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It is not possible to discuss in detail all the aspects of negotiation theory in one article.

However, it is possible to touch on the essentials of that theory and to relate them to the practical needs of a municipality or private sector purchasing department.

Negotiating theory covers the following subjects:

• what are the various negotiating techniques and styles;
• what are the advantages and disadvantages of each styles;
• when should they be used;
• how should a person react to each strategy when used against him or her, to turn the situation to best advantage;
• learning to assess the effectiveness of negotiation technique, and improve upon technique; and
• assessing settlement offers.

Successful negotiation and a thorough understanding of the negotiation process require a negotiator to take into account a range of psychological, economic, ethical and legal considerations.

It cannot be overstressed that full preparation before negotiation is essential. A negotiator must have a command of the facts and must understand the latitude that is available for concession.

In preparing for negotiation, it is essential to test hidden assumptions about both the municipality’s and the supplier’s position, as revealed in what the negotiators do and say.

If a negotiator can cause his counterpart to change his assumptions, he might also cause that person to alter his decisions. A hidden assumption can lead to a misinterpretation of the facts and thus to the wrong conclusion.

It takes place quite frequently, however, in situations in which an element of conflict and resulting confrontation exist. It follows that an understanding of conflict is essential for any mediator or negotiator.

One job of a negotiator is to manage conflict in a creative manner to reduce the adversarial tension arising from a dispute. Conflict is universal and present in all societies and relationships.

Conflict is also inevitable. As long as resources are scarce and humans must compete for them. Since no two people are alike, conflict can also arise as a result of personality clashes.

Conflict in itself is neutral. However, it can have positive or negative outcomes depending how it is handled.

Negotiators should attempt to facilitate the settlement process and open up the channels of communication between the parties.

This can be accomplished by:

• establishing a process through which negotiations can proceed;
• ensuring the parties and their representatives work within that process;
• employing simple tactical devices to defuse problems that may worsen the conflict or distract attention from the underlying problem (e.g., restarting points in less inflammatory language);
• ensuring adequate procedural safeguards are followed to ensure everyone has a fair input into the resolution of the dispute;
• advising clients as to the “reality” or practicality of their positions (e.g., is it possible to obtain the best-case scenario);
• helping the parties to identify, devise and explore options and assisting them to formulate and articulate their proposals;
• helping them to identify the strengths and weaknesses of their case and the case of their adversaries;
• helping them to assess whether there is a realistic prospect for settlement; and
• remaining sufficiently detached from the dispute to allow a neutral and objective perspective to be brought to bear on the issues at hand.

Efforts at managing conflict must reflect a genuine desire to understand the other party’s position.

The risk is that adopting a purely passive approach to discussion may sometimes come across as patronizing.

If so, perceived passivity may inflame rather than calm down a dispute.

One surprisingly effective tool is to ask a person to outline his or her position, on a point-by-point basis, so that the negotiator can respond constructively to the concerns that are being raised.

It is virtually impossible for the negotiation to proceed unless there is at least some common understanding of the issues at hand.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.