Negotiation

AAA

DEFINITION of 'Negotiation'

A strategic discussion that resolves an issue in a way that both parties find acceptable. In a negotiation, each party tries to persuade the other to agree with his or her point of view.


In advance of the negotiation, participants learn as much as possible about the other party's position and what the strengths and weaknesses of that position are, and are prepared to defend their positions and counter the arguments the other party will likely make to defend their position.

INVESTOPEDIA EXPLAINS 'Negotiation'

Many offers that people assume to be firm and final are actually flexible. For example, negotiation can be used to reduce debts, to lower the sale price of a house, to get a better deal on a car or to improve the conditions of a contract. Negotiation is an important skill when accepting a new job. Often, the employer's first compensation offer is not a company's best offer, and the employee can negotiate for higher pay, more vacation time, better retirement benefits and so on. Negotiating a job offer is particularly important because all future increases in compensation will be based on the initial offer.

RELATED TERMS
  1. Barter

    The act of trading goods and services between two or more parties ...
  2. Brinkmanship

    A negotiating technique in which one party aggressively pursues ...
  3. Best Alternative To A Negotiated ...

    The course of action that will be taken by a party engaged in ...
  4. Counterbid

    A purchase offer made in counter to the offer of another potential ...
  5. Trade

    A basic economic concept that involves multiple parties participating ...
  6. Counterparty

    The other party that participates in a financial transaction. ...
Related Articles
  1. Budgeting

    Negotiating A Debt Settlement

    If you're being harassed by a debt-collection agency, you can take charge. Find out how.
  2. Entrepreneurship

    Prepare To Sell Your Business

    Follow these tips to ensure you get the most out of your hard work.
  3. Professionals

    6 Employment Perks And How To Get Them

    Find out how to get more than money from your employer.
  4. Personal Finance

    Master The Art Of Negotiation

    Learn the strategies that will help you to come out on top in any negotiation.
  5. Entrepreneurship

    Why Successful Business Owners Sell Out

    Learn the motives that drive companies into the arms of an acquirer.
  6. Fundamental Analysis

    What is the first day of the fourth quarter?

    Learn about different financial years used by various companies. Explore when the fourth quarter begins on October 1st and when it does not.
  7. Entrepreneurship

    The Best (And Worst) Countries To Be An Entrepeneur

    Where you start a business can influence its success. This new World Bank study will help you find the most – and least – favorable economic climates.
  8. Mergers are not the same as acquisitions.
    Investing

    What's a Merger?

    Mergers are not the same as acquisitions. In an acquisition, one company buys and subsumes another company, leaving only the buyer in place. In most mergers, both companies merge to form an entirely ...
  9. Investing News

    Looking to Open a Franchise? These Topped The List In 2014

    These franchise businesses stood out in 2014.
  10. Not every new company or product makes it, but many successful startups share the following characteristics.
    Entrepreneurship

    6 Characteristics Of Successful Apps

    Not every new company or product makes it, but many successful startups share the following characteristics.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center