Negotiation is any form of verbal communication whereby parties to a conflict of interest discuss, without resort to arbitration or other judicial processes, the form of any joint action which they might take to manage a dispute between them. Bargaining is the process of negotiating for agreement. The process of bargaining itself is characterized by exchanges of information on offers, counter-offers and concessions which incorporate the parties’ beliefs and expectations. The process incorporates argument and persuasion to influence the other parry about the division of available resources.
Negotiation Phases
Negotiation is a complex process with several component parts. there are a number of common characteristics for all negotiation situations:
- There are two or more parties who may be acting as individuals, as groups or organizations.
- The parties must search for a way resolve the conflict.
- The parties believe that by using influence they will achieve a better deal, rather than by accepting what is offered.
- The parties prefer to reach agreement, rather than continue to disagree
- The parties expect to give and take, that is, to modify their demands
- Success requires management of tangibles (for example, terms of agreement) and intangibles (for example, underlying personal beliefs and values).
General Negotiation Process
In general, there are seven negotiation phases in negotiation process:
- Preparation: identifying the important issues and goals.
- Relationship building: understanding how you will relate to the party.
- Information gathering: learning what you need to know about (variables, other party’s situation and goals).
- Information using: building the case for the negotiation.
- Bidding: the process of negotiating from initial offer towards the agreement.
- Closing the deal: building commitment from the parties.
- Implementing the deal: a post-negotiation phase. Even after the agreement is reached, there may be loose ends to clarify so there will be follow-ups to the original negotiation.
Depending on normal practice and cultural context, the parties will expend differing energies on each of these phases. Some will spend considerable time building the relationship before entering the subsequent phases, others will spend little time on preparation, depending on their familiarity with the negotiation target and knowledge of the other party.