Experienced
negotiators know the importance of building a personal relationship before entering
a negotiation. Negotiations involve two parties, usually an organisation and
its Suppliers, trying to reach a deal in which both parties may want a
different outcome.
Reaching a Compromise
In
most, if not all, negotiating scenarios, the best deals and compromises are
reached between an organisation and its Suppliers, where the parties involved
in the negotiating process are removed from the day-to-day operational and
administrative tasks of trading.
Operational
and administrative staff within organisations rarely, if ever, formulate or
write the technical specifications upon which an organisation describes the
needs of its Suppliers. Negotiations with Suppliers should be undertaken and
led by those who have an intimate knowledge of the technical specification upon
which the negotiation will be based.
Those
negotiating with Suppliers must have an objective view of what is being
negotiated and a clear understanding of an organisation's strategic needs
without political or operational bias. A successful negotiating process must
balance an organisation's strategic and tactical needs.
Operational
and administrative staff are deeply involved with an organisation's tactical
needs and often lack the strategic clarity and visionary intent required in the
negotiating process. As such, they should be involved in, but not lead,
negotiating processes to balance an organisation's strategic and tactical needs.
Negotiating With Suppliers
An
organisation and its Suppliers must be able to negotiate with each other in a
scenario where neither side is viewed as more potent than the other. Each party
is equally reliant on the other to create a mutually profitable trading
opportunity. Organisations must lead the negotiating process to ensure that
Suppliers understand their requirements so that Suppliers can meet them
profitably.
A
personal relationship with an organisation’s Suppliers against whom the
organisation will be negotiating prevents an adversarial relationship from
souring the deal before it starts. If an organisation’s negotiation
Stakeholders see themselves as adversaries in a confrontation with an
organisation’s Suppliers, both sides tend to become defensive and reactive.
An
overly heated atmosphere and anger can unravel the most carefully planned
negotiation process. However, much can be done to avoid the problems and issues
when an organisation tries to establish a “personal relationship” with its
Suppliers, who will be on the other side of the negotiating table.
If
an organisation and its Suppliers did not have divergent needs, negotiations
would not be needed. However, when both parties are asked to give up something,
this can create a problematic atmosphere.
Reaching a Mutually Beneficial State
If
an organisation’s Suppliers believe that the organisation is genuinely looking
for a mutually beneficial deal, the organisation is far more likely to make a
concession. It is always good to remember that business is business and that an
organisation must establish itself as the leader in the negotiation process, as
it has the requirement to fulfil, which it knows best.
Negotiation
stakeholders should never make personal attacks or attribute any combative
exchange between an organisation and its Suppliers to malice on the part of
their opponent. In this situation, asking for even a tiny concession can be
seen as an encroachment or an attempt to take advantage of the other party.
When
things become tense in a negotiation, it is always best to suggest a break.
Taking some time away from the negotiating table can help the parties steer the
conversation back to a more convivial personal relationship. It always pays not
to take things personally.
Getting the Best Advantages While Compromising
Understanding
what a Supplier wants from the negotiation can help an organisation achieve its
goals. It is wise to remember to get to know the negotiators' positions on the
other side and the people with whom an organisation is negotiating. Focusing on
seeking their cooperation can be the element that closes a deal.
A
good negotiator will build a personal rapport with the person against whom they
will be negotiating before they even get to the table, emphasising the
importance of maintaining a professional but personable approach to managing an
organisation’s supply base.
The
key is for the negotiator to frame themselves as a friend first and a
negotiator second to the Supplier, transforming the relationship between the
parties in negotiation from competitors to co-operators to provide a positive
perspective on the Supplier that an organisation is negotiating with.
The Positivity of Negotiations
Positive
negotiation relationships are meaningful with suppliers because they engender
trust, which is vital to securing an organisation’s best negotiating position
with suppliers. Consideration of a proposed action entails a risk. People view
negotiations and the associated risks as more acceptable when a proposal is
made by someone they trust.
Research
in the social sciences has found that people tend to respond to negotiations
with similar reactions. Suppliers tend to react kindly if an organisation
cooperates and treats its suppliers with trust and respect. Effective
leadership within the negotiating process is crucial to securing a successful
outcome.
The
nature of reciprocal trust reinforces the value of taking time to get to know
and understand the other party and build rapport before an organisation begins
to negotiate. It is important not to assume that an organisation can form a
bond simply by exchanging a few friendly emails before meeting in person.
Instead, they should forge a personal connection before the negotiation process
begins.
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