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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Mediation vs Negotiation — 5 Key Differences

Key takeaways

  • These two processes involve the facilitation and success of a negotiation process.
  • One focuses on resolving disputes. On the other hand, another seeks to meet in the middle with an agreeable solution. 
  • It’s a process where procurement teams leverage to achieve the best outcome for both parties.

Mediation and negotiation are both used as alternative dispute resolution techniques based on give and take to resolve disputes. However, how would you know if you are using negotiation or mediation?

In this article, we discuss what mediation and negotiation are. We will tell you their differences and similarities to further your knowledge of these techniques. Additionally, we will tell you both their processes to help you see more of their uniqueness. 

Once you are done reading this article, you will gain further insight into both mediation and negotiation in your profession. Thus, this will enable you to use it properly and effectively.

I have created a free-to-download editable in-negotiation toolkit template. It’s a PowerPoint file that can help you create the best approach when negotiating with other parties. I even created a video where I’ll explain how you can use this template.

What is Mediation?

Mediation is a dispute or conflict resolution technique where a person assists parties to come to a conclusion that is mutually agreeable to both parties. 

The person assisting the parties must be unbiased and independent in nature. He or she must be an impartial person that must have nothing at stake in the conflict and his or her decision must be acceptable to all parties. 

You must take note that the mediator does not just mean anyone recommended by the parties. A mediator should be a professional and experienced outside party appointed aiming to solve the dispute. 

The mediator must possess independence, unbiasedness, and integrity when looking at the circumstances. His or her role is more like an advisor. Thus, the mediator’s decision is not binding but rather his or her advice assists parties to reach a settlement by suggesting solutions, listening to the issue, and persuading parties to come to terms. 

During the meditation, both parties are given the time to present their evidence regarding their claims and the mediator summons a witness to verify the claims. Hence, it creates an environment that eases interaction between the parties involved. 

Negotiation: What is it?

When you go to the market to buy ingredients and feel like the price is a little higher, you try to ask if the price can be brought down within your range. This is an example of negotiation where 2 people both lose something and settle for less than what they want. 

Negotiation refers to an approach between parties in a dispute seeking to reach a concession by finding a solution for both parties to agree with.  

In negotiation, the term dispute or conflict does not mean unrest, disruption, or quarrel, rather it implies disagreement between parties regarding their rights and interest. However, it requires that both parties must give off something or compromise for it to be effective. Therefore, both parties must lose or gain something for the negotiation to be successful.

You must know that negotiation has three possible outcomes:

1. Win-lose -This outcome happens when one party wins while the other loses.

2. Win-win – The outcome for both parties is beneficial.

3. Inefficient but equitable – The outcome in which all the items are shared equally by both parties. 

Similarities of Mediation and Negotiation

Mediation and negotiation are of course similar in the way they are used. Both of them are techniques used to resolve disputes between parties and come to an agreement. 

Both negotiations are consensual and only produce a resolution if both parties will agree to the terms. 

Furthermore, both negotiations seek to have a mutually acceptable outcome to resolve the problem at hand while also building a stronger rapport. 

Differences Between Mediation and Negotiation

Here is a comprehensive side-by-side of the differences between mediation and negotiation.

Mediation
Mediation is a method used to resolve disputes by inviting an independent third party to facilitate discussions and suggest solutions.
Mediation involves the intervention of a neutral third party or what we call the mediator.
The mediator meets the parties both jointly and separately to discuss the point of the issue and suggest solutions.
The mediator proposes a solution to the dispute. However, it is up to the parties if they will adopt the solution or not.
In mediation, the outcome is controlled by the parties in dispute.
Negotiation
Negotiation is a method used through discussion between representatives or party members of the parties where a mutually acceptable agreement is sought.
Negotiation does not involve the intervention of a neutral third party to resolve the dispute.
The members or representatives of the parties present their interests, and demands, and talk about their rights.
The members or representatives discuss and decide a possible outcome that is acceptable to both parties.
In negotiation, the outcome is based on the relationship between the parties involved.

The Process of Mediation

In case you’re wondering how to go about the process of mediation here’s a list of the steps to keep you prepared!

1. The mediator states his or her neutrality in the dispute

Of course, in the first stage, the mediator states his neutrality in the dispute and describes the process of mediation to both parties. 

The parties are informed about the fact that whatever will be disclosed will remain confidential even when they go to court for the purpose of dispute resolution. 

Furthermore, the mediator needs to gain the confidence and trust of the parties to effectively resolve the dispute. 

2. The opening statement of the parties in dispute

In the opening statement, the parties in dispute will explain the issue from their perspective alongside their interest and perception of the issue. 

3. Outlining the issue at hand

After the parties explain their sides regarding the issue, the mediator will decide the sequence or outline in which the negotiation will commence. Thus, it will enable parties to evaluate the progress themselves.

4. Exploring the issues

Once the sequence is outlined, the mediator helps the parties to concentrate on the issues and explore them further to check some ways to resolve them. 

5. Private discussion

In this stage, the parties involved get the chance to present their side to the mediator one by one separately. You must take note however that the meditator is not allowed to disclose any information given by one party to another during this stage. 

6. Joint session

Once the private discussion is over, a joint session will begin to move the parties to an agreement by providing them with an alternative solution. 

If there is no consensus between the parties, a private discussion may be done to avoid deadlock situations.

7. Outcome/closure

Once the parties agree to the alternative solution, the dispute is settled as both sides agree to the terms of each other. 

The Process of Negotiation

Here is the process of negotiation listed down in steps to guide you in the negotiation process.

1. Identifying the problem

In this stage, different issues related to salaries, economic benefits, and administration are identified. The issue at hand affects the entire negotiation process which includes the selection of representatives, the period of negotiation, etc. 

2. Preparing the negotiation

In this stage, the parties involved prepare in advance the issues that they will raise during the negotiation, and representatives are selected for carrying out the negotiation. 

3. Negotiation 

The representatives of both parties put forward their initial demands and present their views to one another. During the negotiation, the representatives must focus on knowing the purposes of the other side so they can present counterarguments. 

This goes on until a final settlement is reached. However, if they reach an impasse, then one of them may walk away from the negotiation.

Conclusion

This article delves into the realms of mediation and negotiation, elucidating the nuances that distinguish these alternative dispute resolution techniques. Readers gain comprehensive insights into the definitions, similarities, and differences between mediation and negotiation, empowering them to navigate these techniques effectively in their professional endeavors.

By understanding the distinct processes involved in mediation and negotiation, individuals are equipped to make informed decisions and foster resolutions that cater to the unique dynamics of each method.

Frequentlyasked questions

What is mediation?

It is a dispute or conflict resolution technique where a person assists parties to come to a conclusion that is mutually agreeable to both parties.

What is negotiation?

It is an approach between parties in a dispute seeking to reach a concession by finding a solution for both parties to agree with.

What is the main difference between mediation and negotiation?

The main difference between the two is that mediation has a third-party involved to suggest solutions while negotiation does not involve the intervention of a neutral third party.

Be a Master Negotiator

Do you want to enhance your skill and be a master negotiator? Then check our Negotiation Course For Procurement Professionals to master the art of negotiation and lock every deal that you will do. 

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics