Negotiation is a decision-making process by two parties with opposing interests. In conflict resolution, we use negotiation mostly to settle differences between management and the unions through collective bargaining machinery. We have explained collective bargaining earlier in this book. Here, however, we are more concerned for communication perspectives of negotiation. In any negotiation process, we consider two goals—substantive and relationships.
Substantive goals are those which help us to settle some claims, involving either receiving or giving some benefits. A negotiation for wage increase is an example of substantive goal.
Relationship goals deal with the outcome of decisions, which put the two negotiating parties to work well subsequent to the negotiation reached. Effective negotiation, therefore, requires resolving the substance issues, while nurturing the harmonious relationships between two negotiating parties.
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Whatever may be the process for negotiation, we follow two approaches, i.e., distributive approach and integrative approach. Distributive approach is a win-lose or a zero-sum game approach, whereas, the integrative approach is a collaborative approach, where both the negotiating parties try to expand the outcomes of their decisions by sharing the benefits.
Distributive negotiation approach is taken in those cases where negotiating parties intend to settle their differences with mutually exclusive goals. Hence, both the parties intend to withhold as much information as possible and try to obtain maximum information from the other. Therefore, often in distributive negotiation, it becomes difficult to take an informed decision, as the agreement is reached between the parties without adequate information backup. In contrast, in the integrative approach, negotiation goals of the negotiating parties are not mutually exclusive; hence none of the negotiating parties gains at the expense of the other.
Both the negotiating parties work together to optimize the resources in the best possible manner so as to gain mutual benefit. While doing substantive negotiation, we always try to gain tangible benefit, whereas, in integrative negotiating we try to gain both tangible and intrinsic satisfaction. Hence, in integrative negotiation, negotiating parties adopt supportive attitude, empathy and take informed decisions.
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In some negotiation, we also adopt third-party intervention to reach a conclusive settlement. Involvement of arbitrator and mediator is often required in case of organizational conflicts, particularly in wage-related matters.
Thus, negotiation is a process by which two parties seek to reach agreement through bargaining. Win-win negotiation situation is possible when each party is prepared to give up something to achieve something the other party has. In organization, while we negotiate we try to understand the following things step wise.
Step – 1: What do you want?
Step – 2: What we can bargain?
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Step – 3: What wants will we agree?
Followed by this, we then list our objectives like, what we intend to get and what we must get. While negotiating we must listen carefully, ask questions, whenever necessary and get clarified whenever we require. Also we try to summarize the discussion. Things that we need to avoid are: argument, interruption and assumption and even expressing our concerns.
To make the negotiation effective, we always search for areas of common interests and also make use of the positive body language. Most commonly agreed model of negotiation is—preparing for negotiation (which involves setting of objectives, defining strategy and gathering of data), opening, bargaining and closing.
Every manager needs to negotiate in one area or the others in his/her day-to-day work life. To succeed in negotiation, managers must have analytical ability, empathy, planning ability, interactive skills and communication skills. Such skills can only be developed through experience.
Some theoretical understanding may help but putting the learned theories into practice, requires a manager to be a part of negotiation, initially as an extra-member to watch how seniors play their role in negotiation. Negotiation skills of managers help in following important areas:
i. Optimization of time, scope, costs and quality
ii. Managing the change in organization successfully
iii. Optimizing resource allocation
iv. Managing contract and vendors
v. Managing industrial relations
vi. Industrial disputes settlement
Negotiation in organization, as has already been introduced, involves interaction between two conflicting groups to reach to a solution acceptable by both the groups. Thus, effective negotiation intends to resolve conflicting situations, striking a win-win solution (acceptable to both the conflicting parties). Depending on the situation, styles of negotiation may differ.