Negotiation is a method to settle differences and reach compromise or agreement without argument. There are two main types of negotiation - distributive and integrative. Distributive negotiation involves bargaining over a fixed amount of value, while integrative negotiation aims to create value and find solutions where both parties benefit. Successful negotiation requires preparation, open discussion to clarify goals, and finding outcomes where all sides achieve mutual gains. Various strategies like making multiple offers simultaneously can help negotiations succeed in resolving conflicts to the satisfaction of all parties involved.

1. NEGOTIATION

2. INTRODUCTION

3.  Negotiation is a method by which people settle
differences. It is a process by which compromise
or agreement is reached while avoiding argument
and dispute.
 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.

4.  It is aimed to resolve points of difference, to gain advantage for an
individual or collective, or to craft outcomes to satisfy various
interests. It is often conducted by putting forward a position and
making concessions to achieve an agreement. The degree to which
the negotiating parties trust each other to implement the negotiated
solution is a major factor in determining whether negotiations are
successful.
 People negotiate daily, often without considering it a negotiation.
Negotiation occurs in organizations, including businesses, non-
profits, and within and between governments as well as in sales and
legal proceedings, and in personal situations such as marriage,
divorce, parenting, etc. Professional negotiators are often
specialized, such as union negotiators, leverage buyout negotiators,
peace negotiator, or hostage negotiators. They may also work under
other titles, such as diplomats, legislators, or brokers.

5. TYPES OF NEGOTIATION

6.  Negotiation can take a wide variety of forms, from a
multilateral conference of all United Nations members to
establish a new international norm (such as the UN
Convention on the Law of the Sea) to a meeting of
parties to a conflict to end violence or resolve the
underlying issue (such as constitutional negotiations in
South Africa in 1990-1994 or in Colombia with the FARC
on 2012-2015) to a business encounter to make a deal
to a face-off between parents (or between parent and
child) over the child's proper behavior. Mediation is a
form of negotiation with a third-party catalyst who helps
the conflicting parties negotiate when they cannot do so
by themselves Negotiation can be contrasted
with arbitration, where the decision lies with the third
party, which the conflicting parties are committed to
accept.

7.  Negotiation theorists generally distinguish
between two types of negotiation. The
difference in the urge of the two type depends
on the mindset of the negotiator but also on the
situation: one-off encounters where lasting
relationships do not obtain are more likely to
produce distributive negotiations whereas
lasting relationships are more likely to require
integrative negotiating. Different theorists use
different labels for the two general types and
distinguish them in different ways

8. DISTRIBUTIVE NEGOTIATION
 Distributive negotiation is also sometimes called positional or
hard-bargaining negotiation and 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. For this reason,
distributive negotiation is also sometimes called win-
lose because of the assumption that one person's gain is
another person's loss. Distributive negotiation examples
include haggling prices on an open market, including the
negotiation of the price of a car or a home.
 In a distributive negotiation, each side often adopts an
extreme or fixed position, knowing it will not be accepted—
and then seeks to cede as little as possible before reaching a
deal. Distributive bargainers conceive of negotiation as a
process of distributing a fixed amount of value.

9.  A distributive negotiation often involves people who
have never had a previous interactive relationship,
nor are they likely to do so again in the near future,
although all negotiations usually have a distributive
element.
 In the distributive approach each negotiator fights
for the largest possible piece of the pie, so parties
tend to regard each other more as an adversary
than a partner and to take a harder line.
Since Prospect Theory indicates that people value
losses more than gains and are more risk-averse
about losses, concession-convergence bargaining
is likely to be more acrimonious and less productive
of an agreement.

10. INTEGRATIVE NEGOTIATION
Integrative negotiation is also called interest-based, merit-
based, or principled negotiation. It is a set of techniques
that attempts to improve the quality and likelihood of
negotiated agreement by taking advantage of the fact that
different parties often value various outcomes differently.
While distributive negotiation assumes there is a fixed
amount of value (a "fixed pie") to be divided between the
parties, integrative negotiation attempts to create value in
the course of the negotiation ("expand the pie") by either
"compensating" loss of one item with gains from another
("trade-offs" or logrolling), or by constructing or reframing
the issues of the conflict in such a way that both parties
benefit ("win-win" negotiation).

11.  However, even integrative negotiation is likely to
have some distributive elements, especially when
the different parties both value different items to the
same degree or when details are left to be allocated
at the end of the negotiation. While concession is
mandatory for negotiations, research shows that
people who concede more quickly, are less likely to
explore all integrative and mutually beneficial
solutions. Therefore, early conceding reduces the
chance of an integrative negotiation.

12. INTEGRATED NEGOTIATION
 Integrated negotiation is a strategic approach to influence that
maximizes value in any single negotiation through the astute
linking and sequencing of other negotiations and decisions
related to one's operating activities.
 This approach in complex settings is best executed by
mapping out all potentially relevant negotiations, conflicts and
operating decisions in order to integrate helpful connections
among them, while minimizing any potentially harmful
connections (see examples below).
 Integrated negotiation is not to be confused with integrative
negotiation, a different concept (as outlined above) related to
a non-zero-sum approach to creating value in negotiations.
 Integrated negotiation was first identified and labeled by
international negotiator and author Peter Johnston in his
book Negotiating with Giants.

13. Other examples of integrated negotiation include the following:
1) In sports, athletes in the final year of their contracts will ideally hit
peak performance so they can negotiate robust, long-term
contracts in their favor.
2) A union needs to negotiate and resolve any significant internal
conflicts to maximize its collective clout before going to the table
to negotiate a new contract with management.
3) If purchases for similar goods or services are occurring
independent of one another across different government
departments, recognizing this and consolidating orders into one
large volume purchase can help create buying leverage and cost-
savings in negotiations with suppliers.
4) A tech start-up looking to negotiate being bought out by a larger
industry player in the future can improve its odds of that
happening by ensuring, wherever possible, that its systems,
technology, competencies and culture are as compatible as
possible with those of its most likely buyer.
5) A politician negotiating support for a presidential run may want to
avoid bringing onboard any high-profile supporters who risk
alienating other important potential supporters, while avoiding any
unexpected new policies that could also limit the size of their
growing coalition.

14. PROCESS OF NEGOTIATION

15. 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:
1. Preparation
2. Discussion
3. Clarification of goals
4. Negotiate towards a Win-Win outcome
5. Agreement & Implementation

16. 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.

17. 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
include 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.

18. 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 factors in order of
priority. Through this clarification it is often possible
to identify or establish some common ground.
Clarification is an essential part of the negotiation
process, without it misunderstandings are likely to
occur which may cause problems and barriers to
reaching a beneficial outcome.

19. 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.

20. AGREEMENT & IMPLEMENTATION
 Agreement can be achieved once understanding of
both sides’ viewpoints and interests have been
considered.
 It is essential to for everybody involved to keep an
open mind in order to achieve an acceptable
solution. Any agreement needs to be made
perfectly clear so that both sides know what has
been decided.
 From the agreement, a course of action has to be
implemented to carry through the decision.

21. TYPES OF NEGOTIATORS

22. SOFT
 These people see negotiation as too close to
competition, so they choose a gentle style of
bargaining. The offers they make are not in their
best interests, they yield to others' demands, avoid
confrontation, and they maintain good relations with
fellow negotiators. Their perception of others is one
of friendship, and their goal is agreement. They do
not separate the people from the problem, but are
soft on both. They avoid contests of wills and insist
on agreement, offering solutions and easily trusting
others and changing their opinions.

23. HARD
 These people use contentious strategies to
influence, utilizing phrases such as "this is my final
offer" and "take it or leave it." They make threats,
are distrustful of others, insist on their position, and
apply pressure to negotiate. They see others as
adversaries and their ultimate goal is victory.
Additionally, they search for one single answer, and
insist you agree on it. They do not separate the
people from the problem (as with soft bargainers),
but they are hard on both the people involved and
the problem.

24. PRINCIPLED
 Individuals who bargain this way seek integrative
solutions, and do so by sidestepping commitment to
specific positions. They focus on the problem rather
than the intentions, motives, and needs of the
people involved. They separate the people from the
problem, explore interests, avoid bottom lines, and
reach results based on standards independent of
personal will. They base their choices on objective
criteria rather than power, pressure, self-interest, or
an arbitrary decisional procedure. These criteria
may be drawn from moral standards, principles of
fairness, professional standards, and tradition.

25. STRATEGIES FOR NEGOTIATION

26. MAKE MULTIPLE OFFERS SIMULTANEOUSLY
When you put only one offer on the table at a time, you will learn
very little if the other party turns it down. By contrast, think about
what happens when you simultaneously present multiple offers,
each of which is equally valuable to you, advises Harvard
Business School professor Max H. Baseman. If the other side
refuses all of your offers, ask her which one she likes best. Her
preference for a specific offer should give you a strong clue
about where you might find value-creating, win-win trades and
generate mutual gain. In addition to identifying potential win-win
moves, when you make multiple offers simultaneously, you
signal your accommodating and flexible nature, as well as your
desire to understand the other party’s preferences and needs.
So, the next time you are about to make an offer, advises
Baseman, consider making three that you value equally instead.

27. INCLUDE A MATCHING RIGHT
In negotiation, including a matching right in your contract—
a guarantee that one side can match any offer that the
other side later receives—can be a classic win-win move,
according to Harvard Business School and Harvard Law
School professor Guan Subramanian. Imagine that you’re
a landlord negotiating with a prospective tenant. You want
to keep the ability to sell the apartment to someone else in
the future, while the prospective tenant wants a
commitment to rent the apartment for as long as she
wants. Offering the tenant a matching right—the power to
match any legitimate third-party offer—would allow you to
preserve your own flexibility while giving the tenant the
opportunity to avoid the disruption of a move. In this
manner, matching rights can improve the odds of a win-
win agreement.

28. TRY A CONTINGENT AGREEMENT
 In negotiation, parties often reach impasse because
they have different beliefs about the likelihood of future
events. You might be convinced that your firm will
deliver a project on time and under budget, for example,
but the client may view your proposal as unrealistic. In
such situations, a contingent agreement—negotiated “if,
then” promises aimed at reducing risk about future
uncertainty—offers a way for parties to agree to
disagree while still moving forward, writes
Massachusetts Institute of Technology professor
Lawrence Susskind in his book Good for You, Great for
Me: Finding the Trading Zone and Winning at Win-Win
Negotiation (Public Affairs, 2014).

29.  Contingent commitments often create incentives for
compliance or penalties for noncompliance, explains
Susskind. You might propose paying specified penalties
for turning your project in late or agree to significantly
lower your rates if you go over budget, for example. To
add a contingent agreement to your contract, begin by
having both sides write out their own scenarios of how
they expect the future to unfold. Then negotiate
expectations and requirements that seem appropriate to
each scenario. Finally, include both the scenarios and
the negotiated repercussions and rewards in your
contract. A contingent agreement can greatly increase
your odds of being satisfied with whatever remedies are
in place—and help generate a win-win deal.

30. NEGOTIATE DAMAGES UPFRONT
 Because not all future events can be anticipated with
contingent agreements, another way to foster a win-win
agreement is to include liquidated damages clauses in your
contract that stipulate how much will be paid if the contract is
breached, according to Subramanian. Consider that if one
party sues the other side for breach of contract down the line,
the plaintiff (if she wins) will be awarded monetary damages
rather than the specific goods or services that were lost.
Therefore, negotiating upfront exactly how much will be paid
for each late or missed delivery, for example, may streamline
any alternative dispute-resolution measures or lawsuits that
arise. In addition, negotiating damages puts a new issue on
the table—and thus expands the potential for value creation.
In this manner, adding new issues to the mix increases the
opportunity for win-win negotiations.

31. SEARCH FOR POST-SETTLEMENT SETTLEMENTS
 Imagine that you’ve just reached an agreement. You are
fairly happy with the deal, but suspect you could have
eked more value out of it. According to conventional
wisdom, you should quit talking about the agreement
with your counterpart and move on, lest you spoil
the deal. By contrast, Bazerman advises asking the
other party whether he would be willing to take another
look at the agreement to see if it can be made better.
Explain to your counterpart that you would each be free
to reject a revised deal if it doesn’t improve both of your
outcomes. This type of post-settlement settlement can
lead to new sources of value to divide between you. It
can also help generate a win-win contract if you didn’t
have one before. Your success in hammering out your
initial agreement may have established the trust needed
to explore the possibility of an even stronger deal.

32. BARRIERS TO NEGOTIATION

33. PREMATURE JUDGMENT
 Going into a complex negotiation with your mind made
up means that you might miss something that could be
ideal, if it is given some consideration. Having your mind
made up will interfere with imagination, creativity, and
real problem solving.
 Be open to ideas and do some brainstorming with
colleagues or your committee beforehand. While this
kind of creative exercise may not feel natural to you, it
does reflect the need for great ideas to be a springboard
for conversation and the perpetuation of the business
(or whatever it is that you are negotiating).


34. SEARCHING FOR THE SINGLE OUTCOME
 Human nature makes us critical, and if we become
cynical about negotiation, we may just want to get in and
out of the meeting as quickly as we can. By searching or
aiming for just one best answer, you exclude every other
possibility. You might leave better answers outside of
consideration.
 Give consideration to other approaches (such as
brainstorming, formal problem solving, and negotiating
in a pleasant location) to open people’s minds, including
the other party. If that’s not possible, you could also
solicit the advice of experts in the area.

35. THE FIXED PIE
 A third problem with creative solutions lies with a fixed
pie. This is the assumption that the more I get from a
deal, the less there is for you. This is rarely true, since
both sides could
clearly be worse off than they are now, but the idea of it
still interferes with negotiation.
 Consider that there is shared interest in negotiating
(otherwise the two parties would not be speaking to
each other), and at the same time is the potential for
shared gain. If we operate
together, what is the potential for future growth or benefit
for both parties? If I want to negotiate the price of my
car, and wish to pay less, but you are able to upsell me
on the paint and rust protection in addition to an
extended warranty, we both benefit.

36. SOLVING THEIR PROBLEM IS THEIR PROBLEM
 Another truth of human nature is that we are usually
only concerned with our own problems, and we
want the other party to solve their own problems.
However, to really achieve that agreement, the
negotiator has to appeal to the other party. If the
negotiator(s) get tunnel vision, the result is only
going to appeal to one side. That can lead to an
agreement that comes unraveled, or in the case of
collective bargaining, does not get ratified by the
membership.

37. EFFECTIVE NEGOTIATION

38. PROBLEM ANALYSIS
 Effective negotiators must have the skills to
analyze a problem to determine the interests
of each party in the negotiation. A detailed
problem analysis identifies the issue, the
interested parties and the outcome goals.
For example, in an employer and employee
contract negotiation, the problem or area
where the parties disagree may be in salary
or benefits. Identifying the issues for both
sides can help to find a compromise for all
parties.

39. PREPARATION
 Before entering a bargaining meeting, the
skilled negotiator prepares for the meeting.
Preparation includes determining goals,
areas for trade and alternatives to the stated
goals. In addition, negotiators study the
history of the relationship between the two
parties and past negotiations to find areas
of agreement and common goals. Past
precedents and outcomes can set the tone
for current negotiations.

40. ACTIVE LISTENING
 Negotiators have the skills to listen actively to the
other party during the debate. Active listening
involves the ability to read body language as well
as verbal communication. It is important to listen to
the other party to find areas for compromise during
the meeting. Instead of spending the bulk of the
time in negotiation expounding the virtues of his
viewpoint, the skilled negotiator will spend more
time listening to the other party.

41. EMOTIONAL CONTROL
 It is vital that a negotiator have the ability to keep his
emotions in check during the negotiation. While a
negotiation on contentious issues can be frustrating,
allowing emotions to take control during the meeting can
lead to unfavorable results. For example, a manager
frustrated with the lack of progress during a salary
negotiation may concede more than is acceptable to the
organization in an attempt to end the frustration. On the
other hand, employees negotiating a pay raise may
become too emotionally involved to accept a
compromise with management and take an all or
nothing approach, which breaks down the
communication between the two parties.

42. VERBAL COMMUNICATION
 Negotiators must have the ability to
communicate clearly and effectively to the
other side during the negotiation.
Misunderstandings can occur if the
negotiator does not state his case clearly.
During a bargaining meeting, an effective
negotiator must have the skills to state his
desired outcome as well as his reasoning.

43. COLLABORATION AND TEAMWORK
 Negotiation is not necessarily a one side
against another arrangement. Effective
negotiators must have the skills to work
together as a team and foster a
collaborative atmosphere during
negotiations. Those involved in a
negotiation on both sides of the issue must
work together to reach an agreeable
solution.

44. PROBLEM SOLVING
 Individuals with negotiation skills have the
ability to seek a variety of solutions to
problems. Instead of focusing on his
ultimate goal for the negotiation, the
individual with skills can focus on solving the
problem, which may be a breakdown in
communication, to benefit both sides of the
issue.

45. DECISION MAKING ABILITY
 Leaders with negotiation skills have the
ability to act decisively during a negotiation.
It may be necessary during a bargaining
arrangement to agree to a compromise
quickly to end a stalemate.

46. INTERPERSONAL SKILLS
 Effective negotiators have the interpersonal
skills to maintain a good working
relationship with those involved in the
negotiation. Negotiators with patience and
the ability to persuade others without using
manipulation can maintain a positive
atmosphere during a difficult negotiation.

47. ETHICS AND RELIABILITY
 Ethical standards and reliability in an
effective negotiator promote a trusting
environment for negotiations. Both sides in
a negotiation must trust that the other party
will follow through on promises and
agreements. A negotiator must have the
skills to execute on his promises after
bargaining ends.