Negotiation is a critical form of social interaction. Whether friends are talking about when they should meet up or heads of state are deciding how best to divide up valuable resources, all are engaged in the process of determining how issues will be managed into the future. The process, in which parties discuss issues that are important to them with a view to reaching some form of agreement, is known as negotiation.
The main feature that differentiates negotiation from other forms of social interaction is that prior to a negotiation some form of disagreement exists between the individuals involved. Essentially, those who engage in negotiation are in conflict or in dispute about issues that have relevance for both parties. The negotiation procedure represents a means for parties to resolve their differences (Carnevale & Pruitt, 1992). People in conflict become motivated to negotiate, only if they believe that they will be able to improve their circumstances through such a process (Thompson, 1998).
Negotiation is only one of several processes that may be adopted when attempting to resolve conflict. Other forms of dispute resolution include mediation wherein disputing parties employ a third party or a mediator to facilitate discussion of the issues involved (Astor & Chinkin, 2002). Third party models -- such as conciliation, arbitration and adjudication -- can be differentiated by the amount of power that the third party holds to enforce settlement outcomes upon those in dispute (Merrills, 1991). Negotiation is unique in that there is no third party with a facilitative or adjudicatory function.
There are instances in which negotiation may not be the most appropriate way to resolve presenting issues. These instances include cases where (a) disputants have attempted negotiation and have failed to reach a resolution, (b) where there is no common basis for discussion between disputants, (c) where the parties themselves do not have the power to settle (Merills, 1991), and (d) where either of the parties experience significant communication difficulties. In each of these cases, the use of a third party to empower, to direct the process, or both, may prove to be more beneficial than will negotiation (Goldberg, Sander & Rogers, 1992).