NEGOTIATION & IT'S THEORIES

by Lipika Sharma


NEGOTIATION

Negotiation is the method of resolving disputes between parties by mutual understanding and agreement where there is no third party interference. Negotiation is a contemporary mode of dispute resolution. It is a part of the Alternative Dispute Resolution (ADR) system of out-of-court dispute resolution. The term ‘Negotiation’ is derived from the Latin term ‘Negotiari’, which means ‘to carry on business’. Negotiation may be described as a bargaining mechanism between two parties for the purpose of resolving disputes.

Negotiations are taking place within the four Cs’ context. These are-

  • Common interests

  • Conflicting interests

  • Compromises

  • Criteria

Common interest considers the fact that each party shares in the negotiation or wants something that the other party has or is doing. There will be no reason for negotiation without a common goal. Negotiation may also be called integrative bargaining, as it applies to win-win negotiations when each of the competing sides will end up with similarly favorable or desirable performance. Everyone can win. It’s a problem-solving approach to solving a common problem.


The maxim ‘Omnia prius verbis quam armis sapientem decet experiri means ‘An intelligent man would rather negotiate than use arms’. This principle can be clearly illustrated in following instance. In Mahabharata, Lord Krishna went to negotiate with Duryodhana and sought to convince Kauravas that the battle between the brothers (Pandavas and Kauravas) was devastating, and would produce the worst consequences. He talked to Dhritarashtra, Bhishma, Duryodhana and so on, and sat down to talk. He asked Duryodhana to give Pandavas at least five villages to avoid conflicts and wars among the brothers. However, the negotiations failed because of Duryodhana’s adamant attitude, Dussasana, Shakuni and Karna. The outcome was very disastrous. Lakhs of people were killed. Lastly, in the war Duryodhana and his supporters died too. If the agreement is successful, then there would have been no Kurukshetra War. Hence, it is said that exhausting negotiation before resorting to arms is the part of wisdom.


THEORIES/ APPROACHES TO NEGOTIATION

A good negotiator should know the best and worst alternatives he is striving to achieve for the settlement process. The Best Alternative to Negotiated Agreement (BATNA) and the Worst Alternative to Negotiated Engagement (WATNA) are key elements that should be questioned and discussed by a negotiator at every level. If he does not discuss it, he should be aware of it. Having an understanding will better lead him through the threats to deer. BATNA and WATNA are the best methods of results assessment.

BATNA takes into account risk factors involved in the analysis of his choice including costs, time, relationships, etc. If BATNA is available somewhere, then the party must stop the negotiation process. If all other options are expected to be WATNA, it is better to seek negotiated settlement. BATNA exam offers right thinking on formula adopted compared to better alternatives if any.

Some authors describe negotiation as a zero-sum transaction meaning one only gains from the equivalent loss of another. There’s just one winner in a zero-sum game so there may be plenty of losers. A negotiation will actually end in one of four possible outcomes: lose-lose, win-lose, win-win or no outcome.


1. WIN- LOSE OR LOSE- WIN

It is often regarded as a zero-sum game. A good example of zero-sum will be a game of chess. There’s one winner in chess, and one loser. Adding one positive to one negative the result is zero. The loser’s feeling is not pleasant, as he has to walk away without meeting his wishes or needs. Win-lose situations usually result in the loser not being willing to negotiate with the winner in the future.


2. LOSE - LOSE APPROACH

Some individuals can’t bear the thought of losing a contract. They are spending so much time and energy making the one who won to bleed earlier but it usually leads to a lose-lose situation.

In this situation, neither side meets its needs or wants in lose-lose conditions. A common example of a lose-lose agreement is a labour strike in which a management and labour unions cannot negotiate a suitable compromise. Everybody loses almost always in a labour strike. The workers are losing, the business is losing and the most sadly, the consumer is losing. In a lose-lose deal it is impossible that any partner would come to a bargaining table in the future with the same partner.


3. WIN- WIN

Getting what the negotiator wanted after a negotiation doesn’t mean he won and the other participant lost. There’s a win-win situation where both parties win, which is the ideal outcome for nearly all negotiations. A good negotiator finds a balance between the objectives of each party to create a win-win outcome.


4. NO OUTCOME

The fourth possible outcome of a negotiation is a ‘no outcome’, implying that no side wins or losses. Negotiators never come to terms that is acceptable with all sides in this case (win-win) so the only option is to just walk out and try and find someone else to negotiate with. Some may see the outcome ‘no outcome’ as win-win or lose-lose. Under these situations, a win-win outcome happens as both sides choose another party to negotiate the deal, while in a lose-lose scenario both sides is spending their precious time in the negotiation and then attempting to find a different dealer after that. The walk-away option is at times the better one. Giving up and walking away may seem like a loss at first. Yet in reality, before the harm from an irreversible deal, they walked away. There is a limit on how many on sacrifice in every meeting. In certain situations walking away can be smart. The delegate should mention his walk-away-point before entering the negotiation table.