Negotiation is defined by Richard Shell in his book 'Bargaining for Advantage' as an interactive communication process that may takes place whenever we want something from someone else or another person wants something from us. Meanwhile, Prachi Juneja (n.d.) defines negotiation as the style of discussing things among individuals in an effort to come to a conclusion satisfying all the parties involved.
Stages of Negotiation
Stage 1 – Preparation
Preparation is responsible for 90% of negotiating success. The more prepared you are preceding a negotiation, the more likely it is that the result of the negotiation will be acceptable for all parties involved. There are two most important things to do during preparation. Firstly, make sure to have all the information that you can about the forthcoming negotiation. Secondly, think about the negotiation process from the beginning to the end and be fully prepared for any eventuality.
One of the keys to effective negotiation is to be able to express your needs and your thoughts clearly to the other party. Thus, it's vital that you carry out some research on your own about the other party before you begin the negotiation process.
Five Key Elements of Negotiation Preparation
1. Initial Points to Consider
a. Should I be negotiating?
b. What I need to know
c. Organize information
2. Research
a. Players and stakeholders
b. The fact base
c. Standards and benchmarks
3. Analysis
a. Re-organizing data
b. Anticipating what will happen
c. Assessing strengths and risks
4. Identification of Your and Their
a. Interests
b. Positions: goals, most desired outcomes, and least acceptable
c. Agreements
d. Best Alternatives to a Negotiated Agreement
e. Concessions
5. Know the Relationship You Want to Build
a. Plan to build trust
b. Prepare for emotional reactions
c. Develop probes to discover "Don't knows" and test Assumptions
The information exchange stage occurs when you begin to engage the other side, share information and explore options that address interests – what you each need, as opposed to positions – what you each ask for later in the bargaining stage.
The information you provide must always be well researched and must be communicated effectively. It is critical to focus on building rapport and trust, without which neither party will feel comfortable sharing interests. One way to build the relationship is to do your "social homework" in this stage by finding out and showing interest in the other party's business culture, personality, outside interests and values.
Four Critical Assessments are made in the information exchange stage:
a. Trustworthiness – Are they honest and dependable?
b. Competency – Are they credible and able?
c. Likeability – Can you work well together?
d. Alignment of Interests – Are your interests aligned with theirs?
The master's tool in the information exchange stage is the probe. Probe is defined as a technique employed to encourage the respondent to give a more detailed answer to a question and elaborate on his previous response. For instance: "Anything more?" “Why do you think that is fair?” “How did you come up with that solution?”
If your assessment in this stage of the negotiation process is negative, you make adjustments or implement your Best Alternative to a Negotiated Agreement (BATNA). BATNA is a well conceived plan that you are willing and able to execute if no agreement can be reached.
If your assessment in this stage of the negotiation process is positive, you move forward. With trust developed, you explore for creative solutions that address interests and see the potential to create real value.
Stage 3 – Bargaining
This stage focuses on 'win-win' outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration.
Bargaining is where the "give-and-take" happens. You make and manage your concessions in bargaining. When you give and take that which satisfies both parties' interests, you will build a lasting relationship and a fruitful outcome.
Probe and creativity are two tools that you will need in the bargaining stage.
Emotions can help or hinder progress. Finely tuned communication skills are critical at this juncture as you explore options to create value and execute trades to capture value. You will be most successful when solutions satisfy everyone's needs.
Stage 4 – Conclusion
This stage is the point in the process when you reach agreement. Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered. This is the time to put down in writing the common interests and produce a comprehensive summary of the agreement.
Never forget to thank the other party for their willingness to negotiate even when no agreement is reached.
1. Patience
Good negotiators are normally very patient. They focus mainly on getting agreement on all the parts of the contract that the two parties have in common before they go on seeking for cordial ways to settle the other issues. Besides, it is important to prepare good questions to ask to clarify and understand each point. This will help to avoid confusion later.
2. Active Listening
Negotiators have the ability to listen attentively to the other party during the conversation. Active listening includes the ability to read body language as well as verbal communication. It is vital to listen to the other party to find areas for compromise during the meeting. The experienced negotiator will spend more time listening to the other party and find clues for further debate.
3. Emotional Control
It is important that a negotiator has the ability to keep his emotions under control during the negotiation. Negotiating on sensitive issues can be frustrating and allowing emotions to take control can worsen the situation during the meeting. This will more likely lead to negative results.
4. Verbal Communication
Skilled negotiators must be able to communicate clearly and efficiently to the other party during the negotiation. If the negotiator does not state his case clearly, it can lead to misunderstanding and an unfavorable result. During a bargaining meeting, an effective negotiator must have the skills and tact to clearly point out his desired outcome as well as his logical perception.
5. Interpersonal Skills
Effective negotiators have the interpersonal skills to maintain a good working relationship with those involved in the negotiation. Negotiators with patience and the ability to persuade others without using manipulation can maintain a positive atmosphere during a difficult negotiation.
6. Problem Analysis
Effective negotiators must have the skills to analyze a problem to determine the interests of each party in the negotiation. A detailed problem analysis identifies the issue, the interested parties and the outcome goals.
7. Problem Solving
An effective negotiator have the capability to find a variety of solutions to problems. Instead of concentrating on his desired goal for the negotiation, the individual with skills can focus on problem-solving, which may lead to a breakdown in communication and therefore benefit both sides of the issue.
8. Decision Making Ability
Leaders with negotiation skills have the ability to act decisively during a negotiation. It may be necessary during a bargaining arrangement to agree to a compromise quickly to end a stalemate.
9. Ethics and Reliability
Ethical standards and reliability in a skilled negotiator stimulate a trust for effective negotiation to take place. Both parties in a negotiation must trust that the other side will keep up with promises and agreements. A negotiator must implementing his promises after bargaining ends.
1. Make Multiple Offers Simultaneously
When you put only one offer on the table at a time, you will learn very little if the other party turns it down. By contrast, think about what happens when you simultaneously present multiple offers, each of which is equally valuable to you.
If the other side refuses all of your offers, ask her which one she likes best. Her preference for a specific offer should give you a strong clue about where you might find value-creating, win-win trades and generate mutual gain. In addition to identifying potential win-win moves, when you make multiple offers simultaneously, you signal your accommodating and flexible nature, as well as your desire to understand the other party’s preferences and needs.
2. Include a Matching Right
In negotiation, including a matching right in your contract—a guarantee that one side can match any offer that the other side later receives. It can be a classic win-win move.
Imagine that you’re a landlord negotiating with a prospective tenant. You want to keep the ability to sell the apartment to someone else in the future, while the prospective tenant wants a commitment to rent the apartment for as long as she wants. Offering the tenant a matching right—the power to match any legitimate third-party offer—would allow you to preserve your own flexibility while giving the tenant the opportunity to avoid the disruption of a move. In this manner, matching rights can improve the odds of a win-win agreement.
3. Try a Contingent Agreement
In negotiation, parties often reach impasse because they have different beliefs about the likelihood of future events. You might be convinced that your firm will deliver a project on time and under budget, for example, but the client may view your proposal as unrealistic. In such situations, a contingent agreement—negotiated “if, then” promises aimed at reducing risk about future uncertainty—offers a way for parties to agree to disagree while still moving forward.
Contingent commitments often create incentives for compliance or penalties for noncompliance. You might propose paying specified penalties for turning your project in late or agree to significantly lower your rates if you go over budget, for example. To add a contingent agreement to your contract, begin by having both sides write out their own scenarios of how they expect the future to unfold. Then negotiate expectations and requirements that seem appropriate to each scenario. Finally, include both the scenarios and the negotiated repercussions and rewards in your contract.
4. Negotiate Damages Upfront
Because not all future events can be anticipated with contingent agreements, another way to foster a win-win agreement is to include liquidated damages clauses in your contract that stipulate how much will be paid if the contract is breached.
Consider that if one party sues the other side for breach of contract down the line, the plaintiff (if she wins) will be awarded monetary damages rather than the specific goods or services that were lost. Therefore, negotiating upfront exactly how much will be paid for each late or missed delivery, for example, may streamline any alternative dispute-resolution measures or lawsuits that arise. In addition, negotiating damages puts a new issue on the table—and thus expands the potential for value creation.
5. Search for Post-Settlement Settlements
Asking the other party whether he would be willing to take another look at the agreement to see if it can be made better. Explain to your counterpart that you would each be free to reject a revised deal if it doesn’t improve both of your outcomes. This type of post-settlement settlement can lead to new sources of value to divide between you. It can also help generate a win-win contract if you didn’t have one before.
To prevent your negotiation from disintegrating into hard-bargaining tactics, you first need to make a commitment not to engage in these tactics yourself. Next, you need to prepare for your counterpart’s hard-bargaining tactics. To do so, you first will have to be able to identify them. The better prepared we are for hard-bargaining strategies in negotiation, the better able we will be to defuse them.
Here is a list of the 10 hardball tactics in negotiation to watch out for from the authors of Beyond Winning: Negotiating to Create Value in Deals and Disputes.
1. Extreme demands followed up by small, slow concessions. This tactic protects dealmakers from making concessions too quickly. However, it can keep parties from making a deal and unnecessarily drag out business negotiations. To head off this tactic, have a clear sense of your own goals, best alternative to a negotiated agreement (BATNA), and bottom line.
2. Commitment tactics. Your opponent may say that his hands are tied or that he has only limited discretion to negotiate with you. Do what you can to find out if these commitment tactics are genuine. You may find that you need to negotiate with someone who has greater authority to do business with you.
3. Take-it-or-leave-it negotiation strategy. Offers should rarely be non-negotiable. To defuse this tactic, try ignoring it and focus on the content of the offer instead, then make a counter-offer that meets both parties’ needs.
4. Inviting unreciprocated offers. When you make an offer, you may find that your counterpart asks you to make a concession before making a counteroffer herself. Don’t bid against yourself by reducing your demands; instead, indicate that you are waiting for a counteroffer.
5. Trying to make you flinch. Sometimes you may find that your opponent keeps making greater and greater demands, waiting for you to reach your breaking point and concede. Name the hard-bargaining tactic and clarify that you will only engage in a reciprocal exchange of offers.
6. Personal insults and feather ruffling. Personal attacks can feed on your insecurities and make you vulnerable. Take a break if you feel yourself getting flustered, and let the other party know that you won’t tolerate insults and other cheap ploys.
7. Bluffing, puffing, and lying. Exaggerating and misrepresenting facts can throw you off guard. Be skeptical about claims that seem too good to be true and investigate them closely.
8. Threats and warnings. The first step is recognizing threats and oblique warnings as the hard-bargaining tactics they are. Ignoring a threat and naming a threat can be two effective strategies for defusing them.
9. Belittling your alternatives. The other party might try to make you cave in by belittling your BATNA. Don’t let her shake your resolve.
10. Good cop, bad cop. When facing off with a two-negotiator team, you may find that one person is reasonable and the other is tough. Realize that they are working together and don’t be taken in by such hard-bargaining tactics.
Final Thoughts
Being a good negotiator requires a set of skills and knowledge to make sure that the required objectives are reached.
Edited by: 浪子
Bibliography
Tutorials Point. (n.d.). Negotiation Skills. Retrieved from
https://www..com/management_concepts/negotiation_skills.htm
Watershed Associates. (n.d.). Negotiation Stages Introduction. Retrieved from
https://www.watershedassociates.com/learning-center-item/negotiation-stages-introduction.html
Watershed Associates. (n.d.).BATNA: Best Alternative to a Negotiated Agreement. (n.d.). Retrieved from
https://www.watershedassociates.com/learning-center-item/batna.html
Marc Wins. (2017). 7 Key Skills for Successful Negotiation. Retrieved from
https://www.procurement-academy.com/7-key-skills-successful-negotiation/
Prachi Juneja. (n.d.). Negotiation Techniques. Retrieved from
https://www.managementstudyguide.com/negotiation-techniques.htm
Skills You Need. (n.d.). What is Negotiation? Retrieved from
https://www.skillsyouneed.com/ips/negotiation.html
Luanne Kelchner. (2018). Top Ten Effective Negotiation Skills. Retrieved from
https://smallbusiness.chron.com/top-ten-effective-negotiation-skills-31534.html
Pon Staff. (2018). 10 Hard-Bargaining Tactics to Watch Out for in a Negotiation. Retrieved from
https://www.pon.harvard.edu/daily/batna/10-hardball-tactics-in-negotiation/
Katie Shonk. (2018). 5 Win-Win Negotiation Strategies. Retrieved from
https://www.pon.harvard.edu/daily/win-win-daily/5-win-win-negotiation-strategies/
Top Negotiation Skills and Strategies
Reviewed by 浪子
on
December 20, 2018
Rating:
Reviewed by 浪子
on
December 20, 2018
Rating:
