by Bob MacKenzie

Understanding negotiations

Negotiation is a key life and business skill. It’s a natural human activity – an everyday part of social and group life. All domestic, political, intellectual and economic systems and transactions entail frequent episodes of negotiation.


Negotiation is a process in which two or more parties – each with different starting points or perspectives – attempt to reach an agreement over the distribution of scarce resources when there is a conflict of interest.

The origin of the term negotiation can be traced back to ancient Latin, where it meant something like ‘doing business’. Negotiation is one of three principal methods of dispute resolution. The other two are mediation and arbitration, which are defined briefly in the Glossary of negotiation terms. There is more on these other two options in the topics on Mediation and Conflict Resolution. A negotiation can be either an outcome-driven process, at one extreme, or a relationship-building exercise, at the other. Ideally, it should be both, as building satisfactory relationships with the other parties is in itself a desirable outcome.

Some negotiations are short and relatively simple to conclude. Others can be more complex, tricky and lengthy. All negotiations engender varying degrees of both cooperative and adversarial behaviour, and their development can be confusing for the parties involved. So it’s essential to prepare for them as carefully as you can, while avoiding the dangers of over-preparing.

What is a successful negotiation?

You’ll know that you’ve achieved a successful negotiation when

  • You’ve identified the minimum outcomes that the other party or parties are prepared to accept (their bottom line)
  • You’ve adjusted your initial demands accordingly
  • You’ve obtained all your own desired outcomes or an acceptable level of these (your bottom line), while ensuring that the other parties remain committed to the negotiating relationship.

What types of negotiation are there?

Negotiations can be relatively simple or very complex. This depends upon three factors:

  • The number of people involved
  • The specific issues at stake
  • The circumstances or context within which the negotiation is taking place.

It might help to categorise negotiations as lying somewhere along a continuum between simple and complex.

  • Simple negotiations tend to be conducted over a single issue. This is sometimes called a ‘fixed pie’ negotiation. Because there is only a single issue at stake, one party’s gain is generally the other party’s loss. Simple negotiations often result in a win-lose outcome.

An example of a simple negotiation would when a would-be purchaser tries to bargain over a fixed-price purchase and the would-be seller refuses to budge.

  • Complex negotiations are conducted when there is more than one issue at stake. Here, a win-win outcome is much more possible because there’s a greater chance of each party having differences in preference over any particular issue.

An example of a complex negotiation might be when you are negotiating with an individual staff member or a trade union over a pay settlement that involves choices between job security and higher wages in a time of economic downturn.

Numbers involved

Negotiations can involve different numbers and kinds of people. These can range from as few as two individuals (one on each side) through to small teams of negotiators in each party, or to parties of much larger size. Sometimes, there are many more people in one party than in the other.

In other words, when it comes to the part you may find yourself playing in negotiations, there are nine possible permutations.

  • One to one
  • One to several
  • One to many
  • Several to one
  • Several to several
  • Several to many
  • Many to one
  • Many to several
  • Many to many.

The larger the number of people involved in each party, the greater the chance that each member will need to specialise in a particular negotiating role.

Negotiating roles

As a manager, at various times you’ll find yourself performing one or more of ten common negotiating roles:

  1. Sole negotiator – this can be a very demanding role, as it inevitably carries with it many of the other roles and responsibilities
  2. Lead negotiator – heading a negotiating team
  3. Joint negotiator – someone who carries equal responsibility with another for conducting the dialogue; sometimes, this role is used to make up a combination of ‘good cop, bad cop’ tactics (soft/hard personalities) in a negotiating team
  4. Advocate – an expert negotiator acting as champion of a particular cause
  5. Observer – who is skilled at interpreting body language, who watches for negotiating hints, clues and signals, and who generally has a more detached role; the person charged with this role is often able to provide valuable feedback to others in their party during or in between the various rounds of negotiation
  6. Recorder – who keeps an accurate record of the proceedings
  7. Technical adviser – such as a financial expert, a scientist or a computer specialist, who may have relevant technical expertise in the matter under negotiation
  8. Go-between – a designated person who liaises diplomatically with the other party or carries messages or information to and from them
  9. Critical friend/mentor/coach – often, this is someone who is not necessarily present during all or any of the negotiations; the person playing this role can help to debrief or rehearse the negotiator(s) for the next round of negotiations
  10. Mediator or facilitator – a third party who is called in by mutual agreement of the parties involved in times of impasse or difficulty to help break the deadlock.

Sometimes, of course, several of these roles are combined in one person.

Each set of negotiators has its own group dynamics. The larger your negotiating team, the greater is the likelihood of internal negotiations over negotiating roles, responsibilities, decisions and so on.

The ideal outcome of negotiation is win-win

It’s worth noting the gaming and military terms and metaphors that are so frequently used in negotiations. Examples include those referring to games, such as playing cards or chess (playing one’s hand, for example, or stalemate), or to fighting battles (such as opponents, conflict, strategy, tactics, winning and losing). These terms are beguiling, but they can be misleading, as they can lure us into adopting an adversarial approach, seducing us away from seeking a win-win, mutually-beneficial outcome wherever possible.