HOWTO NEGOTIATE EFFECTIVELY1. What is negotiation Negotiation is an essential part of the every-daybusiness life. It can take place at any time and in any place. Negotiation is akind of meeting, but contrary to the latter it may be held in some unexpectedand uncomfortable place such as the street or on the stairs. There are several definitions of negotiation. It issaid to be the process for resolving conflict between
two or more partieswhereby both or all modify their demands to achieve a mutually acceptablecompromise . Thus, it is the process of changing both parties views of theirideal outcome into an attainable outcome . The need of negotiation arises when we are not fullyin control of events. Negotiations take place to handle mutual differences orconflict of interests wages, hours, work conditions, prices seller vs buyer rights different interpretations of anagreement
The aim of a negotiation is to come to an agreementwhich is acceptable to both sides, and to preserve the overall relationships.While specific issues are to be negotiated, common interest are yet still to bemaintained. Negotiations do not mean war . Negotiators can still be friendsand partners. 2. The negotiation continuum OverlapThe situations of negotiation can be showndiagrammatically in terms of ideals and limits. Ideal Limit HIM Bargaining area
Limit Ideal YOUThe limit may be the limit of negotiator s authority,such as a minimum e.g. price acceptable. If there is overlap it is possibleto settle. The final position within the bargaining area, where settlementtakes place, depends on the negotiators relative strength and skill. No overlapThe aim of the negotiator is to achieve a result, i.e.to find a solution, within the bargaining area. However, it is possible thatboth parties set limits which do not provide overlap.
In this case thenegotiators have to move their limits, otherwise the negotiation will be brokendown. Ideal Limit HIM No dealYOU Limit Ideal Too much overlapTheopposite case is also possible. When one is careless and settles for less thanhe could. In this case the limit of the opposite side should be found and theideal should be revised. Ideal Limit HIIdeal3. The approachThereare four main stages of negotiation
Preparing objectives, information, strategy Discussing argue and signalling willingness tomove Propose and bargain Close and agreeWhilepreparing to the negotiation it is important not only to prepare supportingarguments but also to define objectives. Objectives should be realistic andattainable and have certain priorities. It is also necessary to investigate theopponent s plans and priorities, which can be rather difficult.
Theobjectives should be classified basically as follows Like Ideal but least importantIntend Achievable, a range of possibilitiesMust The real limit Ideal Limit AREA OF NO DEAL Like Intend MustThegeneral strategy for negotiation is to have a negotiating team of three people,who will also be involved in the preparation. Leader Theperson who will do the talking and conduct the negotiations
Summariser Theperson who will ask questions and summarise for control Observer Theperson not involved in the actual negotiations, whose role is to watch,listen and record80 of the negotiating time is spent arguing. If it equals 100 the negotiationwill break down. There are two kinds of arguing Reasonable and constructive Debates, discussions Unreasonable and destructive Emotional quarrels
Theopponent may try to divert you by escaping into destructive behaviour. In thiscase, your behaviour should be not to interrupt, but to listen and control yourfeelings. Even if the battle is won, the war can be lost.Anegotiator should be constructive in arguments and try to get information byasking open questions or even leading questions. One thing should be tackled ata time and the opponent should be made justify his case item by item.
Itis important to be non-committal and to state only ideals at first. Later, theinformation about the negotiator s position can be given, and later alternativeproposals can be made. Sometimes it is necessary to challenge the opponent, sothat he demonstrates his strengths. Negotiationmeans movement. It may be that both parties move on one issue. It may be thateach moves on different issue. The motive forces are twofold
Sanctions Thepenalty of not agreeing Incentives Thebenefits of agreeing. Inboth cases, the parties seek to protect their self-interests. They will showwillingness to move by sending signals.Tosignal is not to show weakness. But if both parties wait for the other tosignal, the result will be deadlock.Theopponent s signals will show his willingness to move.
So one should listen,recognise his signals and interpret them, looking for the qualified words whichare evidence of willingness to move.Anothervery important point of negotiations is proposing and bargaining. Proposalsshould be realistic in order not to cause argument and deadlock. The languageof the proposal signals one s firmness. Weak language such as we hope , welike , we prefer should be avoided.
Instead, a phrase we propose isappropriate. Thefinal step in a negotiation is closing and agreeing. There are two aspects toit When to close How to closeThefirst is the most difficult moment to recognise. There is a balance between Closing too early More concessions from the opponent could have been squeezed Closing too late Theopponents squeezed excessive concessions.The aim of closing is to get the opposition to stopbargaining and to make an agreement.
The final thing to do is to write down theagreement and agree what is written down. It is necessary to do this beforeleaving the negotiating table. 4. Characteristics of an effectivenegotiatorWhatcharacteristics should one have to be an effective negotiator. The first andthe most important characteristics, from the standpoint of many executives andmanagers of large corporations, is preparation and planning skills.
Theother very important characteristics are Knowledge of subject matter being negotiated Ability to think clearly and rapidly underpressure and uncertainty Ability to express thoughts verbally Listening skills Judgement and general intelligence Integrity Ability to persuade others Patience Decisiveness 5. ConclusionIn spite of the existence of negotiating theories, itis frequently
difficult to apply theoretical and conceptual knowledge in apractical situation. In order to be a good negotiator, one should havenegotiation skills as well as a theoretical knowledge. But without a practicalexperience it is hard to negotiate effectively.Interpersonalskills are very important in the negotiation, but what can help a negotiatingparty while thinking what to do is not an elaborated theory, but rather is it asimple analysis and intuition.
Bibliography1. Raiffa,Howard. 1982. The art and science of negotiation. Harvard University Press.Pages 119-133.2. Murcott,Owen. 1991. IBS Management Training. Hanzehogeschool. Groningen.