Negotiation

1.0 NEGOTIATION INTRODUCTION

Formal discussion between people on attempting to reach an agreement is called negotiation. Generally this process is known as bargaining process between two or more parties that seeks for a common ground and reach an agreement to resolve conflict or mutual concern settlement. In negotiation, each party could have its own needs, aim and viewpoints that might alter during the process and possible to be diverted from the original aims based on the success of the process. Besides that, negotiation is also known as a platform to settle differences by which compromises or agreement reached while avoiding argument and dispute.

As each parties have interlocking goals that they cannot accomplish independently, they usually do not want or need exactly the same thing. This interdependence can be either win-lose or win-win in nature, and the type of negotiation that is appropriate will vary accordingly. The disputants will either attempt to force the other side to comply with their demands, to modify the opposing position and move toward compromise, or to invent a solution that meets the objectives of all sides. In any differences or disagreement, individuals understandably aims for the best possible outcome for their position or an organisation represented.

A successful outcome can be achieved if the negotiation process has key principle of fairness, seeking mutual benefit and maintaining relationship. The major factor or responsibility of negotiation is reliability in willingness of the person to negotiate and implement the negotiated solution as in contract. Negotiation is not a zero-sum game and if it is then it has failed. In an impasse negotiation, it is essential for involved parties acknowledge the rough decisions taken and work toward solution later.

2.0 NEGOTIATION TYPES

Negotiation can take place in diverse type of forms such as from a trained negotiator representing an organization or position in formal setting to an informal negotiation between friends. In order to contrast negotiation, mediation such as a neutral third party can be assigned to listen to all side arguments ad attempt to create an agreement between the parties. This method of negotiation is known also as positional or hard-bargaining negotiation.

A fundamental asymmetry in negotiating position can only be overcome by learning techniques or hiring a professional negotiator. Negotiations are fundamentally divided into two types known as distributive negotiation and integrative negotiation.

2.1 Distributive Negotiation

Distributive term in negotiation means there is a giving out; or the scattering of things. By its mere nature, there is a limit or finite amount in the thing being distributed or divided amongst the people involved. Hence, this type of negotiation is often referred to as 'The Fixed Pie' where there is only so much to go around, but the proportion to be distributed is limited but also variable. In the real world of negotiations, two parties face off with the goal of getting as much as possible. The seller wants to go after the best price they can obtain, while the buyer wants to pay the lowest price to achieve the best bargain. It's really just good old plain haggling, which is not all that much different from playing a tug of war.

This type of negotiation usually involves people who have never had a previous interactive relationship, nor are they likely to do so again in the near future. This type of negotiation is also sometimes called a “zero sum game”. For example, purchasing products or services are simple business where distributive bargaining is often employed.

2.2 Integrative Negotiation

Integrative negotiation is also known as interest-based or principled negotiation. In this type of negotiation the two concerns that will be establish is creating value and claiming the value. It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreement by providing an alternative to traditional distributive negotiation techniques. As distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided between the parties, on the other hand integrative negotiation often attempts to create value in the course of “expanding the pie” in negotiation.

It focuses on the underlying interests of the parties rather than their arbitrary starting positions, approaches negotiation as a shared problem rather than a personalized battle, and insists upon adherence to objective, principled criteria as the basis for agreement. Integrative negotiation often involves a higher degree of trust and the forming of a relationship. It can also involve creative problem-solving