NEGOTIATION- CHAPTER 1

In this chapter we learnt about nature of

negotiation.
Negotiation is a social process by which
interdependent people with conflicting
interests determine how they are going to
allocate resources or work together in the
future. It is a social process because people
must interact with others to achieve their
desired outcomes. This interaction may occur
face-to-face, telephonically, by mail or,
increasingly, electronically via e-mail, instant
messaging, or video conferencing.
Negotiations occur for one of two
reasons:
1) to create something new that neither party
could do on his or her own
2) to resolve a problem or dispute between the
parties.
A large number of perspectives can be used to
understand different aspects of negotiations,
including theory and research from economics,
psychology, political science, communication,
labor relations, law, sociology, and
anthropology. The same negotiation outcome

may also be explained simultaneously from

several different perspectives.
Sometimes people fail to negotiate because
they do not recognize that they are in a
bargaining situation. Therefore, people should
be well prepared to recognize negotiation
situations; understand what the process of
bargaining involves; know how to analyze,
plan, and implement successful negotiations.
Characteristics of a negotiation situation
There are several characteristics common to all
negotiation situations:
There are two or more parties-that is, two or
more individuals, groups, or organizations.
There is a conflict of interest between two or
more parties-that is, what one wants is not
necessarily what the other one wants.
The parties negotiate because they think they
can use some form of influence to get a better
deal that way than by simply taking what the
other side will voluntarily give them or let them
have.
When we negotiate, we expect give and take.
We expect that both sides will modify or give in
somewhat on their opening statements,
requests, or demands. However, truly creative
negotiations may not require compromise;

instead the parties may invent the solution that

meets the objectives of all sides.
Successful negotiation involves the
management of intangibles( the underlying
psychological motivation that may directly or
indirectly influence the parties during a
negotiation.) as well as the resolving of
tangibles.
Interdependence
In negotiation, both parties need each other.
Interdependent relationships are characterized
by inter looking goals-the parties need each
other in order to accomplish their goals.
Interdependent goals are an important aspect
of negotiation. The structure of the
interdependence between different negotiating
parties determines the range of possible
outcome of the negotiation and suggests the
appropriate strategies and tactics that the
negotiators should use.
The interdependence of peoples goals is the
basis for much social interaction. By examining
the ways in which the goals are
interdependent, we can estimate what type of
behavior is most likely to emerge. So, the
nature of the interdependence will have a
major impact on the nature of the relationship,

the way negotiations are conducted, and the

outcomes of a negotiation.
Mutual adjustment
Interdependent relationships-those in which
people are mutually dependent-are complex.
Both parties know that they can influence the
others outcomes and that their outcomes can,
in turn, be influenced by the other. It is
important to recognize that negotiation is a
process that transforms overtime, and mutual
adjustment is one of the key causes of the
changes that occur during a negotiation. The
effective negotiator needs to understand how
people will adjust and readjust what they say
during negotiations based on what the other
party does and is expected to do.
Interdependence and perceptions
Understanding the nature of the
interdependence of the parties is critical to
successful negotiation. Negotiators make
judgements about the nature of the
independence in their negotiation situations,
and negotiator perceptions about
interdependence become an important as the
actual structure of the interdependence.
Two potential consequences of interdependent

relationships are:
1. Value creation
One of the main sources of value creation is
contained in the differences that exist between
negotiators. It is important that negotiators be
aware that potential differences between them
may be the critical factors that they can use to
reach an agreement.
2. Conflict
Conflict may be defined as a sharp
disagreement or opposition, as of interests,
ideas, etc and includes the perceived
divergence of interest, or a belief that the
parties current aspirations cannot be achieved
simultaneously.