NEGOTIATION SKILLS

WHAT IS NEGOTIATION SKILLS a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument.

However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.

WHY NEGOTIATE?

It is inevitable that, from time-to-time, conflict and disagreement will arise as the differing needs, wants, aims and beliefs of people are brought together. Without negotiation, such conflicts may lead to argument and resentment resulting in one or all of the parties feeling dissatisfied. The point of negotiation is to try to reach agreements without causing future barriers to communications.

CHARACTERISTICS OF NEGOTIATION

There are certain characteristics of the negotiation process. These are:

(i) There are a minimum of two parties present in any negotiation.

(ii) Both the parties have pre-determined goals which they wish to achieve.

(iii) There is a clash of pre-determined goals, that is, some of the pre-determined goals are not shared by both the parties.

(iv) There is an expectation of outcome by both the parties in any negotiation.

(v) Both the parties believe the outcome of the negotiation to be satisfactory.

(vi) Both parties are willing to compromise, that is, modify their position.

(vii) The incompatibility of goals may make the modification of positions difficult.

(viii) The parties understand the purpose of negotiation

THE PROCESS OF NEGOTIATION

In order to achieve a desirable outcome, it may be useful to follow a structured approach to negotiation. For example, in a work situation a meeting may need to be arranged in which all parties involved can come together. The process of negotiation includes the following stages/process:

Preparation

Discussion

Clarification of goals

Negotiate towards a Win-Win outcome

Agreement

Implementation of a course of action

PREPARATION

Before any negotiation takes place, a decision needs to be taken as to when and where a meeting will take place to discuss the problem and who will attend. Setting a limited time-scale can also be helpful to prevent the disagreement continuing.

This stage involves ensuring all the pertinent facts of the situation are known in order to clarify your own position. In the work example above, this would include knowing the ‘rules’ of your organisation, to whom help is given, when help is not felt appropriate and the grounds for such refusals. Your organisation may well have policies to which you can refer in preparation for the negotiation.

Undertaking preparation before discussing the disagreement will help to avoid further conflict and unnecessarily wasting time during the meeting.

DISCUSSION

During this stage, individuals or members of each side put forward the case as they see it, i.e. their understanding of the situation.

Key skills during this stage are questioning, listening and clarifying. Sometimes it is helpful to take notes during the discussion stage to record all points put forward in case there is need for further clarification.

It is extremely important to listen, as when disagreement takes place it is easy to make the mistake of saying too much and listening too little. Each side should have an equal opportunity to present their case.

 A method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument.

In any disagreement, individuals understandably aim to achieve the best possible outcome for their position (or perhaps an 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 affairs, the legal system, government, industrial disputes or domestic relationships as examples. However, general negotiation skills can be learned and applied in a wide range of activities. Negotiation skills can be of great benefit in resolving any differences that arise between you and others.

CLARIFYING GOALS

From the discussion, the goals, interests and viewpoints of both sides of the disagreement need to be clarified. It is helpful to list these in order of priority. Through this clarification it is often possible to identify or establish common ground

NEGOTIATE TOWARDS A WIN-WIN OUTCOME

This stage focuses on what is termed a Win-Win outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration.

A Win-Win outcome is usually the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal.

Suggestions of alternative strategies and compromises need to be considered at this point. Compromises are often positive alternatives which can often achieve greater benefit for all concerned compared to holding to the original positions.

 

AGREEMENT

Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered. It is essential to keep an open mind in order to achieve a solution. Any agreement needs to be made perfectly clear so that both sides know what has been decided.

IMPLEMENTING A COURSE OF ACTION

From the agreement, a course of action has to be implemented to carry through the decision.

 

In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation:

Attitudes

Knowledge

Interpersonal Skills

1. Attitudes

All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the issues and personalities involved in the particular case or attitudes linked to personal needs for recognition.

 

2. Knowledge

The more knowledge you possess of the issues in question, the greater your participation in the process of negotiation. In other words, good preparation is essential.

Do your homework and gather as much information about the issues as you can.

Furthermore, the way issues are negotiated must be understood as negotiating will require different methods in different situations.

 

3. Interpersonal Skills

There are many interpersonal skills required in the process of negotiation which are useful in both formal settings and in less formal one-to-one situations. These include: effective verbal communication, listening skills, building rapport, assertiveness, problem solving and decision making skills.

 

BASIC APPROACHES

There are four different approaches to negotiation and the outcome of the negotiation depends on the approach. The various approaches to negotiation are as follows:

1. Distributive Negotiation or Win-Lose Approach

2. Lose-Lose Approach

3. Compromise Approach

4. Integrative Negotiation or Win-Win Approach

DISTRIBUTIVE NEGOTIATION OR WIN-LOSE APPROACH

This is also called competitive, zero sum, or claiming value approach. This approach is based on the premise that one person can win only at the expense of the other. It has the following characteristics:

(i) One side ‘wins’ and one side ‘loses’.

(ii) There are fixed resources to be divided so that the more one gets, the less the other gets.

(iii) One person’s interests oppose the other’s.

(iv) The dominant concern in this type of bargaining is usually to maximize one’s own interests.

(v) The dominant strategies in this mode include manipulation, forcing and withholding information.

Strategy to be used: In this mode, one seeks to gain advantage through concealing information, misleading or using manipulative actions. Of course, these methods have serious potential for negative consequences. Yet even in this type of negotiation, both sides must feel that at the end the outcome was the best that they could achieve and that it is worth accepting and supporting.

The basic techniques open to the negotiator in this kind of approach are the following:

Influence the other person’s belief in what is possible.

Learn as much as possible about the other person’s position especially with regard to resistance points.

Try to convince the other to change his/her mind about their ability to achieve their own goals.

Promote your own objectives as desirable, necessary, ethical, or even inevitable.

LOSE-LOSE APPROACH

This negotiation approach is adopted when one negotiating partner feels that his own interests are threatened and he does all he can to ensure that the outcome of the negotiation is not suitable to the interests of the other party as well. In the bargain, both the parties end up being the loser. This type of situation arises when the negotiating partners ignore one another’s needs and the need to hurt each other outweighs the need to find some kind of an acceptable solution. This is the most undesirable type of outcome and hence this negotiation approach is best avoided.

 

COMPROMISE APPROACH

This approach provides an outcome which is some improvement over the lose-lose strategy outcome. To avoid a lose-lose situation, both parties give up a part of what they had originally sought and settle for something less than that. A compromise is the best way out when it is impossible for both parties to convince each other or when the disputed resources are limited.

INTEGRATIVE NEGOTIATION OR WIN-WIN APPROACH This negotiation approach is also called as collaborative or creating value approach. It is superior to all negotiation approaches. It results in both the parties feeling that they are achieving what they wanted. It results in satisfaction to both the parties. It has the following characteristics.

(i) There are a sufficient amount of resources to be divided and both sides can ‘win’

(ii) The dominant concern here is to maximize joint outcomes.

(iii) The dominant strategies include cooperation, sharing information, and mutual problem-solving. This type is also called ‘creating value’ since the goal here is to have both sides leave the negotiating feeling they had greater value than before.

Since the integrative approach is most desirable, some of the guidelines to integrative bargaining are listed below:

Orient yourself towards a win-win approach. Your attitude while going into negotiation plays a huge role in the outcome.

Plan and have a concrete strategy. Be clear on what is important to you and why it is important.

Know your Best Alternative to a Negotiated Alternative (BATNA).

Separate people from the problem.

Focus on interests, not positions; consider the other party’s situation.

Create options for mutual gain.

Generate a variety of possibilities before deciding what to do.

Aim for an outcome based on some objective standard.

Pay a lot of attention to the flow of negotiation.

Take the intangibles into account, communicate carefully.

Use active listening skills, rephrase and ask questions and then ask some more

NEGOTIATION STRATEGIES

1. Yielding

2. Compromising

3. Competing

4. Problem-solving

YIELDING

A yielding strategy is to not negotiate. A person who yields accepts the first offer or assumes the price is fixed.

A common reason a person yields is to avoid inner discomfort from thoughts of taking advantage of someone else or the fear of breaking social rules that say you must accept what others say as truth. Another reason is fear of some form of conflict or other unpleasantness.

People who use the yielding strategy typically assume other people are more important and powerful than them, and so abase themselves by giving in at the earliest opportunity. They put gaining the approval of others well above getting what they want from the situation.

COMPROMISING

A compromising strategy seeks some fair balance where both parties appear to get an equitable deal. A typical tactic people used by people who adopt this approach is to 'split the difference', which is not necessarily the best way when the other person is using tactics such as highballing or asking for all needs, wants and likes.

People who use compromising tend to see others as worthy and equal to them, and hence seek fair play. They realize that nobody can get everything they want and seek an equitable arrangement. As with yielders, they care about what others think about them but have higher self-esteem and see themselves as equal to others rather than inferior.

COMPETING

A classic and more aggressive approach is to treat the negotiation as a zero-sum game where their goal is to get as much as possible at whatever cost to the other party.

People who take this approach often assume they are superior or feel inferior but need to appear superior. They may well use any of the negotiation tactics, including the more deceptive ones, and consider this is not at all wrong (after all, it is a negotiation). They may well generally distrust others, seeing the world as a dog-eat-dog place where you deserve what you can get and also deserve to lose what you lose.

PROBLEM-SOLVING

The problem-solving approach is closer to Compromising than Competing in that it starts from a position of respect for the other party. A person using this approach does not see the other person as competitor or threat, but rather as a person who has legitimate wants and needs, and that the goal of negotiation is less to make trades and more to work together on an equitable and reasonable solution.

In particular, a problem-solver will seek to understand the other person's situation, explain their own, and then creatively seek a solution where both can get what they need. They will listen more and discuss the situation for longer before exploring options and finally proposing solutions.

The relationship is important for a problem-solver, but mostly in that it helps trust and working together on a solution rather than it being important that the other person necessarily approves of the first person.

 

 

PHASES OF NEGOTIATION  Stage 1: Preparation

(i) Gathering Information

(ii) Leverage Evaluation

(iii) Understand the people involved

(iv) Rapport

(v) Know your objective

(vi) Type of negotiation

(vii) Plan

Stage 2: Opening Phase

Here the two sides come face to face. Each party tries to make an impression on the other side and influence their thinking at the first opportunity. Psychologically, this phase is important because it sets the tone for the negotiation to a large extent. It involves both negotiating parties presenting their case to each other.

Stage 3: Bargaining Phase

The bargaining phase involves coming closer to the objective you intended to achieve when you started the negotiation. In this phase, the basic strategy is to convince the other side of the appropriateness of your demands and then persuading the other party to concede to those demands. For this, one needs to be logical in one’s approach and frame clearly-thought-out and planned arguments.

Stage 4: Closure Phase

The closing phase of a negotiation represents the opportunity to capitalize on all of the work done in the earlier phases. The research that has been done in the preparation phase, combined with all of the information that has been gained is useful in the closing phase. It also involves the sealing of the agreement in which both parties formalize the agreement in a written contract or letter of intent. Reviewing the negotiation is as important as the negotiation process itself. It teaches lessons on how to achieve a better outcome. Therefore, one should take the time to review each element and find out what went well and what needs to be improved

FORMS AND FUNCTIONS OF NEGOTIATING PROCESS

  1. Compromising

2. Forcing

3. Avoiding

4. Smoothing

5. Confronting

Of the five negotiation strategies mentioned above, the confronting strategy is viewed as the best one. It is a strategy that really seeks a resolution to the conflict. The benefits of the confronting approach are:

(a) It is productive since both parties gain.

(b) It examines the cause of differences between the two parties and seeks a creative solution of the problem.

(c) It aims at a solution that integrates the interests of all concerned parties.

(d) It maintains the self-respect of both the parties and creates mutual respect between them.

In contrast to the confronting strategy, the avoiding and smoothing strategies have the following effects:

(1) They are helpful in managing the conflict process.

(2) They are useful in controlling the intensity of conflict and reduce its harmful effect.

(3) The source of conflict continues to exist even after the conflict is over.