Negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable. Individuals should make separate, interactive decisions; and negotiation analysis considers how groups of reasonably bright individuals should and could make joint, collaborative decisions. These theories are interleaved and should be approached from the synthetic perspective.
Common assumptions of most theories
Negotiation is a specialized and formal version of conflict resolution, most frequently employed when important issues must be agreed upon. Negotiation is necessary when one party requires the other party's agreement to achieve its aim. The aim of negotiating is to build a shared environment leading to long-term trust, and it often involves a third, neutral party to extract the issues from the emotions and keep the individuals concerned focused. It is a powerful method for resolving conflict and requires skill and experience. Henry Kissinger defined negotiation as "a process of combining conflicting positions into a common position under a decision rule of unanimity, a phenomenon in which the outcome is determined by the process."[1] Druckman adds that negotiations pass through stages that consist of agenda-setting, a search for guiding principles, defining the issues, bargaining for favorable concession exchanges, and a search for implementing details. Transitions between stages are referred to as turning points.[2]
Most theories of negotiations share the notion of negotiations as a process, but they differ in their description of the process.
Structural, strategic and procedural analysis builds on rational actors, who are able to prioritize clear goals, are able to make trade-offs between conflicting values, are consistent in their behavioral pattern, and are able to take uncertainty into account.
Negotiations differ from mere coercion, in that negotiating parties have the theoretical possibility to withdraw from negotiations. It is easier to study bi-lateral negotiations, as opposed to multilateral negotiations.
Structural analysis
Structural Analysis is based on a distribution of empowering elements among two negotiating parties. Structural theory moves away from traditional Realist notions of power in that it does not only consider power to be a possession, manifested for example in economic or military resources, but also thinks of power as a relation.
Based on the distribution of elements, in structural analysis we find either power-symmetry between equally strong parties or power-asymmetry between a stronger and a weaker party. All elements from which the respective parties can draw power constitute structure. They may be of material nature, i.e., hard power (such as weapons), or of social nature, i.e., soft power (such as norms, contracts, or precedents).
These instrumental elements of power, are either defined as parties’ relative position (resources position) or as their relative ability to make their options prevail.
Structural analysis is easy to criticize, because it predicts that the strongest will always win. This, however, does not always hold true.
Strategic analysis
Strategic analysis starts with the assumption that both parties have a veto. Thus, in essence, negotiating parties can cooperate (C) or defect (D). Structural analysis then evaluates Á outcomes of negotiations (C, C; C, D; D, D; D, C), by assigning values to each of the possible outcomes. Often, cooperation of both sides yields the best outcome. The problem is that the parties can never be sure that the other is going to cooperate, mainly because of two reasons: first, decisions are made at the same time or, second, concessions of one side might not be returned. Therefore, the parties have contradicting incentives to cooperate or defect. If one party cooperates or makes a concession and the other does not, the defecting party might relatively gain more.
Trust may be built only in repetitive games through the emergence of reliable patterns of behavior, such as tit-for-tat.
Process analysis
Process analysis is the theory closest to haggling. Process Analysis focuses on the study of the dynamics of processes. E.g., both Zeuthen and Cross tried to find a formula in order to predict the behavior of the other party in finding a rate of concession, in order to predict the likely outcome.
The process of negotiation, therefore, is considered to unfold between fixed points: starting point of discord, endpoint of convergence. The so-called security point, which is the result of optional withdrawal, is also taken into account.
An important feature of negotiation processes is the idea of turning points (TPs). A considerable amount of research has been devoted to analyses of TPs in single and comparative case studies, as well as experiments. Considered as departures in the process, Druckman has proposed a three-part framework for analysis in which precipitating events precede (and cause) departures which have immediate and delayed consequences.[3] Precipitating events can be external as when a mediator becomes involved, substantive as when a new idea is proposed, or procedural as when the formal plenary structure becomes divided into committees. Departures can be abrupt or relatively slow and consequences can escalate, moving away from agreement, or they might move in the direction of agreement. Using this framework in a comparative study of 34 cases, Druckman discovered that external events were needed to move talks on security or arms control toward agreement.[4] However, new ideas or changed procedures were more important for progress in trade or political negotiations. Different patterns were also found for interest-based, cognitive-based, and values-based conflicts[5] and between domestic and international negotiations.[6]
Turning points are also analyzed in relation to negotiation crises or disruptions in the flow of the talks. Earlier research showed that TPs are more likely to occur in the context of crises, often in the form of changes that put the talks back on track and transition to a new stage (Druckman, 1986, 2001). A key to resolving crises is reframing the issues being discussed. The choice to reframe was shown to occur more frequently among negotiators when their trust is low and transaction costs are high.[7] The research to date on TPs has generated ideas likely to stimulate further studies. Some of these ideas include a search for the underlying mechanisms that can explain the emergence of TPs. Foremost among these are flexibility and adaptability in response to crises or violations of expected behavior. The key challenge is to discover the conditions that foster progress toward a solution to the dilemma of balancing the desire to agree with the desire to come out favorably. For a review of the research on turning points, see Druckman and Olekalns.[8]
Integrative analysis
Integrative analysis divides the process into successive stages, rather than talking about fixed points. It extends analysis to pre-negotiations stages, in which parties make first contacts. The outcome is explained as the performance of the actors at different stages. Stages may include pre-negotiations, finding a formula of distribution, crest behavior, settlement
Bad faith negotiation
Bad faith is a concept in negotiation theory whereby parties pretend to reason to reach settlement, but have no intention to do so, for example, one political party may pretend to negotiate, with no intention to compromise, for political effect.[9][10]
Inherent bad faith model in international relations and political psychology
Bad faith in political science and political psychology refers to negotiating strategies in which there is no real intention to reach compromise, or a model of information processing.[11] The "inherent bad faith model" of information processing is a theory in political psychology that was first put forth by Ole Holsti to explain the relationship between John Foster Dulles’ beliefs and his model of information processing.[12] It is the most widely studied model of one's opponent.[13] A state is presumed to be implacably hostile, and contra-indicators of this are ignored. They are dismissed as propaganda ploys or signs of weakness. Examples are John Foster Dulles’ position regarding the Soviet Union, or Israel's initial position on the Palestinian Liberation Organization.
Phases of negotiation
There is no magic or mystery to negotiations or to what makes someone a master negotiator. There are five steps or phases in negotiation that effectively work.
Prepare: There is no shortcut to preparation. It is the first phase to any negotiation, though people don't put too much time into it. They often go directly to information exchange stage or even to bargaining.
Information Exchange: The information exchange happens when one starts engaging with the other side, sharing information, and identifying what the other party needs/wants.
Bargain: Bargaining is that phase in which the "give and take" happens. In this stage, we need to continue creating value and finally capture value. Finely tuned communication skills are important in this stage.
Conclude: This is the stage where one reaches an agreement. Here one has to consider strategies to lock the commitment.
Execute: This is the stage where execution of an agreement happens. This stage can also be looked at as the preparation for the next negotiation opportunity. One must make sure that they follow through on promises made in order to build a stronger relationship and trust. One will learn more about the other party in this stage. This will make it easier for the next negotiation. During execution, one is likely to apply the total negotiation process and best negotiating practices.
Negotiation skills
Negotiation skills are qualities that allow two or more parties to reach a compromise. These are often soft skills and include abilities such as:
Communication - To negotiate communication plays vital role, this step helps to understand and explain each others needs/wants.
Mediation is a negotiation facilitated by a third-party neutral. It is a structured, interactive process where an impartial third party, the mediator, assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. All participants in mediation are encouraged to actively participate in the process. Mediation is a "party-centered" process in that it is focused primarily upon the needs, rights, and interests of the parties. The mediator uses a wide variety of techniques to guide the process in a constructive direction and to help the parties find their optimal solution. A mediator is facilitative in that they manage the interaction between parties and facilitates open communication. Mediation is also evaluative in that the mediator analyzes issues and relevant norms ("reality-testing"), while refraining from providing prescriptive advice to the parties. Due to its voluntary nature, a person cannot be compelled to use mediation to resolve their dispute. However, a suggestion from the Court may be difficult to resist.
Negotiation is a dialogue between two or more parties to resolve points of difference, gain an advantage for an individual or collective, or craft outcomes to satisfy various interests. The parties aspire to agree on matters of mutual interest. The agreement can be beneficial for all or some of the parties involved. The negotiators should establish their own needs and wants while also seeking to understand the wants and needs of others involved to increase their chances of closing deals, avoiding conflicts, forming relationships with other parties, or maximizing mutual gains. Distributive negotiations, or compromises, are 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 the success of a negotiation.
In negotiation theory, the best alternative to a negotiated agreement or BATNA refers to the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached. The BATNA could include diverse situations, such as suspension of negotiations, transition to another negotiating partner, appeal to the court's ruling, the execution of strikes, and the formation of other forms of alliances. 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. Care should be taken, however, to ensure that deals are accurately valued, taking into account all considerations, such as relationship value, time value of money and the likelihood that the other party will live up to their side of the bargain. These other considerations are often difficult to value since they are frequently based on uncertain or qualitative considerations rather than easily measurable and quantifiable factors.
In the social sciences, bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price or nature of a transaction. If the bargaining produces agreement on terms, the transaction takes place. It is often commonplace in poorer countries, or poorer localities within any specific country. Haggling can mostly be seen within street markets worldwide, wherein there remains no guarantee of the origin and authenticity of available products. Many people attribute it as a skill, but there remains no guarantee that the price put forth by the buyer would be acknowledged by the seller, resulting in losses of profit and even turnover in some cases. A growth in the country's GDP Per Capita Income is bound to reduce both the ill-effects of bargaining and the unscrupulous practices undertaken by vendors at street markets.
Roger D. Fisher was Samuel Williston Professor of Law at Harvard Law School and director of the Harvard Negotiation Project.
Conflict resolution is conceptualized as the methods and processes involved in facilitating the peaceful ending of conflict and retribution. Committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest of group and by engaging in collective negotiation. Dimensions of resolution typically parallel the dimensions of conflict in the way the conflict is processed. Cognitive resolution is the way disputants understand and view the conflict, with beliefs, perspectives, understandings and attitudes. Emotional resolution is in the way disputants feel about a conflict, the emotional energy. Behavioral resolution is reflective of how the disputants act, their behavior. Ultimately a wide range of methods and procedures for addressing conflict exist, including negotiation, mediation, mediation-arbitration, diplomacy, and creative peacebuilding.
Social exchange theory is a sociological and psychological theory that studies the social behavior in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits. The theory also involves economic relationships—the cost-benefit analysis occurs when each party has goods that the other parties value. Social exchange theory suggests that these calculations occur in romantic relationships, friendships, professional relationships, and ephemeral relationships as simple as exchanging words with a customer at the cash register. Social exchange theory says that if the costs of the relationship are higher than the rewards, such as if a lot of effort or money were put into a relationship and not reciprocated, then the relationship may be terminated or abandoned.
Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict in the workplace. The aim of conflict management is to enhance learning and group outcomes, including effectiveness or performance in an organizational setting. Properly managed conflict can improve group outcomes.
The term zone of possible agreement (ZOPA), also known as zone of potential agreement or bargaining range, describes the range of options available to two parties involved in sales and negotiation, where the respective minimum targets of the parties overlap. Where no such overlap is given, in other words where there is no rational agreement possibility, the inverse notion of NOPA applies. Where there is a ZOPA, an agreement within the zone is rational for both sides. Outside the zone no amount of negotiation should yield an agreement.
In game theory, Deadlock is a game where the action that is mutually most beneficial is also dominant. This provides a contrast to the Prisoner's Dilemma where the mutually most beneficial action is dominated. This makes Deadlock of rather less interest, since there is no conflict between self-interest and mutual benefit. On the other hand, deadlock game can also impact the economic behaviour and changes to equilibrium outcome in society.
Peace journalism is a style and theory of reporting that aims to treat stories about war and conflict with balance, in contrast to war journalism, which peace journalism advocates say display a bias toward violence. The theory proposes practical methods for correcting biases in stories appearing in the mainstream and alternative media, and suggests ways for journalists to work with other media professionals, audiences, and organizations in conflict.
A bilateral monopoly is a market structure consisting of both a monopoly and a monopsony.
In negotiation, leverage is the power that one side of a negotiation has to influence the other side to move closer to their negotiating position. A party's leverage is based on its ability to award benefits or impose costs on the other side. Another conceptualization holds that the party that has the most to lose from a "no deal" outcome has less leverage than the party that has the least to lose.
Bargaining power is the relative ability of parties in an argumentative situation to exert influence over each other in order to achieve favourable terms in an agreement. This power is derived from various factors such as each party’s alternatives to the current deal, the value of what is being negotiated, and the urgency of reaching an agreement. A party's bargaining power can significantly shift the outcome of negotiations, leading to more advantageous positions for those who possess greater leverage.
Getting to Yes: Negotiating Agreement Without Giving In is a best-selling 1981 non-fiction book by Roger Fisher and William Ury. Subsequent editions in 1991 and 2011 added Bruce Patton as co-author. All of the authors were members of the Harvard Negotiation Project.
Intra-household bargaining refers to negotiations that occur between members of a household in order to arrive at decisions regarding the household unit, like whether to spend or save or whether to study or work.
A conflict is a situation, in which inacceptable differences in interests, expectations, values, and opinions occur in or between individuals or groups.
Sequential bargaining is a structured form of bargaining between two participants, in which the participants take turns in making offers. Initially, person #1 has the right to make an offer to person #2. If person #2 accepts the offer, then an agreement is reached and the process ends. If person #2 rejects the offer, then the participants switch turns, and now it is the turn of person #2 to make an offer. The people keep switching turns until either an agreement is reached, or the process ends with a disagreement due to a certain end condition. Several end conditions are common, for example:
David Lax is an American negotiation expert, author, speaker, statistician and academic. He is currently a Distinguished Fellow at the Harvard Negotiation Project, Managing Principal of Lax Sebenius LLC, a firm that advises companies and governments in challenging and complex negotiations, and a former professor at Harvard Business School.
Trust building is the most influential factor in negotiating between two sides. The stronger this factor appears, the greater the chance will be for negotiators to cooperate. Studies have suggested that religious backgrounds can have a direct impact on the confidence and process of negotiation. Such tendencies generally do not prevent a contract or an agreement from being concluded; however, there are reasons to believe that religious affiliations reduce the negotiation process and give more confidence to decision makers.
References
↑ Kissinger, Henry. Nuclear Weapons and Foreign Policy. New York: W. W. Norton. ISBN9780393004946.
↑ Druckman, D. (1986). "Stages, crises, and turning points: Negotiating military base rights, Spain and the United States." Journal of Conflict Resolution, 30 (2): 327-360.
↑ Druckman, D. (2004). Departures in negotiation: Extensions and new directions. Negotiation Journal, 20: 185–204.
↑ Druckman, D. (2001). Turning points in international negotiation: A comparative analysis. Journal of Conflict Resolution, 45: 519–544.
↑ Druckman, D. (2005). "Conflict Escalation and Negotiation: A Turning Points Analysis." In I.W. Zartman and G. O. Faure (eds.) Escalation and Negotiation. Cambridge, England: Cambridge University Press.
↑ Hall, W. E. (2014). Turning Points in Environmental Negotiation: Exploring Conflict Resolution Dynamics in Domestic and International Cases. Dordrecht, The Netherlands: Republic-of-Letters
↑ Druckman, D. and Olekalns, M. (2013). "Motivational primes, trust and negotiators' reactions to a crisis." Journal of Conflict Resolution, 57: 959–983.
↑ Druckman, D. and Olekalns, M. (2013a). “Punctuated Negotiations: Transitions, Interruptions, and Turning Points.” In M. Olekalns and W. Adair (eds,) Handbook of Negotiation. Cheltenham UK: Edward Elgar
↑ "negotiating in bad faith", example of use of "bad faith" from definition in Oxford Online Dictionary,
↑ example of use – "the Republicans accused the Democrats of negotiating in bad faith", Oxford Online Dictionary,
↑ The "Inherent Bad Faith Model" Reconsidered: Dulles, Kennedy, and Kissinger, Douglas Stuart and Harvey Starr, Political Psychology, (subscription required)
↑ “…the most widely studied is the inherent bad faith model of one’s opponent...", The handbook of social psychology, Volumes 1–2, edited by Daniel T. Gilbert, Susan T. Fiske, Gardner Lindzey
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