Negotiation

Negotiation is a dialogue between two or more parties aimed at reaching a mutually acceptable agreement on matters of common interest, involving communication, persuasion, and strategic decision-making to reconcile differing positions (Fisher R., Ury W. 1981, p.4)^[1]. The salary discussion with your new employer. The contract terms with your biggest customer. The budget allocation among department heads. Each requires negotiation—the art of getting what you want while giving others enough of what they want that they agree.

Negotiation pervades business life. Managers negotiate with employees over assignments and compensation. Sales teams negotiate with customers over prices and terms. Companies negotiate with suppliers, partners, regulators, and unions. Surveys suggest managers spend 20-40% of their time in some form of negotiation. Those who do it well capture disproportionate value; those who do it poorly leave money, opportunity, and relationships on the table.

Types

Negotiations differ fundamentally in structure:

Distributive negotiation

Fixed pie. In distributive negotiation, parties compete for shares of a fixed amount. What one gains, the other loses^[2].

Win-lose. Price negotiations often fit this pattern. The lower the buyer pays, the less the seller receives.

Tactics. Anchoring, concession patterns, and information control dominate distributive bargaining.

Integrative negotiation

Expanding the pie. Integrative negotiation seeks mutual gains by identifying complementary interests and creative solutions.

Win-win. When parties have different priorities, trades become possible. You care more about delivery timing; I care more about payment terms. We can both gain^[3].

Value creation. The goal is not just claiming value but creating it through collaboration.

Preparation

Effective negotiation requires thorough preparation:

Know your interests

Underlying needs. Interests lie beneath positions. Your position is what you demand; your interest is why you want it.

Priorities. Which interests are essential versus nice-to-have? Understanding your own priorities enables intelligent tradeoffs^[4].

Know your BATNA

Best alternative. Your Best Alternative To a Negotiated Agreement is what happens if negotiations fail. Strong BATNAs provide leverage.

Walk-away point. Knowing when to walk away protects against bad deals driven by desperation.

Understand the other party

Their interests. What do they need? What pressures do they face? Understanding their constraints enables solutions that work for both sides.

Their alternatives. What happens to them if negotiation fails? Weak BATNAs create pressure to reach agreement^[5].

Key skills

Successful negotiators demonstrate specific capabilities:

Active listening. Hearing what others say—and what they don't say—provides information essential for problem-solving.

Questioning. Skillful questions reveal interests, constraints, and priorities without revealing your own hand.

Emotional intelligence. Managing your own emotions and reading others' enables effective interaction under pressure^[6].

Communication clarity. Expressing positions and interests clearly prevents misunderstandings that derail agreement.

Creativity. Finding solutions that satisfy both parties' interests requires imaginative problem-solving.

Harvard method

The principled negotiation framework revolutionized the field:

Separate people from problems. Address relationship issues separately from substantive issues.

Focus on interests. Look behind positions to underlying interests where creative solutions live^[7].

Generate options. Brainstorm multiple possibilities before evaluating them.

Use objective criteria. Where interests conflict, apply fair standards rather than exercising raw power.

Common tactics

Negotiators employ various approaches:

Anchoring. First offers shape expectations. An aggressive opening anchor can pull the final agreement in your direction.

Framing. How options are described affects their attractiveness. Losses feel worse than equivalent foregone gains.

Concession management. The pattern and pace of concessions signal resolve and provide information about true priorities.

Deadline pressure. Real or artificial deadlines create urgency that can force agreement—or mistakes^[8].

Ethics

Negotiation raises ethical questions:

Honesty. Must you reveal everything? May you bluff about your BATNA? Where is the line between strategy and deception?

Fairness. Using superior power to extract one-sided deals may be legal but damages relationships and reputations.

Long-term relationships. Negotiations occur within relationships that extend beyond the immediate deal.

Negotiation — recommended articles

Conflict resolution — Communication — Sales management — Contract management

References

• Fisher R., Ury W. (1981), Getting to Yes: Negotiating Agreement Without Giving In, Penguin.
• Raiffa H. (1982), The Art and Science of Negotiation, Harvard University Press.
• Thompson L. (2015), The Mind and Heart of the Negotiator, 6th Edition, Pearson.
• Harvard Business Review (2023), Negotiation Essentials.

Footnotes

1. ↑ Fisher R., Ury W. (1981), Getting to Yes, p.4
2. ↑ Raiffa H. (1982), Art and Science of Negotiation, pp.45-62
3. ↑ Thompson L. (2015), Mind and Heart of the Negotiator, pp.78-94
4. ↑ Fisher R., Ury W. (1981), Getting to Yes, pp.34-48
5. ↑ Harvard Business Review (2023), Negotiation Essentials
6. ↑ Raiffa H. (1982), Art and Science of Negotiation, pp.89-104
7. ↑ Fisher R., Ury W. (1981), Getting to Yes, pp.56-72
8. ↑ Thompson L. (2015), Mind and Heart of the Negotiator, pp.134-148

Author: Sławomir Wawak