Negotiation isn’t a Dispute or a Confrontation- it’s about Communicating Well

STRATEGIC NEGOTIATION

Negotiation

Negotiation is an open process for two parties to find an acceptable solution to a complicated conflict.

It is a pre-determined approach or prepared plan of action to achieve a specific goal or objective. Potentially find and make an agreement or contract in a negotiation with another party or parties

In any disagreement, individuals understandably aim to achieve the best possible outcome for their position or perhaps an organisation they represent. However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.

Negotiation Tactics

Are the detailed methods employed by negotiators to gain an advantage. Negotiation Tactics are often deceptive and manipulative and are used to fulfill one party’s goals and objectives, often to the detriment of others. This makes most tactics in use today ‘win or lose’ by nature.

Negotiation is about communicating well, for example if you are asking for a raise. Understanding the other party’s interests and tactics is integral to good negotiating. Choosing a strategy that best responds to their interests and tactics will help you achieve the best outcome. Here some of tactics you can use;

1. Do your preparation work.

Successful negotiations are built on solid preparation work. This means you know something about the parties involved, you’ve done a little background check, know about their business and you have even an idea of their strengths and weaknesses.

The same is true if you are on the other side of the table and are looking to invest in a product or service. You should have a solid understanding of the pros and cons of the commodity they are selling.

2. Listen more than you talk.

It’s easy to go into a negotiation focused only on what you will say, especially when you are nervous.

The goal of a negotiation isn’t just to get what you want, but also to help the other side get what they  want. Otherwise, how will you ever strike a deal?. To do that, you need to actually know what the other side wants, which means you have to listen. Finding common ground means knowing common ground exists. https://www.learnafrica.co.ke/management-consultants-kenya/#1529482054169-e056a320-0551

3. Deal with your ego and emotions before you get in. 

While you should have confidence and assurance because you’ve done your prep work, you also have to check off your ego. Do not allow your emotions run the show because it will never serve you well. In fact, you should be going in feeling as neutral as you can about the situation. Leaving your ego behind will free you to think objectively during intense bargaining. You can then negotiate from a standpoint of flexibility. 

3. Always find the right way to frame the negotiation.

Find the best perspective from which to view the negotiation. Maybe the frame is money. Or time. Or delivery schedule or quality. You can make it easier to negotiate on the points that matter to you.

 5. Play the game rather than letting the game play you.

If you’re entering into high-stakes negotiations, it may be helpful to run through possible scenarios with a friend or colleague. This will help you feel less nervous, and it may also show you objections to the offer that you hadn’t thought of. Can also help you see a side of the deal that you hadn’t considered. Playing through the scenarios may help you feel less attached to the outcome. In order to treat the whole thing as a game, you should care but not too much.

6. Negotiate in good faith.

Whether you’re negotiating a long-term business deal or setting up a quick sale, it’s natural to feel on the defensive when you begin negotiations. We are all protective of our interests and we want to cut the best deal in our favor. But if you are hoping to walk away with your reputation intact, you need to practice negotiating with compassion and good faith.

7. Always get when you give.

You send a proposal to a customer and he asks for a 10 percent discount. Simply saying yes sends a terrible message; in effect, that means your original price was too high. Whenever you make a concession, make sure you receive something in return. Maybe you will provide a 10 percent discount, but your delivery schedule will be extended. Or you’ll need a larger deposit.

8. Know when to walk away – (Always know when to close)

When you enter into a negotiation with the knowledge that you are willing to walk away if things don’t go as planned, you come from a position of strength. Staying neutral is key to a successful negotiation. You can’t be bullied into a deal if you just leave. But often we tell ourselves that this deal means everything to us. Our ego is involved, and that weakens our position. And of course, you should have a clear idea of your own bottom line.

Successful negotiation requires a good sense of timing and the ability to sense the other side’s next move. So you’re either working to bring the sides progressively closer, or the deal is going nowhere so get out of the deal.

Matching the Strategy to the Situation

Your chosen strategy will depend on who you are negotiating with and the type of relationship you have with them. Will also depend on what you are negotiating, and the time frame and setting you are negotiating in. Some of the different strategies for negotiation include:

Problem solving – both parties committing to examining and discussing issues closely when entering into long-term agreements that warrant careful scrutiny.

  • Contending – persuading your negotiating party to concede to your outcome if you’re bargaining in one-off negotiations or over major ‘wins’.
  • Yielding – conceding a point that is not vital to you but is important to the other party; valuable in ongoing negotiations.
  • Compromising – both parties forgoing their ideal outcomes, settling for an outcome that is moderately satisfactory to each participant.
  • Inaction – buying time to think about the proposal, gather more information or decide your next tactics.

How to Approach a Negotiation

1. Distributive Negotiation or Win-Lose Approach or Bargaining Approach

Also called competitive, zero sum, or claiming value approach. The approach is based on the premise that one person can win only at the expense of the other. Any victory by one party must be matched by the other’s loss. That is why this is also called Bargaining Orientation.

Although this approach is marked by competitiveness and may create ill will, this is sometimes the best approach when the other party is determined to take advantage of you or when your interests truly conflict with those of the other party and compromising is not a satisfactory option.

It has the following characteristics:

(i) One side wins and one side loses.(ii) There are fixed resources to be divided so that the more one gets, the less the other gets.(iii) One person’s interests oppose the other’s.(iv) Dominant concern in this type of bargaining is usually to maximize one’s own interests.(v) The dominant strategies in this mode include manipulation, forcing and withholding information.

2. Lose – Lose Approach

Adopted when one negotiating partner feels that his own interests are threatened. He/she does all  can to ensure that the outcome of the negotiation is not suitable to the interests of the other party as well. In the bargain, both the parties end up being the loser. In this type of situation arises when the negotiating partners ignore one another’s needs. Therefore the need hurt each other outweighs the need to find some kind of an acceptable solution. Most undesirable type of outcome and hence this negotiation approach is best avoided. Everybody ends up being a loser.

3. Compromise Approach

Provides an outcome which is some improvement over the lose-lose strategy outcome. To avoid a lose-lose situation, both parties give up a part of what they had originally sought and settle for something less than that. Compromise is the best way out when it is impossible for both parties to convince each other or when the disputed resources are limited.

Lose-lose situation is hardly a desirable outcome. To avoid this, sometimes people compromise. Both parties give up a part of what they had originally sought, and settle for something less than that. A compromise is the best way out when it is impossible for both parties to convince each other or when even the partial attainment of one party’s goals depends’ on the satisfaction of the other.

Good option when disputed resources are limited. For instance, if two managers each need a full-time secretary, but budget restrictions make this impossible; they may have to compromise by sharing one secretary.

4. Integrative Negotiation or Win-Win orientation

When the needs of the negotiating parties a 45.1 looks at some of the aspects of this approach. The win -win approach is superior to other problem-solving styles, because everyone ends up feeling satisfied. However, such a solution is only possible when the needs of the parties involved do not conflict. Goal here is to have both sides leave the negotiating feeling they had greater value than before.

Sometimes known as collaborative or creating value approach. Superior to all negotiation approaches. Results in both the parties feeling that they are achieving what they wanted. It results in satisfaction to both the parties.

Has the following characteristics.

(i) There are a sufficient amount of resources to be divided and both sides can ‘win’. (ii) The dominant concern here is to maximize joint outcomes. (iii)  The dominant strategies include cooperation, sharing information, and mutual problem-solving. 

Stages of Negotiation (Process)

In order to achieve a desirable outcome, it may be useful to follow a structured approach to negotiation.

1. Preparation

There is no good short cut to Preparation. It is the first stage of any negotiation, though people often don’t give it the time it warrants. They often charge into the Information Exchange Stage, or even directly to Bargaining.This stage involves ensuring all the pertinent facts of the situation are known in order to clarify your own position.

Preparation starts with determining if this is a potential collaborative situation so that you can select the better strategy. Next you spend time researching information, analyzing data and leverage, and identifying interests and positions. Finally, you have to consider the relationship you want to build.

Before any negotiation takes place, a decision needs to be taken as to when and where a meeting will take place to discuss the problem and who will attend.  Setting a limited time-scale can also be helpful to prevent the disagreement continuing.

 2. Discussion

During this stage, individuals or members of each side put forward understanding of the situation. Each party tries to make an impression on the other side and influence their thinking at the first opportunity. Psychologically, this phase is important because it sets the tone for the negotiation to a large extent.  Each side should have an equal opportunity to present their case.

3. Clarifying Goals (Bargaining Phase)

From the discussion, the goals, interests and viewpoints of both sides of the disagreement need to be clarified. Through this clarification it is often possible to identify or establish some common ground. Clarification is an essential part of the negotiation process, without it misunderstandings are likely to occur which may cause problems and barriers to reaching a beneficial outcome.

4. Negotiate Towards a Win-Win Outcome

This stage focuses on what is termed a ‘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. A win-win outcome is usually the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal.

Suggestions of alternative strategies and compromises need to be considered at this point.

5. Agreement (Closure)

Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered. It is essential to for everybody involved to keep an open mind in order to achieve an acceptable solution.  Any agreement needs to be made perfectly clear so that both sides know what has been decided.

6. Implementing a Course of Action (Execute)

This stage may also be viewed as preparation for the next negotiation opportunity. You must ensure that you follow through on promises made in order to strengthen the relationship and to build trust. During execution you are likely to apply the total negotiation process to unexpected events, failures in performance and the inevitable changes.

Failure to Agree

Even with the best preparation, you may not always be able to negotiate a successful outcome. You must plan for what to do in case negotiations fail.  Having an alternative plan will help you to: Reduce your own internal pressures. Minimize your chances of accepting an offer that is not in your best business interests. set realistic goals and expectations.

If the process of negotiation breaks down and agreement cannot be reached, then re-scheduling a further meeting is called for.  This avoids all parties becoming embroiled in heated discussion or argument, which not only wastes time but can also damage future relationships.

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