Most people assume that negotiation is reserved for diplomats, hostage negotiators, international peacekeepers, business people and professional negotiators. Yet in reality, we all negotiate everyday in every aspect of our lives, whether over simple issues with family and friends, work colleagues, partners, buyers and sellers, or over large and complex issues such as company mergers, acquisitions and alliances, environmental or territorial disputes – often our success is limited by a lack of self-awareness that we are actually negotiating, not having adequately prepared for negotiations or that we do not possess sufficient knowledge or skills covering the various methods, strategies and processes to negotiate effectively according to different conditions and circumstances- this often leaves us with sub-optimal results. Accordingly, if we want to increase the value of our negotiated outcomes it is important that we learn to become a better negotiator. Why may you ask?
Well, while we may do it every day, negotiation is not necessarily an easy thing to do well nor is it something that we always tend to approach consciously or wisely. A lack of knowledge and skill in applying different negotiation principles and strategies to the appropriate negotiation context often leaves us with less than optimum outcomes. ‘Not knowing’ also leads us to assume that we are better negotiators than what we actually are – in reality, this bias simply makes us good at continuing to do the wrong things as we tend to be unaware of and leave potential value behind once the dealing is done .
For many, the traditional concept of negotiation is associated with distributive bargaining over fixed or limited resources, meaning that I seek to gain as much as I can at your expense. This ‘fixed pie’ mentality is often associated with competitive sum/zero or win/lose outcomes, as this form of negotiation is heavily oriented toward claiming value. Commonly referred to as positional negotiation , this approach follows a process where negotiators take a position, argue for it and make concessions to reach a compromise (Fisher, Ury and Patton) often losing sight of the underlying interests that are driving us to negotiate in the first place. This adversarial approach to negotiation is the most familiar way most people negotiate on a daily basis – often to their own detriment.
Positional negotiators use all means at their disposal (Kolb 1995), extending to making extreme claims to persuade, force, manipulate or deceive the other party into moving toward their own preferred position and getting the best possible deal from the other party (Patton BM 1985). The causalities of this approach include a lack of trust and damaged relationships.
Distributive bargaining often requires little preparation, the outcomes are predictable and the process is used to divide scarce resources when long term relationships are unlikely or not considered important. It particularly lends itself to the negotiation of simple transactional exchanges as the focus is upon substance rather than ongoing or long term relationships.
Yet, negotiation is much more than just claiming value – it is also be about creating value and preserving relationships. Fortunately, in recent decades we have seen the emergence of alternative and favoured approaches to negotiation that is focussed upon creating value as well as claiming value – labelled as ‘principled negotiation’ (Patton: 1985) or ‘interest based bargaining’ (Fisher, Ury and Patton: 1991) this form of negotiation is suited to collaboration, with its focus upon integrative ‘Win/Win’ rather than Zero/Sum outcomes (Timothy Rauenbusch: 2000). Also referred to as integrative bargaining, negotiation on merits, or mutual gains bargaining (Ancona, Friedmand and Kolb: 1991).
According to Fisher et al (1991) the core elements of the Principled Negotiation model are:
· Separating people from the problem
· Focusing upon interests, not positions
· Generating Options for mutual gain
· Insist upon using objective criteria or fair standards
Principled negotiation balances and deals with the relationship and substance issues on their merits (Patton BM 1985). Principled Negotiation promotes better communication, understanding, more inventing or creating of value, added options and better reality testing of options (Patton BM 1985). Some of the key elements of Negotiation models with an integrative, interest based orientation include active listening, converting positions into underlying needs or interests, joint data collection and brainstorming, facilitation, and effective communication.
Mutual gains bargaining employs a collaborative problem solving approach that attempts to meet the substantive and legitimate interests of all parties involved, resolves conflicts fairly and preserves long-term relationships.
The evolution of negotiation theory now blends the strengths of distributive and integrative negotiation approaches to balance the creation and claiming of value e, for at the end of the day, the extra value create still needs to be divided between the parties involved. The purpose of this collaborative orientation is to ensure each party agrees to an outcome that serves both their own and their collective interests much better than what they could possibly achieve acting alone. The aim of integrative bargaining is to deliver ‘Win/Win’ outcomes for each party involved with the negotiation.
According to Patton (1985) The key features of ‘mutual gains’ bargaining are:-
1. Collaborative problem solving
2. Separating people or emotional issues from the substantive problem
3. Focus upon interests rather than positions
4. Seeking to generate or invent options for mutual gain
5. Focus upon creating value as well as claiming value
6. Integrative bargaining
7. Based on terms of objective criteria or fair standards – issues negotiated on their merits
8. Encourages sharing and disclosure of information
9. Seeks win/win outcomes
10. Creates durable agreements