Types of negotiation in organizations

Depending upon the situation and time, the way the negotiations are to be conducted differs. The skills of negotiations depends and differs widely from one situation to the other. Basically the types can be divided into three broad categories.

1. Day-to-day/Managerial Negotiations

Such types of negotiations are done within the organization and are related to the internal problems in the organization. It is in regards to the working relationship between the groups of employees. Usually, the manager needs to interact with the members at different levels in the organization structure. For conducting the day-today business, internally, the superior needs to allot job responsibilities, maintain a flow of information, direct the record keeping and many more activities for smooth functioning. All this requires entering into negotiations with the parties internal to the organization.

Types 22.1: Types of Negotiation


Parties Involved


Day-to-day/ Managerial

1. Different levels of Management

2. In between colleagues

1. Negotiation for pay, terms and working conditions.

2. Description of the job and fixation of


3. Trade unions

4. Legal advisers

responsibility. 3. Increasing productivity.

Commercial Negotiations

1. Management

2. Suppliers

3. Government

4. Customers

5. Trade unions

6. Legal advisors

7. Public

1. Striking a contract with the customer.

2. Negotiations for the price and quality of goods to be purchased.

3. Negotiations with financial institutions as regarding the availability of capital.

Legal Negotiations

1. Government

2. Management

3. Customers

1. Adhering to the laws of the local and national government.

2. Commercial Negotiations

Such types of negotiations are conducted with external parties. The driving forces behind such negotiations are usually financial gains. They are based on a give-and-take relationship. Commercial negotiations successfully end up into contracts. It relates to foregoing of one resource to get the other.

3. Legal Negotiations

These negotiations are usually formal and legally binding. Disputes over precedents can become as significant as the main issue. They are also contractual in nature and relate to gaining legal ground.

Is negotiation necessary ?

Negotiation, at times can be a lengthy and cumbersome process. By asking whether it is necessary, time may sometimes be saved and unnecessary compromise avoided. On occasions, a request to negotiate may best be met by pointing out that the party making the request has no standing in the matter. If a manager has the undoubted authority to act, making a decision rather than negotiating about it may be the best tactic.

Alternatively, there are cases in which the best response to a request or a claim is to concede it without argument. Why waste time negotiating if the other party has a good case and there are no adverse consequences in conceding ? Unnecessary negotiation, followed, perhaps, by a grudging concession of the other party's claim, will lose all the advantage that might be gained with a quick unexpected yes.

An alternative to a simple yes or no when a difference of view occurs is to skip negotiation and proceed immediately to some form of third - party intervention. An alternative to a simple yes or no when a difference of view occurs, is to skip negotiation and proceed immediately to some form of third - party intervention. On the most formal basis, this might imply a decision to take a dispute to court : informally, two managers who quickly realize that they cannot reach agreement about a working problem may jointly agree to stop wasting time in argument and refer the matter to a senior manager for resolution.

It is good to follow the general rule :

Do not negotiate unless you have to - or unless you can obtain some direct or indirect advantage by doing so.

Win-Win Negotiation

Finding a fair compromise

Do you feel that someone is continually taking advantage of you? Do you seem to have to fight your corner aggressively, or ally with others, to win the resources you need? Or do you struggle to get what you want from people whose help you need, but over whom you have little direct authority? If so, you may need to brush up your win-win negotiation skills.

The purpose of negotiation is to resolve situations where what you want conflicts with what someone else wants. The aim of win-win negotiation is to find a solution that is acceptable to both parties and leaves all involved feeling that they've won - in some way - once the negotiation has finished.

There are different styles of negotiation, depending on circumstances.

Where you do not expect to deal with people ever again and you do not need their goodwill, then it may be appropriate to "play hardball", seeking to win a negotiation while the other person loses out. Many people go through this when they buy or sell a house - this is why house-buying can be such a confrontational and unpleasant experience.

Similarly, where there is a great deal at stake in a negotiation, then it may be appropriate to prepare in detail and legitimate "gamesmanship" to gain advantage. Anyone who has been involved with large sales negotiations will be familiar with this.

Neither of these approaches is usually much good for resolving disputes with people with whom you have an ongoing relationship: If one person plays hardball, then this disadvantages the other person -this may, quite fairly, lead to reprisal later. Similarly, using tricks and manipulation during a negotiation can undermine trust and damage teamwork. While a manipulative person may not get caught out if negotiation is infrequent, this is not the case when people work together routinely. Here, honesty and openness are almost always the best policies.

Preparing for a successful negotiation...

Depending on the scale of the disagreement, some preparation may be appropriate for conducting a successful negotiation.

For small disagreements, excessive preparation can be counter-productive because it takes time that is better used elsewhere. It can also be seen as manipulative because, just as it strengthens your position, it can weaken the other person's.

However, if you need to resolve a major disagreement, then make sure you prepare thoroughly. Using our free worksheet, think through the following points before you start negotiating:

Goals: What do you want to get out of the negotiation? What do you think the other person wants?

Trades: What do you and the other person have that you can trade? What do you each have that the other wants? What are you each comfortable giving away?

Alternatives: If you do not reach agreement with the other person, what alternatives do you have? Are these good or bad? How much does it matter if you do not reach agreement? Does failure to reach an agreement cut you out of future opportunities? And what alternatives might the other person have?

Relationships: What is the history of the relationship? Could or should this history impact the negotiation? Will there be any hidden issues that may influence the negotiation? How will you handle these?

Expected outcomes: What outcome will people be expecting from this negotiation? What has the outcome been in the past and what precedents have been set?

The consequences: What are the consequences for you of winning or losing this negotiation? What are the consequences for the other person?

Power: Who has what power in the relationship? Who controls resources? Who stands to lose the most if agreement isn't reached? What power does the other person have to deliver what you hope for?

Possible solutions: Based on all of the considerations, what possible compromises might there be?

Style is critical...

For a negotiation to be 'win-win', both parties should feel positive about the negotiation once it's over. This helps people keep good working relationships afterwards. This governs the style of the negotiation - histrionics and displays of emotion are clearly inappropriate because they undermine the rational basis of the negotiation and because they bring a manipulative aspect to them.

Despite this, emotion can be an important subject of discussion because people's emotional needs must fairly be met. If emotion is not discussed where it needs to be, then the agreement reached can be unsatisfactory and temporary. Be as detached as possible when discussing your own emotions - perhaps discuss them as if they belong to someone else.

Negotiating successfully.

The negotiation itself is a careful exploration of your position and the other person's position, with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible. People's positions are rarely as fundamentally opposed as they may initially appear - the other person may have very different goals from the ones you expect!

In an ideal situation, you will find that the other person wants what you are prepared to trade and that you are prepared to give what the other person wants.

If this is not the case and one person must give way, then it is fair for this person to try to negotiate some form of compensation for doing so - the scale of this compensation will often depend on the many of the factors we discussed above. Ultimately, both sides should feel comfortable with the final solution if the agreement is to be considered win-win.

Only consider win-lose negotiation if you don't need to have an ongoing relationship with the other party as, having lost, they are unlikely to want to work with you again. Equally, you should expect that if they need to fulfill some part of a deal in which you have "won," they may be uncooperative and legalistic about the way they do this.

Negotiation is something that we do all the time and is not only used for business purposes. For example, we use it in our social lives perhaps for deciding a time to meet, or where to go on a rainy day.

Negotiation is usually considered as a compromise to settle an argument or issue to benefit ourselves as much as possible.

Communication is always the link that will be used to negotiate the issue/argument whether it is face-to-face, on the telephone or in writing. Remember, negotiation is not always between two people: it can involve several members from two parties.

There are many reasons why you may want to negotiate and there are several ways to approach it. The following is a few things that you may want to consider.

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