What is Negotiation?

Negotiation definition

Negotiation is communication, often both writing and dialogue, between two or more parties with the aim of reaching a satisfactory arrangement, known as compromise. Negotiation theory typically breaks potential tactics down into two strategies – distributive and integrative.

Distributive bargaining involves both parties adopting a hard-line approach, with a clear indication of what they will and won’t accept. It is based on the fact that negotiating parties believe there’s a finite amount of value to be shared and that they need to play hard for the lion’s share. Participants in distributive negotiation are concerned with gaining a competitive advantage so that their outcome is relatively superlative.

Integrative negotiation, often called principled negotiation, differs in that parties attempt to increase the value available to share. The emphasis is on building trust and developing the relationship with the belief that this will result in a better outcome for all parties. In this way, the negotiation is seen as a shared problem.

Bad faith negotiation occurs when a party pretends to be willing to seek a compromise but is in fact unwilling to do so. This may be for simple manipulation purposes or as part of a wider agenda – political parties, for example, often give the impression of negotiating to improve public perception. Some commentators believe that all parties act only in self-interest and negotiation is only resolved when one party cannot respond to another’s display of power. The opposite of bad faith negotiation is good faith bargaining.