Negotiation and Bargaining

“Negotiation” is derived from a Latin term that means “to conduct business,” and a great deal of research is focused on economic transactions such as sales and collective bargaining. Over time, the use of negotiation has expanded to other contexts such as marriage and hostage negotiations (Rogan et al. 1997), and in addition to its traditional role as a tool for creating exchange agreements, it is now recognized to be an important component of conflict management. Because of its widespread use, negotiation research is conducted throughout the social sciences including anthropology, communication, economics, management, political science, psychology, and sociology.

Theoretical Concepts

Negotiation is a process by which at least two parties interact in an attempt to reach an agreement. Negotiators are acting in “good faith” as long as they are honestly trying to reach an accord. Negotiation is goal driven. At a minimum, successful negotiation occurs when the parties agree to the terms of a contract or informal understanding, and negotiators often have an agreement bias in which they are willing to accept inferior terms just to avoid a deadlock. However, negotiation objectives extend beyond simply reaching agreement. Frequently, negotiation goals are focused on gaining resources and reflect the specific amount that negotiators wish to obtain as well as the least they are willing to take rather than reaching no agreement. These tangible goals often reflect underlying interests such as the desire to enhance one’s well-being, establish a particular type of relationship, or control the negotiation process and values (Lax & Sebenius 1986).

During negotiation, individuals focus on issues (Putnam & Holmer 1992). Price is often a critical issue in buyer–seller transactions just as wages, benefits, and productivity are often key issues in collective bargaining. The positions that negotiators express reflect the manner in which they frame the issue. Frames constitute their understanding of issues and can be cognitive biases (Thompson et al. 2004). These include the “fixed pie bias,” which reflects the tendency of negotiators to assume they want the same things, to overlook issues about which they agree, and to focus primarily on disagreement. Gain frames are focused on the benefits of a proposed agreement and may cause a premature commitment, whereas loss frames arise from perceived costs and prompt negotiators to prematurely reject agreements in the hope that better ones will come along.

Negotiation involves a complex set of communication processes. During negotiation, individuals bargain by exchanging offers and counteroffers. Arguments are made in support of positions. Information is exchanged about priorities and goals. Negotiators try to establish a certain type of relationship through their communication (Donohue & Ramesh 1992). Finally, coercion is used as a measure of last resort. These processes often reflect distributive and integrative strategies. Distributive strategies are attempts by negotiators to gain the best deal by demanding outcomes of greater value. These strategies can involve making an extreme opening offer, making few and small concessions, attacking each other’s positions while defending their own, disclosing supportive information while withholding damaging data, acting as though hostile or indifferent to each other, and making a take-it-or-leave-it offer. Distributive strategies can be successful, but when reciprocated, they often lead to deadlock. Integrative strategies focus on integrating the needs of all parties by creating solutions that are valuable to all sides. These strategies could involve offering concessions on low-priority issues in exchange for concessions on higher-priority ones, disclosing information about interests and priorities, focusing on the benefits and workability of proposals, expressing mutual concern, and developing alternatives to reaching an agreement. Integrative strategies allow both parties to meet their needs.

Negotiation processes may change over time (Weingart & Olkeans 2004). Goals and strategies are not fixed and individuals often adjust and adapt them as negotiation unfolds. Negotiators may find their original goals are unrealistic or their initial strategies are ineffective. In addition, some negotiators may find it useful to start negotiations by strongly justifying their position and demanding outcomes of great value. By doing so, they communicate strength and may cause their counterpart to take them seriously. To avoid a deadlock, they then shift to an integrative approach and try to create a solution that benefits both. Alternatively, negotiators may shift their orientation throughout a negotiation depending on factors such as resistance.

Negotiations are influenced by the context in which they occur. Negotiating on the behalf of others can make negotiators more distributive and require them to negotiate simultaneously with the opposition and their own constituency. Time pressure limits the ability of negotiators to consider alternatives, and instead, they may rely heavily on distributive strategies.

Measures And Findings

Researchers have developed schemes for coding the content of negotiations. These have been used to study the strategies that are used during the negotiation, and some have examined both the strategies that are used and the responses to them (Weingart & Olkeans 2004).

Most researchers are interested in integrative agreements, which afford high joint benefits and are often creative. The integrativeness of an agreement is often evaluated relative to other possible agreements that could have been reached. Hence, the most integrative agreement is the one that affords both parties the highest benefits. Compromises such as “split the difference” are moderately integrative since both parties give up something. Integrativeness is lowest when both parties do poorly, such as when they reach deadlock or one party wins while the other loses.

Alternatively, some researchers have focused on the type of integrative agreement. Costcutting agreements are those that allow another negotiator to save face, sometimes by providing a symbolic concession. Logrolling agreements occur when all parties receive what they want on high-priority issues but make significant concessions on those of low priority. Bridging agreements involve the creation of novel solutions that frequently result from approaching the problem in a counterintuitive fashion. Nonspecific compensation occurs when negotiators provide each other with resources that are not specifically part of a contract. Contingent agreements reduce risk by specifying future conditions that must be met before resources are exchanged, or the reopening of negotiations at a future time so as to modify the agreement.

The dual concern model has guided a great deal of integrative negotiation research (Pruitt & Rubin 1986). To discover integrative agreements, individuals must be willing to exert considerable energy during negotiation so as to discover each other’s needs and to formulate creative agreements that are mutually beneficial. To do so, they must be rigidly committed to achieving their goals while flexible as to the means of doing so. Hence, integrative bargainers resist giving up their objectives but are willing to consider alternative ways of meeting them that will also serve the needs of their counterpart (De Dreu et al. 2000). This dual concern facilitates reaching integrative agreements by prompting negotiators to ask questions, share information about priorities, logroll, discuss the merits and problems associated with proposals, and build rapport. Individuals with a dual concern avoid blaming one another and making threats.

Future Directions

Negotiation is a tool for exerting influence, and individuals want to become effective negotiators. Researchers are therefore beginning to investigate the critical cognitive and behavioral skills required to be a successful negotiator (Roloff et al. 2003). Beyond cataloguing skills, researchers are investigating how best to train individuals to be more skillful, including the use of case studies and other training methods.

Because of the pervasiveness of electronic media, researchers are also exploring mediated negotiation. This includes the degree to which face-to-face negotiations differ from those occurring through email and other electronic media (McGinn & Croson 2004).

With increasing globalization, negotiation researchers are becoming interested in intercultural negotiations, and especially those involving business transactions. This research focuses on cultural norms for negotiation as well as identifying cultural differences in the manner in which negotiators frame negotiations and the strategies they use (Brett 2001). Perhaps the most important focus for future research arises from the need to understand how negotiation can be used to resolve intractable disputes. Individuals, groups, and nations often have difficulty resolving their disagreements, and these can escalate into prolonged aggressive encounters. Researchers are beginning to turn their attention to such disputes with an eye to identifying how they might be made ripe for a negotiated settlement (Putnam & Wondolleck 2003). This means expanding the focus of negotiation to include third-party interventions such as mediation, facilitation, and arbitration.

References:

1. Brett, J. M. (2001). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions across cultures. San Francisco, CA: Jossey-Bass.
2. De Dreu, K. W., Weingart, L. R., & Kwon, S. (2000). Influence of social motives on integrative negotiation: A meta-analytic review and test of two theories. Journal of Personality and Social Psychology, 78, 889 – 905.
3. Donohue, W. A., & Ramesh, C. (1992). Negotiator–opponent relationships. In L. Putnam & M. Roloff (eds.), Communication and negotiation. Thousand Oaks, CA: Sage, pp. 209–232.
4. Lax, D., & Sebenius, J. (1986). The manager as negotiator: Bargaining for cooperation and competitive gain. New York: Free Press.
5. McGinn, K. L., & Croson, R. (2004). What do communication media mean for negotiators? A question of social awareness. In M. J. Gelfand & J. M. Brett (eds.), The handbook of negotiation and culture. Stanford CA: Stanford University Press, pp. 334 –349.
6. Pruitt, D. G., & Rubin, J. Z. (1986). Social conflict: Escalation, stalemate and settlement. New York: Random House.
7. Putnam, L. L., & Holmer, M. (1992). Framing, reframing, and issue development. In L. Putnam & M. Roloff (eds.), Communication and negotiation. Thousand Oaks, CA: Sage, pp. 128 –155.
8. Putnam, L. L., & Wondolleck, J. M. (2003). Intractability: Definitions, dimensions, and distinctions. In R. Lewicki, B. Gray, & M. Elliott (eds.), Making sense of intractable environmental disputes. Washington, DC: Island Press, pp. 35 –59.
9. Rogan, R. G., Hammer, M. R., & Van Zandt, C. R. (eds.) (1997). Dynamic processes of crisis negotiation: Theory research and practice. Westport, CT: Praeger.
10. Roloff, M. E., Putnam, L. S., & Anastasiou, L. (2003). Negotiation skills. In B. Burleson & J. O. Greene (eds.), Handbook of communication and social interaction skills. Mahwah, NJ: Lawrence Erlbaum, pp. 801– 835.
11. Thompson, L., Neale, M., & Sinacuer, M. (2004). The evolution of cognition and biases in negotiation research: An examination of cognition, social perception, motivation, and emotion. In M. J. Gelfand & J. M. Brett (eds.), The handbook of negotiation and culture. Stanford, CA: Stanford University Press, pp. 7– 44.
12. Weingart, L. R., & Olkeans, M. (2004). Communication processes in negotiations: Frequencies, sequences and phases. In M. J. Gelfand & J. M. Brett (eds.), The handbook of negotiation and culture. Stanford CA: Stanford University Press, pp. 143 –157.