Negotiation - Lesson 1 - What, Who, Why, and How?

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Listen to the audio file

What is negotiation?

Negotiation is an important life skill which is used almost daily in different contexts with different people.

Oxford Dictionary defines negotiation as…

"…a discussion aimed at reaching an agreement"
http://www.oxforddictionaries.com/definition/english/negotiation

…and Businessdictionary.com more specifically defines negotiation as…

"…a bargaining process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict."
http://www.businessdictionary.com/definition/negotiation.html#ixzz3aRzcSU3M

To function effectively in society, it is essential to learn and practise negotiation skills because challenging issues occur daily that require our attention to resolve them.

Listen to the audio file

Who negotiates?

People need to negotiate from a very young age. Children, for example, may negotiate a new bicycle or a higher allowance with their parents if they achieve high grades in school. They may negotiate going to bed later than usual or negotiate time for watching TV if they complete their homework well. Brothers and sisters may negotiate use of the family IPad or television at a specified time for a specified length. Older teenagers may negotiate coming home after midnight, sleeping at friends’ homes, or using the family car. To have a successful career, adults need to negotiate salary, terms of employment, promotions, sales and many other employment related issues. Developing strong negotiation skills is an important aspect of life.

Listen to the audio file

Why and how do people negotiate?

Most people negotiate because they want to make a deal with another party. Generally, they negotiate to resolve an issue or to start or to maintain a relationship.

Watch the following video clip then complete Task 1.

Task 1: Answer the multiple choice questions about the video:

		True	False
1.	The tone of this negotiation is harsh and aggressive.
2.	The tone of this negotiation is relaxed but polite.
3.	Bailee is unprepared for her negotiation with Danny.
4.	Bailee appears confident when she expresses her demands.
5.	Danny is unwilling to negotiate with Bailee.
6.	Bailee tells Danny why she deserves to have her goals met.
7.	Danny is surprised that Bailee wants to be paid in money.
8.	Bailee is not confident when presenting her terms.
9.	Bailee asks for more than she expects to receive during the negotiation.
10.	Danny’s counter offer to Bailee is purposely very low.
11.	Both participants lost something from the negotiation.
12.	Both participants gained something during the negotiation.

(Correct answers are highlighted in yellow)

Task 2: Focus on the vocabulary you will need to understand and complete the tasks later in this and subsequent lessons. Fill in the blanks next to each definition with the correct word or words from the box below.

bottom line (n)
conflict
concession
insist
party/parties (n)
specify (one’s) terms
offer
reject
compromise
counter-offer

A condition of difference or disagreement between people: a conflict
The people involved in a negotiation: party/parties
The minimum one can accept in a negotiation: the bottom line
To be firm; to maintain one’s demands: to insist
Something yielded or granted: a concession
To propose something: to make an offer
To outline what one would like to receive/achieve: to specify (one's) termsspecify terms
To refuse an offer: to rejectone’s terms
An agreement reached where each party gives something to the other: a compromise
An offer made in response to another: a counter-offer

Task 3: Matching. Drag and drop the definitions on the right to the appropriate collocations on the left.

Listen to the audio file

The above negotiation is typical because it aims to resolve a conflict through specific steps which ensure that each party gains and gives something to the other.

Task 4: Complete the following summary of the negotiation between Bailee and Danny.

concessions
compromise
terms
insists
reject
bottom lines
counter-offer
conflict
parties
resolve

A 1)conflict arises because Bailee feels she should be rewarded financially for an acting job with Danny. Danny, however, feels that the experience she will gain is sufficient payment for a person of Bailee’s age. When Bailee 2)insists that she be paid, Danny is willing to negotiate, because he believes Bailee will do the job well. Bailee purposely proposes higher 3)terms than she expects to receive, giving herself space to 4)compromise later if necessary. To reduce Bailee’s demands and to give himself more space to negotiate, Danny makes a low 5)counter-offer which he knows Bailee will 6)reject. Bailee compromises by proposing terms that are slightly lower than her original demand but still higher than she expects to receive. Danny then compromises by offering half of Bailee’s original demand, which she finally accepts. Both 7)parties treat each other respectfully and are willing to compromise to 8)resolve the conflict fairly. Neither wants to make too many 9)concessions to the other party. As they know each other well and are friendly with each other, they are honest and tell what their 10)bottom lines are when the negotiation ends.

Listen to the audio file

Distributive vs Integrative Negotiation

It is important to recognize that there are two main types of negotiation - Distributive and Integrative - and that each involves very different approaches and strategies.

Distributive Negotiation - This is sometimes referred to as win-lose negotiation and occurs when there is a fixed amount of resources and each party wants to receive as much as possible. This involves pursuing one’s own needs with little concern for the other party/parties. For example, when purchasing a used car, the buyer wants to minimize payment while the seller wants to maximize his selling price. The two parties have conflicting interests and do not have a relationship. This type of negotiation emphasizes short term personal gain rather than long term mutual satisfaction or development of a long term working relationship with the other party.

Integrative Negotiation – This is sometimes referred to as win-win negotiation and exists when cooperation benefits both parties. Integrative negotiation does not emphasize selfish pursuit of maximum gain, but focuses on finding a mutually satisfactory outcome for all negotiating parties. Through honesty, trust, integrity and problem-solving strategies, each party tries to gain something without losing something essential. In the video above, Bailee and Danny each know that they will not receive everything they want and that they need to make concessions through integrative negotiation so that each may receive the best possible deal while maintaining their friendly relationship.

Now watch the following video to understand more about the details and differences between distributive and integrative negotiation.

Listen to the audio file

It is important that all parties involved agree on the approach that is most suitable for everyone before negotiations begin. Lesson 2 and subsequent lessons in this series will teach the skills and language needed for successful integrative negotiation.

What was covered in Lesson 1? Take the summary quiz!

Task 5: Quiz: What did you learn about negotiation?

		Yes	No
1.	It is only important for adults to have strong negotiation skills.
2.	Negotiation is an important life skill that allows people to resolve conflict.
3.	Negotiations have several stages which are expected by all parties.
4.	A compromise means reaching an agreement through giving and taking.
5.	In negotiations, opponents usually need to compromise.
6.	In most negotiations, the opposing parties try to find a common goal.
7.	One should always treat an opponent with respect during negotiations.
8.	Participants should define their goals confidently when they negotiate.
9.	Participants should make sure opponents receive as little as possible.
10.	Most negotiations involve parties making concessions to each other.
11.	To begin, negotiators should define higher terms than they expect to receive.
12.	Negotiators should be inflexible in their negotiations.
13.	Negotiators should always know what their bottom line is.
14.	Counter-offers may be very low to allow room for more negotiation.
15.	In integrative negotiation, one party receives much more than the other.
16.	In distributive negotiation, each party is concerned about relationship building.

(Correct answers are highlighted in yellow)

Listen to the audio file

Now complete the next lesson in this series entitled:

Click the tabs to show contents.

Answer
	(1) conflict (2) party/parties (3) bottom line (4) insist (5) concession	(6) offer (7) specify (one’s) terms / specify terms (8) reject (9) compromise (10) counter-offer

Answer
	(1) conflict (2) insists (3) terms (4) compromise (5) counter-offer	(6) reject (7) parties (8) resolve (9) concessions (10) bottom lines