What is Negotiation? The Fundamentals

what is negotiation

What is negotiation? For many of us, our first thoughts go to a salary or hostage negotiation scenario. But all of us engage in the negotiation process far more often than we realize.

Negotiation, in simple terms, is a dialogue between two or more parties with competing interests that are trying to reach an agreement.  Any time people share their own position and discuss the best solution, they are negotiating.

Negotiation can also be a more formal process where two parties to a dispute or two sides of a decision come together to try and work toward a successful outcome or agreement.  This can happen on its own or as a part of a larger alternative dispute resolution process or contractual disputes. This can also take place with a neutral leading the parties through the discussion, or the parties can work directly with each other.

A successful negotiation is a fluid and constant process that requires key skills and a deep understanding of the process to reach the ultimate goal for all parties involved.

What is Negotiation?

Negotiation is an interactive process between two or more experienced negotiators or other parties seeking to find common ground on issues of mutual benefit.

Any time two people need to make decisions that cannot be made unilaterally because it affects the interests of another, they are negotiating.  This can feel overwhelming and difficult if someone is not a practiced negotiator or confident in the negotiation skills, but by learning the appropriate skills and practices, a person can become a skilled negotiator in no time.  It just requires education, preparation, and practice.

Education in the Negotiation Process

Education requires understanding the aspects of negotiation that make it unique and understanding the process and how they fit together.  The Harvard Negotiation Project has developed a list of seven elements that are useful to understand the process of negotiation and the lingo that surrounds it.  These seven elements are:


Interests are the driving force behind what each party wants out of the process.  They can often be unconscious drivers and are usually not shared with the group.  These underlying interests can often be more important to one party. More important than tangible things, like money or title. Understanding your own personal needs and interests as well as the interests driving the other party is an essential part of an effective negotiation.


Another vital element is the personal relationship between the parties.  If the parties are entering into a contractual or business relationship, they will be balancing their need to win with keeping the relationship amicable after the negotiation.  This may mean toning down their demands to appease the other party.


Another essential element is to be prepared with the best alternatives to a negotiated agreement.  This allows the parties to understand what will happen without an agreement during the communication process.  They can then decide if the deal can be adjusted in order to avoid the best alternative. Or if they are willing to walk away from the deal when the other side is not cooperating.


Rapport building and further clarification are the driving forces behind a successful negotiator. Keeping communication open and fun will help the parties move toward agreement.  This requires staying away from communication that could hurt a position, such as silent assumptions or brash demands.


Options are the actual offers that the parties will trade back and forth.  This can include monies, but will also include various conditions, contingencies, and nonmonetary trades. trades.  Negotiate by allowing concessions will show mutual respect and help facilitate a joint decision.


Legitimacy is the quest to bring fairness and legitimate offers to the table. This helps to build rapport and show that the goal is to reach an agreement that will satisfy all. Legitimacy includes an attempt to ensure that the parties do not see unreasonable offers as an offense, or an attempt to be taking advantage and shut down in their negotiation.


Commitments mean that the parties are committed to satisfying the contract or agreement that they signed together.  Approaching an agreement or contract with full commitment will ensure that the parties can move forward without the fear that all their work will go to waste.

Once a person understands these principles, they are well on their way to becoming a good negotiator.  Mastery of these subjects, along with proper preparation and an understanding of the practice will improve your negotiation skills.

Preparation for the Negotiating Process

Preparation is one of the most important negotiating skills.  A party that is properly prepared is better situated to achieve the outcome that they want from the negotiation and to create value as they reach a deal.  By implementing the elements listed above they will be able to preserve personal relationships and see interests that are driving the conversations.

Once the parties are prepared and ready to meet to discuss the outcome of the disagreement, they will enter into negotiations.

Practice for a Successful Negotiation

The best way to practice negotiations is to move through the process in simulations and group activities that familiarize people with the process and how negotiation feels.  While practicing, it is important to follow the process of an actual negotiation to ensure that the parties are adequately aware of how each step works. These steps include:

  • Exchanging Information
  • Clarification
  • Bargaining and Problem-Solving
  • Reaching an Agreement
  • The Course of Action

Once the information is exchanged between the two parties and clarification of the issues and areas of disagreement are understood, the next step is to reach an agreement. During the bargaining and dispute-solving stage, the parties will offer a variety of solutions. And negotiate back and forth on the possible outcomes that may be agreed upon.

The goal of this bargaining process is to achieve a win-win scenario where both parties can leave feeling as if they won. An agreement or deal will be reached once both sides of the discussion have come to the same conclusion. An agreement could also mean an agreement to disagree and walk away without a resolution.

Finally, a course of action will be developed after the negotiations have ended. If the dispute is not settled and that will impact the relationships, a plan of action will be tailored to deal with that.  If the negotiation was successful, a plan for how to implement the changes required and execute the contract.


Negotiation may seem like a scary and large task, but when the parties are educated, prepared, and practiced in the process, it is a cakewalk. With these essential negotiation skills in your toolbelt, all of your negotiations may end in a win-win solution that benefits everyone involved.  Finding a negotiation style that fits with one’s own personality and point of view can only come with practice.

It is important to remember that negotiating is just a conversation about differences that need to be rectified for an agreement to be reached.  It can happen in a formal setting, but it is also present in every aspect of our lives.  We are all already negotiators. And we all have more knowledge than we think!

To learn more about negotiation, negotiation techniques, conflict resolution, and more, contact ADR Times!

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