The Art of Negotiation
Negotiation is a method by which people settle differences or reach a stage where two or more parties agree on the Products, Services, or Works they want to exchange in some form of trade. It is a process in which a compromise or agreement is reached while avoiding arguments and disputes. In a negotiation, the parties aim to achieve the best possible outcome for their position or the organisation they represent. However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome. Specific forms of negotiation are used in many situations:
- International political affairs between countries.
- The legal system, when compiling bodies of
legislation.
- The government between the electorate and political
parties.
- Industrial disputes, particularly with Unions,
Customers and Suppliers.
- Domestic relationships between family members.
- Trade both internationally and domestically.
- Personal and emotional issues that need to be
resolved.
General negotiation skills can be
learned and applied in various activities. They can be very beneficial in
resolving any differences that arise between two or more parties. However,
following a structured negotiation approach may be helpful to achieve a
desirable outcome. For example, a meeting may need to be arranged in a work
situation so all parties can come together.
But there are times when there is a need
to negotiate more informally. When a difference of opinion arises, it might not
be possible or appropriate to go through the stages of formal negotiation. In
any negotiation, the following three elements are essential and likely to
affect the outcome of the negotiation:
- Attitudes.
- Knowledge.
- People Skills.
All negotiation is strongly influenced
by the underlying attitudes to the process held by the parties to the
negotiation, for example, attitudes to the issues and personalities involved in
the case or attitudes linked to personal needs for recognition. Most
negotiation outcomes will fall into one of two categories:
- Win-Win.
- Win-Lose.
By understanding the diverse types of
negotiations that may be encountered, it is possible to determine the most
relevant skills for a specific role, whether the negotiation is with family,
friends, fellow staff or in a trade environment. To improve the negotiation
outcome, there are various forms of negotiation:
- Distributive Negotiations: This form of negotiation occurs
when there are limited resources, and each party assumes that if they lose
something, the other party will gain something. Instead of each party
attempting to come to an agreement based on their interests and needs,
they work to get more than the other party. For example, a customer
may feel that if a supplier does not lower the price for a product or
service, they will be paying too much, and the supplier may think that if
they decrease their cost, they will be losing money.
- Integrative Negotiations: An integrative negotiation occurs
when everyone involved with the negotiation benefits from the agreement
and comes to an integrative deal, and each party receives something of
value. The integrative negotiation process may take longer because both
parties must feel fully satisfied before agreeing. For example, if a
Customer believes a Supplier should reduce the cost of their Products,
Services, or Works, but the Supplier believes they must maintain the price
of their Product or Service, the two parties may negotiate to the point
midway between the needs of both.
- Management Negotiations: Negotiating as part of or with a
Management Team can be stressful. Employees may feel uncomfortable sharing
their needs, wants or desires with someone in a more senior position.
However, they often encounter this sort of negotiation during the job-seeking
process. Potential employees may have to negotiate their salary,
benefits, and job duties. Each of these elements can directly impact their
job satisfaction, so it is essential to address them. Additionally,
negotiating these factors allows the potential employee to demonstrate
their communication skills to the employer. The employee might also
have to negotiate with an organisation’s management team whilst working
for the organisation, re-evaluating their employment contract, or
requesting an increase in their salary.
- Workplace Negotiations: Depending on a person’s job, they
may need to negotiate with their Co-workers. Many positions require close
Teamwork, and without solid negotiation skills, an employee may face
imbalances in their work. Negotiation skills allow co-workers to
develop a plan that evenly benefits the whole Team by sharing the
workload. The art of negotiation may also assist when resolving conflict
in the workplace.
- Supplier Negotiations: Some Organisations manage
external Suppliers. How they negotiate may affect their performance rating.
The ability to reach an agreement with suppliers or service providers can
affect their professional relationships and the success of the business.
Negotiation is when two or more parties
with diverse needs and goals discuss an issue to find a mutually acceptable
solution. Negotiation skills are essential in informal day-to-day interactions
and formal transactions such as negotiating conditions of sale, lease, service
delivery and other legal contracts. Good negotiations contribute
significantly to organisational success, as they:
- Help build better relationships.
- Deliver lasting, quality solutions.
- Avoid poor short-term solutions
that do not satisfy the needs of either party.
- Help an organisation avoid future problems and
conflicts.
Negotiating requires give and take, and
both parties should aim to create a courteous and constructive interaction that
is a win-win for both parties. Ideally, a successful negotiation is where both
parties can make concessions that mean little to them while giving something to
the other party that means a lot to them.
The negotiation approach should foster
goodwill, regardless of the differences in party interests. A good negotiation
process leaves each party satisfied and ready to do business with the other
again at some time in the future.
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