Negotiations

Frequently Asked Questions about Negotiations

• What are the stages of a Negotiation?
• What are the different types of Negotiations?
• What are Bad Faith Negotiations?
• What are the phases of a Negotiation?
• What is the meaning of BATNA in Negotiation?
• What are Zero-Sum Negotiations?
• What is a Win-Win Negotiation?
• What are the types of negotiation strategies?
• What are the negotiation techniques?
• What is an effective negotiation?
• What are the Top Negotiating Skills?
• When and Why is Mediation used?
• When and Why is Arbitration used?

“We cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.”

– John F. Kennedy

Why are Negotiating Skills Important?

The aim of a negotiation is to resolve points of difference, to gain an advantage for one party, or to create outcomes to satisfy multiple interests. It is often conducted by putting forward a position and making concessions to achieve an agreement. The degree of trust between the negotiators is a significant factor in determining whether negotiations are successful.

Negotiation processes permeate our interactions in many of our personal, business, and family arrangements. Negotiation Skills are essential for negotiating any of the following types of negotiation situations:

Individual Negotiations

People negotiate every day, often without thinking about it as a negotiation. Examples of everyday personal negotiations include the following.

• Pay and Benefits discussions at work
• Car or House Purchases
• Rental agreements
• Furniture, appliances and other significant purchases
• Discount haggling on purchases

Business Negotiations

Negotiation occurs in organizations, including businesses, non-profits, governments as well as in sales and legal processes. Examples of business negotiations include the following.

• Purchase Contracts
• Supply Contracts
• Employment Contracts
• Office and Factory Leasing
• Annual pay reviews

Family Negotiations

Even in small or large extended families, there are subtle and non-subtle negotiations. Examples of family-oriented negotiations include the following.

• Marriage or Divorce decisions
• Parenting decisions
• Setting boundaries with Children
• Getting to Yes with Parents and In-Laws
• Inheritance and Will decisions

“Never allow a person to tell you no who doesn’t have the power to say yes.”

– Eleanor Roosevelt

What are the different types of Negotiations?

In general terms, there are two types of negotiations. The difference has to do with the mindset of the negotiators and the situation.

1. Distributive Negotiation (Zero-Sum Negotiations)

One-off encounters where there will be no long-term relationships are more likely to produce distributive negotiations. Distributive negotiation is also sometimes called hard-bargaining attempts to distribute a “fixed pie” of benefits. Distributive negotiation operates under zero-sum conditions and implies that any gain one party makes is at the expense of the other and vice versa.

Distributive negotiation examples include the negotiation of the price of a car. Distributive negotiation is also sometimes called win-lose because of the assumption that one person’s gain is another person’s loss.

2. Integrative Negotiation ( Win-Win Negotiation)

Integrative negotiations attempt to improve the quality and likelihood of negotiated agreement by taking advantage of the fact that different parties often value various outcomes differently.

Rather than assuming there is a fixed amount of value (a “fixed pie”) to be divided between the parties, integrative negotiation attempts to create value and “expand the pie.” This is done by “compensating” loss of one item with gains from another, this is referred to as “trade-offs”.

This type of negotiation is called “win-win” negotiation because it reframes the issues of the conflict in such a way that both parties benefit from an agreement.

“Silence is the ultimate weapon of Power.”

– Charles de Gaulle

What is the meaning of BATNA in Negotiation?

The “Best Alternative To a Negotiated Agreement” or BATNA is the most advantageous alternative course of action if negotiations fail and an agreement cannot be reached. It is the best actions or alternatives one might take if no agreement is reached.

The BATNA is the key focus and the driving force behind a successful negotiator. A party should generally not accept a worse resolution than its BATNA.

The principle of the BATNA was developed by negotiation researchers Roger Fisher and William Ury of the Harvard Program on Negotiation (PON).

Getting to Yes

The highly acclaimed book, “Getting to Yes”, outlines a method called principled negotiation. Its purpose is to reach an agreement without jeopardizing relationships. The method is based on five propositions:

• Separate the People from the Problem: This proposition is about the interaction between the parties. The principle explores the different party’s perception, emotion, and communication styles.
• Focus on Interests, not positions: This principle recommends that the negotiators explore the interests behind the position that each party holds.
• Invent Options for mutual gain: This principle aims to help the parties to explore options that will impact each party in a positive way.
• Insist on using objective criteria: This principle is about making sure that the conversation stays focused on the objective of reaching an agreement and that it is productive. Keep an open mind, and never give in to pressure or threats.
• Know your BATNA: This principle is about understanding your BATNA (Best Alternative To Negotiated Agreement) options. It emphasizes that no method can guarantee success if all the leverage lies on the other side.

Getting to Yes: Negotiating Agreement Without Giving In was a book by Roger Fisher and William L. Ury. Subsequent editions added Bruce Patton as co-author.

“Only those who risk going too far can possibly find out how far one can go.”

– TS Eliot

Negotiation Impasse

A negotiation impasse occurs when the two parties negotiating are unable to reach an agreement and become deadlocked. An impasse, or stalemate, can be mutually harmful, by delay a negotiated mutually beneficial agreement.

If a negotiation impasse is mutually harmful, it may be beneficial for the parties to accept arbitration or mediation or some other form of “alternative dispute resolution” as outlined below.

Bad Faith Negotiations

A bad faith negotiation is one in which one or more of the parties pretend to negotiate to reach an agreement, but have no intention to do so. Examples include when the large party in the negotiation pretends to negotiate with a smaller party, with no intention to compromise, but for the purpose of depleting the more minor party’s resources. Bad faith negotiating strategies are ones in which there is no real intention to reach a compromise.

Mediation

A Mediation is a structured process where a neutral third party assists disputing parties in resolving conflict through the use of specialized communication skills and negotiation techniques. Mediation is focused primarily upon the needs, rights, and interests of all the parties.

Mediation works only if all participants in mediation actively participate in the process. The mediator uses a variety of techniques to guide the process in a constructive direction and to help the parties find a solution.

Mediation, as used in law, is a form of alternative dispute resolution. The mediator assists the parties to negotiate a settlement. Mediation is used in various areas such as commercial, legal, workplace, community, and family matters.

“Our experience has taught us that with goodwill a negotiated solution can be found for even the most profound problems.”

– Nelson Mandela

Arbitration

Arbitration is a way to resolve disputes outside the courts. The dispute will be decided by one or more “arbitrators” which renders the “arbitration award.” An arbitration award is legally binding on both sides and enforceable in the courts.

Arbitration is used for the resolution of commercial disputes. Arbitration is also frequently used in consumer and employment matters, where the terms of contracts may mandate arbitration.

Alternative Dispute Resolution

Mediation and Arbitration are both forms of “alternative dispute resolution” (ADR). The term denotes a range of dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement without litigation. Alternative dispute resolution is generally classified into these types:

• Negotiation
• Mediation
• Collaborative law
• Arbitration
• Conciliation

Conciliation

Conciliation is an alternative dispute resolution (ADR) process whereby the parties use a conciliator. The conciliator meets with the parties both separately and together in an attempt to resolve their differences.

A Conciliator does this by lowering tensions, improving communications, interpreting issues, encouraging parties to explore potential solutions, and assisting in finding a mutually acceptable outcome.

Conciliation has no legal standing, and there is usually no decision or written award. Conciliation is used when the parties are in need of restoring or repairing a relationship.

“It’s amazing what you can accomplish if you don’t mind who gets the credit.”

– Ronald Reagan

Negotiations – FAQs – to be covered with our Next Instalment

• What are the stages of a Negotiation?
• What are the phases of Negotiation?
• What are the types of negotiation strategies?
• What are the negotiation techniques?
• What are the four points of negotiation?
• What is effective negotiation?
• What are the Top Negotiating Skills?
• What are the basic kinds of negotiators?
• What are the different Tactics in the negotiating process?

Are these Coaching Tips on “Negotiation FAQs” useful?

Explore the Coaching Information from some of the world’s top experts. Click the links below:

Books About Negotiation

• Getting to Yes, by Roger Fisher and William Ury, 1981
• Getting to Yes with Yourself: And Other Worthy Opponents, by William Ury, 2015
• Crucial Conversations: Tools for Talking When Stakes Are High, by Al Switzler, Joseph Grenny, and Ron McMillan, 2001
• Never Split the Difference: Negotiating As If Your Life Depended On It, by Christopher Voss and Tahl Raz, 2016
• Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond, by Deepak Malhotra and Max H. Bazerman, 2007
• Getting Past No, by William Ury, 1991
• Bargaining for Advantage: Negotiation Strategies for Reasonable People, by G. Richard Shell, 1999
• Difficult Conversations, by Bruce Patton, Douglas Stone, and Sheila Heen, 1999
• The Negotiation Book: Your Definitive Guide to Successful Negotiating, by Steve Gates, 2010
• Beyond Reason: Using Emotions as You Negotiate, by Daniel Shapiro and Roger Fisher, 2005
• Negotiating the Impossible: How to Break Deadlocks and Resolve Ugly Conflicts (Without Money Or Muscle), by Deepak Malhotra, 2016
• Getting More, by Stuart Diamond, 2010
• Secrets of Power Negotiating: Inside Secrets from a Master Negotiator, by Roger Dawson, 1987

“Let us never negotiate out of fear. But let us never fear to negotiate.”

– John F. Kennedy

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