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BBI of Chicago
August 2022

The Importance of Negotiation

By: Erick Soares Gonçalves.

Negotiation can be defined as the search for conflict resolution and is present in all degrees, ranging from formal environments, such as discussions in large organizations, to non-formal environments, such as family environments. In the history of humanity, negotiation has always been necessary because the divergence of opinions is rooted in society. Therefore, it is essential to reach a common denominator so that all parties feel benefited.

According to Barry, Lewicki, and Saunders (2014), negotiations occur due to several factors, namely the need to share finite resources, to produce something new that it would not be possible to do alone, or to resolve a conflict between the parties. Negotiation is not always synonymous with success, as those involved may not have the necessary technical knowledge and empathy, generating radicalization in the process with an unsatisfactory result for one or both parties. Scenarios in which only one party is satisfied are ill-advised because the other party will not feel comfortable negotiating again in the future.

For Carvalho (2016), there are universal characteristics to all negotiations. Although it is a complex task to reach this conclusion, each negotiation involves unique factors and considers different conditions, such as social, human, and economic factors. Added to these factors are the diverging needs of the two or more parties and the preparation to give in at some point in search of greater interest. A conflict that can occur during negotiation is when one of the parties has a craving that the other will not give in to. However, the negotiation seeks to avoid this type of problem, as it aims for both parties to achieve their purpose.


Beyond the human aspect, we can use some methodologies for evaluating a negotiation. One such methodology is the ZOPA (Zone of Possible Agreement), which is the search for a satisfactory agreement for both parties. One of the fundamental concepts of the ZOPA is to have a well-defined reserve price, which would be the minimum acceptable for each of the parties in the negotiation. When the difference in reserve prices is converging, it is possible to have a ZOPA, thus, a good deal for everyone involved.

Another concept that can facilitate the negotiation process when in an impasse is BATNA (Best Alternative To a Negotiated Agreement), in which the negotiator seeks to establish the minimum acceptable outcome in case the parties don't reach an agreement. This technique helps the negotiator to close a deal while mitigating losses, meaning it is a form of protection against unsuccessful negotiations. According to Fisher and Ury (1991), three actions are necessary to carry out the BATNA: listing the actions to be taken if the desired agreement is not reached, having some of the ideas ready, and having chosen the best option in mind, then it will be The next stage of negotiation is carried out, which involves proposals and counter-proposals, in search of an agreement, and it is at this stage that the parties apply the knowledge and previously defined strategy.

Negotiation is a fundamental process present in several day-to-day interactions and has evolved from what was previously done only by "word of mouth." Currently, different techniques and forms of preparation are used to make it possible to extract the best for the parties.

In a negotiation, we must always seek the ZOPA outcome so that both parties will be satisfied and should come back to an agreement in the future. For this to happen, it is necessary that the reservation price has been previously defined and that it is attainable by both parties. In addition, it is of paramount importance that negotiators have the concept of BATNA well defined, as this reduces the chances of closing a deal where there is a significant loss for one or both parties

BIBLIOGRAPHIC REFERENCES

BARRY, B.; LEWICKI, R.; SAUNDERS, D. Fundamentos de negociação. AMGH. Porto Alegre, 5. ed, 2014.

CARVALHO, J. Negociação. SILABO. Lisboa, 5 ed, 2016.

LANG, Rodrigo; MAGALHÃES, João. Negotiation MAP: o framework de negociação que vem revolucionando o mercado. [S.l.]: Business Behavior Institute. 2019. 52 p.

FISHER, R. E URY, W.; PATTON, B. Getting to Yes: negotiating agreement without giving in. 2 ed., USA: Penguin Books, 1991.

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