Negotiation is a critical step — maybe the most critical step — to drive a project, program, or business relationship. Getting it right is imperative. Botching a negotiation puts your company or team at risk of losing a deal, wasting time and money, and severing significant relationships.
Understanding the nuances of successful negotiations doesn’t come naturally to most people. That’s why we need practice. Negotiation simulations give team members the skills and practice they need to successfully negotiate with others in the business world.
In this guide, we’ll discuss what negotiation simulations are and how they can be an effective way to hone your team’s negotiation skills.
Table of Contents
- What Is Negotiation Simulation?
- How Effective Are Negotiation Simulations?
- 2 Basic Types of Negotiation Approaches That Are Practiced in Negotiation Simulations
- 6 Types of Negotiation Simulation Exercises
- How Can AI Improve Negotiation Simulations?
- The Maker Group: Use Our Negotiation Simulation Modules To Enhance Your Negotiation Skills
What Is Negotiation Simulation?
A negotiation simulation is a type of negotiation exercise that gives participants a chance to practice their negotiation skills.
In a negotiation simulation exercise, participants are provided with an issue that needs to be negotiated. In addition to the scenario, they may also be presented with new dispute resolution tools, tactics, strategies, and techniques to help them develop the art of negotiation. Using these tools, participants work to address the issue and construct a negotiation solution through role-play or other processes.
Many of these exercises are set up as negotiation simulation games, allowing a team to build morale as they compete against one another.
Negotiation simulations can be used to help companies, businesses, and teams negotiate deals in the following industries:
- Labor relations
- Foreign relations
- And more
How Effective Are Negotiation Simulations?
Negotiation simulation exercises are extremely effective.
According to a study published by the Institute for Education Sciences, negotiation simulation games improve student learning, with poor performers benefiting the most. The study also showed that simulations are more effective in enhancing learning than traditional and online classes. These results show that learner engagement and setting are key factors in learning negotiation strategies.
Participants develop and master negotiation skills through negotiation simulation by:
- Exploring various negotiation strategies.
- Looking at issues from both sides.
- Experimenting with different resolution methods.
- Examining the different results.
- Improving active listening skills.
- Refining BATNA (Best Alternative To a Negotiated Agreement) skills.
- Learning how to manage multi-party negotiations.
- Practicing how to address new information as it becomes available.
- Practicing different negotiation approaches.
The Maker Group negotiation workshops and simulations are aimed at meeting these goals and more.
Our experiential approach, coupled with our proprietary technology, means that your team members will not only enjoy the training process but will also walk away with negotiation skills that they can begin putting into play right away.
2 Basic Types of Negotiation Approaches That Are Practiced in Negotiation Simulations
Negotiation types vary depending on many factors. Arming yourself with only one type of approach may leave you fumbling in negotiations and may result in less than favorable results on your own end.
Being skilled in a variety of negotiation techniques means you’ll be prepared to use the appropriate strategy in different situations.
All of The Maker Group simulation modules are based on different negotiation approaches and will equip participants with enhanced negotiation skills.
The Maker Group negotiation simulation exercises are often used for three common purposes:
- As an embedding tool after negotiation training.
- As a precursor to training, especially suited for beginner negotiators.
- As a way to provide training for as many people in a company as possible in a cost-effective way.
The integrative negotiation approach is often referred to as the win-win approach. That’s because both parties work to find a solution that will benefit them both, meeting the needs and concerns of each party.
Though the negotiation results will likely not be split 50-50, each party can still walk away with significant advantages with this cooperative approach.
Integrative negotiation scenarios are ones that may involve a high level of trust. Because integrative negotiation situations often involve a team of negotiators and more than one issue to be negotiated, they usually also involve a high level of complexity.
Integrative negotiation may involve one or more of the following:
- Brainstorming various solutions
- Openness about each party’s needs
- Listing common goals
- Making tradeoffs
- Building bridges and forming of long-term relationships
Unlike the integrative negotiation approach, the distributive approach is characterized by low trust and low complexity. It can also be referred to as zero-sum negotiation or win-lose negotiation because a win by one party means a loss to the other party.
You may also hear distributive negotiation referred to as “the fixed pie,” meaning that the only part to be distributed is limited, so there is only so much to go around. It’s kind of like negotiating over who’s going to get the last piece of pizza.
For this reason, this type of negotiation is around only one issue where each party is competing to gain as much value as possible.
Distributive negotiation may involve:
- Haggling, the exchanging of offers back and forth.
- A realization of clear priorities and realistic expectations.
- Tenacity and persistence.
- The lack of a pre-existing relationship or the likelihood of a long-term relationship.
- Being tough and hard with the other party.
- Not showing your emotions.
- Giving very little information to the other party.
- Gaining as much information as possible from the other party.
- Revealing to the other party that you have options available to you.
- One party vying to make the first offer to set the negotiation anchor or reference point.
6 Types of Negotiation Simulation Exercises
Negotiation simulations are meant to take the two types of negotiation and put them into practice.
Using a variety of negotiation simulation examples and exercises not only keeps the experience engaging and interesting but also allows participants to experiment with different techniques to use in real-world negotiations.
#1: Short Introductory
Well suited as an introduction to the basics of negotiation (like BATNA or ZOPA), short introductory exercises are simple and usually include only one or two issues. These types of exercises help show the need for negotiation skills to succeed in gaining positive outcomes.
These exercises work best when the participants receive a description of the negotiation scenario that allows for a wide variety of possible results.
#2: Scorable Distributive
Because scorable distributive exercises require more background information and involve direct opposition, these exercises are more comprehensive than short introductory simulations.
To discuss value-claiming thoroughly, scorable distributive simulations may include:
- Negotiation anchoring
- Making concessions
- Areas of reservation
- And more
These exercises may be more successful in small groups so everyone can contribute.
#3: Non-Scorable Integrative
If you want to practice value creation and topics like trust, communication, and collaborative problem-solving, non-scorable integrative negotiation exercises may be the way to go.
These types of exercises work well to introduce, strengthen, and practice integrative negotiation. Because these simulations are more qualitative and realistic, there is an opportunity for beneficial collaboration between parties.
Some options for non-scorable integrative exercises may include scenarios involving:
- Trust-building (or rebuilding).
- Collaborative search for a resolution.
- The need to remove emotions from the negotiation process.
- The ability to see both sides of the issue.
#4: Scorable Multi-Issue
Multi-issue negotiations can be complex, and this type of exercise is helpful to teach and discuss:
- Value engineering
- Post-settlement resolutions
- Comparative priorities
- Exchanging of information
- Balance of value creation and claiming
- Building relationships
- Cooperation; and
- Revealing priorities
#5: Scorable Multiparty
Some negotiations may be necessary between multiple parties, and those parties may vary in their degree of influence and power. Scorable multiparty simulation exercises can be helpful in learning how to manage these kinds of negotiations.
These kinds of simulations can also be useful when issues of character and fairness standards come into play. Rarely are these exercises integrative.
#6: Non-Scorable Multiparty, Multi-Issue
Advanced negotiation sessions may include non-scorable multiparty, multi-issue simulations. These can be very complex and require more comprehensive and practiced negotiation skills. Because of the complexity, these types of exercises can also be challenging and time-consuming.
This type of negotiation simulation exercise is helpful to learn how to discern and acknowledge many different positions in a negotiation. Though a win-win outcome may be realized for all parties in some instances, those instances are probably rare in this type of negotiation simulation.
How Can AI Improve Negotiation Simulations?
Writing negotiation simulations can be a complex and challenging process. Ideal negotiation simulations are ones that:
- Generate desired learning effects
- Include a variety of elements
- Promote learning
- Are engaging and motivating
- Stimulate critical thinking
- Consider the length of time for each simulation
- Are as close to real scenarios as possible
- And more
Those are numerous elements to consider in designing negotiation simulations, and presenting those requirements to simulation writers is a big ask. It would be all too easy to omit an important detail or nuance that could make the simulation an extraordinary learning experience.
This is where AI (artificial intelligence) comes in.
AI can enhance negotiation simulations by:
- Imitating human behavior and thinking (like analyzing facial expressions, language processing, and emotions).
- Generating data that can provide helpful feedback on the participants’ strengths and weaknesses.
- Suggesting ways to adjust actions and provide other alternatives for desired solutions.
- Creating realistic negotiation scenarios.
- Providing a risk-free platform to practice negotiation skills.
- Adjusting feedback according to individual needs and results.
At The Maker Group, we create our simulations with the best that AI technology has to offer.
Our negotiation simulations are based on a decision tree — where each choice affects the options available for the next choice — that leads to paths that end in outcomes. Each module culminates in a negotiation against an AI agent with an optimal path to reach the best outcome.
The Maker Group: Use Our Negotiation Simulation Modules To Enhance Your Negotiation Skills
The Maker Group uses a tool that offers a more streamlined version of negotiation simulations than in-person simulation workshops.
Instead of the antiquated training where people stand in a room and act out negotiation situations, our AI workshop removes an element of human error from the party leading the negotiation simulation.
The entire experience is gamified, with scoreboards, leaderboards, and competitive opportunities for teams. Our negotiation simulation solution involves self-led negotiation simulations and an interactive story/video game.
With many people now working off-site, participants can even play and learn how to negotiate from home.
If you want a fun and engaging way to enhance the negotiation experience for your team, schedule a complimentary negotiation consultation.
In this 30-minute session, you’ll be able to meet with one of our negotiation professionals and learn how The Maker Group can assist you and your team in your next negotiation.