Negotiation

Negotiation is a process of dialogue between parties with some shared and some conflicting interests, aimed at reaching a voluntary agreement over issues such as price, terms, or responsibilities. It is both a skill and a social process used in business, diplomacy, law, and everyday life.

Parties typically distinguish between positions and interests. Interests are underlying needs, while positions are stated demands. Effective negotiation often seeks to expand the pie through integrative bargaining or at least arrive at a fair allocation in distributive bargaining. A BATNA, the best alternative to a negotiated agreement, sets the floor for any deal. The zone of possible agreement (ZOPA) is the range in which overlap between acceptable outcomes exists.

A negotiation usually involves preparation, relationship-building, information exchange, bargaining and problem solving, and closure and implementation. Preparation includes identifying interests, options, limits, and the BATNA. During bargaining, parties present offers and concessions, guided by objective criteria and creative option generation. The outcome may be a formal contract or an informal agreement.

Principled negotiation emphasizes separating people from problems, focusing on interests, generating options, and using objective standards. Techniques include asking calibrated questions, reframing, and anchoring with data. Ethical conduct and cultural sensitivity influence credibility and long-term relationships.

Negotiation occurs in business, law, labor, diplomacy, and personal life. Power imbalances, asymmetrical information, and cultural differences shape dynamics and risk of impasse. Successful negotiators aim for durable, enforceable agreements and plan for implementation and potential renegotiation.