Definitions
After graduates from our negotiation training courses complained about not finding a definitive negotiation glossary of definitions, we put together the world's best.
A formal agreed upon list of goals to be achieved or items to be discussed in a particular order during a meeting or negotiation. Agendas can be formal and obvious, or informal and subtle in negotiations. A negotiation agenda can be used to control the negotiation meeting.
A person who acts for or in place of another individual or entity as their representative in a negotiation with a third party. An agent, sometimes referred to as a third party agent, has full or limited authority to act on the behalf of the party they represent.
Anchoring is an attempt to establish a reference point (anchor) around which a negotiation will revolve. The anchor will often be used as a reference point to make negotiation adjustments. Anchoring often occurs when the first offer is presented at the beginning of a negotiation.
A process to resolve a dispute between negotiating parties who have reached a deadlock in their negotiation. The parties in dispute are referred to a ‘third party’, which is one that is either agreed upon by the parties in dispute, or as provided by legislated law. The third party renders a [judgement] that is binding on the parties in dispute. Arbitration is often used in international negotiations and in collective bargaining.
Setting the highest achievable negotiation target level in terms of goals or objectives to conclude a negotiated agreement.
What is bargaining? Bargaining is a simple form of the distributive negotiation process that is both competitive and positional. Meaning bargaining doesn't seek to create value but instead focuses on negotiators claiming value.
Bargaining very often revolves around a single issue—usually price.
Your Bargaining Zone is the range or area in which an agreement is satisfactory to both negotiating parties. The bargaining zone is essentially the overlap area between walk away positions in a negotiation.
BATNA is an acronym popularised by Roger Fisher and William Ury which stands for 'Best Alternative to a Negotiated Agreement'. BATNA answers the question: 'What would you do if you weren't able to agree a deal with your negotiation counterparty?' Your BATNA is the alternative action you'll take should your proposed agreement fail to materialize. Most business people simply use the phrase: 'Best Alternative'.
A temporary union between two or more individuals or groups for a common aim or goal. A relatively common practice utilized in multi-party negotiations, used to gain advantage in the negotiation. Coalitions are more common when negotiators' stand to gain more through collaboration than through competing.
A negotiation process that occurs between employers (or their representatives) and the representatives of a union to negotiate issues that consists of wages, hours of work and other conditions of employment. Normally results in a written contract that is defined by specific time duration – ‘life of the contract’. Doesn't necessarily comprise of bargaining as the name suggests.
Learn more about Collective Bargaining
This term refers to the area of agreement or a basis for an understanding, that is mutually agreed upon by all parties to a negotiation.
Your concession strategy is a plan of the goals / positions and sometimes the underlying interests that you will be trading with the other party. Before you enter the negotiations, at the very least you should have clarity on your and the other party's goals, and an sequence of which goals you want to trade or exchange. Concession strategies vary in detail. 'Concession Strategy' is more accurately called the 'Trading Plan'.
Negotiation Concessions are also sometimes referred to as ‘trade-offs’ where one or more parties to a negotiation engage in conceding, yielding, or compromising on issues under negotiation and do so either willingly or unwillingly. Negotiation Concessions often include 'log rolling'.
A constituent is someone or a group on the same side of the negotiating party but who exerts an independent influence on the outcome through the principal negotiator, or to whom the principal negotiator is accountable. For example, a union negotiator must have an agreement voted upon by the union members (constituents) before it can be ratified as an agreement.
An arrangement where one company (the seller), agrees to sell products or services to a foreign purchaser, but also simultaneously agrees to purchase specified products or services from the foreign partner. Also known as parallel bartering and is the most commonly used form in a countertrade agreement in international business interactions.
An international trade arrangement with a foreign business partner. A barter system whereby the parties agree to exchange, or purchase (buy back) for resale, goods or services in exchange for another type of goods or services. Goods or services exchanged may be used in the primary product or service being sold.
In a negotiation, a counterparty (counterparties – plural) is the other representatives(s) of the other negotiation party(s) with whom one is negotiating a potential agreement or contract.
A negotiation process where the debtor negotiates the amount, timing and any other terms of a loan such as arrears, liability, or balance owed to the creditor(s).
A distributive negotiation type or process that normally entails a single issue to be negotiated. The single issue often involves price and frequently relates to the bargaining process. Also referred to as ‘Win – Lose’, or ‘Fixed – Pie’ negotiation because one party generally gains at the expense of another party. 'Win - Win' negotiation is conversely often referred to as Integrative Negotiation.
This is usually a mutually agreed upon neutral third party to lead a complex meeting of two or more parties involved in a negotiation. Often employed in ‘multi party’ negotiations. Their purpose is to organize, aid, and offer assistance in helping the negotiating parties find their own solutions on the issues under discussion.
A means to process and [organise] information. A frame provides a perspective of the problems or issues for a decision maker. One can use a frame to understand the importance of facts or issues in relation to each other. One can use this understanding of the facts or issues to then determine possible outcomes and consider contingency actions to solve a problem. Using a framework can allow you to consider all potential gains and losses and available options for any situation.
A few negotiation training courses make use of negotiation simulation exercises delivered using online negotiation training games. In this way, technology can be leveraged to teach participants essential principles of negotiation, psychology or influence in a fun and interactive environment. Some games are played between pairs, whilst others involve a room full of people. The purpose of most negotiation training games is to win, and sometimes to avoid losing. Many negotiation games leave the decision of what 'winning' or 'losing' means to the players. Negotiation role-play exercises prevalent in most courses should not be confused with negotiation games.
Haggling means to negotiate, argue, bargain or barter about the terms of a business transaction, usually focussing on the purchase or selling price of a product or service. A form of distributive negotiation. (See Negotiation Bargaining)
A negotiation conducted between law enforcement agencies, diplomatic or other government representatives for the release of a person(s) held hostage against their will by criminal, terrorist or other elements.
A company's first sale of stock to the public. The IPO is usually tendered, but not always, by those of young, smaller companies attempting to locate equity capital and a public market for their stock. An IPO may present considerable risk but also has the potential of significant profits for investors. Investment companies (closed end funds) generally include underwriting fees which represent a load which is then passed onto buyers.
A means of negotiation decision making to [conceptualise] the actions, contingencies of all possible outcomes, options and scenarios. Applied to integrative negotiations with the intention of incorporating the goals and aims of all the negotiating parties to create maximum value through collaborative negotiation.
Integrative negotiation is often referred to as "win-win" and typically entails two or more issues to be negotiated. It often involves an agreement process that better integrates the aims and goals of all the involved negotiation participants through creative and collaborative problem-solving. Relationship is usually more important, with more complex issues being negotiated than with distributive negotiation.
Negotiation interests are considered to be the motivating factor(s) and the underlying reasons behind the ‘negotiation position’ adopted by a negotiation party. Negotiation interests often entail some combination of economic, security, recognition, and control issues, or the desires, concerns, aims or goals of a negotiating party in a negotiation process.
A process that occurs between two or more members or colleagues of the same company, organization or constituency. Colleagues need to negotiation internally usually with their stakeholders - most especially when preparing for an external client, supplier, government, regulatory body or other negotiation. The word 'preparation' is often used interchangeably with the phrase 'internal negotiation'. The differing reward structures, motivations and psychology play a major role in ensuring that internal negotiations are often as challenging as external negotiations. The most popular way to prepare with your colleagues or stakeholders is via a physical meeting or a conference call.
A contractual agreement between two or more business partners to assume a common business strategy on a project. All partners generally agree to share the profits and losses through their common shareholdings.
A formalised legal process to resolve a dispute through legal action in the form of a lawsuit. It often entails a contractual issue. It is the act of either bringing or challenging a lawsuit.
A negotiation exchange that involves making negotiation concessions or the ‘trading-off’ of issues so as to [maximise] on each sides' value. So you will offer the other side something that they value more than you, in exchange for gaining something from them that you value more than they do. (Also: Log Rolling)
A negotiation result where all parties to a negotiation leave resources or gold on the table at the conclusion of a negotiation and fail to recognize or exploit more creative options that would lead to a ‘win-win’ negotiated outcome. A term also used in ‘Game Theory’ and Economics.
Lose-Win refers to a distributive negotiation where one negotiator's loss is the other negotiator's gain. Both negotiators are typically competing to claim the most value from a 'fixed pie' or value negotiation. The term 'lose-win' was popularized by ‘Game Theory’. This is a form of a zero-sum game. (The inverse is known as Win - Lose Negotiation).
A concept often employed in ‘Group’ or ‘Multi Party’ negotiations to achieve consensus or agreement. As the term implies, a decision or agreement is reached after having been voted upon and decided in [favour] by a majority of the parties present at the negotiating table
Mediation usually consists of a negotiation process that employs a ‘mutually agreed’ upon third party to settle a dispute between negotiating parties to find a compatible agreement to resolve disputes.
Negotiation meetings are typically where most of the deal is negotiated, with business negotiation meetings these days being face to face and via voice. The proper planning and effective running of negotiating meetings can make or break a deal. The more complexity involved, the more important getting the negotiation meeting planned correctly becomes.
A negotiation process conducted for the merger or joining of two companies into a single business entity, or the outright purchase of a company by another company.
A negotiation that involves more than two negotiating parties in a negotiation.
A technique sometimes employed to offset the possibility of anchoring in an integrative negotiation. Multiple offers are two or more offers or proposals of relatively equal value that are presented simultaneously to invite greater discussion of the issues under negotiation.
Negotiation is an interactive process between two or more negotiators or parties seeking to find common ground on issues of mutual interest, where the negotiators or parties seek to make a mutually acceptable agreement that will be honoured by all.
Negotiators' positions are the things they demand you give them and also the things that they refuse to provide you with. Negotiation positions are typically communicated in meetings, emails, and proposals. Inexperienced negotiators too often take the positions of the other side at face value and don't probe with questions or challenge sufficiently.
The primary decision making authority in a negotiation. Third party agents will often represent the interests or objectives of a principal in a negotiation.
Principled negotiation is an interest-based approach to negotiation that focusses primarily on conflict management and conflict resolution. Principled negotiation uses an integrative approach to finding a mutually shared outcome.
Business services provided by internal specialists or external vendors or consultants. Procurement Solutions includes skills development ranging from purchasing or procurement training, coaching, consulting or other education services, as well as input on any procurement procedure as it relates to any aspect of the supply chain. Three main areas include sourcing costs, logistics management and aspects of manufacturing. Typical focal areas include achieving price reductions, technology, reverse auctions, information systems, transport and shipping, working capital (e.g. inventory and payment terms), and automation.
The assignment of purchase orders by a business to a third party who accepts responsibility for billing and collecting from buyers of the company's products and services. It is a form of expensive financing used to purchase materials required to produce products needed to [fulfil] a purchase order already received from a buyer.
Rapport happens across a number of levels. In business, most people associate rapport with matching and mirroring body language. Rapport brings you and the other party you're seeking to influnece into synch. When done well, rapport is undetectable, and works at the unconcious level. Rapport is more difficult to detect on the auditory level. So if you adjust your volume, cadence, inflection, pitch, resonance, length of sentences to that of the person or people you're seeking to influence, you'll be more likely to be listened to and enjoy more understanding and agreements.Rapport can also occur at the level of beliefs and values. When you discuss similarities in your beliefs and values, you're more likely to enjoy a deeper sense of rapport. Story telling is powerful for this reason.
The act of making a similar or like exchange of something in return for something given by one party to another party. In a negotiation, this could entail an exchange of information and/or an exchange of concessions between the negotiating parties.
The reservation price is the least favourable point at which you will accept a negotiated agreement. For example, for a seller this means the least amount (minimum) or bottom line they would be prepared to accept. For a buyer, it would mean the most (maximum) or bottom line that they would be prepared to pay. It is also sometimes referred to as the "walk-away" point.
A low level or approach in the amount of risk that a negotiator is prepared to accept in a negotiation. A negotiator who decides to accept the "sure thing" where a result is certain to be achieved is said to be "risk-averse", and is not willing to gamble further on a potential negotiated result.
A high level or approach in the amount of risk that a negotiator is prepared to accept in a negotiation.. A negotiator who decides to gamble rather than accept the ‘sure thing’, and who has the expectation that they will gain more in a negotiation is said to be ‘risk-seeking’.
Salary negotiation is a process where one party (usually the employee) negotiates the amount of their pay, income, earnings, commission, salary, wages, wage remuneration, annual review, or salary raise with another party (usually a representative of the employer, such as their manager).
What is negotiation skills? Negotiation skills are required to secure better agreements in our personal and business lives. Negotiating skills include methods of:
A predetermined approach or prepared plan of action to achieve a goal or objective to make an agreement or contract. (also see Negotiation Tactics.)
The most popular way to divide the typical negotiation styles or approaches are:
Negotiation tactics are the detailed methods employed by negotiators to gain an advantage. Negotiation tactics are often deceptive and manipulative. Often, negotiators use negotiation tactics to fulfill their own goals and objectives. This is often to the detriment of others, making most tactics in use today "win-lose" by nature.
The desired negotiation outcome or goal decided at the start of the negotiation. This is best set across each and every aspect of a negotiation (e.g. price, term, volume etc). Some organisations set an ambitious negotiation aspiration or opening offer, and a less ambitious negotiation target, while for others these are one in the same. The level of negotiation aspiration is heavily influenced by a country's culture, with the Germans setting lower aspirations and the Chinese higher.
Also sometimes referred to as a ‘Concession’ where one or more parties to a negotiation engage in conceding, yielding, or compromising on issues under negotiation and do so either willingly or unwillingly.
A negotiation trading plan is a table or spreadsheet that sets out which goals / positions / tradables you are going to exchange or trade with the other party. A trading plan is an essential part of negotiation preparation, especially for complex negotiations. Trading plans should not only identify the goals of each party, trading plans should also rank these goals for each party and set out which goals you want to trade together. The Negotiation Experts clients are trained to use a trading plan after having prepared a SWOT analysis, and to plan a negotiation agenda using your trading plan. A trading plan is often referred to by the less accurate name of a 'Concession Strategy'.
A process often employed in ‘Group’ or ‘Multi Party’ negotiations to reach a decision or agreement by the involved negotiating parties. A unanimous decision is only achieved when all the negotiating parties are in total accord in making a decision or an agreement.
Negotiation Walk away is the alternative that a negotiator will act on if they are not successful in a negotiation. A walk away may be an alternative supplier or buyer, to manufacture the product or deliver the service in-house, to wait or simply do nothing i.e. to go without. The walk away answers the negotiation question: "What will you do if you don't agree this deal?"
Win-Lose refers to a distributive negotiation where one negotiator's gain the other negotiator’s loss. Both negotiators are typically competing to take away or claim the most value from their negotiation. Also called the ‘fixed-pie’ scenario, in that there is only a limited amount to be distributed. The term 'win-lose' was popularized by ‘game theory’. (The counter-side is known as Lose-Win Negotiation).
A win-win negotiation settlement is an integrative negotiated agreement. In theory, this means the negotiating sides have reached an agreement after fully taking into account each other's interests, such that the agreement cannot be improved upon further by any other agreement. By definition, there are no resources or "gold" left on the table and all creative options have been thoroughly exploited. "Win-win" has its roots in Economics Game Theory.
Occurs when an under aspiring negotiator sets their target or aspirations (goals or objectives) too low at the outset of a negotiation and is granted an immediate agreement by their negotiating counterpart.
An acronym which means a negotiation Zone of Possible Agreement. It is the range or area in which an agreement is satisfactory to both parties involved in the negotiation process. Often also referred to as the "Contracting Zone". Negotiation ZOPA or the Contracting Zone is the range between each parties Walk Away or Real Base or Bottom Lines, and is the overlap area that each party is willing to pay or find acceptable in a negotiation.
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