Basics Of Negotiation And It's Process

1. Introduction

The term negotiation refers to a strategic discussion intended to resolve an issue in a way that both parties find acceptable. Negotiations involve give and take, which means one or both parties will usually need to make some concessions.[1]. Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute.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. Negotiation can take place between buyers and sellers, employers and prospective employees, two or more governments, and other parties. Here is how negotiation works and advice for negotiating successfully.

2. Examples of Negotiations

Negotiating can take place between individuals, businesses, governments, and in any other situation where two parties have competing interests. Here is a everyday examples:

Suppose you've been offered a new job but don't consider the salary sufficient. An employer's first compensation offer is often not its best possible offer, so it may have some room to negotiate. In fact, a 2016 survey by the CareerBuilder website found that 73% of employers were open to negotiating a starting salary with job seekers. And if higher pay isn't a possibility, the employer may be willing to offer something additional, such as more vacation time or better benefits.

In both of these examplesas in most successful negotiationsboth parties have made compromises, while also achieving their principal goals.

3.The Benefits of Negotiation

a.Creating Win-Win Solutions

Most negotiations aim to achieve win-win solutions for everybody. Granted, there are some types of negotiations where this isnt the objective, but in most cases, win-win solutions build and preserve relationships.

Learning what is the meaning of negotiating will help you to get what you want without trampling over everyone you meet or creating conflict.

b. Strengthening Relationships

Personal and professional relationships are the key to success within any area. Failure to create, maintain, and strengthen those relationships will ultimately lead to lesser outcomes in whatever you want to pursue.

While the negotiated definition refers strictly to a process, one of its purposes is to reinforce those vital relationships. After all, if you treat people fairly and work to accommodate their needs, theyre likelier to do business with you again.

c. Achieving Optimal Results

Negotiation for meaning is the name of the game. Mostly, you can expect to be in negotiations because you want to achieve something.

It could be something as significant as landing a major contract with a multinational corporation or something as insignificant as discussing vacation plans with your significant other.

Either way, working on your negotiation skill will help you to achieve the best possible results while also aiding others to achieve their desired results.[3].

4. Business Contracts

What is the definition of negotiating within a business context?

Business negotiations are the most common scenarios where youll be asked to test your skills against someone else.

For example, your employer may ask you to negotiate a lower price for your organizations raw materials. Alternatively, you may conduct business negotiations on behalf of yourself, such as if youre trying to win a promotion or gain a higher salary.

Even if youre not in a prominent position, improving your negotiation skills makes you a more significant asset to your employer. Yet only 58% of millennials said they would negotiate a higher salary for themselves.

If you find yourself in this position, you leave value on the table.

5. Stages 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:

1. Preparation

2. Discussion

3. Clarification of goals

4. Negotiate towards a Win-Win outcome

5. Agreement

6. Implementation of a course of action

While there are many approaches to negotiation tactics, there are five common steps that most effective negotiations follow to achieve a successful outcome [4] :

1. Prepare: Negotiation preparation is easy to ignore, but its a vital first stage of the negotiating process. To prepare, research both sides of the discussion, identify any possible trade-offs, determine your most-desired and least-desired possible outcomes. Then, make a list of what concessions youre willing to put on the bargaining table, understand who in your organization has the decision-making power, know the relationship that you want to build or maintain with the other party, and prepare your BATNA (best alternative to a negotiated agreement). Preparation can also include the definition of the ground rules: determining where, when, with whom, and under what time constraints the negotiations will take place.

2. Exchange information: This is the part of the negotiation when both parties exchange their initial positions. Each side should be allowed to share their underlying interests and concerns uninterrupted, including what they aim to receive at the end of the negotiation and why they feel the way they do.

3. Clarify: During the clarification step, both sides continue the discussion that they began when exchanging information by justifying and bolstering their claims. If one side disagrees with something the other side is saying, they should discuss that disagreement in calm terms to reach a point of understanding.

4. Bargain and problem-solve: This step is the meat of the process of negotiation, during which both sides begin a give-and-take. After the initial first offer, each negotiating party should propose different counter-offers for the problem, all the while making and managing their concessions. During the bargaining process, keep your emotions in check; the best negotiators use strong verbal communication skills (active listening and calm feedback; in face-to-face negotiation, this also includes body language). The goal of this step is to emerge with a win-win outcomea positive course of action.

5. Conclude and implement: Once an acceptable solution has been agreed upon, both sides should thank each other for the discussion, no matter the outcome of the negotiation; successful negotiations are all about creating and maintaining good long-term relationships. Then they should outline the expectations of each party and ensure that the compromise will be implemented effectively. This step often includes a written contract and a follow-up to confirm the implementation is going smoothly.

6.Characteristics Of Negotiation Process:

a. Voluntary

b. Bilateral/ Multilateral

c. Informal

d. Flexible

6. Conclusion

Negotiation is an important part of life. Understanding it and the many faucets associated with it is important. People often view negotiation as a win-lose enterprise, but in most situations, a win-win mindset will lead to greater benefits of negotiation. Adding issues to the discussion is often the key to value creation and a great deal. While negotiation is a great starting point in the dispute resolution process, there are some disadvantages of negotiation that limit its effectiveness in some situations. Parties entering negotiations in bad faith is only one potential disadvantage that can occur in negotiations Ideally, parties should have equal power in a negotiation, but when one party has drastically less power, this can make negotiations problematically one-sided. Consider a situation where an uneducated man with no lawyer tries to negotiate with a massive corporation with a whole team of high-paid attorneys. With no safeguards to protect his rights, the man will be unlikely to come to a fair agreement with the firm. or most routine negotiations, a reactive approach is sufficient. When the stakes are low, skilled negotiators can pivot with relative ease from one tactic to another as the opposite side makes moves, and often thats enough to ensure that the final deal fully captures value for them. But from time to time dealmakers find themselves in complex negotiations with higher stakes. In those situations they require a much more robust approach. Just like business, political, and military leaders, negotiators need a strategic framework that illuminates the key choices they must make to achieve their ultimate objectives.