone who rises to the challenge and enjoys negotiating, or you would rather hide than have to get involved, we are all negotiators. We have to negotiate every day with family, friends, colleagues, or clients. We negotiate with our spouse about where to go for dinner. We negotiate with our child about bedtime, computer or gadget time, and allowances.

Negotiation takes place over a period of time and moves through a series of steps. Successful negotiation also opens the way for more negotiation.

Methods

There are several methods for negotiation. They can be judged by three criteria:

1. If agreement is possible, the conclusion should include an actual agreement (verbally or in writing). This is what Roger Fisher, William Ury, and Bruce Patton describe as a “wise agreement.”
2. The process and result should be efficient.
3. The relationship between the negotiators should not be damaged and may even improve as a result of the process underway.

Types of Negotiation

Negotiation can be conducted, and categorized, in different ways. What follows are some common examples.

1. Integrative/Distributive

When we distinguish between integrative and distributive negotiations, we are saying that the parties are looking for different things as they approach the negotiation.

Integrative negotiations are commonly referred to as “win-win.” In this type of negotiation, each side is working toward a solution where everyone wins something. They can make tradeoffs, look at multiple issues, and try to expand the scope of what’s possible rather than divide it up. Integrative negotiations generally foster trust and good working relationships.

Distributive negotiations are referred to as “win-lose.” One party gets what they want, and the other party has to give something up. This can be the case when you negotiate a lease on office space, for example. If you feel like you got a good deal and the property manager had to give something up for you, you “won.” If you feel like the property manager had the upper hand and you got ripped off, you “lost.” The parties’ interests often seem to be opposed (although this may not be the case once you look at things creatively), and so this type of negotiation does not lead to lasting or positive relationships.

2. Inductive/Deductive/Mixed

The inductive method involves starting on small details and working upward until a settlement is reached. This can be the case where, for example, an employer and labor union are negotiating the details of an employee pension and investment plan. Small details are considered one at a time.

Deductive negotiations start with an agreed-upon strategy. They rely on established principles and a formula to frame the negotiation while the parties work out the details.

3. Mixed negotiations

These are the most common forms of negotiations. They are a blend of inductive and deductive methods.

4. Soft/Hard/Principled

Soft and hard bargaining involves negotiating a position rather than interests. To avoid some of the common problems associated with bargaining over positions, negotiators who take a soft approach treat the participants as friends, seeking agreement and offering concessions as a way to create or preserve a positive relationship with the other side.

A soft bargainer behaves transparently, sharing their bottom line, which can leave them vulnerable to a hard bargainer who is competitive, hides their bottom line, and offers few concessions, if any. In a negotiation between a soft and hard bargainer, the hard approach will almost always come out with a much better deal.

In their book Getting to Yes: Negotiating Agreement without Giving In, Roger Fisher, William Ury, and Bruce Patton recommend principled negotiation, instead of hard vs. soft, because principled negotiation relies on interests rather than positions. Principled negotiation means that negotiators are able to separate people from the problem, that they focus on interests rather than positions, generate multiple options, and base the results on an objective standard. 

5. Non-Negotiable Positions vs. Options

There are several ways that you can handle non-negotiable positions or options. As a negotiator, you must not go to the table with an intention like, “This is all the money we have, and so this position is non-negotiable.” If you dig your heels in on such a position, there really isn’t going to be much of a negotiation. Similarly, if you elect to draw the line on a particular issue, you must know your limits and the room you actually have to negotiate.

For example, perhaps you approach your boss about a raise. The boss says no because he has no money left in the budget. Instead of giving up your idea of getting a raise (because you know that you have already earned it), consider whether there are other things that would satisfy you, like attending a conference, taking a course, or working fewer hours each week. If you are prepared with your justification for the raise before you approach your boss, and you also have a few alternatives based on your knowledge of the need for training, the availability of a conference budget, and so on, your chances of success are much greater.

Just because someone says no to your request does not mean you have asked the only question that is available.

A good negotiator is prepared to use several possible approaches and formulas. They often ask questions more than they provide answers. They can assess a situation, including the expertise of the parties involved, and adapt their approach to suit the occasion.

An employer’s negotiator, for example, who starts out insisting that they have a winning formula for this round of negotiations, will raise the defenses of the other party instantly, even if the formula would have been ideal. At the beginning of a negotiation, it is important to establish an approach that will be agreed upon between the parties. It is equally important to recognize when the formula is getting in the way of making progress because it is too rigid and needs to be tailored to the situation.

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is a popular alternative to negotiation. If negotiations stall for any of a number of reasons, the result can often be a move to arbitration or litigation. However, arbitration and litigation can be expensive and time-consuming undertakings. Either of them can result in a solution that neither party is happy with (a “lose-lose” outcome), and both processes are full of friction.

ADR is an alternative that allows the negotiating parties to take advantage of a formal dispute resolution process. Using mediators or facilitation, parties work through the process together and try to come up with an acceptable solution. One factor that makes ADR different is the idea that the negotiating partners must both be satisfied with the outcome. If a stalemate results with proper use of ADR, then the negotiations can move to arbitration or litigation as a last resort.