The Art of Negotiation

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 help 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 negotiations:

• Attitudes.

• Knowledge.

• People Skills.

All negotiation is strongly influenced by the underlying attitudes to the process held by the parties to the negotiations, 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 potential employees to demonstrate their communication skills to the employer. The employee might also have to negotiate with an organisation’s management team whilst working, 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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