“Negotiation is a process of interaction, by which two or more parties who need to be jointly involved in an outcome but who initially have different objectives, seek by the use of argument and persuasion, to resolve their differences in order to achieve a mutually acceptable solution”
Negotiation. A widely used concept though the term is seldom mentioned. People negotiate all the time, almost daily. Friends negotiate where to have lunch. Two neighbors settle the argument over loud music. A housewife tries to get a reduction in the estimate for some electrical repairs by offering payment in advance. Children negotiate to decide which program to watch & also negotiate with their parents to stay up late.
In the business world, a marketing executive persuades a factory manager to alter a production schedule to fit in an order for a special customer. A sales representative tries to persuade a shop manager to display a particular brand more prominently. In some other part of the world, some ministers meet for a marathon negotiating session about prices & trade affairs while some negotiate about setting up standards on arms & ammunitions. Fowler (1986) illustrates that, in all these situations, despite massive differences of scale and subject matter, people are negotiating.
Lewicki (2003) observes that Negotiation is not a process reserved only for the skilled diplomats, top salesperson or board managers; its something that everyone does, almost daily, though the stakes differ from different scenarios.
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Nieuwmeijer(1992) states, Negotiation is an essential part of our everyday life; just as we cannot exist without communicating, so we can barely exist without negotiating.
Negotiation is a basic way of getting what one wants from another, it is an exchange of information through communication. This also serves to continue or discontinue the relationship. The purpose of this communication exchange is to reach agreement between parties who have certain things in common while disagreeing on others.
Lewicki (2003) states, Negotiations occur for either of these reasons: (1) to create something new that neither party could do on his or her own, or (2) to resolve a problem or dispute between the parties.
Because people can negotiate about so many different things, understanding the fundamental processes of negotiation is essential for anyone who works with other people. Also, in many situations, there are lots of permutations of outcomes than one can imagine & our actions can have much more impact on producing these outcomes. Learning & Understanding negotiation therefore is quintessential to have a grip with this complexity.
UNDERSTANDING BASIC PRINCIPLES
Fowler(1990) observes that the procedures and language of negotiation vary with the type of negotiation involved. Yet, the basic principles and much of the psychology of the process remains the same.
Negotiation is a process, which involves a range of skills. To handle this process effectively, one needs to identify the skills which are relevant to any particular negotiating episode & for that its important to recognize the elements or principles of negotiation. Following are Seven Principles, which are common to all forms of Negotiation:
1. Involves two or more parties with a common interest & expect each other’s co-operation to achieve a satisfactory resolution.
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2. Parties start with a difference of views & opinions but share some degree of interest.
3. Initially consider Negotiation a more satisfactory way rather than coercion or Arbitration.
4. Both parties consider the possibility of persuading the other to modify their initial stance. Both parties are supposed to be willing to compromise.
5. Both parties retain some hope of a final agreement, which is acceptable by both when their ideal outcomes prove unattainable.
6. Both parties have equal influence or power-real or assumed- over the other.
7. There is an underlying human element in all forms of Negotiation. The progress of negotiation is strongly influenced by emotions and attitudes and not just by logic of both the parties.
Depending upon the nature, personality traits & the ability to take stances while Negotiating, Johnson(1993) and Nieuwmeijer(1988) have classified the negotiators & Negotiation Styles/Strategies as:
1. Hard Bargainers/ Forcing/Adversarial
These are the people who are tough & stubborn. They have an attitude of “Take it or Leave it”. They attempt to win the Negotiation through Power, Pressure, Fear or Intimidating. They like to make trades on their own terms without the possibility of meeting in the halfway. This style is effective in cases where the other party/people can’t think of a better alternative & are uncertain of themselves & the situation, sometimes when people are looking to save their energy & efforts required to put up a strong confrontation to such Hard Bargainers. Whereas some give in to a Hard bargainer, owing to the suspicious & deceptive atmosphere of the business world, where the Hard bargainer appears to be straightforward & honest.
However, the hard bargainers are at a risk of damaging their relationships with people owing to their stubborn & rigid nature. Owing to this they may wound their friends & make it difficult for their adversaries to drop their hostility. They’re also at a risk of losing their credibility if they fail to enforce the Fear or Pressure tactics. Also, many people try to bypass Hard bargainers & in some cases, the hard bargainer may miss out on a good deal.
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2. Soft Bargainers/ Accommodating
These are the ones who attempt to prevail by being agreeable & who are flexible in their approach & also by nature. They appear friendly & have good amount of influence over people. Soft bargainers are people who don’t like to catch too much attention & do not like conflicts or to get into them. Also they tend to avoid harsh confrontations. Some use the Soft Bargaining strategy if the issue is not important or they’re unwilling to fight.
3. Tit-for-Tat Bargainers/ Compromising
These are the persuasive bargainers, falling in between the Hard Bargainers & Soft Bargainers, who promote goal-oriented behavior by rejecting both Hard Bargaining & Soft Bargaining measures. They think of achieving their negotiation goals through Punishment & Reward. These bargainers let the other side make their first move. If the move is positive, they Reward the other party by making a positive move as well. If the first move is negative, they dish out a negative move by handing over a Punishment. This strategy sometimes helps to reinforce the kind of behavior, which is expected from the other side. Since this approach is based on cool & preplanned responses, it doesn’t allow the bargainer to be fooled by kindness or blinded by anger and a desire to take revenge.
4. Principled Bargainers/ Collaborative /Non-Adversarial
These are the Bargainers who have a Strategic approach towards Negotiations. These can be Hard or Soft Bargainers who follow some Strategies to achieve their Negotiation Goals. They believe that each of the above approaches has its own advantages depending upon the person’s persona, however much of its effectiveness is lost if a Negotiator falls into a predictable pattern. These Bargainers or Strategy involves Separating the people from the problem, Focusing on interests of the involved parties and Invents options for mutual gain.
However, (Spector, 1977) observed that one may use an approach that satisfies their personality & fits their preferred self-image rather than one that is suited to accomplishing their negotiating goal
STAGES IN NEGOTIATION
Fowler (1990), believes that The Negotiating Process is not a single activity, rather it proceeds over a period of time & has a series of Stages. Fowler (1986) has put these stages precisely, in comparison to other authors (Johnson,1993; Lewicki,2003; Nicholson,2004; Nieuwmeijer,1988), which are:
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To establish whether the parties have formed a contract, the courts begin from examining the elements of offer, acceptance, whether or not there was a consideration or the bargain and the contractual intent to make a binding contract and any other external positive factors. The coincidence of offer and corresponding acceptance results in a contract. In some instances contracts are inferred from ...
1. A PREPARATION Stage; before the Negotiation begins; the background, or sequence of events which lead to Negotiation.
2. The Actual Negotiating Process-the interaction which leads to an agreement about an Outcome.
3. The Implementation of the Agreement; the extent to which the Agreement reached has its desired effect and is effectively implemented.
A lot of thinking goes into the Preparation Stage, as one has to set the OUTCOMES/ GOALS one wishes to have from Negotiation. Secondly, one must get as much information as possible about the other party/parties & their positions like any outside pressure viz. Economic, Social, Political, Familial or Time that can affect the Negotiation. One must also keep these influences in mind and utilize them from the opening stage of setting Outcomes to the final stage of agreeing onto the next step.
Fowler(1986) defines the following three possible settlement levels or expected Outcomes which one should plan for:-
1. The ideal or best possible Outcome.
2. The Expected Settlement Outcome.
3. The Worst, though still just acceptable Outcome.
Kennedy, Benson & Macmillan describe this as the ‘L-I-M’ approach, where L is what the Negotiator would Like to achieve, I is what it is Intended to achieve & M is what Must be achieved as the bare minimum. (Anon, cited in Effective Negotiation, Fowler,1986)
These outcomes should be considered from the other party’s viewpoint as well as one’s own.
The Actual Negotiating Process is where, one has to practice his soft skills in order to achieve their desired Outcomes. Various authors like Johnson (1993), Nicholson & Pillutla (2004), Lewicki (2003) have illustrated many stages & pattern that constitute this stage but Fowler (1986) points out that most effective negotiations follow a six-stage pattern, which are:
i. Defining the issue: No negotiation can be effective unless the involved parties have a common understanding of what & why it is they’re discussing and what each is seeking to achieve.
... two negotiations are the same, but the outcome usually depends on three factors: (a) the bargaining power of the parties, (b) information each party ... bargaining , and (f) documenting the agreement. 1. Defining the desired results to be achieved – This stage begins as the acquisition team ...
ii. Defining initial positions: Each side puts up what it is seeking & their stance on it.
iii. The Argument: A stage where the initial positions are challenged & tested.
iv. Exploring Possibilities: both the parties evaluate new ideas & possibilities surfaced through discussions & debates.
v. Defining Proposals: Based on the arguments & evaluated proposals, firm proposals are defined & if necessary discussed, debated & argued further, to eventually reach Proposals acceptable by both the parties.
vi. Defining & Concluding the Agreement: Eventually after much discussion & deliberation, Final Agreements & Proposals are agreed upon.
The Implementation of the Agreement is where both the parties have finally reached upon an Agreement by mutual consent & now look forward towards implementing them. Fowler(1986) suggests that, to make Implementation effective, a Joint Implementation Review Team should be set up so that both the parties can ensure that the Agreement reached upon through Negotiation is implemented as per the Proposal.
Negotiations may not always produce successful results, as success never comes guaranteed. At times, it may seem impossible for both the parties to arrive on an acceptable agreement. In such cases, a Third Party Assistance or Intervention should be considered.
Johnson(1993), Lewicki et al(1985) & Fowler(1986) suggest three forms of assistance:
1. Conciliation: in which the conciliator assists the parties to reach their won eventual agreement
2. Mediation: in which the Mediator suggests a solution, which the parties may accept or reject.
3. Arbitration: in which parties agree in advance to accept the arbitrator’s solution.
Johnson (1993) & Fowler (1986) consider Mediators as Conciliators & arbitrators as threateners & regard Mediation & Conciliation as effective ways to resolve disputes.
However, Lewicki et al (1985) consider Mediation to be the most effective way of dispute resolution in contrast to Arbitration.
The researcher suggests that the employment of Third Party Assistance/Intervention is purely dependent on the type & the outlook of the parties involved.
Negotiation Point "Effective negotiation is not about conflict. It is not about deviance or dishonesty. It is not about posturing, or bullying, or threatening. Effective negotiation is about exhaustive preparation, utter clarity, heartfelt communication, and a sincere, demonstrated desire to fully understand not just your own needs, but the needs of the other party." Leigh Stienberg: Winning with ...
Negotiation might seem a specialist topic on face, but it is actually a very general activity, which every one practices in their daily life on a regular basis. Though the Negotiations carried out in the Business & Corporate World is much more structured & requires a good understanding of the Procedures & Processes carried out in Negotiation as its extensive & Intensive adding furthermore to the complexity.
Negotiation, even for a general purpose, involves a range of skills that one has to practice over the period of time to become a successful negotiator. Mostly, it’s the nature & the personality of a person that makes one a good negotiator. However, one has to learn & practice the methods/ approaches/strategies of Negotiation over the period of time to become a Successful Negotiator.
Negotiation does involve a contest to accomplish one’s desired outcomes but at the same point of time, one must take care that Negotiation should be used to eradicate dissents & disagreements and help to build relationships & not to destroy them or create resentment.
The researcher understood that we all are different people having different views and opinions and Negotiation should be used as an effective way to co-exist in harmony.
Apart from looking for one’s own favorable outcome, a Successful Negotiator looks out for creating a Win-Win situation, so as to thrive in this ever-competitive business world.
Negotiation, like all similar things in our life may not be always successful. We have to compromise sometimes but even then if we don’t have a decision at hand we can use help of a Third Party. A Third Party assistance can be of help as sometimes both the parties may miss out on some issues & the third party being neutral & an onlooker may provide a good solution.
At the end of it all, the researcher concludes that everyone is a Negotiator, but to be a Successful Negotiator, one has to practice & hone some Negotiating Skills.