Win-Win Solution: A Negotiation Strategy

What is Negotiation
Realize it or not, we negotiate everyday for almost every thing; from the simplest thing as asking for a ride to the big complex issues like purchasing a house or vehicle. A lot of writer and professional negotiators have their own definition of negotiation. The term negotiation is derived from the Latin word negotiari which means to carry on business. Oxford Advanced Learners Dictionary (2000) defined negotiation as: The process of reaching an agreement by conferring or discussing, and The transfer of rights in a negotiable instrument by endorsement and delivery. Luecke and Patterson (2008) stated that negotiation is a way to resolve differences between people when imposed settlements are not possible. Meanwhile, Dolan viewed an effective negotiation as a communication function by which people working sideby-side with another party (or parties) to achieve mutually beneficial and satisfactory results. (Dolan, 2006: 4). Another definition of negotiation is provided by Lewthwaite (1998) in the introduction of Negotiate to Success. She proposed that negotiation can be seen as a process of bargaining to achieve a mutually acceptable agreement. The three definitions above are but a few of various other definitions of negotiations out there. However, we can see a red line of what a negotiation is about from them. The key factors of a negotiation are differences (problem/conflict), multiple parties, mutually acceptable agreement. No matter how big or small the issue is, as long as there are, at least, two parties working together to resolve it in a way that will benefit both parties, it is negotiation.

Why we need to negotiate

People communicate to express their ideas, needs, thoughts, and opinion. These

expressions are the way people use to satisfy their needs. Since the needs of one person

may conflict with those of others, we need a way to work around it. Even when a need is shared by two parties, we still need to figure out how to optimize the satisfaction of the need for both parties. In short, we need negotiationor rather, we need to negotiate because there are conflicted and/or shared needs of two or more parties that need to be satisfied. Negotiation is mainly about finding the best way to satisfy those needs, be it conflicting or shared. In fact, quoting Lewthwaite (1998: 2), all human interactions are characterised by some sort of negotiation between or among people trying to give to and take from one another.

Elements of negotiation
Hughes, et. al., (1992) defines seven key elements of negotiations. They are Interest, Legitimacy, Relationship, Alternatives, Commitments, and Communication. Interest is defined as a partys needs, goals, and motivations. Parties negotiate because they want to satisfy their interests better, through an agreement, then they could without such an agreement. One of the fundamental measure of success in negotiation is the satisfaction of the interestshow well is ones interests are met. Legitimacy or fairness is important in negotiation. Both legitimacy and fairness are significant in defining the success of negotiation. Negotiations often fail because one or both parties negotiating feel not to be treated fairly or legitimately. The difference in what is fair certainly can influence the process and result of negotiation. Relationship of the parties is the third key element of negotiation. The kind of

relationship the parties have or want to have will determine the process of negotiation. For example, if both parties have a strong relationship, characterised by high level of trust and mutual respect, the agreement can be reached quickly. Another example is: if one of the parties wants to build a better relationship with the other (to pursue longer and more beneficial deals, for example), the first are willing, to some extent, to compromise its position in order to make the latter satisfied. Relationship may also determine the strategy used in the negotiation. More of this will be discussed later.

Alternatives and BATNA (Best Alternatives to a Negotiated Agreement) are fundamental in negotiation. When the negotiation fails, what are the alternatives for both parties? Analysing BATNA is useful for negotiating parties to know when to walk away, when to insist, or when to compromise. In shorts, knowing or having alternatives will determine what a negotiator can do in the process. Commitment here is defined as an agreement, demand, offer, or promise of agreement by one or more parties, and any formalization of that agreement. The last element is communication. It is the process through which a negotiation concluded, an agreement achieved, or interests satisfied. Hughes et. al. (1992) stated that the seven elements are one way to organize the field of negotiation. But it is not the only way. There are other elements that can also be included in the process of determining the terrain of negotiation; for example Parties or Issues.

Strategies and approaches of negotiation

Basically, there are two approaches of negotiation; the competitive approach and the collaborative approach (Irwin et.al., 1998). The competitive approach consists of the win-lose strategy, in which each party tries hard to maximize the benefit to themselves, regardless of the other party. Sometimes, the result of negotiation using this approach is a situation in which none of the parties gains what they want or a situation in which both parties have to loose something to gain (compromise or lose-lose strategy). The competitive approach is the traditional approach of negotiation that has been gradually replaced by the more preferred approach of collaborative negotiation. In collaborative negotiation, the focus is not the interests of the parties involved. Rather, the focus is the issues at hand. Using this approach, both parties negotiating are not trying to maximize their gain. They try to figure out a way that will work and benefit both parties without making one of the parties lose.