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A Four Stage Negotiation Process


Disciplines > Negotiation > Negotiation activities > A Four Stage Negotiation Process

Exploration | Bidding | Bargaining | Settling | See also


Here is a simple way of structuring and thinking about the negotiation process, broken down into four major stages.


Exploration is the early stage where you share information with others and learn more about them and what they want. This may be carefully planned, with checklists of needs and information to seek.

Exploration may also be a relatively unstructured affair where the two parties get to know one another and discover that each has something that the other wants. This type of 'emergent negotiation' often appears in social situations where the initial contact has some purpose other than substantive exchange.

Exploration not only discovers information, it sets the climate for the subsequent negotiation, most notably whether this is competitive or collaborative. For collaborative negotiation, the greater sharing and relationship development can make exploration a relatively lengthy process.


When the parties have enough information, then the negotiation starts with someone offering an exchange. This typically takes two forms, exchange proposal ('I'll give you this for that') or exchange request ('What do you want for that?' or 'What will you give me for this?').

The essence of a bid is that it is an offer that may be accepted, rejected or trigger a counter-offer. If the initial bid is accepted then the deal is swiftly concluded. Otherwise there may be significant bargaining activity.

The secret of good bidding is to be firm and clear. To retain credibility the bid should be realistic, but this does not mean it should be low if you are selling, or high if you are buying. In fact a good bid lies at the extreme end of what may be acceptable and leads the other party to consider that they may yet be able to reach agreement.


The heart of many negotiations is in bargaining, the adjustment of what is being traded until both parties are satisfied with the arrangement. This is the activity that many view as being what negotiation is all about, although a much better result can be gained with attention to other stages as well.

An important part of bargaining is trading, where parties effectively say 'If you give me that, then I will give you this.' Trading may be about individual items or the whole package. It may also include non-material aspects such as support given and when things will be delivered.

This stage can become heated and use many competitive negotiation tactics, especially if the parties have a win-lose attitude. In more collaborative negotiations, parties show more concern for one another while vigorously but carefully seeking an equitable deal.


When the deal is broadly agreed, it is formalized in a way that makes it difficult for either party to back out or change their commitment.

The first step of settling is to agree what you have agreed. It is surprising how often people do not agree on this as they reflect on the detail, and returning to bargaining may be necessary.

The simplest way of sealing the deal is with a handshake, which has a powerful effect in preventing people from backing out. This may be significantly strengthened with a formal contract, especially in commercial settings.

See also

The Eight-Stage Negotiation Process, The Three-Stage Negotiation Process, Collaborative Negotiation, Competitive Negotiation


Scott, B. (1988). Negotiating Constructive and Competitive Negotiations, Paradigm Publishing

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