Negotiation is a broad term embracing the practice of discussions between one or more persons or groups to reach an agreement on an issue. It can involve monetary issues, such as negotiating a price of a product, or it can be a much larger issue in contract negotiations between employers and employees.
Whichever situation it refers to, negotiation involves three main elements – process, behavior and substance. The process is how the parties communicate or negotiate with each other, such as through letters or face-to-face meetings. The tactics of each of the parties are part of this process, as are the stages of the proceedings. The behavior is the relationship the negotiating parties have with each other, which may be conciliatory, amicable or outright antagonistic. This behavior does have an effect on the outcome of the substance, which is what the negotiations are about.
Unless it is very simple negotiation, such as between a buyer and seller of a single item at a flea market, for example, all negotiations employ the use of trained negotiators who acts in the interest of one party. Thus there would be two or more negotiators involved, with each one acting as the advocate for their respective employer.
In a negotiation, each negotiator has to know the minimum that each party will accept before arriving at an agreement. The process usually starts out with each party asking for more than they know that the other party will accept and then starts tackling smaller issues to get them out of the way. Monetary issues are usually the most difficult to resolve and sometimes the negotiations reach a stalemate in which neither side will move. This can then go to arbitration in which an independent third party looks at both sides of the issue and reaches a conclusion. In regular arbitration, neither of the parties does have to accept the ruling, but in binding arbitration, the ruling does have to be accepted by all parties. This is the reason that few employers will agree to binding arbitration.
Emotions play a huge part in the success and failure of negotiations. Quite often when an agreement is reached, there are very bad feelings between the parties involved. In some cases, employees may go on strike and refuse to work until the employer accepts their demands or makes other conciliations.
Lawyers are often involved in complex negotiations between employer and employees and with negotiations for buyouts of companies. This is to ensure that all items in the final contract are legal and will not negatively impact either party in legal matters for the duration of the contract.