In business, negotiation is a process whereby two or more parties settle differences. In contrast to arbitration or mediation, where a third party imposes a resolution upon the disputants, in negotiation each party tries to come to an agreement on their own terms.
The key to successful negotiation is effective communication. When parties are able to express their needs and wants clearly, and listen to the needs and wants of others, they are more likely to come to an agreement that satisfies everyone involved.
There are four main types of negotiation: distributive, integrative, collaborative, and Win-Win. In distributive negotiation, each side is trying to get the best possible outcome for themselves. This type of negotiation is often used in situations where there is a limited amount of resources available, and each side is trying to get the largest share possible. Integrative negotiation is used when both sides are trying to find a solution that will be mutually beneficial. Collaborative negotiation is similar to integrative negotiation, but with a greater focus on developing a relationship between the parties involved. Win-Win negotiation is used when both sides want to achieve the best possible outcome for both parties involved. This type of negotiation requires each side to be willing to give up something in order to reach an agreement.