Stages and Phases of Negotiation

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14 November 2015

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Stages and Phases of Negotiation


       Negotiation is an important aspect of every business and different situations in life since it helps individuals, countries and even organizations to come into an agreement that is mutually acceptable to all the people involved (Crump, 2011). Negotiation involves leaving ones comfort zone and stand so as to reach an agreement of which a compromise of ideas, position among others has to be done so that each one involved benefits in one way or another. Negotiation can simply be defined as the process or method through which people who have differences settle them by reaching an agreement or a compromise. The main aim of negotiations is to avoid any form of arguments and settle matters in a peaceful way. The aim of the individuals involved in negotiations is to achieve the best possible outcome for all the parties which are involved in the negotiation (Eden, & Kilgour, 2010).

       A successful outcome in a negotiation process can only be achieved through the application of the principles of seeking a common or mutual benefit, fairness and to ensure that the existing relationships are improved and maintained throughout the process. There are different specific forms of negotiations which are applied depending on the situation such as international affairs, government, domestic relationships, legal system, and industrial disputes among many others (Liu, & Sharma, 2011). Negotiation skills are very necessary and important in carrying out the negotiation process.

Stages and phases of Negotiation

       Negotiation as defined is a process which involves people and it takes place in stages and phases before the main agreement is reached by the parties which are involved. There are different stages and phases which have been identified through which the negotiation process must undergo before the final agreement is reached (Eden, & Kilgour, 2010). These stages and phases include: Preparation, relationship building, information gathering, information using, bidding, closing the deal and finally implementing the agreement. This gives a total of seven stages and phases which are involved in a negotiation process of any kind.


       Negotiations are of great importance because in the end of the whole process, there is an outcome which is expected to be beneficial to the parties which are involved. Just like any other operation and processes which exist, there is great need for proper preparations to be made (Liu, & Sharma, 2011). Preparations are important and form the first stage towards a successful negotiation process. This phase and stage will involve making decisions of what is of great importance in the negotiation, defining the various goals and objectives which are to be achieved, and thinking ahead on how the whole process will be conducted in addition to how the parties involved will work together to reach a particular common agreement as Hiam, & Lewicki (2013) observed.

       At this phase and stage of negotiation, a determination is made whether there is any need for the negotiation and defining why the negotiation has to take place in addition to what is to be achieved in the long run (Crump, 2011). The parties that are to be involved in the negotiation must be able to set up their negotiation agendas, identify the correct people who will take part in the negotiation, obtain the necessary resources which may be required to complete the negotiation process, make an identification of the venue where the negotiation is to take place (Aknine, 2012). It is important to get prepared so that one is not ambushed during the negotiation process and fail to achieve anything of importance once the process is completed.

Relationship building

       After the preparation stage and setting up the relevant resources, people and identifying the main agendas of the whole negotiation process, the next stage that is of great importance is the establishment of a relationship with the opposite party or parties which are to be involved j the negotiation process (Hiam, & Lewicki, 2013). Building a good relationship from the start before the whole process of negotiation is started is of great necessity because it will help in having the process completed as required and within a considerable good time. Good relationship is also important because it will help in minimizing the amount of resources which are to be used during the process. This stage requires that you get to know, understand and learn about the opposite party or parties who are to be involved in the process (Eden, & Kilgour, 2010).

       This will help in the identification of the similarities that the parties share which may act as strength to the successful completion of the process, and differences which may affect the whole process. It is also important to build relationships with the opposite party to help show the kind of commitment that you have in ensuring that there is successful achievement of the mutual goals and objectives through the outcome of the negotiation. According to Liu and Sharma (2011), the relationship building stage is of extreme importance since it will help in the moving of the other phases of negotiation forward (Liu, & Sharma, 2011). Without good relationship with the opposite party there are fewer chances that the negotiation will move to the next phase. This stage of relationship building will help in knowing whether the process will proceed to the next level and what kind of atmosphere will the negotiations take place.

Information gathering

       After ensuring that there is good relationship with the parties which are involved in the negotiation process, the next step or phase towards the successful completion of the negotiation process will the gathering of the relevant information and data as observed by Crump (2011). Information and data is important in knowing what to ask for during the negotiation and how to approach the issues which the other parties involved will bring to the negotiation table (Liu, & Sharma, 2011). This process is important because it helps in getting to learn what one is needed to know about the various issues which will be involved in the negotiation, about the opposite parties and the various needs that the other parties may have.

       Information gathering also helps in the determination of the feasibility of the having a settlement and the possible outcomes that may result from the process (Eden, & Kilgour, 2010). This stage also helps in knowing and learning about what will take place in case there is lack of agreement with the opposite side after the process of negotiation is completed. Information gathering will require extensive research and analysis of data and information that is available to ascertain the relevant and required information of the negotiation. The information to be gathered can be obtained from various sources such as the records which are available, and interviews among others (Aknine, 2012).

Information using

       The next stage and phase that is to be undertaken in the process of negotiation is the use of the information which has been gathered (Hiam, & Lewicki, 2013). After gathering the relevant information of negotiation, it is important to make use of that information and data for the completion of the process. It is at this particular stage that the negotiators or the people who have been selected to conduct the negotiation form both sides of the negotiation come together and assemble the case that they would like to make. They indicate their preferred outcome of the process, the desired type of settlement which they expect and one that will ensure that the needs of the negotiators are maximized to the fullest (Liu, & Sharma, 2011).

       The negotiators meet and share the preferred outcomes that they would like to achieve at the end of the negotiation. It is at this stage that each party becomes aware of the needs of the other party and what kind of outcome that each is hoping to see at the end of the process. The information that had been gathered plays a major role in enabling the negotiators to relay and make known their preferred outcome (Eden, & Kilgour, 2010). The negotiators try to sell their outcome to the other involved parties and view their reactions while making a comparison between the outcome suggested by the other party and the one that is presented. Comparing the preferred outcomes as relayed by the negotiators requires the use of the information that was gathered to see whether the outcome will bring mutual benefits to everyone stakeholder concerned or not (Aknine, 2012).

       This stage can also be referred to as the conceptualization stage because it is like the parties involved come together to analyze the blue prints or designs which they have made and share with one another. There is great need for the best communication skills during this stage so that the views and expectations of each party are clearly relayed to the opposite party. This also provides the negotiators with an opportunity to be able to frame their agendas in such a way that they are in line with the information which they will obtain during this stage (Hiam, & Lewicki, 2013).

       This stage also provides an opportunity for listening carefully to what the opposite party has, making the relevant and any necessary inquiries which will be beneficial in the successful completion of the negotiation process, making any clarifications so that there is no any form of misunderstanding on the outcomes which each party expects (Crump, 2011). Furthermore, the use of information stage is important in the negotiation process because it allows for the developing of the shared interest which the parties involved have relayed to each other and hence move towards a successful negotiation process that is beneficial to all the parties which are involved.


       The next stage and phase of the negotiation process involves bidding which is simply the process whereby the parties place their “opening or starting offers” on the negotiation table. This is the step that is initial and ideal position that each party presents towards the reaching an actual outcome that will be of benefit to all the involved parties (Eden, & Kilgour, 2010). At this point, after the negotiators have known the preferred outcomes for each side, they place their offers towards reaching an agreement and in most cases, the offers differ from each other hence the need to move to an actual position from the ideal position presented (Aknine, 2012).

       This stage requires the identification of the agreeable trades on each side which can enable the parties to reach a compromise and finally an agreement. Each party involved considers the various things in their agenda which they can be able to give away while looking at what they can obtain from each other so that they can reach a middle ground during the negotiation (Hiam, & Lewicki, 2013). The use of trade in variables which include the things which the parties deal in and value while the other party do not value, and also using the elegant negotiable which refers to the things that each party does not need and can easily give away but are valued by the opposite party (Aknine, 2012).

       The other thing that is done at this point is helping the opposite party to think about the deals that they are offering and what you bare offering so that they can be able to identify easily what is the most ideal position for all the parties. Apart from identifying the agreeable trades, the negotiators can also engage in making of conditional proposals to each other as a way of compromise to reach and amicable agreement. The use of words such as “If you…I will….” makes part of the conditional proposal that the parties can apply during this stage of bidding (Hiam, & Lewicki, 2013). This helps in creating a positive idea between the parties and helps in coming up with an agreement that will benefit all the parties.

       During the bidding stage, it is important that the negotiators keep an open end to the negotiation (Crump, 2011). This does not mean that every suggestion the opposite party makes is agreeable but they should be open to alternatives as may be suggested and consider them to come to a considerable agreement. Negotiations require that the parties should be open minded because they are all needed to make some form of compromise with their bids so that a mutual ground is reached that will benefit all of them (Eden, & Kilgour, 2010). Keeping an open end allows for the discussion and analysis of the suggestions made with regard to the shortcomings and the advantages that will be derived if the options which have been suggested are agreed upon. A lot of brainstorming is required during the bidding stage and the information which had been gathered earlier and the agendas of each party play an important role in the decision on the bid that will be settled upon by the parties, hence leading to the best alternative to a negotiated agreement (BATNA) (Liu, & Sharma, 2011).

Closing the deal

       After the bidding has been done and a lot of consultations and discussions done, the parties then move to the next step of agreeing on the best bid possible that will bring maximum benefits to all the stakeholders involved (Liu, & Sharma, 2011). The best alternative to a negotiated agreement is then taken and settled upon by the parties which then calls for the commitment of those involved. The negotiators and the opposite party must assure themselves that the alternative which they have settled upon will bring them mutual benefits and makes them happy in the long run. Depending on the kind of negotiation that is being carried out, there are different ways of closing the deal of the negotiation.

       This is also influenced by various factors such as culture, beliefs, and the type of negotiation conducted (Eden, & Kilgour, 2010). There can be a hand shake to indicate a closing of a deal in a negotiation, signing of contracts, signing of a memorandum of understanding between the parties, and even the placing of funds in escrow acts as a sign of commitment and good faith towards the success of the negotiation. These ways of showing that there is a deal between the parties also helps in portraying the good faith of the negotiator and the parties that they are committed to follow through with the agreement to the final detail (Crump, 2011).

       Another way of showing that there is a deal which has been reached between the negotiating parties can be through making public announcements either in form of press release, or even a presentation with all the parties present at meeting which are important. This helps in providing credence to the agreement which has been reached (Hiam, & Lewicki, 2013). This stage may involve legal experts from either side and the obligations of each party are clearly outlined as they have agreed. It is important at this point and phase of the negotiation that all the details are clearly outlined and described in a meticulous way to avoid any disputes in future that may arise as a result of the negotiation deal that has been made.

Implementing the agreement

       A negotiation process does not end with the closing of a deal between the negotiator and the involved parties, but it also needs implementation. This forms the next stage in the negotiation process (Liu, & Sharma, 2011). After a deal has been settled upon, the parties which are involved need to play their part and ensure there is implementation of the deal. This requires the determination of what is to be done and by whom so that they keep their end of the bargain (Eden, & Kilgour, 2010). At this stage is where flaws and errors, if any, are discovered and dealt with accordingly. This may result in the reopening of the deal for fresh negotiations, or the settlement of the issues which arise through a court of law, mediators or even arbitrators, depending on the most efficient and cost effective the parties may see necessary (Hiam, & Lewicki, 2013). During this stage of implementation, there is also the need for making a follow up on the side of each party to find out how the deal is going and whether there is any issue that each party needs to address for the success of the agreement which has been reached.


       Negotiations take place every day in the live of human beings be it politically oriented, economically or even socially oriented. Human beings have to make compromise when negotiating and be open-minded during the whole process so that a mutual agreement is reached. The stages of negotiation if followed closely and with great care, there are high chances that the end results of the negotiation process will always be successful. However, it should be noted that depending on the situation which requires negotiation, the stages and phases that will be involved may vary. This will also depend on the parties who are involved in the negotiation process. The main important point to be noted with regard to negotiation is that, for there to a successful negotiation process, the principles of fairness, ensuring that good relationships are built and maintained, and seeking to achieve a common and mutual benefit for all has to be observed throughout the whole process.


Aknine, S. (2012). A Multi-Agent Model for Overlapping Negotiations. Group Decision & Negotiation, 21(6), 747-790.

Crump, L. (2011). Negotiation Process and Negotiation Context. International Negotiation, 16(2), 197-227.

Eden, C., & Kilgour, D. M. (2010). Handbook of Group Decision and Negotiation. Berlin: Springer Netherland.

Hiam, A., & Lewicki, R. J. (2013). Mastering business negotiation: A working guide to making deals and resolving conflict. San Francisco, Calif: Jossey-Bass.

Liu, A., & Sharma, D. (2011). How to Attain Desired Outcomes Through Channel Conflict Negotiation. Journal Of Marketing Channels, 18(2), 103-121.

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"Stages and Phases of Negotiation" StudyScroll, 14-Nov-2015. [Online]. Available: [Accessed: 28-Jan-2023]

StudyScroll. (2015). Stages and Phases of Negotiation. [Online]. Available at: [Accessed: 28-Jan-2023]

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