What is Negotiation?
What is Negotiation?
Information is a negotiator’s greatest weapon.
– Victor Kiam
Introduction
Negotiation is a dialogue between two or more people or parties with the goal of reaching an understanding or resolving a point of difference. It is a means of resolving disagreements or producing an agreement on courses of action, bargaining for individual or collective advantage, and crafting outcomes to satisfy the various interests of the two parties involved in the negotiation process.
Negotiation is a process in which each person engaged attempts to acquire an advantage towards the conclusion of the process. As a result, the goal of negotiation is to reach a compromise.
Negotiation takes place in business, non-profit organizations and government branches, legal procedures, between countries, and in personal issues such as marriage, divorce, parenting, and daily life. In business, negotiations are very important. According to some, business life is a constant negotiation with other individuals who are protecting their own interests. Many individuals mistakenly believe that nothing is negotiable until the other side signals so; a more accurate perspective is that everything is negotiable.
Negotiations may be defined in a variety of ways. Richard Shell in his book “Bargaining for Advantage.” defined negotiation as “an interactive communication process that may occur anytime we want something from someone else or another person wants something from us”
Conflict and disagreement are inevitable to emerge from time to time when people gather together. People have various needs, desires, goals, and beliefs, which may occasionally collide. Negotiation is a method that may be used to address and resolve interpersonal conflicts and discover common ground. Without discussion, such issues may end in squabbles and anger, leaving one or more parties unsatisfied. The goal of negotiation is to obtain agreements without introducing future communication hurdles.
It is a method of reaching a compromise or agreement while avoiding debate and disagreement. Individuals obviously want to attain the best possible result for their stance in each argument (or perhaps an organisation they represent). However, the values of justice, mutual gain, and relationship maintenance are critical to a successful end.
Warm Up Exercise
With this warm up exercise, you are encouraged to consider the communication tactics that you are already using as well as areas in which you might make improvements. Consider a case in which you were denied an opportunity due to a lack of communication, and consider what communication skills in particular may have prevented the situation from occurring. Take some time right now to jot down your ideas on paper.
Brief check
Negotiation is a method of resolving disagreements and reaching agreements between two or more parties. Negotiation is a "give and take" procedure that leads to a compromise in which each party makes a concession for the benefit of all parties involved.
What are the most common reasons people negotiate?
The reasons for deciding to negotiate are many. Among them are: testing the strength of other party/parties; obtaining information about other parties’ issues, interests, and positions; changing perceptions; buying time; bringing about a desired change in a relationship; developing new procedures for dealing with problems; making gains; and solving a problem.
While there are an endless number of negotiating situations, the majority of discussions are distinguished by three characteristics:
- A conflict of interest exists between two or more parties. What one wants is not always what the other wants.
- There are no defined procedures for resolving the disagreement, or the parties want to operate outside of established rules to devise their own solution.
- The parties would rather reach an agreement than argue publicly, have one side concede, cut off communication permanently, or take their issue to a higher authority.
Why do people avoid negotiating?
Even when many of the prerequisites for negotiation exist, parties often choose not to negotiate. Their reasons might include:
Parties are afraid of being viewed as weak by their opponents;
Negotiating may exacerbate the disagreement;
Parties lack trust in the process;
There is a lack of jurisdictional authority;
Authoritarian authorities are unable or unwilling to meet;
Meetings are too time-consuming;
Parties want to avoid committing to a stance;
There is still time to raise demands and exacerbate dispute to their benefit.
Negotiation Goals
Negotiation principles are not affected by the identities of the people engaged, their cultures, or the sums at risk. Negotiation is a talent that can be employed in every situation, whether you are looking for a promotion, commissioning a nuclear power station, or just purchasing a used automobile. Negotiation is such a prevalent problem-solving procedure that it is in everyone’s best advantage to get acquainted with negotiation dynamics and abilities.
Negotiation success or failure may be influenced by a number of factors. For a negotiation to provide favourable results for all parties, the negotiator must first describe the issue and what each party desires. It is critical to differentiate between problems, stances, interests, and settlement choices while setting negotiation objectives.
A problem is a topic or subject about which two sides dispute. Problems are often used to describe issues. Substantive issues (concerning money, time, or compensation), procedural issues (concerning how a disagreement is handled), or psychological issues (related to the effect of a proposed action).
Stances are assertions made by one side regarding how a problem may or should be handled or addressed, or they are a suggestion for a specific solution.
Interests are specified demands, conditions, or advantages that a party must meet in order for an agreement to be deemed acceptable. Interests may relate to particular procedural issues, as well as psychological demands.
Settlement alternatives are potential solutions that meet the interests of one or more parties. The existence of alternatives suggests that there are several ways to fulfil interests.
Brief check
If you hit your target, you'll be rewarded handsomely, but the difficulties of coordinating sophisticated discussions can increase the risk of a deadlock. Starting with more modest negotiating goals, on the other hand, may seem a lack of desire or resolve, but it may improve negotiators' chances of gradually gaining momentum and trust.
Types of Negotiations Processes
Essentially, there are two types of negotiation processes, which vary fundamentally in their strategies and possible durability of the agreement.
They are –
Integrative or win-win strategy: Integrative negotiations are built on collaboration. Both sides feel they can get what they want without giving up anything valuable. The possibilities for both parties’ advances in these discussions are good. Both parties try to reconcile their viewpoints so that the final result is an agreement from which both parties gain – hence the subsequent agreement is usually stable. Win-win discussions, often known as partnership agreements, are distinguished by open and compassionate conversations.
Multiple topics are involved in integrative discussions. The problem-solving strategy is the main approach in integrative negotiations. This permits each side to make compromises on less significant matters in exchange for concessions from the other party on more critical ones.
Another important point within integrative negotiation is information exchange. This is a necessary step in issue resolution. The success of integrative talks is dependent on a spirit of trust and collaboration in order to build bridges.
Distributive or win-lose strategy:In these discussions, each party wants maximum advantages and, as a result, frequently strives to inflict greatest costs on the opposing party. This technique often results in agreements that are intrinsically fragile. Capable negotiators recognize the importance of result stability and concentrate on more than merely extracting the most concessions from the opposing side.
Haggling over the price of a vehicle with a car dealer is an example of a distributive negotiation. In this sort of negotiation, the participants are less concerned with developing a connection or making a good impression. Distributive negotiation strategy includes the following (1) Confidentiality of information: You don’t want a vehicle salesperson to know how desperately you need a new automobile or how much you’re ready to spend, for example. (2) Attempting to elicit information from the other side: Knowledge really is power in a negotiation. The more you understand about the other party’s condition, the better your negotiation position will be. (3) Allowing the opposing side to make the initial offer: It might be just what you’ve been looking for!
These phases describe the negotiation process itself. Before the process begins, both parties need to prepare for the negotiation. This involves establishing their bargaining position by defining their BATNA, WATNA, and WAP. It also involves gathering information about the issues to be addressed in the negotiation.
After the negotiation, both parties should work to restore relationships that may have been frayed by the negotiation process.
The Three Phases
The three phases of a negotiation are:
Exchanging Information: The capacity to explain one's own opinions clearly to the other side is one of the keys to good negotiation. Therefore, the information offered to the opposite party must always be well researched and well delivered. If there are any questions, they should always be answered.
Bargaining: This is perhaps the most crucial of the phases. It is where both sides perform the majority of their work and at this stage the real transaction begins to take form. It is never simple to bargain. To reach a final agreement, all sides would have to learn to compromise on a number of issues. As a result, each side would have to give up something in order to get something else.
Closing: The last stage would be when the parties involved make the final few tweaks to the agreement before completing it and putting their faith in each other to fulfil their roles.
It is essential to pay attention to all the phases of negotiation. Without the first phase, the exchange of information, and the establishment of bargaining positions, the second phase cannot happen in any meaningful sense because no one knows where they stand. It sets a scene for demands to be manageable and reasonable. Negotiations are, after all, about the art of the possible. Without the third phase, anything that has been decided during phase two cannot be formalized and will not take hold – leading to the necessity for further negotiation or an absolute breakdown in a relationship.
Brief check
Each time you face a circumstance, the type of negotiation that is required may be different. You may equip yourself with the necessary abilities and methods to adjust rapidly and become a great negotiator. Negotiating skills can help you find solutions quickly and establish healthy working relationships.
Skills for Successful Negotiating
Key skills include:
Effective speaking
Self-confidence
Effective listening
Emotional intelligence
A sense of humour
Persistence
A positive attitude
Patience
Respect
Creativity
Without the above factors, negotiations will be difficult if not impossible. The necessity for negotiation arises because neither party will be able to get everything they want. Knowing that there must be concessions, each party in the negotiation is required to adopt an attitude of understanding that they must get the best deal possible in a way which is acceptable to the other party. The importance of effective speaking and listening is clear; it is necessary to establish what you are looking for and what you are prepared to accept, while understanding what the other parties will be happy with.
A sense of humour and a positive attitude are essential because they allow for a sense of give and take. Negotiations can become fraught, and having the ability to see the other side’s point of view while being sanguine with regard to what you can achieve will be essential. Of course you will want as much as you can get – but the other side needs to achieve what they can, too. Seriously uneven negotiations will simply lead to further problems along the line. An atmosphere of respect is essential. If you do not make concessions while demanding them from your counterpart, it makes for a negotiation, which will end in dissatisfaction.
However important a sense of understanding for your “opponent” may be, it is also necessary to have the confidence to not settle for less than you feel is fair. Good negotiators understand the importance of balance. Yes, you will have to make concessions, but the point of making concessions is to secure what you can get – so you need to pay attention to your bottom line and ensure you are not beaten down to a minimum. Knowing what is realistic, and ensuring that you can get the best deal, relies on being ready to insist upon something that the other side may not be willing to give initially. Emotional intelligence, persistence, patience, and creativity can all play a part here.
Practical Application
Phillip and Julian worked for a large electronics company that was experiencing significant problems with one of their subassemblies. As a result of the company’s challenges, Philip and Julian were both quite frustrated and frequently argued back and forth about minor issues, much like two kids in a schoolyard. Phillip added his two cents on his idea, and Julian added his two cents. Katy, their manager, was well versed in negotiation techniques and was aware that the two employees had failed to grasp the true underlying issues. So she decided to listen in on their conversation and offered to be the judge. She then allowed them to present each case individually, sifting through their ideas piece by piece and scrutinizing every word. After that, she was convinced that both Philip and Julian lacked insight into the true basis of their negotiation, and that, like most negotiators, they did not train themselves to identify and frame the issues in negotiation to resolve. As the judge, Katy determined that Phillip and Julian had both made brilliant moves and advised them to put their ideas on paper and learn to collaborate. She emphasized that if this critical first step of the negotiation process is not addressed properly, the rest of the negotiation process will most likely unravel. This is due to a lack of understanding of the fundamental issues at the outset. She demonstrated to them how two sides could find a successful negotiation resolution by tackling the issues in a creative and mutually beneficial way.Phillip and Julian completely respected and trusted their manager as they carried out Katy’s advice. They were eventually crowned winners in front of their co-workers and bosses.
