2.

0 NEGOTIATION SKILLS
Negotiation is a method by which people settle differences. It is a process by
which compromise or agreement is reached while avoiding argument.
In any disagreement, individuals understandably aim to achieve the best
possible outcome for their position (or perhaps an organisation they
represent). However, the principles of fairness, seeking mutual benefit and
maintaining a relationship are the keys to a successful outcome.
Specific forms of negotiation are used in many situations: international
affairs, the legal system, government, industrial disputes or domestic
relationships as examples. However, general negotiation skills can be learned
and applied in a wide range of activities. Negotiation skills can be of great
benefit in resolving any differences that arise between you and others.
Why Negotiate?
It is inevitable that, from time-to-time, conflict and disagreement will arise
as the differing needs, wants, aims and beliefs of people are brought
together. Without negotiation, such conflicts may lead to argument and
resentment resulting in one or all of the parties feeling dissatisfied. The point
of negotiation is to try to reach agreements without causing future barriers to
communications.

Characteristics of Negotiation
There are certain characteristics of the negotiation process. These are:
(i) There are a minimum of two parties present in any negotiation.
(ii) Both the parties have pre-determined goals which they wish to achieve.
(iii) There is a clash of pre-determined goals, that is, some of the predetermined goals are not shared by both the parties.
(iv) There is an expectation of outcome by both the parties in any
negotiation.
(v) Both the parties believe the outcome of the negotiation to be satisfactory.

(vi) Both parties are willing to compromise, that is, modify their position.
(vii) The incompatibility of goals may make the modification of positions
difficult.
(viii) The parties understand the purpose of negotiation
2.1

The Process of Negotiation

In order to achieve a desirable outcome, it may be useful to follow a

structured approach to negotiation. For example, in a work situation a
meeting may need to be arranged in which all parties involved can come
together. The process of negotiation includes the following stages/process:
1.
2.
3.
4.
5.
6.

Preparation
Discussion
Clarification of goals
Negotiate towards a Win-Win outcome
Agreement
Implementation of a course of action

1. Preparation
Before any negotiation takes place, a decision needs to be taken as to when
and where a meeting will take place to discuss the problem and who will
attend. Setting a limited time-scale can also be helpful to prevent the
disagreement continuing.
This stage involves ensuring all the pertinent facts of the situation are known
in order to clarify your own position. In the work example above, this would
include knowing the rules of your organisation, to whom help is given, when
help is not felt appropriate and the grounds for such refusals. Your
organisation may well have policies to which you can refer in preparation for
the negotiation.
Undertaking preparation before discussing the disagreement will help to avoid
further conflict and unnecessarily wasting time during the meeting.

2. Discussion
During this stage, individuals or members of each side put forward the case as
they see it, i.e. their understanding of the situation. Key skills during this
stage are questioning, listening and clarifying. Sometimes it is helpful to
take notes during the discussion stage to record all points put forward in case
there is need for further clarification. It is extremely important to listen, as
when disagreement takes place it is easy to make the mistake of saying too
much and listening too little. Each side should have an equal opportunity to
present their case.
3. Clarifying Goals
From the discussion, the goals, interests and viewpoints of both sides of the
disagreement need to be clarified. It is helpful to list these in order of
priority. Through this clarification it is often possible to identify or establish
common ground.
4. Negotiate Towards a Win-Win Outcome
This stage focuses on what is termed a Win-Win outcome where both sides
feel they have gained something positive through the process of negotiation
and both sides feel their point of view has been taken into consideration.
A Win-Win outcome is usually the best result. Although this may not always be
possible, through negotiation, it should be the ultimate goal.
Suggestions of alternative strategies and compromises need to be considered
at this point. Compromises are often positive alternatives which can often
achieve greater benefit for all concerned compared to holding to the original
positions.
5. Agreement
Agreement can be achieved once understanding of both sides viewpoints and
interests have been considered. It is essential to keep an open mind in order
to achieve a solution. Any agreement needs to be made perfectly clear so

that both sides know what has been decided.

6. Implementing a Course of Action
From the agreement, a course of action has to be implemented to carry
through the decision.
In any negotiation, the following three elements are important and likely to
affect the ultimate outcome of the negotiation:
1. Attitudes
2. Knowledge
3. Interpersonal Skills
1.
Attitudes
All negotiation is strongly influenced by underlying attitudes to the process
itself, for example attitudes to the issues and personalities involved in the
particular case or attitudes linked to personal needs for recognition.
2.
Knowledge
The more knowledge you possess of the issues in question, the greater your
participation in the process of negotiation. In other words, good preparation
is essential.
Do your homework and gather as much information about the issues as you
can.
Furthermore, the way issues are negotiated must be understood as
negotiating will require different methods in different situations.
3.
Interpersonal Skills
There are many interpersonal skills required in the process of negotiation
which are useful in both formal settings and in less formal one-to-one
situations. These include: effective verbal communication, listening skills,
building rapport, assertiveness, problem solving and decision making skills.

2.2

Basic Approaches

There are four different approaches to negotiation and the outcome of the
negotiation depends on the approach. The various approaches to negotiation
are as follows:
1. Distributive Negotiation or Win-Lose Approach
This is also called competitive, zero sum, or claiming value approach. This
approach is based on the premise that one person can win only at the expense
of the other. It has the following characteristics:
(i) One side wins and one side loses.
(ii) There are fixed resources to be divided so that the more one gets, the less
the other gets.
(iii) One persons interests oppose the others.
(iv) The dominant concern in this type of bargaining is usually to maximize
ones own interests.
(v) The dominant strategies in this mode include manipulation, forcing and
withholding information.
Strategy to be used: In this mode, one seeks to gain advantage through
concealing information, misleading or using manipulative actions. Of course,
these methods have serious potential for negative consequences. Yet even in
this type of negotiation, both sides must feel that at the end the outcome was
the best that they could achieve and that it is worth accepting and
supporting.
The basic techniques open to the negotiator in this kind of approach are the
following:

 Influence the other persons belief in what is possible.

Learn as much as possible about the other persons position
especially with regard to resistance points.
Try to convince the other to change his/her mind about their
ability to achieve their own goals.
Promote your own objectives as desirable, necessary, ethical, or
even inevitable.
2.

Lose-Lose Approach

This negotiation approach is adopted when one negotiating partner feels that
his own interests are threatened and he does all he can to ensure that the
outcome of the negotiation is not suitable to the interests of the other party
as well. In the bargain, both the parties end up being the loser. This type of
situation arises when the negotiating partners ignore one anothers needs and
the need to hurt each other outweighs the need to find some kind of an
acceptable solution. This is the most undesirable type of outcome and hence
this negotiation approach is best avoided.

3.

Compromise Approach

This approach provides an outcome which is some improvement over the loselose strategy outcome. To avoid a lose-lose situation, both parties give up a
part of what they had originally sought and settle for something less than
that. A compromise is the best way out when it is impossible for both parties
to convince each other or when the disputed resources are limited.
4.

Integrative Negotiation or Win-Win Approach

This negotiation approach is also called as collaborative or creating value

approach. It is superior to all negotiation approaches. It results in both the
parties feeling that they are achieving what they wanted. It results in
satisfaction to both the parties. It has the following characteristics.

(i) There are a sufficient amount of resources to be divided and both sides can
win
(ii) The dominant concern here is to maximize joint outcomes.
(iii) The dominant strategies include cooperation, sharing information, and
mutual problem-solving. This type is also called creating value since the goal
here is to have both sides leave the negotiating feeling they had greater value
than before.
Since the integrative approach is most desirable, some of the guidelines to
integrative bargaining are listed below:
Orient yourself towards a win-win approach. Your attitude while
going into negotiation plays a huge role in the outcome.
Plan and have a concrete strategy. Be clear on what is important
to you and why it is important.
Know your Best Alternative to a Negotiated Alternative (BATNA).
Separate people from the problem.
Focus on interests, not positions; consider the other partys
situation.
Create options for mutual gain.
Generate a variety of possibilities before deciding what to do.
Aim for an outcome based on some objective standard.
Pay a lot of attention to the flow of negotiation.
Take the intangibles into account, communicate carefully.
Use active listening skills, rephrase and ask questions and then ask
some more
2.2.1 Four Negotiation Strategies
There are four common strategies that are used in various ways.
1. Yielding
A yielding strategy is to not negotiate. A person who yields accepts the first
offer or assumes the price is fixed.
A common reason a person yields is to avoid inner discomfort from thoughts of
taking advantage of someone else or the fear of breaking social rules that say

you must accept what others say as truth. Another reason is fear of some form
of conflict or other unpleasantness.
People who use the yielding strategy typically assume other people are more
important and powerful than them, and so abase themselves by giving in at
the earliest opportunity. They put gaining the approval of others well above
getting what they want from the situation.
2. Compromising
A compromising strategy seeks some fair balance where both parties appear
to get an equitable deal. A typical tactic people used by people who adopt
this approach is to 'split the difference', which is not necessarily the best way
when the other person is using tactics such as highballing or asking for all
needs, wants and likes.
People who use compromising tend to see others as worthy and equal to
them, and hence seek fair play. They realize that nobody can get everything
they want and seek an equitable arrangement. As with yielders, they care
about what others think about them but have higher self-esteem and see
themselves as equal to others rather than inferior.
3. Competing
A classic and more aggressive approach is to treat the negotiation as a zerosum game where their goal is to get as much as possible at whatever cost to
the other party.
People who take this approach often assume they are superior or feel inferior
but need to appear superior. They may well use any of the negotiation tactics,
including the more deceptive ones, and consider this is not at all wrong (after
all, it is a negotiation). They may well generally distrust others, seeing the
world as a dog-eat-dog place where you deserve what you can get and also
deserve to lose what you lose.
4. Problem-solving
The problem-solving approach is closer to Compromising than Competing in
that it starts from a position of respect for the other party. A person using this
approach does not see the other person as competitor or threat, but rather as

a person who has legitimate wants and needs, and that the goal of
negotiation is less to make trades and more to work together on an equitable
and reasonable solution.
In particular, a problem-solver will seek to understand the other person's
situation, explain their own, and then creatively seek a solution where both
can get what they need. They will listen more and discuss the situation for
longer before exploring options and finally proposing solutions.
The relationship is important for a problem-solver, but mostly in that it helps
trust and working together on a solution rather than it being important that
the other person necessarily approves of the first person.

2.3

Phases of Negotiation

The negotiation process/phases can essentially be understood as a four-stage

process. The four stages of the negotiation process are preparation, opening,
bargaining and closure.
Stage 1: Preparation
Preparation is instrumental to the success of the negotiation process. Being
well-prepared generates confidence and gives an edge to the negotiator.
Preparation involves the following activities:
(i) Gathering Information: One needs to learn as much as one can about the
problem and ascertain what information is needed from the other side.
Understanding clearly the issues involved is also needed.
(ii) Leverage Evaluation: Evaluation of ones leverage and the other partys
leverage at the outset is important because there may be a number of things
one can do to improve ones leverage or diminish the leverage of the other
side.
(iii) Understand the people involved: It is important to know the people
with whom the negotiation is to take place. An understanding of their
objectives, roles and the issues likely to be raised by them will facilitate
better handling of the situation during the negotiation process.

(iv) Rapport: It is helpful to establish a rapport with the opponent during the
early stages, that is, before the bargaining process begins is helpful. This was,
one can determine early on how cooperative the opponent is going to be.
(v) Know your objectives: Clarity of objectives is absolutely essential. It
needs to be decided in advance how much you are willing to concede to the
opponent and what your priorities are. All arguments and justifications should
be ready.
(vi) Type of negotiation: Anticipate the type of negotiation expected, that is,
ascertain whether it will be highly competitive, cooperative or something
unusual; whether the negotiation will be face to face, by fax, through a
mediator, or in some other manner.
(vii) Plan: Decide on the negotiation approach and plan accordingly.
Stage 2: Opening Phase
Here the two sides come face to face. Each party tries to make an impression
on the other side and influence their thinking at the first opportunity.
Psychologically, this phase is important because it sets the tone for the
negotiation to a large extent. It involves both negotiating parties presenting
their case to each other.
Stage 3: Bargaining Phase
The bargaining phase involves coming closer to the objective you intended to
achieve when you started the negotiation. In this phase, the basic strategy is
to convince the other side of the appropriateness of your demands and then
persuading the other party to concede to those demands. For this, one needs
to be logical in ones approach and frame clearly-thought-out and planned
arguments.
Stage 4: Closure Phase
The closing phase of a negotiation represents the opportunity to capitalize on
all of the work done in the earlier phases. The research that has been done in
the preparation phase, combined with all of the information that has been
gained is useful in the closing phase. It also involves the sealing of the
agreement in which both parties formalize the agreement in a written

contract or letter of intent. Reviewing the negotiation is as important as the

negotiation process itself. It teaches lessons on how to achieve a better
outcome. Therefore, one should take the time to review each element and
find out what went well and what needs to be improved
2.4

Forms and Functions of Negotiating Process

The intentions of the negotiator determine his choice of conflict resolution

strategies. The strategy adopted has a tremendous impact on the outcome of
conflict.
Depending on the level of concern the negotiator has for ones own outcomes
and for the outcomes of others, the negotiator may adopt one of the
following five strategies:
1.
Compromising: This strategy aims at finding a middle ground. Often the
person gives away something in exchange for something, else. A person using
this strategy has a moderate degree of concern for ones own interests and
the interests of others. There is no clear outcome when this strategy is used.
2.
Forcing: This is an aggressive and dominating strategy aimed at
achieving ones personal goals at the expense of others. This style of conflict
resolution reflects a high concern with ones own interests but low concern
with the interests of others.
3.
Avoiding: In this strategy the negotiator has little concern for ones
outcomes as well as those of others. The individual physically and mentally
withdraws from the conflict. This often results in a lose-lose outcome.
4.
Smoothing: In this strategy the negotiator is more concerned with
others outcomes than ones own outcomes. The participant does not mind
giving the other side whatever they want. The negotiator deliberately seeks a
solution that is beneficial to the other side even though it may not be in his
best interests.
5.
Confronting: In this strategy the negotiator participant faces the
conflict head-on and aims at a solution that is mutually satisfactory. The
negotiator strives to find a solution that is acceptable to both the parties. The

strategy seeks to maximize the outcomes for both the sides. This strategy is
also known as problem solving or integrating.
Of the five negotiation strategies mentioned above, the confronting strategy
is viewed as the best one. It is a strategy that really seeks a resolution to the
conflict. The benefits of the confronting approach are:
(a) It is productive since both parties gain.
(b) It examines the cause of differences between the two parties and seeks
a creative solution of the problem.
(c) It aims at a solution that integrates the interests of all concerned
parties.
(d) It maintains the self-respect of both the parties and creates mutual
respect between them.
In contrast to the confronting strategy, the avoiding and smoothing strategies
have the following effects:
(1) They are helpful in managing the conflict process.
(2) They are useful in controlling the intensity of conflict and reduce its
harmful effect.
(3) The source of conflict continues to exist even after the conflict is over.

Reference list:
Beach, L.R. (2005) The Psychology of Decision Making, Sage Publications
http://www.skillsyouneed.com/ips/negotiation.html#ixzz2tdNKabpF
http://www.managementstudyhq.com/characteristics-and-steps-ofnegotiation-process.html#sthash.Yf9hhKR4.dpuf
http://www.bms.co.in/explain-different-types-of-negotiation-strategies/