Negotiation

Stages of Negotiation

Graphics courtesy of PM Study CircleOpens in new window To come to a point where leaders can achieve a desirable outcome, it may be useful to understand a structured approach to negotiation. For example, in a work situation a meeting may need to be arranged in which all parties involved can come together. The process of negotiation includes the following stages:

1. preparation,
2. discussion,
3. clarification of goals,
4. negotiation towards a Win-Win outcome,
5. agreement, and
6. implementation of a course of action.

1.     Preparation

Before any negotiationOpens in new window takes place, a decision has to be made as to when and where a meeting will take place to discuss the problem and who will attend.

Setting a limited time-scale can also be helpful to prevent the disagreement continuing. This stage involves ensuring all the pertinent facts of the situation are known in order to clarify your own position.

For leaders, this includes knowing the “rules” of your organization, to whom help is given, when help is not felt appropriate and the grounds for such refusals.

Your organization may well have policies to which you can refer in preparation for the negotiation. Undertaking preparation before discussing the disagreement will help to avoid further conflict and unnecessarily wasting time during the meeting.

2.     Discussion

During this stage, individuals or members of each side put forward the case as they see it (i.e., their understanding of the situation). Key skills during this stage include questioning, listening, and clarifying.

Sometimes it is helpful to take notes during the discussion stage to record all points put forward in case there is need for further clarification.

It is extremely important to listen, as when disagreement takes place it is easy to make the mistake of saying too much and listening too little. Each side should have an equal opportunity to present their case.

3.     Clarifying goals

From the discussion, the goals, interests, and viewpoints of both sides of the disagreement need to be clarified. It is helpful to list these factors in order of priority. Through this clarification it is often possible to identify or establish some common ground.

Clarification is an essential part of the negotiation process, without it misunderstandings are likely to occur which may cause problems and barriers to reaching a beneficial outcome.

4.     Negotiate Towards a Win-Win Outcome

This stage focuses on what is termed a win-win outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration. A win–win outcome is usually the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal. Suggestions of alternative strategies and compromises need to be considered at this point. Compromises are often positive alternatives which can often achieve greater benefit for all concerned compared to holding to the original positions.

5.     Agreement

Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered. It is essential for everybody involved to keep an open mind in order to achieve an acceptable solution. Any agreement needs to be made perfectly clear so that both sides know what has been decided.

6.     Implementing a course of action

From the agreement, a course of action has to be implemented to carry through the decision.

When managers pursue these five strategies, and encourage other organizational members to do so, they are more likely to be able to effectively resolve their conflicts through integrative bargainingOpens in new window.

In addition, throughout the negotiation process, managers and other organizational members need to be aware of, and on their guard against, the biases that can lead to faulty decision making.

Fisher and Ury’s Negotiation Tips

Fisher and Ury have developed an approach to help resolve conflicts. The negotiating tips include taking the time to prepare for a negotiating session, keeping the people and problems separate, and focusing on interests rather than on positions.

1.     Prepare for the Negotiation

To successfully resolve conflicts, leaders may need to spend considerable time preparing for a negotiating session. Leaders should anticipate each side’s key concerns and issues, attitudes, possible negotiating strategies, and goals.

2.     Separate the People From the Problem

Because all negotiations involve substantive issues and relationships between negotiators, it is easy for these parts to become entangled. When that happens, parties may inadvertently treat the people and the problem as though they were the same.

For example, a group of software engineers upset that their pay has not increased for the second year in a row may direct their personal bitterness toward their team leader. However, reactions such as these are usually a mistake because the decision may be out of the other party’s hands, and personally attacking the other party often makes the conflict even more difficult to resolve.

Leaders can do several things to separate people from the problem. First, leaders should not let their fears color their perceptions of each side’s intentions. It is easy to attribute negative qualities to others when we feel threatened. Similarly, it does no good to blame the other side for our own problems. Even if this is justified, it is still usually counterproductive.

Another thing leaders can do to separate the people from the problem is to communicate clearly. These guidelines are especially helpful in negotiating and resolving conflicts.

3.     Focus on interests, not positions.

Focusing on interests depends on understanding the difference between interests and positions. Leaders should not waste time arguing over who should get their way or, alternatively, trying to find a compromise point in between the two firm positions both sides have staked.

In negotiating, it is much more constructive to satisfy interests than to fight over positions. Furthermore, it is important, for example, for a leader to focus on both their counterpart’s interests (not position) and their own interests (not position).

Failure to Agree

If the process of negotiation breaks down and agreement cannot be reached, then rescheduling a further meeting is called for. This avoids all parties becoming embroiled in heated discussion or argument, which not only wastes time but can also damage future relationships.

At the subsequent meeting, the stages of negotiation should be repeated. Any new ideas or interests should be taken into account and the situation looked at afresh. At this stage, it may also be helpful to look at other alternative solutions and/or bring in another person to mediate.

Informal Negotiation

There are times when there is a need to negotiate more informally. At such times, when a difference of opinion arises, it might not be possible or appropriate to go through the stages set out above in a formal manner. Nevertheless, remembering the key points in the stages of formal negotiation may be very helpful in a variety of informal situations.

In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation:

1. Attitudes. All negotiation is strongly influenced by underlying attitudes to the process itself, for example, attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition.
2. Knowledge. The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation. In other words, good preparation is essential. Do your homework and gather as much information about the issues as you can. Furthermore, the way issues are negotiated must be understood as negotiating will require different methods in different situations.
3. Interpersonal Skills. Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or one-to-one negotiations. These skills include:

• effective verbal communication
• listening
• reducing misunderstandings is a key part of effective negotiation
• rapport building
• problem-solving
• decision-making
• assertiveness
• dealing with difficult situation.