Negotiation is a two-way street; it is a conversation between two or more parties to resolve disagreements or issues in a way that is acceptable to all parties. In most cases, it’s a give-and-take situation. Negotiation occurs when each party concedes to resolve a problem in the best interests of all parties involved. Negotiations skills can be used in various situations. It can occur between businesses, managers, departments, co-workers, or a team member and a manager in the workplace. For example, negotiating for better salary or benefits when receiving an employment offer or a new gig.
Quality communication guarantees success in all aspects of life. While some people are single-handedly afraid of negotiations, others have learned to create a bigger budget for individual projects, promotions, or higher salaries. Therefore, negotiation is considered an asset and a quality every recruiter looks for in their applicants.
Most of us don’t realize we are involved in a negotiation until it’s too late. In the Journal Principles and Tactics of Negotiation, Charles B. Craver, author of The Intelligent Negotiator, says, “The first important lesson in negotiating is to recognize that you are negotiating.”
Mastering the skill of negotiation is not difficult and can be learned with practice and patience.
Types Of Negotiation
There are several types of negotiation in the business world.
- Integrative negotiation
- Distributive negotiation
- Multipart Negotiation
- Team Negotiation
- Positional Negotiation
1. Integrative Negotiation (Merit-based, Win-Win)
“In many negotiations, there does not have to be a winner or a loser – everyone can win. Instead of assuming that negotiations are win/lose situations, negotiators can look for win/win solutions – and will often find them)”.
Thus, we also call integrative negotiation a merit-based, interest-based, or win-win strategy. Integrative negotiation allows both parties to pursue their own interests and build a long-term cooperative relationship.
According to authors Lewicki, Saunders, and Barry, for negotiation to be integrative, negotiators must:
- Focus on what they have in common instead of differences
- Address needs and interests, not positions
- Commit to including the needs of all parties
- Exchange information and ideas
- Devise opportunities in which both parties can benefit
- Use objective criteria for standards of behavior and success
2. Distributive Negotiation (Win-Lose)
Distributive bargaining is also called win-lose bargaining. During this type of negotiation, there is a frequent conflict between the two sides. As a result, the goal of negotiations is challenging to achieve or almost impossible because the very competitive-hostile atmosphere makes it impossible. Given this outcome of the negotiations, this approach is considered poor and inappropriate for planning long-term cooperation.
3. Multiparty Negotiation
It includes three or more parties in the multiparty negotiation process, and they use diverse negotiating methods to make their arguments. For example, a multiparty discussion occurs when six friends decide on the location of a party and debate the benefits and drawbacks.
4. Team Negotiation
This form of negotiation is carried out between the two parties. Team negotiations, for example, are negotiation methods that the teams of two organizations use intending to merge.
When forming a negotiation team, a corporation searches for employees with good negotiation abilities and highly developed strategic thinking capacity.
5. Positional Negotiation
Positional negotiation is when you state your position from the beginning. Then you must defend that location against an attack. Positional negotiation is one of the most important types of negotiation since it involves both sides having firm positions and holding to them adamantly. They may not consider the other party’s interests or understand where they are coming from. Many find positional bargaining to be relatively ineffective.
Out of all the five types of negotiation skills, Integrative and Distributive negotiation skills are the most used ones.
5 Stages Of The Negotiation Process
Negotiation is a process. There are five stages of a negotiation process, and they are:
The negotiation process requires research as a foundation. You must weigh all sides, assess both sides’ strengths and weaknesses, and develop your negotiation techniques while preparing. Define the type of interaction you want to have with the other party and the link you want to establish with them.
2. Information Exchange
For the negotiating process, the information exchange entails discovering and producing value. It also aids in the development of rapport.
To accomplish the intended results, both parties should clarify their interests and exchange opinions. Even advanced negotiation methods will fail unless there is a clear exchange of information.
The importance of a bargain in any form of negotiation cannot be overstated. It’s the start of a series of trade-offs. Each party makes a demand and tries to get something in return. It is critical to maintain self-control during the bargaining process. During discussions, don’t lose your calm or grow upset. Train yourself to be calm and polite in order to attain your goals.
Both sides should thank each other once they reach a solution that is acceptable to both parties. They should certify that all parties’ interests have been protected and that the conclusion has been favorable. A decent wrap-up and friendly close always reward long-term partnerships.
All forms of negotiation result in successful implementation. The actions to put the negotiated agreement into action should be spelled out in detail. A written contract is frequently entered into in the corporate setting to confirm the intent to execute.
BATNA- Best Alternative To A Negotiated Agreement
No matter whose side we represent in the negotiations, it is essential to know our BATNA (Best Alternative To A Negotiated Agreement). BATNA is a fallback option to use unless they reach an agreement with the other party.
Therefore, we must have a backup option before we enter into any negotiations because, in that way, we secure our position and make the side we represent stronger. Therefore, to have good results in the negotiations, we should find out what the BATNA of the other party is or ask appropriate questions during the negotiations that can give us an answer.
ZOPA- Zone Of Potential Agreement
The next step is to see a ZOPA (Zone Of Potential Agreement) because it is the extent to which an agreement is possible. Any offer outside ZOPA leads to failure to reach an agreement. ZOPA consists of three main points:
- Stretch goal: The most optimistic price (the most desirable price).
- Reservation price: The most pessimistic price (price below (above) that cannot be gone).
- Most likely price: The price that is most realistic to reach an agreement.
Given that both parties have their three points in the negotiations, ZOPA represents all possible agreements between the Reservation price of one and the other party. The higher the ZOPA, the greater the possibility of reaching an agreement during the negotiations.
Why Negotiate In The First Place?
Negotiating smartly is one of the most significant advantages of a successful business to achieve the desired result through negotiations. Whether you are negotiating for your business, buying a car, or solving problems with loved ones, the power to act as a negotiator is your secret weapon for achieving the desired results.
How To Do It?
Negotiations do not have to be dragged back and forth. It should also not be a fight with arguments in which points are collected as in boxing. The best negotiators manage to conduct the conversation fluently so that the other party is not fully aware that it is a part of the negotiation process.
If there is something you want and it is in possession of another person, negotiation skills will help you increase your chances of getting that thing. The key is to be a tough but fair and honest negotiator.
Rules And Tips For Improving Negotiation Skills
Here are some rules and tips for improving your negotiation skills:
1. Be Prepared To “Leave” The Negotiations
This is individually the most powerful strategy for getting what you want. If you are not ready to say No without even thinking about it, then prepare yourself to get less than what you wanted.
Before entering into negotiations, know in advance what you are willing and not willing to accept. You do not have to weigh it in the middle of the conversation because you will not act convincingly.
You have an excellent negotiating position if the other side feels you will leave the bargain below your acceptable minimum. And vice versa, when the other side thinks you do not have the strength to stand up and stop the negotiations because you care about reaching an agreement at any cost, you have weakened your position, and you will get as much as the other side will give you.
Thus, the power to “bluff” your willingness to break off negotiations, even though you are aware that you have to do the job at all costs, is also an effective negotiation tool.
2. Know When To Cut The Whole Thing
The old rule was that good deals are concluded very quickly – and that bad deals take a long time. Decide based on the time you need to reach an agreement. If you need to force an agreement, there is a good chance that you will later regret that you worked so hard.
Decide when you should end some negotiations and request an agreement immediately or never. Do not regret when such agreements are not reached because they should not have happened in the first place.
3. Negotiate Only With Decision Makers
Nothing is more complicated and exhausting than negotiating a deal with someone who does not have the ultimate power to decide on the same. It is like negotiating against yourself, making a specific proposal, and trying to defend it in front of yourself. Then that proposal is served to someone behind the scenes and returned with the final answer that it cannot be done under those conditions.
It is much more efficient to talk face to face with the person who decides, if you cannot provide that, do not even negotiate.
4. Do Your Preparations Beforehand
The more information you have about the environment, conditions, and market, the greater the chances of reaching the best agreement from your point of view.
Sometimes you can beat the other side by shooting blindly, but chances are higher that you will hit the price if you know the average prices for that service or the price your competition is offering at the moment. Knowledge is – in negotiations indeed – power.
5. Do Not Take Anything Personally
To maintain objectivity, treat all negotiations as if you were a “professional” hired by the employer to negotiate. When you allow yourself to engage emotionally in negotiations, the rational side slips aside, and you can regret it later. A cold head gives the best results in negotiations and therefore excludes your ego from negotiations.
6. Anticipate The Other Party’s Objections
Before entering into negotiations, try to consider all the reasons and objections that could prevent the other party from reaching an agreement with you. During negotiations, people give numerous reasons why something cannot be done. Most of which are meaningless or a product of fear due to ignorance or a deliberate provocation to achieve a better position. When you prepare quality answers to the opponent’s objections in advance, you strengthen your position by quickly rejecting those doubts.
7. Don’t Underestimate Karma
The best agreements are those from which both parties leave with positive feelings about the achieved results. The worst are those negotiations where one side leaves with a feeling that it has drawn a thick end.
A win-win combination is the best end to negotiations that should be successful in the long run, and with that knowledge, you should conduct the entire negotiation procedure. Negotiations in which you have harmed others will return to you in the same way. As the saying goes: What goes around comes around; it only takes time.
8. Be Partners, Not Rivals
Whether you’re negotiating in college or the workplace, keep in mind that negotiating is not a competition, nor is pointing the finger at the culprit on duty. It is an arrangement for mutual benefit.
If you want to build a partnership based on trust, you will quickly conclude that when negotiating, you need to look for the optimal solution for both parties, which will help you develop soft skills.
Don’t be afraid to ask questions, especially those related to collaboration. Stick to openness and friendliness to make communication correct and enjoyable.
9. Listen Carefully
Adopt the tactics of skilled negotiators and listen carefully to what the other side has to say. Read between the lines. Find out what is important for your partner to achieve and what he will not agree to at any cost. Whether parts of the agreement oppress the other party or something they are afraid of, be sure to touch on these topics together.
To build mutual respect, restrain yourself from interrupting and interfering with the word. Instead, try to look at the situation from all angles and consider a compromise.
In the end, it will be easier for you to reach an agreement to your mutual satisfaction when you step into someone else’s shoes for a moment. If listening has never been your strong suit, you can always learn to listen effectively and become even more successful.
On the other hand, you will probably find yourself at least once with an offer in hand that does not meet your minimum expectations. If you feel you deserve more, don’t hesitate to ask for it. But, unfortunately, it is often just an irrational fear and shyness.
10. Arguments Are Tools
Without a clear goal, negotiations are a waste of time. You must know at all times what solution to the situation you want and what concessions you do not wish to agree to. Accompany everything with good arguments. Explain what you want, but keep a cool head and a calm tone.
As you will generally have to argue your views to older colleagues, you will likely lag behind experience on this issue. So use your social networks for argumentative discussions, or you can also engage in online debates on websites like Debate, Debate Island or ProCon.
11. Patience Is Key
Setting some deadlines in the negotiation process can only lead to tensions and nervousness. Instead, embark on this process calmly and with an open mind. If the discussion goes in the wrong direction, it may be better to interrupt and postpone the resumption for another day. Then, allow yourself and the other side to relax and reflect.
12. Educate Yourself
Like any other skill, people should learn negotiation skills. There are many ways to enrich knowledge outside of college for free. For example, you can listen to a podcast on negotiation that features an expert on the topic, someone who has worked for the FBI for years.
Write these negotiating rules and put them in a visible place so. It will act as a reminder until all of them become a part of your list of principles you can use to negotiate with people.
If you are negotiating with clients or long-term business partners, maintaining relationships is crucial. To maintain a relationship, it is more important HOW you give in than WHAT you give up. Try to reach a friendly, wise, and fair (impartial) agreement – so both sides will feel that they have negotiated well. Negotiate, try to strengthen long-term relationships instead of ruining them.
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Key Takeaways On How To Practice And Improve Negotiation Skills
Some Rules And Tips For Improving Negotiation Skills Are:
What Is The Difference Between Negotiation And Bargaining Skills?
Bargaining is an arrangement among two or more parties about what each will do for the other or a thing purchased or offered for sale at a lower price than is customary or expected. On the other hand, negotiation is a dialogue that entails thought and deliberation about a variety of subjects.
What Is The Importance Of Negotiation Skills In Personal Life?
Negotiation skills are essential everywhere and not just in professional lives. For example, it helps in effectively buying things. Some negotiation skills that pertain to many day-to-day situations are:
Should We Write About Our Negotiation Skills On Our Resume?
Negotiation skills are an asset not just for you but for recruiters and employers as well. One of the most frequently asked questions in an interview is about a person’s negotiating ability.
Furthermore, negotiation skills benefit people not just in their professional but personal life as well. Therefore, mentioning and highlighting negotiating skills in a resume can make one’s application stand out from other participants.
What Are Some Negotiation Tips We Can Give Our Co-Workers?
Some negotiating tips you can give to your co-workers are: