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What are the Steps in the Negotiation Process?

Negotiation is an art, requiring a strategic approach to reach a beneficial agreement. It begins with preparation, understanding both parties' interests. Communication is key, as is actively listening and presenting your case. Bargaining follows, where compromise and creativity come into play. Finally, closure and implementation seal the deal. Ready to master these steps? Let's explore how each one can set you up for success.
Mandi Rogier
Mandi Rogier

The negotiation process is a complex series of actions that seeks to provide a mutually agreeable outcome to two dissenting parties. Formal negotiations may take place with the assistance of a trained mediator who serves as an impartial third party in navigating the issues at hand. For a professional negotiator, the process may follow a series of definitive steps. Negotiations can also take place on a more informal level, however, and the process in these instances can become less structured.

The first step in any negotiation process involves understanding the issue at hand. This step often takes place before the two parties enter into formal talks. Each side must come into the negotiations with a clear idea of what the conflict is and what he wants to gain from the proceedings.

Two people negotiate back and forth regarding a contract.
Two people negotiate back and forth regarding a contract.

Once in negotiations, the next step is for each side to present his case. This involves explaining what the individual’s goal is, what he wants to gain, and what he is willing to offer up in return. Both sides must listen to each other for the negotiations to proceed successfully. If a mediator is present, he will take careful note of these proceedings in order to offer up creative solutions that may work for both parties.

Business negotiations for a large company may take weeks before an acceptable solution is found.
Business negotiations for a large company may take weeks before an acceptable solution is found.

The bulk of the negotiation process is a continuous back and forth of ideas, options, and even arguments between the two sides. The first solution offered up is rarely the final choice. This part of the process varies greatly depending on the type of negotiations taking place. If a negotiator is involved, he will direct this stage of the process by offering various solutions and continuously working with both parties to find a mutually acceptable agreement.

Once the contract has been accepted and signed by both parties, the steps laid out within must be completed.
Once the contract has been accepted and signed by both parties, the steps laid out within must be completed.

This step of the negotiation process, where the dissenting parties take time to explore various solutions, may take place over several sessions. Business negotiations for a large corporation may take weeks before an acceptable solution is found. For smaller negotiations, such as inter-office issues between two coworkers, this step may be much easier, involving only a brief discussion before an agreement is met.

Formal negotiations may take place with the assistance of a trained mediator.
Formal negotiations may take place with the assistance of a trained mediator.

Once the process of finding a solution is completed, negotiations enter into the final steps of the process. The agreement is clearly laid out for both parties, often with a written contract. This document is reviewed thoroughly and amended as needed until it meets the satisfaction of all involved. Once the contract has been accepted and signed by both parties, the steps laid out within must be completed.

One of the first steps in negotiation is to discover the expectations of all parties involved.
One of the first steps in negotiation is to discover the expectations of all parties involved.

The final step in the negotiation process is fulfilling the agreement. This may be as simple as trading goods and parting ways. In more complex negotiations, the solution may be a more long term commitment, or a working partnership between two parties. If at any point the agreement no longer works for one or both parties, negotiations may begin again at the beginning to amend the contract and find a better, more sustainable, solution.

Frequently Asked Questions

What are the key stages of the negotiation process?

The negotiation process typically unfolds in five key stages: preparation, where parties gather information and define objectives; opening, where initial positions are presented; exploration, involving the exchange of views and further clarification of interests; bargaining, where concessions are made and alternatives are considered; and finally, closure, where an agreement is reached or the negotiation is adjourned. Effective negotiation requires careful attention to each stage to maximize the potential for a favorable outcome.

How important is preparation in the negotiation process?

Preparation is crucial in the negotiation process, often considered the most important step. It involves researching the other party's interests, determining your own goals, and establishing clear objectives. According to Harvard Law School's Program on Negotiation, thorough preparation can lead to more favorable negotiation outcomes because it equips negotiators with the information needed to make informed decisions and to effectively manage the exchange.

Can you explain the role of bargaining in negotiations?

Bargaining is the stage where the actual give-and-take of negotiation occurs. It's where each party discusses their wants and needs, making concessions and proposing alternatives to find a mutually acceptable solution. The effectiveness of bargaining often hinges on the strategies employed, such as anchoring with an initial offer or using objective criteria to justify a position. The goal is to reach a compromise that satisfies the core interests of all involved parties.

What happens if negotiations reach an impasse?

If negotiations reach an impasse, parties may take a break to reassess their positions and explore alternative solutions. Mediation or bringing in a third party can also help to facilitate a resolution. According to the American Bar Association, employing a mediator increases the chances of resolving an impasse by providing an impartial perspective that can help parties move beyond deadlock and find common ground.

Is closure always the final step in the negotiation process?

Closure is typically the final step in a successful negotiation process, where parties formalize an agreement. However, closure doesn't always mean the end. Sometimes, negotiations may result in an agreement to reconvene or continue discussions at a later date. Additionally, post-negotiation activities such as implementing the agreement, monitoring adherence, and managing any subsequent disputes are critical for ensuring the durability of the negotiated outcomes.

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Discussion Comments

Crimea

I completely agree. Negotiation skills are gained primarily through practice. When people take a class on negotiations, there is actually very little theory that goes into it. Most of the material and expertise is learned through just being paired against classmates, given a certain situation, and negotiating it from a certain side. This is the best way to learn.

Most people do have to do negotiations at some point in their life, most often contract negotiation or salary negotiation and learning how be effective at this can be very beneficial.

Shevardnadze

Amiable negotiations where both sides are looking for the deal that will increase the pie for both parties create the most value and lead to the best outcome for all involved. A lot of people make the mistake of walking into a negotiation with a hostile attitude and this is one of the worst things that you can do. This is especially useful for the union negotiation process as any amount of striking is more expensive and detrimental than trying to find a mutually beneficial agreement. Sometimes an arbitrator may be brought in to mediate a negotiation that has turned hostile and a true working relationship no longer exists.

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    • Two people negotiate back and forth regarding a contract.
      By: NOBU
      Two people negotiate back and forth regarding a contract.
    • Business negotiations for a large company may take weeks before an acceptable solution is found.
      By: Scott Griessel
      Business negotiations for a large company may take weeks before an acceptable solution is found.
    • Once the contract has been accepted and signed by both parties, the steps laid out within must be completed.
      By: vadymvdrobot
      Once the contract has been accepted and signed by both parties, the steps laid out within must be completed.
    • Formal negotiations may take place with the assistance of a trained mediator.
      By: focusphoto
      Formal negotiations may take place with the assistance of a trained mediator.
    • One of the first steps in negotiation is to discover the expectations of all parties involved.
      By: WavebreakMediaMicro
      One of the first steps in negotiation is to discover the expectations of all parties involved.