Types of negotiation to resolve conflicts and strengthen your leadership skills

07/09/2023 | Santander Universidades

How much did they pay you to give up on your dreams? This is one of the best-known phrases from the movie Up in the Air, starring George Clooney, Anna Kendrick and Vera Farmiga. It gives a great example of one of the types of negotiation that works best: collaborative negotiation. In other words, where a win-win solution is found. 

In the film, the character of Ryan, played by George Clooney, has to fire an employee, and through negotiation, shows him that bad news - such as being laid off - can be turned into an opportunity to keep fighting and achieve our dreams.

What is negotiating?

Negotiating is not always about winning. On the contrary, this concept refers to a process in which one or more parties agree on a series of measures and seek to reach an agreement that satisfies all their interests. 

According to a survey conducted by PWC with more than a dozen successful companies, one of the aspects that those leaders interviewed deem to be most important in the new era is having the ability to work alongside people from different cultures with different ways of thinking. In other words, we live in a reality where collaboration is vital, and in order to collaborate, it is fundamental to create alliances and of course, negotiate. 

Thus, negotiation skills are one of the qualities a business leader must possess, since these are essential for managing resources, teams of people and moments of crisis.

What types of negotiations are there?

Firstly, it is important to note that everyone has their own negotiation style. However, it's also true that in general, the different types of negotiations can be categorised. 

So, depending on the given context, some types of negotiation will prove more suitable, while - depending on which stage the negotiations have reached - more than one type might be used. Below, we outline the most common types of negotiation: 

  • Collaborative negotiation: i.e., win-win negotiation, meaning that all parties secure benefits and are not competing to win. What is sought here isn't a one-off agreement, but rather, a long-term relationship between the parties. 

For example, with a rental agreement, if the tenant wants to lower the rent, they might propose an extension of the term, which benefits the landlord. In this way, both sides win and a relationship of trust is established by both parties.

  • Distributive negotiation: only one of the parties wins, meaning that a good long-term relationship is not being sought. This is the case, for example, when a second-hand product is sold, such as a vehicle, where the seller seeks to obtain the highest possible profit and the buyer the lowest price. 
  • Accommodative negotiation: here, one of the parties accepts it has lost and does so as part of a strategy to bolster long-term relationships. There are many examples of this type of negotiation in the business world. 

For example: a company asks for a discount on a product or service from one of its suppliers and, in return, agrees to buy a larger volume. At that moment, there is a loss of profits for the supplier, yet over time, it gains in the number of sales.

  • Avoidance negotiation: this type of negotiation is known as lose-lose. Both sides deem that it isn't worth negotiating at this precise moment, as there is no basis from which to initiate the negotiations, leading these to be postponed. In such cases, either in time the circumstances will change, or the help of a mediator is sought. 
  • Multi-party negotiations: this is a highly complex form of negotiating due to the large number of parties involved, making it more difficult to reach an agreement. 

For example, this is the case of an employer who has to negotiate working conditions with a group of various employees. In this scenario, the participation of a mediator might be useful.


Stages in the negotiation process

Negotiation is used in many areas of our personal and professional life. We not only negotiate with clients, employees and suppliers, but also with our children, partners or even phone companies. Hence, it is vital to understand both the types of negotiation and the various stages of a negotiation process.

  • Planning. This is the most important stage because this is when information is gathered and the objectives of the negotiation are set. To do this, the following activities must be carried out: 
    • Gathering data, the needs and details of the other party, which in turn support our stance in the negotiation. 
    • Evaluating any risks that might arise during negotiations. 
    • Setting the objectives you hope to reach and the limits, both maximum and minimum, of the negotiation. 
  • Meeting of the parties. This is when the negotiation effectively begins and the parties meet each other face-to-face. In general, there are several sub-stages: opening negotiations, exchanging opinions, offers and details, and closing the process. It is important to remember that a meeting of the parties might be in person, but can also be conducted via email or videoconference. 
    • With email negotiations, misunderstandings may crop up, because neither party can physically see the gestures or expressions of the other. For this reason, it is essential to use friendly language and explain all aspects in a clear and simple way. 
    • As for video conferencing, several factors can have an impact, such as connection problems or a failure to correctly interpret the body language of the other party. However, according to a study by Cotec, negotiation processes conducted in person are 54% more successful than those via a screen.
  • Signing the agreement. When negotiations close with an agreement, it is essential to formulate this in a written contract signed by both parties. This creates trust and legal security. 
  • Analysing the process. Lastly, it is time to evaluate the results and compare these with the objectives set, in order to learn and improve. From such an analysis, we can glean valuable information on aspects to develop in our negotiating skills, as well as identifying any training needs to achieve this. 

After all, negotiating is part of our daily lives, hence the importance of learning the different types of negotiations in order to identify which will be most effective for us. However, it should also be noted that a good negotiation requires mastery of other skills, such as empathy, assertiveness and communications. In this regard, lifelong learning is a key tool in acquiring such knowledge and abilities. 

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