Negotiation is part of everyday life. Generally, it is defined as constructive compromise and peaceful persuasion.
If two parties disagree then there is a need for both to give some ground to reach the agreement.
It also involves some persuasion. Both parties start negotiation with different views, thus one party has to be persuaded that the other has a good point.
For managers and leaders there is often negotiation involving employees relating issues and commercial issues. In commercial negotiations there may not be an ongoing relationship, but with employees, there is an ongoing relationship. Some negotiations are done through representatives ( employee negotiations) and some through one person speaking (commercial negotiations).
Employment negotiations are often carried out face-to-face and commercial may be both face-to-face or using communications such as e-mail or phone. Additionally, in employee negotiations there generally needs to be a conclusion and in commercial we may have a choice to walk away from the situation.
Even with those differences, the purpose of negotiation is to reconcile differences. The outcomes is perceived based on the level of power between the two parties.
The process
The process of negotiation requires some basic steps:
1. Preparation and analysis
This is the most crucial part of the negotiation process it should take place before the two parties meet. We need to gather information, analyse it and prepare for the negotiation. It might involve gathering data. The data must be analysed. We must take the time to understand what the information tells us. The points must be understood so that the parameters of negotiations are identified.
There are top and bottom levels of negotiations. If there is a sound preparation and analysis, the negotiator will know the parameters to work within.
2. Presentation
Once the preparation has been completed, there is a need to meet and present the stance. Here, key aspects of a deal have to be presented as some things may not be compromised. We must decide on how much to say so that the negotiations can proceed effectively. But if we say too much, there may be little to negotiate.
We will present, but we also must listen to the other side. Negotiations can get rather heated sometimes and people start arguing. Take time to listen, think about what they say, and then reply.
3. Searching for common ground
Some issues during negotiations may be easier and quicker to agree. Some, however, may take more time. We may use the below table to identify the common ground developed by Gennard and Judge (2010).
The first step is to identify all the issues that are part of the negotiation. Then we start to consider whether each party is prepared to negotiate that particular topic. X means that the party is not prepared to compromise and O denotes that they are.
Then stages of Ideal, Real and Fall-back are determined. If someone is not prepared to compromise, but may realistically be prepared to compromise.
4. Concluding agreement
at some stage a decision has to be made. It might be, that an agreement has been reached, or because one party is not prepared to compromise on anything. We may not want to end the negotiations too early as there may be a need for resuming the negotiations. There needs to be a clear summary of what was agreed and accepted.
5. Writing up the agreement
Negotiation should conclude with writing an agreement. These are generally legal contracts or written records so that it is all clear on what has been concluded.
Why negotiations fail?
Sometimes negotiations fail. According to Daniels (2006) the main reasons are:
* Abuse of power - people abuse power and negotiations fail;
* Goal incompatibility - two sides want fundamentally different outcomes and they are so different that the agreement cannot be reached;
* No clear decision maker - it might be that no one has been given a responsibility to make decisions. Here conflicts may occur.
* Unreasonable expectations - one side may something that is never going to happen;
* Rugue leaders - the leaders on one side may not represent the ideas of a group and has its own agenda.
* Leadership style - the style of the negotiator is putting-off thus conflicts occurs
What makes negotiations successful?
"Win-win" bargaining is a powerful message. But what when one side is not interested with paying those rules? One example of great case study "Negotiating with Walmart Buyers" ( source https://www.negotiations.com/case/negotiating-wal-mart/) presents how building trust, establishing joined vision and problem solving-skills, information sharing and moving away from the low price denominators helped to reach agreements.
The supplier has understand the Walmart's culture on a deep level and creating the sense of shared responsibility.
There are some principles worth remembering from the case study:
* We prepare, prepare, prepare;
* We think in partnership terms, focus on common goal;
* We do not make demanding statements, we ask;
* Focus on long -term mutual partnership gains;
* Gain credibility and trust;
* Don't ignore small issues;
* Do not go to a meeting without clear negotiation agenda;
* Get to the point as time is valuable;
* Bring issues to the surface and find solutions;
* Know your product;
* Be knowledgable.
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