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Defining negotiation

Negotiation is much more common than most people think. This article explores the "what", "why", "when" and "who" of negotiation.

A definition of negotiation

We tend to think of fancy boardrooms and dramatic haggling whenever the word “negotiation” comes up, but it’s actually a form of communication most of us engage in every day. Let’s start with a simple explanation.

The uppermost part of the tower: one person give another a shape, one person climbs a ladder to the top, and two people seem to dance, surrounded by small floating shapes.

Negotiation is a communication process between two or more people with different interests who want to exchange resources (money, services and labor, materials, time, etc.). The aim of negotiation is to reach a mutually beneficial compromise (i.e. an agreement), while optimizing each individual’s interests. In other words, what about this exchange is going to make it worth your while? What are you willing to compromise to get what you want?

One lower level of the tower: a person climbs a ladder, two people fight over a large ball, and two people work together to build a small bridge.

Negotiation is an activity which includes two essential elements: conflict and communication.

  • Conflict
    Negotiation takes place when the parties’ interests are at least partially conflicting. There is an advantage in the mutual exchange of resources, but a conflict over how to share this advantage.
  • Communication
    Communication is the tool used to debate the conflict. The objective is to resolve points of difference, to gain advantage for an individual or multiple parties, or to reach outcomes that meet various interests.


Sometimes people need to engage with each other because they each have something the other wants. While it’s great to dream that someone will simply give us what we want, the truth is that humans have developed a specific form of communication for just this kind of situation.

People negotiate in order to:

  • Share and exchange limited resources
  • Avoid or resolve disputes
  • Establish expectations and boundaries in relationships with others


Each of us is involved in some form of negotiation every day. Some are sanctioned by contracts, receipts, or written down, while others are silent or verbal agreements.

In our private lives, our relationship with partners, family and friends are often based on negotiated compromises or “transactions.”

In our work relationships, the complexity of different tasks is based on an explicit or implicit agreement about their requirements and expected results.

In higher stake situations, negotiation can take place between organizations, companies, public institutions, governments, or as legal proceedings.


Negotiation can take place between one or more individuals and groups, at different levels.

Negotiation can take place between:

  1. Two single individuals
  2. Two parties (companies, governments, public institutions, organizations, etc.)
  3. Three or more parties (teams, coalitions, agencies, inter-group relationships, etc.)

When individuals or group representatives are unable to resolve conflicts on their own, external actors — such as mediators, arbitrators or advocates — are called in to manage the process. Mediators are neutral and impartial individuals who act as third parties in facilitating the dialogue between two parties with the aim of reaching an agreement, whereas arbitrators are called upon to render an actual decision (i.e. ultimately to “judge”). Advocates are called when the negotiation takes place within a legal proceeding.

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