When we hear the word “negotiation” we often imagine an acrimonious process between management and labor over contract terms or a stuffy boardroom of well-dressed people debating a complex business acquisition. Certainly, these situations involve complex negotiation processes but the concept of negotiation is much broader. Negotiation is a process whereby parties with differing needs and objectives reach a solution that is mutually acceptable.
We negotiate to satisfy a need or want. The need or want is the currency of negotiation. All of us negotiate in our personal and professional lives whether it is purchasing a vehicle, requesting a raise, or hammering out an agreement with a contractor. However, negotiating can be more informal such as persuading a child to go to bed, choosing a restaurant with a group of friends, or when to have the neighbors over for dinner. And yes, you can negotiate with yourself. Should I eat that bowl of ice cream or stick to my diet? Should I accept that “friend” request from my high school enemy that I haven’t talked with in decades?
Negotiating becomes necessary because of differing needs. This causes conflict. Conflict is pervasive in our lives. As illustrated above, dozens of conflicts occur every day because of differing needs or objectives and negotiating resolves conflict. Simply stated, everyone negotiates something every day. The question then is not why negotiate but how can we improve our negotiation skills to attain our needs.
The purpose of this chapter is to emphasis the various styles of negotiation. Readers are encouraged to ascertain the particular style they most often utilize and to understand how and when to apply the various negotiation styles based upon the situation.
The Game of NegotiationTop
Negotiation can be examined as if it were a game. First of all, we can understand the game. It is not a random process. It can be analyzed and understood and, thus, it can be controlled. It is controlled by employing various tactics throughout the process to meet objectives. Secondly, there are players. There can be one, two or multiple players involved in the game. Who the players are and the tactics they employ will determine how you plan and execute your negotiations. Lastly, there are rules. Some rules are clear and explicit such as laws. Other rules are informal such as ethical practices.
The Stages of NegotiationTop
The game of negotiation can be further understood because it has a predictable sequence of events or stages. The game of negotiation includes the following stages:
- Opening and Exchanging information
- Closing and Implementation
The first stage relates to planning and preparation. This is a time to assess the situation and the relationship with the other party. You will want to begin collecting information needed for the negotiations. Important information includes defining your needs and objectives. What are your minimum expectations? How much are you willing to yield? Additionally, what do you anticipate from the other party? What are their needs and objectives? What will they ask for?
With this information, you need to map out the negotiation process. What do you want to achieve? What are the issues and their priority? What is your initial position? At this point it is important to define your limits and determine available alternatives. It is important at this time to determine your BATNA. (Best Alternative To a Negotiated Agreement). In other words, what is your action if you are not able to reach a mutually acceptable agreement? By considering these factors, you have essentially developed your negotiation strategy.
Opening and Exchanging information:
In this stage the parties exchange the information gathered in the preparation stage. The process begins with each party laying out and explaining their opening positions. Once initial positions have been exchanged, the parties will explain and justify their positions. It is important to ascertain the other party’s wants and needs. Seek to uncover underlying interests, issues and perceptions. Identify points of differences and conflict. Both parties should listen and question the other party’s positions to determine points of leverage and counter arguments.
This stage is the essence of the game of negotiation. It is the classic game of give and take. Each party will utilize various negotiation strategies to achieve the objectives established during the preparation process. A natural part of the bargaining process is making concessions, in other words, giving up one thing to get something else in return. Typically, both parties expect concessions to move from opening positions.
Closing and Implementation:
This is the final stage of the negotiation process where a final agreement is completed. Both parties should review the terms of the agreement to avoid any misunderstanding. It is important to clarify anything that was left ambiguous or incomplete. In this stage a course of action needs to be developed to implement and monitor the terms of the agreement. The implementation of the agreement is a critical part of the negotiations. Parties often discover that the agreement was misunderstood, incomplete, or flawed. Unforeseen problems may arise or one of the parties didn’t do things they said they would. Every good agreement includes opportunities for the parties to reopen discussions as the result of problems in the implementation.
The Five Styles of NegotiationTop
As mentioned earlier, everyone negotiates something every day. As a result, people develop different negotiation styles [i]. Individuals tend to rely on a preferred negotiation style because it has worked in the past or because of each person’s temperament. People often use the same negotiation style to resolve conflict instead of adjusting the style to fit the specific situation. Always relying on the same style of negotiation can result in an unsuccessful outcome.
In the game of negotiation, you should always think about using various negotiation styles to fit each situation. There are many different ways to negotiate and they can be identified as competition, collaboration, compromise, accommodation and avoidance.
Experienced negotiators know how and when to use the various negotiation styles. How do you know the circumstances under which to select a specific style? To choose the right style you need to consider two important factors:
- The outcome – what you might lose.
- The relationship – how the negotiation will affect you your relationship with the other party.
Every time you are set to begin an negotiation, these are the two critical factors to consider in selecting your style. How important is the outcome to be gained by the negotiation? How important is the past, present, and future relationship with the other party? With this model in mind, we can examine the characteristics, strengths, and weaknesses of the five styles of negotiation as follows:
A competitive negotiation style is the classic model of “I win, you lose.” This style of negotiation considers winning at all costs even at the expense of the other party. Competitive negotiators use hardball tactics to achieve their needs without regard to the other party’s needs. A competitive negotiation style is beneficial when the outcome is important, and the relationship is not. This style might be useful when the goals of the party’s goals are short term and incompatible. The tangible benefits are the most important. The competition style can be an effective counter balance when you expect the other party to be competitive.
The competition negotiation style is, however, very risky. It can be costly and time consuming and often lead to a deadlock. This style is often used by inexperienced negotiators who either believe it is the only viable style or who have had success with its use in the past.
In contrast to the competitive style, a collaborative negotiation style seeks a “I win, you win” outcome. This win-win model focuses on making sure all parties have their needs met. With this style, both relationship and outcome are important. The purpose is to maximize outcome and preserve the relationship. A collaborative style is appropriate in situations where developing and maintaining a relationship is important, where both parties are willing to understand the other party’s needs and objectives, and when finding a long lasting and creative solution is desired.
A collaborative negotiation style is often the most difficult to employ because it requires an investment in time and energy in finding innovative solutions. It is successful in situations where the party’s goals are compatible such as within an organizational or family unit.
Compromise (split the difference):
Unlike the collaborative style, the compromising negotiation style follows a “I win/lose some, you win/lose some” model. Compromising is the style most people think of as negotiation, but it is really only bargaining. Compromisers use this style instead of finding a solution that fully benefits everyone.
Often described as splitting the difference, a compromising style results in an agreement about half way between both party’s opening positions. Compromising is an adequate style in many circumstances. Compromising shows some concern for the relationship and does achieve gains on the outcome dimension. It may result in satisfying some of each party’s needs, but it does not maximize the situation as collaboration can. However, it can often bring about an unsatisfactory feeling that you gave too much and didn’t get enough in return. Thus, this style is best used in circumstances where factors, such as time, prevent the players form achieving a true collaboration but still wish to achieve positive outcomes and relationships.
This style can be described as the “I lose, you win” model and is the direct opposite of the competitive style. For accommodating negotiators, the relationship means everything and the outcome is not important. The accommodating style might be used in situations where one party has caused harm to another party and needs to repair the relationship. Additionally, this style might be preferred in order to increase support and assistance from the other party and hope they will be accommodating in the future.
Accommodation is sometimes the best style to employ because it serves to strengthen personal factors. It can build trust, show respect, and enhance relationships. The major drawback, however, is that it may appear to be condescending toward the other party or cause the other party to feel uncomfortable because of an easy win.
This style is the “I lose, you lose” model. This style is used when both outcome and relationship are not important. Negotiations can be costly in terms of time and energy. Do the costs of negotiation outweigh the likely outcome and relationship returns? If not, it may be preferable not to negotiate at all. This strategy is implemented by withdrawing from active negotiations or by avoiding the negotiations entirely. An avoidance style is used infrequently in negotiating and is often used when the negotiation concerns a matter that is trivial to both parties.
The following graph illustrates the importance of relationship and outcome, with high and low priorities represented for each. The vertical axis represents the degree of concern for the relationship and the horizontal axis represents the degree of concern for the outcome.
Style Selection Criteria
In deciding what style to use in each negotiating situation, the two most important elements are what outcome is to be gained and how important is the past, present and future with the other party. There are certain factors to take into consideration as you select a style for each negotiation. [ii]
Look at each situation and asses the circumstances. Which strategy would work best? Do you really care about the outcome and relationship? And if so, how much? Remember all negotiation styles have advantages and disadvantages.
What are your personal preferences of the different styles? The stronger you have preferences for a particular style, the more likely you will choose it. Your preferences are influenced by your values. How much do you value truth, courtesy, and respect? How important is ego, reputation and image to you? These are all factors that contribute to a particular style that you are comfortable with.
Consider your experience with various negotiation styles. The more experience success you have with a particular style, the better you become at employing it.
As you approach any given negotiation session, consider your perceptions of the other party. Ask yourself, how well do you like them? How much do you trust them? How well do you communicate with them? What does the future hold for your relationship? Answering these questions will serve you in selecting your negotiation style.
People are often fearful of the negotiation process. Sometimes they lack confidence in their ability to communicate. Sometimes they feel they are incapable of attaining the best deal. Many people use the same method every time they negotiate. Typically, this is a zero-sum approach. They decide what they want and increase it by twenty percent for their opening position. Then, the negotiation is process of engaging in compromises. The focus is on positions and not the needs and interests of both parties.
Changing the way you think about negotiations is the first step in becoming a successful negotiator. It is important to recognize there are various styles of negotiating that can be used in different circumstances. More importantly, however, is that selecting the appropriate negotiation style depends upon two factors, outcome and relationship. Understanding these concepts will improve your negotiating skills that you will use each and every day.
- Lewicki and A. Hiam, The Fast Forward MBA in Negotiating and Deal Making (New York: Wiley, 1999)
- Fisher and W. Ury, Getting to Yes: Negotiating Agreement Without Giving In (New York: Penguin, 1981)
- Thomas and R. Kilman, The Conflict Mode Inventory (Tuxedo Park, New York: XICOM, 1974)
[i] Adapted from R. Lewicki and A. Ham, The Fast forward MBA in Negotiating and Deal Making (New York: Wiley, 1999)