Negotiation glossary
The words the analysis report uses when it scores your session, defined in two sentences each. Every term links to the scenario where you can try it.
- Anchoring
- Anchoring is the effect the first figure named in a negotiation has on the final result. Both sides adjust from that figure rather than from an objective value, so the party that opens with a credible, ambitious number tends to close nearer to it.
- Bargaining power
- Bargaining power is your ability to get the terms you want in a negotiation. It comes mostly from how good your alternatives are compared with the other side's, how much time pressure each side faces and how much each side knows; it is relative, not a fixed trait of a person or a company.
- BATNA
- Your BATNA (Best Alternative To a Negotiated Agreement) is the best option you already have if this negotiation ends without a deal. Any agreement worse than your BATNA should be refused; any agreement better than it is worth considering.
- Best and final offer
- A best and final offer, often shortened to BAFO, is a proposal presented as the last one a party will make: take it or leave it. In procurement it is a formal last round of bids; in everyday negotiations it is often a tactic to stop further concessions, and it is not always as final as it sounds.
- Concession
- A concession is a movement away from your position toward the other side's, on price or on any other term. The two questions that decide whether it helps you are what you ask in return and how it is presented; a concession given for free teaches the other side that pushing works.
- Counteroffer
- A counteroffer is a reply to an offer that proposes different terms instead of accepting or refusing it. It keeps the negotiation open, signals what you need, and replaces the other side's number with yours as the new reference point.
- Distributive negotiation
- Distributive negotiation is bargaining over a fixed quantity, typically a price, where whatever one side gains the other loses. It is sometimes called win-lose or positional bargaining; the tools that decide it are the anchor, the pace of concessions and each side's walk-away point.
- Integrative negotiation
- Integrative negotiation is an approach where the parties look for agreements that make both better off, by putting several issues on the table and trading what is cheap for one against what is valuable for the other. It contrasts with distributive negotiation, where a single fixed amount is divided.
- Logrolling
- Logrolling is trading concessions across two or more issues that the parties value differently: each side gives ground on what matters less to it and gains on what matters more. It is the basic mechanism of integrative negotiation and the reason both sides can do better than a split down the middle.
- MESO
- MESO stands for Multiple Equivalent Simultaneous Offers: instead of one proposal, you present two or three complete packages at the same time, each worth the same to you. The other side's choice tells you what it values, and the deal moves forward on their preferred terms without you conceding.
- Negotiation styles
- Negotiation styles are the typical ways people handle conflict at the table. The most used model, from Kenneth Thomas and Ralph Kilmann (1974), describes five: competing, collaborating, compromising, accommodating and avoiding, based on how much each style pursues your own goals and the other side's.
- Principled negotiation
- Principled negotiation is the method described by Roger Fisher and William Ury in Getting to Yes (1981). It rests on four principles: separate the people from the problem, focus on interests rather than positions, invent options for mutual gain, and insist on objective criteria, with your BATNA as the safety net.
- Reservation price
- Your reservation price is the least favourable terms you will accept before you prefer your best alternative (your BATNA). For a seller it is a minimum, for a buyer a maximum; it is the one number to fix before a negotiation and never to reveal during it.
- Walk-away point
- The walk-away point is the point at which you end the negotiation and turn to your best alternative because any further concession would leave you worse off. It is your reservation price seen as an action rather than a number, and it only protects you if you set it before the conversation starts.
- Win-win negotiation
- A win-win negotiation ends with an agreement that leaves both sides better off than their best alternative, usually because they traded on issues they value differently instead of only splitting one number. It does not mean equal outcomes or avoiding conflict; it means looking for value to create before dividing it.
- ZOPA
- The ZOPA (Zone Of Possible Agreement) is the overlap between what one side is willing to accept at most and what the other side is willing to accept at least. Every deal that will ever be signed lies inside it; when the two limits do not overlap, there is nothing to negotiate about.