Concept of Negotiation

Table of Contents

Introduction1

Distributive and Integrative Negotiation1

Added-Value Negotiation2

Strategies for Dealing With Conflict3

The Five Steps of Negotiation4

Preparation and planning5

Definition of ground rules5

Clarification and justification5

Bargaining and problem-solving6

Closure and implementation6

Negotiating Styles6

Third-Party Negotiations7

Cross-Cultural Issues in Negotiation8

Conflict Management10

New Challenges15

References18

Concept of Negotiation

Introduction

Negotiation is a long-standing art that has developed into a major mode of decision making in all aspects of social, political, and business life (Avenhaus 2007). Negotiation may be defined as a process of potentially opportunistic interaction by which two or more parties, with some apparent conflict, seek to do better through jointly decided action than they could otherwise. Negotiation then becomes a structured set of interactions in which parties weigh alternative courses of action, each of which may have different consequences, both for the parties themselves and for others in their social, political, or commercial constituency. Negotiations do not always lead to decisions or agreements. Other outcomes can include softening or hardening of position, personal understanding between negotiators, and symbolic messages sent to the rest of the stakeholder community.

Distributive and Integrative Negotiation

The two main types of negotiation are distributive and integrative. A distributive negotiation usually involves a single issue in which one person gains at the expense of the other operating under zero-sum conditions (Avenhaus 2007). Distributive negotiation involves traditional win-lose thinking. In distributive negotiation, each party has a target point that defines what it would like to achieve. Each also has a resistance point, which marks the lowest outcome that is acceptable. The arc between these two points makes up each one's aspiration range. As long as some overlap exists between each party's aspiration ranges, there exists a settlement range in which each one's aspirations can be met.

Examples of tactics used in distributive negotiation are persuading your opponent of the impossibility of getting to his or her target point and the advisability of accepting a settlement near yours; arguing that your target is fair (Baç et.al 2000), whereas your opponent's is not; and attempting to get your opponent to feel emotionally generous toward you and, thus, accept an outcome close to your target point.

In more conflicts, however, more than one issue is at stake, and each party values the issues differently. The outcomes available are no longer a fixed pie divided among all parties. An agreement can be found that is better for both parties than what they would have reached through distributive negotiation. This situation calls for integrative negotiation, which involves a progressive win-win strategy.

Added-Value Negotiation

One practical application of the integrative approach is added-value negotiation, during which the negotiating parties cooperatively develop multiple deal packages while building a productive long-term relationship (Bottom et.al 2000). It consists of five steps:

Clarify interest, with each party identifying each tangible and intangible need. The two parties discuss their respective needs and find common ground for negotiation.

Identify options, which involves creating a marketplace of value when the parties discuss desired elements of value.

Design alternative deal packages (Carnevale et.al 2006). Each party mixes and matches elements of value from both parties in workable ...