Negotiation Definitions

After clients on our negotiation training courses asked for a glossary of negotiation definitions, we decided to share this resource:

Arbitration: 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. (read more about the

definition of Arbitration

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Aspiration Base: This is a realistic view of setting the highest achievable standard in terms of goals or objectives in concluding a negotiated agreement. (read more about the

definition of Aspiration Base

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BATNA: 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'. (read more about the

definition of BATNA

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Collective Bargaining: 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’. (read more about the

definition of Collective Bargaining

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Common Ground: 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. (read more about the

definition of Common Ground

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Concession Strategy: 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'. (read more about the

definition of Concession Strategy

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Counter Purchase: An arrangement where one company agrees to sell products to a foreign purchaser for cash, 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. (read more about the

definition of Counter Purchase

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Counter Trade Agreement: 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. (read more about the

definition of Counter Trade Agreement

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Debt Negotiation: A negotiation process where one party negotiates the amount (debt) and other any other applicable terms of a loan such as arrears, liability, or balance due which is owed to another party. (read more about the

definition of Debt Negotiation

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Distributive Negotiation: 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. (read more about the

definition of Distributive Negotiation

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Hostage Negotiation: 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. (read more about the

definition of Hostage Negotiation

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Initial Public Offering (IPO): A companys first sale of stock to the public. The IPO is usually tendered, but not always, by those of young, small 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. (read more about the

definition of Initial Public Offering (IPO)

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Integrative Framework : 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. (read more about the

definition of Integrative Framework

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Integrative 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 negotiating parties through creative and collaborative problem solving. Relationship is usually more important, with more complex issues being negotiated than with Distributive Negotiation. (read more about the

definition of Integrative Negotiation

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Internal Negotiation: A process that occurs between two or more members or colleagues of the same company, organization or constituency. Colleagues need to negotiation internally, most especially when preparing for an external client, supplier, government, regulatory body or other negotiation. The word 'preparation' is often used interchangably with the phrase 'internal negotiation'. The different reward structures, motivations and phsychology play a major role in ensuring that internal negotiations are often as challenging as external negotiations. (read more about the

definition of Internal Negotiation

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Joint Venture Agreement: A contractual agreement between 2 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. (read more about the

definition of Joint Venture Agreement

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Litigation: 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. (read more about the

definition of Litigation

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Lose-Lose Negotiation: 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. (read more about the

definition of Lose-Lose Negotiation

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Lose-Win Negotiation: This term refers to a distributive negotiation whereby one party’s gain is another party’s loss. Both parties are competing to get the most value from the negotiation. Also called the ‘fixed-pie’ scenario in that there is only a limited amount to be distributed. A term also used in ‘Game Theory’ and Economics. (Also known as Win - Lose Negotiation). (read more about the

definition of Lose-Win Negotiation

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Majority Rule: 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 (read more about the

definition of Majority Rule

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Mediation: 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. (read more about the

definition of Mediation

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Merger and Acquisition Negotiation: 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. (read more about the

definition of Merger and Acquisition Negotiation

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Multi Party Negotiation: A negotiation that involves more than two negotiating parties in a negotiation. (read more about the

definition of Multi Party Negotiation

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Multiple Offers: 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. (read more about the

definition of Multiple Offers

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Negotiation: An interactive process between two or more parties seeking to find common ground on an issue or issues of mutual interest or dispute where the involved parties seek to make or find a mutually acceptable agreement that will be honoured by all the parties concerned. (read more about the

definition of Negotiation

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Negotiation Agenda: 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. (read more about the

definition of Negotiation Agenda

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Negotiation Agent: 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. (read more about the

definition of Negotiation Agent

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Negotiation Anchoring: Anchoring is an attempt to establish a reference point (anchor) around which a negotiation will revolve and will often use this reference point to make negotiation adjustments. Anchoring often occurs when the first offer is presented at the beginning of a negotiation. (read more about the

definition of Negotiation Anchoring

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Negotiation Bargaining: Bargaining is a simple form of distributive negotiation process which is both competitive and positional. Bargaining doesn't seek to create value, but instead focusses on negotiators claiming value. (read more about the

definition of Negotiation Bargaining

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Negotiation Bargaining Zone: 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. (read more about the

definition of Negotiation Bargaining Zone

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Negotiation Coalition: 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. (read more about the

definition of Negotiation Coalition

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Negotiation Concessions: 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'. (read more about the

definition of Negotiation Concessions

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Negotiation Constituent: 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. (read more about the

definition of Negotiation Constituent

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Negotiation Counterparty: 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. (read more about the

definition of Negotiation Counterparty

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Negotiation Facilitator: 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. (read more about the

definition of Negotiation Facilitator

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Negotiation Framing: 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. (read more about the

definition of Negotiation Framing

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Negotiation Game: Many negotiation training courses make use of negotiation games in order to teach their delegates useful 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 games is to win or avoid losing. Most negotiation games leave the decision of what 'winning' or 'losing' means to the players. Negotiation role play exercises should not be confused with negotiation games. (read more about the

definition of Negotiation Game

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Negotiation Haggling: A form of distributive negotiation. Haggling means to negotiate, argue, or barter about the terms of a business transaction, usually focussing on the purchase or selling price of a product or service. (read more about the

definition of Negotiation Haggling

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Negotiation Interests: Interests are considered to be the motivating factor(s) and underlying reasons behind the ‘position’ adopted by a negotiating party. They 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. (read more about the

definition of Negotiation Interests

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Negotiation Logrolling: 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) (read more about the

definition of Negotiation Logrolling

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Negotiation Meeting:  Negotiation meetings are typically where most of the deal is negotiated, with most negotiation meetings being face to face. So 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. (read more about the

definition of Negotiation Meeting

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Negotiation Position: 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. (read more about the

definition of Negotiation Position

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Negotiation Principal: The primary decision making authority in a negotiation. Third party agents will often represent the interests or objectives of a principal in a negotiation. (read more about the

definition of Negotiation Principal

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Negotiation Procurement Solution: 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. (read more about the

definition of Negotiation Procurement Solution

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Negotiation Rapport: When two or more parties achieve an agreement through the building of trust, establish a friendly relationship, or have a sense of mutual understanding. A successful business client relationship conducted through a negotiation is one example of a rapport. (read more about the

definition of Negotiation Rapport

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Negotiation Reciprocation: 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. (read more about the

definition of Negotiation Reciprocation

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Negotiation Skills: Negotiation Skills are required to negotiate superior deals in both your business and personal life. Negotiating Skills include methods of: communicating, persuading and influencing, planning, strategizing, and employing tactics, techniques, tool-sets, systems & processes, and often teamwork. (read more about the

definition of Negotiation Skills

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Negotiation Strategy: A pre-determined approach or prepared plan of action to achieve a specific goal or objective to potentially find and make an agreement or contract in a negotiation with another party or parties. (See Negotiation Tactics). (read more about the

definition of Negotiation Strategy

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Negotiation Styles: The most popular way to divide the typical negotiation styles or approaches are: Competing (or Aggressive), Collaborating (or Cooperative), Avoiding, Compromise, Accommodating (Conceding). Most negotiators have one or two preferred negotiation styles. Ideal is to be able to choose to apply the most appropriate negotiation style to each type of negotiation, and to be able to switch negotiating style depending on who you are negotiating with and other important elements of your negotiation context.  (read more about the

definition of Negotiation Styles

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Negotiation Tactics: Negotiation tactics are the detailed methods employed by negotiators to gain an advantage. Tactics are often deceptive and manipulative and are used to fulfil one party's goals and objectives - often to the detriment of others. This makes most tactics in use today 'win-lose' by nature. (read more about the

definition of Negotiation Tactics

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Negotiation Target: See ‘Aspiration’ (read more about the

definition of Negotiation Target

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Negotiation Trade-Off: 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. (read more about the

definition of Negotiation Trade-Off

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Negotiation Trading Plan: 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'. (read more about the

definition of Negotiation Trading Plan

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Negotiation Walk Away: 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?" (read more about the

definition of Negotiation Walk Away

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Negotiation ZOPA: 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. (read more about the

definition of Negotiation ZOPA

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Principled 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. First explained in the book "Getting to Yes", Principled Negotiation is used mostly in North America and is more popular amongst Academics and Mediators than in Business. Sellers have rightly criticized those Academics who put Principled Negotiation forward as a negotiation panacea. Professional sales people brand these Academics as idealists who don't understand the challenges posed in the real world by negotiating with professional business buyers. (read more about the

definition of Principled Negotiation

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Purchase Order Financing: The assignment of purchase orders by a business to a third party who accepts responsibility for billing and collecting from buyers of the companys 2019 products. It is a form of expensive financing used to purchase materials required to produce products needed to fulfill a purchase order already received from a buyer. (read more about the

definition of Purchase Order Financing

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Reservation Price: The reservation price is the least favourable point at which one 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, while 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. (read more about the

definition of Reservation Price

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Risk-Averse: 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. (read more about the

definition of Risk-Averse

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Risk-Seeking: 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’. (read more about the

definition of Risk-Seeking

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Salary Negotiation: Salary negotiation is a process where one party negotiates the amount of their pay, income, earnings, commission, salary, wages, wage remuneration, annual review, or salary raise with another party. (read more about the

definition of Salary Negotiation

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Unanimity Rule: 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. (read more about the

definition of Unanimity Rule

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Win-Lose Negotiation: This term refers to a distributive negotiation whereby one party’s gain is another party’s loss. Both parties are competing to get the most value from the negotiation. Also called the ‘fixed-pie’ scenario in that there is only a limited amount to be distributed. A term also used in ‘Game Theory’ and Economics. (Also known as Lose-Win Negotiation). (read more about the

definition of Win-Lose Negotiation

)

Win-Win Negotiation: A win-win negotiation settlement is an integrative negotiated agreement. In theory this means the negotiating parties have reached an agreement after fully taking into account each others' 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. (read more about the

definition of Win-Win Negotiation

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Winners Curse: 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. (read more about the

definition of Winners Curse

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