What is meant by negotiation

A negotiation is a discussion to reach an agreement on something. Sometimes negotiations are high-profile, high-stakes events like trade negotiations or international treaties. We sometimes see negotiations in legal dramas or the news when two giant corporations are looking to merge, or one is seeking to acquire the other.

Most negotiations are much lower-key – they involve two or more parties seeking to overcome an obstacle or deciding to do something together. That includes buying a house, selling a car, dividing assets in a divorce, choosing what to have for dinner, or trying to establish a fair price for a service.

Why and when negotiations are helpful 

Negotiations happen when the answer is not obvious or pre-decided. Good negotiations should reach a conclusion that is a good outcome for both parties – there is a mutual benefit from whatever is agreed. However, there will be differences in how the benefits are shared between the two parties. Each is interested in securing as much of the benefit for themselves or their organisations as they can. 

Generally, negotiations will happen between the two or more parties who have an interest in the decision. Sometimes though, there will be a facilitator to help to reach an agreement – and this might be essential in particularly difficult or complex negotiations.

How to plan for negotiations effectively 

Several key concepts are essential to understand when planning for a negotiation:

• What is your goal from the negotiation?  Plan ahead to be clear on what you want to achieve, and how you will know if you have achieved it.
• What are your non-negotiables? Think about which things you absolutely cannot agree to in the negotiation. These are sometimes referred to as ‘red lines’. 
• What are you willing to give up? Choose those things that you are ready to compromise on if it helps to reach an agreement.   
• What are elements of mutual benefit? Identify those ‘easy wins’ which will be easy to agree as you both benefit from them.‍
• What happens if you can’t reach an agreement? Identify what the Best Alternative to a Negotiated Agreement (BATNA) is for you. This is the best thing you could do if you were unable to reach an agreement. This is your ‘walk away’ position and is vital to know.

It is vital to think not only from your perspective, but also to predict what the other party is likely to be thinking about. Negotiation is often compared to a game of chess – you cannot only think about your plan, but you need to be constantly aware of the intention of your opponent too. Some things to think about in advance:

• What is the goal of the other party? Think about what success will look like for them and challenge yourself to be sure that this is really the case. 
• What might be their non-negotiables? Identify what they might feel unable to compromise on at all.
• Where might they be willing to compromise? Think about where they might be ready to make concessions.
• What will happen for them if you can’t reach an agreement? Trying to identify what their Best Alternative to a Negotiated Agreement (BATNA) is – this can help to work out how much the other party need the agreement and so how much they might compromise. 

Spending time on this planning means that you are best prepared to speak adaptively and to achieve your goals.