NEGOTIATION- CHAPTER 1

In this chapter we learnt about nature of negotiation.

Negotiation is a social process by which interdependent people with conflicting interests determine how they are going to allocate resources or work together in the future. It is a social process because people must interact with others to achieve their desired outcomes. This interaction may occur face-to-face, telephonically, by mail or, increasingly, electronically via e-mail, instant messaging, or video conferencing.

Negotiations occur for one of two reasons:1) to create something new that neither party could do on his or her own 2) to resolve a problem or dispute between the parties.

A large number of perspectives can be used to understand different aspects of negotiations, including theory and research from economics, psychology, political science, communication, labor relations, law, sociology, and anthropology. The same negotiation outcome may also be explained simultaneously from several different perspectives.

Sometimes people fail to negotiate because they do not recognize that they are in a bargaining situation.

Therefore, people should be well prepared to recognize negotiation situations; understand what the process of bargaining involves; know how to analyze, plan, and implement successful negotiations.

Characteristics of a negotiation situationThere are several characteristics common to all negotiation situations:There are two or more parties-that is, two or more individuals, groups, or organizations.There is a conflict of interest between two or more parties-that is, what one wants is not necessarily what the other one wants.The parties negotiate because they think they can use some form of influence to get a better deal that way than by simply taking what the other side will voluntarily give them or let them have.When we negotiate, we expect give and take. We expect that both sides will modify or give in somewhat on their opening statements, requests, or demands. However, truly creative negotiations may not require compromise; instead the parties may invent the solution that meets the objectives of all sides.Successful negotiation involves the management of intangibles( the underlying psychological motivation that may directly or indirectly influence the parties during a negotiation.) as well as the resolving of tangibles.

InterdependenceIn negotiation, both parties need each other. Interdependent relationships are characterized by inter looking goals-the parties need each other in order to accomplish their goals. Interdependent goals are an important aspect of negotiation. The structure of the interdependence between different negotiating parties determines the range of possible outcome of the negotiation and suggests the appropriate strategies and tactics that the negotiators should use.

The interdependence of people’s goals is the basis for much social interaction. By examining the ways in which the goals are interdependent, we can estimate what type of behavior is most likely to emerge. So, the nature of the interdependence will have a major impact on the nature of the relationship, the way negotiations are conducted, and the outcomes of a negotiation.

Mutual adjustmentInterdependent relationships-those in which people are mutually dependent-are complex. Both parties know that they can influence the other’s outcomes and that their outcomes can, in turn, be influenced by the other. It is important to recognize that negotiation is a process that transforms overtime, and mutual adjustment is one of the key causes of the changes that occur during a negotiation. The effective negotiator needs to understand how people

will adjust and readjust what they say during negotiations based on what the other party does and is expected to do.

Interdependence and perceptionsUnderstanding the nature of the interdependence of the parties is critical to successful negotiation. Negotiators make judgements about the nature of the independence in their negotiation situations, and negotiator perceptions about interdependence become an important as the actual structure of the interdependence.

Two potential consequences of interdependent relationships are:1. Value creationOne of the main sources of value creation is contained in the differences that exist between negotiators. It is important that negotiators be aware that potential differences between them may be the critical factors that they can use to reach an agreement.

2. ConflictConflict may be defined as a “sharp disagreement or opposition, as of interests, ideas, etc” and includes the perceived divergence of interest, or a belief that the parties’ current aspirations cannot be achieved simultaneously.”