Definition of Negotiation

Negotiation is a dialogue between two or more people or parties intended to reach a mutually beneficial outcome, resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests. Negotiations can be conducted on all topics, except ethics and religion. Negotiation take place daily, whether on a conscious or subconscious level. The risk in conducting negotiations is that there is no guarantee of successful results and often the hopes of the parties influence their tactics and the outcome of the negotiations.

For a negotiation to result in positive benefits for all sides, the negotiator must define what is the problem and what each party wants. In defining the goals of negotiation, it is important to distinguish between issues, positions, interests and settlement options.

  • An issue is a matter or question parties disagree about. Issues can usually be stated as problems. Issues may be substantive (related to money,time or compensation), procedural (concerning the way a dispute is handled), or psychological (related to the effect of a proposed action).
  • Positions are statements by a party about how an issue can or should be handled or resolved; or a proposal for a particular solution.
  • Interests are specific needs, conditions or gains that a party must have met in an agreement for it to be considered satisfactory. Interests may refer to content, to specific procedural considerations or to psychological needs.
  • Settlement options are possible solutions which address one or more party’s interests. The presence of options implies that there is more than one way to satisfy interests.

Reasons for choosing to negotiate

  • Test the strength of other parties
  • Obtain information about issues, interests and positions of other parties
  • Change perceptions
  • Buy time
  • Bring about a desired change in a relationship
  • Develop new procedures for handling problems
  • Make gains


Capable negotiators understand that the stability of the outcome is important and focus on more than simply maximizing the concessions that can be extracted from the other side. Three outcomes are possible when negotiating:

  1. Win-win (both sides win)
  2. Win-lose (one side wins, the other loses)
  3. Inefficient but equitable (all items shared equally)

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