Negotiation is the process of sharing available resources in an amicable and mutually beneficial way. It is a comprehensive social process that occur in our day to day interactions, for instance you negotiate whether to go out or stay indoors, children negotiate with parents on which TV station to watch, lawyers negotiate on a term of settlement and so on. Negotiation occur in our daily life more often than we realize and our negotiating skill is a combination of our social and intellectual experiences as well as conscious behavioral training we undertake. Most times, people are ignorant of their negotiating situations and are therefore always compromising on issues and situations that could easily be negotiated.
Negotiation is a decision-making process where two or more parties mutually discuss and agree on how to share scarce resources. According to an article on “skills you need” (https://www.skillsyouneed.com/ips/negotiation.html), Negotiation is a process by which compromise or agreement is reached while avoiding argument and dispute.
The most distinguishing factor between negotiation and bargaining is the concept of interdependence where parties rely on one another to achieve their preferable outcomes. There is no interdependence in bargaining, it is about winning at all cost for both parties.
The common misconceptions about negotiation includes:
- Negotiation is a win-lose situation: Most people believe that negotiation is about a party getting their desired outcomes while the other parties lose out. In the real sense, negotiation is about working out the best options for all parties involved. Everybody’s needs are attended to. Interdependence plays a major role in negotiation, parties realize that their needs and desires are dependent on one another so they all create opportunities for all to achieve their desired outcome.
- Negotiation is about bargaining: It is generally believed that arguing or bargaining is synonymous to negotiation but they represent two different processes. Bargaining is mostly about win-lose situations, it is the process of winning at all cost without putting into consideration the needs and desires of others while negotiation is the consideration of every party’s need and desires and the mutual agreement of all parties to the allocation of scarce resources. Negotiation is finding a mutually acceptable solution to a complex situation in which all the parties win. It is about negotiating the tangibles and managing the intangibles. Negotiation covers a wider range of issues, wants and desires while bargaining is result oriented.
- Your Best Alternative to a Negotiated Agreement (BATNA) is your walk away point during negotiation: A BATNA isn’t the point at which you walk away from a negotiation, it is your best next option if the negotiation doesn’t go well. Usually, your BATNA informs your decision to agree in a negotiation or not for instance, if I go to a store to purchase a pink handbag, before entering the store, I ought to know what my BATNA is, it could be that there are other stores selling the same bag at a cheaper rate. If the storekeeper isn’t willing to go down on price anymore, I can consider my BATNA which would be to go to the other cheaper store but if the price I am getting from this storekeeper is lower than my BATNA then I would purchase the bag from this store. In essence, BATNA is about creating the next best option to your needs before negotiating and it is not in all negotiations that we resort to using our BATNA but it is always advisable that any party going to a negotiation have a BATNA in mind. It only comes to play when negotiation is not addressing all your needs and wants.
- Negotiation is only about sharing value: This is a more distributive and competitive mindset to negotiation. Most people get stuck up on how to share existing value rather than looking for ways to create more value (integrative). Value creation is an essential part of any successful negotiation. Negotiation is about creating and claiming value. Creating value is the process of creating additional options to the already existing ones that could be of interest to parties. Negotiators must always recognize the pie and look for ways to expand the pie. This involves analyzing and creating various strategic approaches that would result to better outcomes for all parties. In any negotiation situation, negotiators should always be on the lookout for better ways of maximizing their outcomes and the outcome of others.
In conclusion, Negotiation is the process of discerning and addressing the needs and concerns of parties in a way to maximize goals and outcome. it is the process of making mutual concessions and adjustments till all values created are shared in an amicable way. The more conscious we are of negotiation situations especially in conflict situations, the more preferred outcomes we can get out of them and proper knowledge of what negotiation is all about can make a huge difference in negotiating situations.
Associate, SimmonsCooper Partners.