Negotiation refers to the dialogue between two or more or parties with an intention to reach a fruitful outcome over one or more issues. This outcome can be fruitful for all of the parties involved, or just for one or some of them.
Negotiation aims to resolve points of difference, to gain advantage in order to satisfy various interests. It is conducted by putting forward a position and making small concessions to achieve an agreement. One of the major factors in determining whether negotiations are successful is by identifying the degree to which the negotiating parties trust each other to implement the negotiated solution.
Negotiation Types
- Distributive negotiation – Also known as positional or hard-bargaining negotiation which attempts to distribute a “fixed pie” of benefits. Distributive negotiation operates under Zero-Sum conditions and implies that any gain one party makes is at the expense of the other and vice versa. That is the reason, distributive negotiation is also called win-lose as it is based on the assumption that a person’s gain results in another person’s loss. Distributive negotiation include haggling prices on an open market, including the negotiation of the price of a car or a home.
- Integrative negotiation – Also known as interest-based, merit-based, or principled negotiation. This technique of negotiation attempts to improve the quality and likelihood of negotiated agreement by taking advantage of the fact that different parties value various outcomes differently.
BATNA
Also known as Best Alternative to a Negotiated Agreement, is an alternate option that a negotiator holds in case current negotiation fails and does not reach agreement. BATNA has the potential to improve a party’s negotiation outcome. BATNA can empower an individual and allow them to set higher goals when moving forward.
The best strategy while moving forward into a negotiation is to ensure that you have a strong BATNA, and if not, then have tools equipped that can help you made the other side’s BATNA weak. The major mistakes made by new negotiators are to disclose their BATNA at first without having had any discussion with the other side. This can weaken your position in the negotiation, as your negotiation might have been weaker than the other sides, and such disclosure puts you at a weaker spot in the negotiation. It is therefore important to ask a lot of questions to develop, if not an exact, but a guess about the other sides BATNA to know your position in the negotiation.
Skills of Good Negotiators
- Flexible
- Creative
- Aware of themselves and others
- Good planners
- Honest
- Good communicators
Assertive Communication
You may choose to use a passive, aggressive or assertive communication style, during the process of negotiation. The assertive style of negotiation will help to increase your chances of negotiating successful outcomes for your business.
Note that, passive communicators tend to use ambiguous language, adopt under-confident body language, and give in to demands too easily. Where on the other hand aggressive communicators take a stimulating approach that tends to distance other parties and destroy negotiations.
It has been seen that assertive communicators, are both confident and thoughtful. They are more likely to keep discussion going and facilitate mutually beneficial outcomes. Assertive communicators tend to adopt a strong and, steady tone of voice. They base their discussion on facts, rather than making emotional or critical judgments. In general, they describe their views, starting sentences with ‘I’, rather than making direct criticisms starting with ‘you’.
Tips for effective negotiation
Do:
- Be clear with your requirements
- Be ready and prepared to take a comprehensive view of the situation
- Be consistent with your goals, expectations and objectives
- Set guidelines for the discussion for the entire process
- Use effective communication skills
- Always look for mutually beneficial solutions
- Seek for legal advice, whenever required
- Ask plenty of questions
- Pay attention to detail
- Pay stress on documentation
Don’t:
- Prevent confusing between negotiation with confrontation
- Stop yourself from becoming emotional, don’t make it personal, and avoid becoming angry, hostile or frustrated
- Do not play the blame game, if you are unable to achieve desired results
