Introduction to Negotiation

Introduction:

This note will discuss the meaning of negotiation, its salient characteristics, and highlight the styles of negotiation.

Meaning of Negotiation:

In the recent case of CSPC Ghamed Pharmaceuticals Ltd. v. Octoglow Ghana Ltd. [2023] GHACA 45 (16 February 2023) , the Court of Appeal defined negotiation as:

An ADR process whereby the parties and their legal advisors seek to resolve the dispute by reaching an agreement either through written correspondence or a meeting between all concerned to manage and ultimately resolve the dispute between them. Negotiations involve the parties to come together to reach some end goal through compromise or resolution that is agreeable to all those involved.

In the course manual for Alternative Dispute Resolution, negotiation is defined as:

the back-and-forth communication between parties to a conflict with the ultimate aim of resolving an existing conflict.

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[It is] a process of engaging with another person or entity to achieve an advantage that is not possible by unilateral action. Negotiation involves a back-and-forth communication geared towards this end.

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It is defined as a basic means of getting what you want from others. It is back-and-forth communication designed to reach agreement when you and the other side have interests that are shared and others that are opposed.

Fisher and Ury [1], in defining negotiation, similarly advanced that it is:

a basic means of getting what you want from others. It is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.

Finally, the Black’s Law Dictionary, 9 ^th ed., defines negotiation as:

A consensual bargaining process in which the parties attempt to reach agreement on a disputed or potentially disputed matter. Negotiation usually involves complete autonomy for the parties involved, without the intervention of third parties.

Salient Characteristics of Negotiation:

From all the above characterisations of negotiation, the following stand out as salient characteristics of negotiation:

1. It is a means to an end. The end may be the resolution of a dispute (termed dispute-resolution negotiation) or the promotion of one’s business interests (termed deal making or transactional negotiation ). During negotiations, parties may either engage in distributive or integrative bargaining. When parties engage in distributive bargaining, they each seek to achieve as much gain as possible, usually at the expense of the other party. Consequently, the end for each party is personal gain, which requires little compromise. When parties engage in integrative bargaining, they are interested in working together to find a mutually beneficial solution. Consequently, the end they seek is a mutually beneficial solution.
2. There is no involvement of a neutral third party. While the parties may meet each other with their lawyers, the lawyers are only there to foster the interest of their clients and not to act as neutral third parties.
3. At its core, it involves back-and-forth communication between the parties.
4. The parties voluntarily submit themselves to negotiation. In the case of Zogli v. Ganyo [1977] 1 GLR 297, the court emphasised that “it is impossible to conceive of a case being dealt with through negotiations for a settlement where the parties or either of them has not voluntarily agreed to submit to that form of dispute resolution.”
5. Finally, the parties are generally not bound to abide by the outcome of negotiation. Also, in the case of Zogli v. Ganyo (supra) , the court held that “it is well known that the result of a negotiation for settlement is not binding on the parties until it is accepted by both.”

Styles of Negotiation:

In the book Getting to Yes, 3rd ed., Fisher and Ury [1] identified three styles of negotiation. These are:

1. Soft negotiation.
2. Hard negotiation.
3. Principled negotiation.

According to the learned authors, people often see only two ways to negotiate: soft and hard negotiation, both of which are styles of positional bargaining.

In soft negotiation, the negotiator:

Wants to avoid personal conflict and so makes concessions readily in order to reach agreement. He wants an amicable resolution; yet he often ends up exploited and feeling bitter.

In hard negotiation, the negotiator:

Sees any situation as a contest of wills in which the side that takes the more extreme positions and holds out longer fares better. He wants to win; yet he often ends up producing an equally hard response which exhausts him and his resources and harms his relationship with the other side.

While both hard and soft negotiation involve parties starting with a particular position—hence being referred to as positional bargaining—their approaches and goals differ significantly. Hard negotiation focuses on achieving one's objectives, often through firm adherence to positions and the use of assertive or competitive tactics. The emphasis is on winning, sometimes at the expense of relationships. In contrast, soft negotiation prioritizes compromise and relationship-building, with negotiators showing a willingness to adjust their positions to foster harmony and reach mutually acceptable solutions.

However, there is a third and optimum style of negotiation, which is principled negotiation, also called interest-based negotiation, problem-solving negotiation, collaborative negotiation, and value-creating negotiation. This style is neither hard nor soft, but both hard and soft. It focuses on the interests of the parties rather than their positions.

Fisher and Ury [1], in characterizing principled negotiation, said:

The method of principled negotiation developed at the Harvard Negotiation Project is to decide issues on their merits rather than through a haggling process focused on what each side says it will and won’t do. It suggests that you look for mutual gains whenever possible, and that where your interests conflict, you should insist that the result be based on some fair standards independent of the will of either side. The method of principled negotiation is hard on the merits, soft on the people. It employs no tricks and no posturing. Principled negotiation shows you how to obtain what you are entitled to and still be decent. It enables you to be fair while protecting you against those who would take advantage of your fairness.

The features, advantages, and disadvantages of principled negotiation would be considered extensively in subsequent notes.

References:

[1] Fisher, R., Ury, W. L., & Patton, B. (2011). Getting to Yes 3rd ed.