Updated: Feb 17, 2022
It is rightly said that successful negotiation can get us whatever we want – in business and life in general.
Negotiation, also called Deal Making is the process through which two or more parties who are in conflict over outcomes attempt to reach an agreement. Negotiation is a constructive process which concentrates more on achieving a solution, beneficial and consenting to both the parties in the negotiation. A win-win outcome is usually the best result. Although this may not always be possible, it should be the ultimate goal.
Negotiation – Meaning It is the process of making joint decisions, when the parties involved have different preferences. It is a give-and- take decision making process, involving interdependent parties with differing needs and ideas reaching a joint agreement, of course after a healthy discussion, thus avoiding argument and dispute.
Negotiation is a part of everyday situations, but in business, it takes on a broader scope and process, wherein the outcome determine successes and failures. Negotiation plays a huge role, in both business relationships and personal relationships. Success of both these areas depend hugely on having great negotiation skills. There is a lot of creativity and sensitivity involved in the negotiation process to generate the expected outcome of any negotiation.
Let us understand the different areas negotiations include:
Partnerships, Joint Ventures, Mergers, Acquisitions
Procuring deals with vendors and customers
Recruitment of new hires and salary negotiations
Team discussions to determine aims, processes and resources
Management discussions and meetings to decide budget, teams and various conflicting interests
Discussions between management and trade unions for various activities
In Personal Life
While buying or renting a home, buying any goods or services
Important decisions with family, friends and self
Marriages, Social Occasions, Parenting, and so on
Negotiations are everywhere. Look around and you will find business negotiations, non-profit negotiations, government negotiations, legal negotiations, personal negotiations, professional negotiations, peace negotiations, union negotiations, hostage negotiations and more. It is because many things are peacefully and satisfyingly achieved after a healthy discussion, debate and process.
Features of Negotiation – why, what, how and why
Understanding the purpose of negotiation
Minimum 2 parties are involved
Expect a defined outcome
Better outcome through influence and persuasion
To get the better of the opponent
Resolution and consensus
Major benefits of Negotiation Learning how to negotiate efficiently contributes significantly to business and personal success, as it not only help build better relationships, but enables progressive growth and development. There are many benefits, but we will look at the major ones.
Resolves major differences thus ensuring better outcomes
Since both parties come to a mutual understanding, there is no bad blood between
Takes the stress out of the meeting, thus paving way for better business relationships
Reduced costs and overheads through better deal making
Before setting out to negotiate, one must be prepared with the outcome one wants to generate from the negotiation. The important aspect here is preparation. Every successful negotiator first looks at the pros and cons and has a very thorough knowledge of what the negotiation is all about. Few points one must consider are:
Know what the negotiation is about
Understand both sides of the argument
Relevancy of issues and its effect on both parties
Flexibility and triviality of any issues
What you want and why you want it
Set realistic and justifiable targets and demands
Have all your expectations and goals set down in writing
If the other party is from a different country, understand cultural differences
Identify the other party’s goals and agenda for the negotiation
Understand their expectations from the negotiation
How you could be affected by the outcome
How they could be affected by the outcome
Prepare your strategy to veer towards a favorable outcome for both parties
Stages of Negotiation in brief:
For any Negotiation to be successful, one must follow a defined process, which would be in the form of:
Preparation: Most important. You cannot defeat your enemy if you don’t know their strengths first. This stage involves ensuring all the pertinent facts of the situation are known, in order to clarify and strengthen your own position.
Discussion: In this stage both the parties put forward their perspective, i.e. their understanding of the situation. Negotiating skills used during this stage include questioning, listening and clarifying.
Clarifying Goals: A common ground can be established at this stage by clarifying goals, interests and viewpoints of both sides of the disagreement. It is helpful to list these factors in order of priority.
Negotiate towards a Win-Win Outcome: This stage is the most important as it focuses on achieving a ‘win-win’ outcome where both sides feel they have gained something positive through the process of negotiation and that their point of view has been taken into consideration.
Agreement: If the negotiation stage has been successful where understanding of both sides’ viewpoints and interests have been considered then an agreement can be reached, which is mutually rewarding for both sides. Recording the decision in physical form would be advisable so that both the sides are aware of what has been decided and have given their agreement for the same.
Action Implementation: Once agreed, a course of action has to be drawn and implemented to carry through the decision
Negotiation is a study in itself. Especially, understanding the stages of negotiation and how a negotiators behavior could influence the process. A major life skill that every person must imbibe since skilled negotiation is required at various junctures in his or her lifetime. It would be very helpful to catch some Effective Negotiation workshops or programs and learn this life skill. After all, if one wants to chop wood quick and fast, one must definitely sharpen the axe first.