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1.0 INTRODUCTION
Negotiation is a common word that always appears in our personal and professional lives. Business is also negotiating. From the day you start thinking about having your own company, you are negotiating every step of the way. We negotiate when we buy office furniture, or when we do a project with co-worker, or when we are dealing with customers or even business partners. You will pay a price if you do not recognise the process for negotiation. Sometimes it is easy to negotiate, but other times, when we have a great deal at stake or we are upset, the task can be intimidating or difficult. In this paper, we are going to talk about what negotiation is, some stages, rules, strategies, etc. that can help you work and negotiate more effectively with your customer, co-workers, and boss. Also, they are also applicable to other interpersonal situations.
(http://members.nbci.com/_XMCM/cooperate/neg.htm) & (http://www.findarticles.com/cf_1/m1471/n3_v20/20350497/print.jhtml)
2.0 FINDINGS
2.1 What negotiation means
¡§Negotiation is the process through which two or more parties seek an acceptable rate of exchange for items they own or control.¡¨ (Meredith & Mantel, 2000, p.229)
¡§Negotiation is a field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things.¡¨ (Meredith & Mantel, 2000, p.229)
Negotiating is an inter-personal process. Each negotiating situation is different and influenced by each party¡¦s skills, attitudes and style. Understanding the negotiation process and the party involved with allow us to manage negotiation easier in satisfying both parties¡¦ interest. Increase your salary; get you a better position; gather support for your project or department; gain approval for a budget; and improve your chance for success on the job are the reasons for negotiation. You will benefit through the process of negotiation if you success at the end. Therefore, it pays to overcome your aversion to haggling and your negotiating skills will be improved through the entire process.
(http://www.findarticles.com/cf_1/m1471/n3_v20/20350497/print.jhtml) & (http://www.smartbiz.com/sbs/arts/bly60.htm)
2.2 Types of Negotiation Within Organization
2.2.1 Horizontal or In-Team Negotiations
STAFF (PARTY A)
STAFF (PARTY B)
(http://www.lead.org/lead/training/international/usa/1999/docs/papers/effective_negotiation_techniques.htm)
This type of negotiation refers to negotiations within group. Examples of this type of negotiation include assigning project responsibility, project meeting date and time, etc.)
2.2.2 Vertical Negotiations
(http://www.lead.org/lead/training/international/usa/1999/docs/papers/effective_negotiation_techniques.htm)
This type of negotiation refers to negotiations within organization. Normally this type of negotiations occurs between Manager to Staff, Management to Manager, Staff to Customers, etc.
2.2.3 External Negotiations
(http://www.lead.org/lead/training/international/usa/1999/docs/papers/effective_negotiation_techniques.htm)
This type of negotiation includes some external bodies such as Government, Trade Associations, etc. Company policy and Trade policy are examples of the issues to be negotiated.
2.2.4 Others
Other types of negotiations include spokesperson negotiations, subcommittee negotiations, and multilateral negotiations, which are normally, occur in an informal private conference between staff. Member 1 in Party A have an informal conversation with Member 1 in Party B is an example of informal private conference. (http://www.lead.org/lead/training/international/usa/1999/docs/papers/effective_negotiation_techniques.htm)
2.3 Possible outcomes of Negotiation
2.3.1 Integrative (Win-Win)
Integrative refers to a type of negotiation outcomes, which is a both sides WIN situation. Both parties cooperate in the negotiation process to maximize and distribute resources fairly to achieve mutual benefits. Integrative outcome is an ideal outcome that can maintain relationship with others for further development.
(http://www.cba.neu.edu/~ewertheim/interper/negot3.htm)
2.3.2 Distributive (Win-Lose)
Distributive refers to a type of negotiation outcomes, which are one side WIN and one side LOSE. The main reason of ending up a Win-Lose situation is one person¡¦s interests oppose the others and to maximise one¡¦s own interests. The dominant strategies in this mode include manipulation, forcing, and withholding information.
(http://www.cba.neu.edu/~ewertheim/interper/negot3.htm)
2.4 Types of negotiators
Negotiation is always affected by the personality of the negotiators. There are 2 main types of negotiator personality. They are:
2.4.1 Autocratic Negotiators
Autocratic Negotiators clearly understand what they want and need in the negotiation process. But very often, you will find this type of negotiators fail to negotiate effectively because they do not have the ability to listen the need of the other party to figure the big picture of the negotiation issue.
(http://www.onlinewbc.org/Docs/manage/negotiating.html)
2.4.2 Accommodating Negotiators
Accommodating Negotiators are more concerned about what the other party want than their own needs. Accommodating Negotiators try to avoid argue and conflict arise in the negotiation process by giving certain amount of compromise, sometimes even override their own interest.
(http://www.onlinewbc.org/Docs/manage/negotiating.html)
2.4.3 Good Negotiators
The project manager must be a highly skilled negotiator in order to meet the high demands of a job of a project manager. A good/highly skilled negotiator should have the personality of Accommodating Negotiators. This type of managers seems to have a better relationship with other people because they always try to understand people need. (http://www.onlinewbc.org/Docs/manage/negotiating.html)
2.5 Stages of Negotiation
Stage 1 Evaluate problem and set your rules1. The highest figure: Everything you WANT to achieve.2. The lowest figure: Your bottom line.3. The goal: A realistic fact of things that you EXPECT to achieve.
Stage 2 Contact involved parties and try to understand their needs
Stage 3 Analyze background information and recognize mutual needs.
Stage 4 Design a detailed plan for negotiation according to mutual needs.
Stage 5 Try to highlight the mutual benefits of your plan to build trust and cooperation
Stage 6 Negotiation begins where other parties not agree with the plan of mutual benefits.
Stage 7 Define issues and develop an agenda for use in guiding the meeting
Stage 8 To find out the reasons that other parties reject the suggestion of mutual benefits and discover the further hidden interests of other parties
Stage 9 Generate alternatives to deal with further hidden interests for settlement
Stage 10 Assess possible options for settlement
Stage 11 Options presentation for final bargaining
Stage 12 Achieving formal settlement
(http://www.lead.org/lead/training/international/usa/1999/docs/papers/effective_negotiation_techniques.htm)
2.6 Barrier to successful negotiation
1. Set the right tone for the negotiation
A successful negotiation is form by understand each other and to achieve mutual agreement. Negotiation is a way of finding solution, rather than beating the other party. Good relationship between parties cannot be maintained of being too aggressive in the negotiation process.
(http://members.nbci.com/_XMCM/cooperate/neg.htm)
2. Contest competition
Lots of negotiators viewed negotiation as a contest and try to use any kind of strategies to win the contest. However, negotiation is not a contest but it is the finding of a solution to problem at which will benefit both sides to have a both parties win outcome. You will create more difficulty down the road if you are not being considerate to win everytime. (http://members.nbci.com/_XMCM/cooperate/neg.htm)
3. Think before you respond
It is normal to have feeling like anger, disappointment, frustration, etc. in the negotiation process. However, as we get more emotional, we often react without thinking and cannot solve the problem in a constructive ways.
(http://www.batna.com/difficult_v4.html)
4. Failure to understand
Sometimes negotiators focus too much on their own needs instead of finding solution to both parties. We could not negotiate properly if we do not understand each other properly. (http://members.nbci.com/_XMCM/cooperate/neg.htm)
5. Personal preference
Sometimes negotiators tend to be more understandable to people they like than people they do not like. Effective negotiation can never achieved if negotiators only focus on personalities, not issues and problem solving.
(http://members.nbci.com/_XMCM/cooperate/neg.htm)
6. Not being responsible
Both parties contribute in a negotiation process. Both parties have the responsibility for the best or worse outcome. Negotiators should not blame the other party but to take the responsibility to create a spirit of cooperation.
(http://members.nbci.com/_XMCM/cooperate/neg.htm)
7. Being hasty
Do not be hasty to button down a day¡¦s work for low quality solutions. And do not start giving in to the other party due to the reason of tired or ready to home. Try to call for a break and contemplation will help in such situation to avoid risking anger the other party. (http://www.smartbiz.com/sbs/arts/bly60.htm)
2.7 Influence
2.7.1 People
An effective negotiation is about the ability of the negotiator to influence people. Most people are always being influenced instead of influencing others due to the reason that they do not understand how easy it is to influence others. There are several approaches to maximise you influence, they are:
1. Precedent
Use of successful past examples to illustrate your idea. This can support your idea and make people believe that your approach works.
2. Legitimacy
Use of documentation such as trade journals, written reports, past success examples to make your idea look legitimate and get people¡¦s belief.
3. Persistence
Try to present your ideas in a positive ways of saying YES, BUT¡K..instead of saying NO.
4. Competition
Let people to understand that you have other alternatives even without their assistance. They will feel less secure and try to be cooperate that your needs can be satisfied elsewhere.
5. Knowledge
Demonstrate your knowledge by showing them your qualifications and past successful examples.
(http://www.knowledgecenters.versaware.com/notoc/getpage.asp?book=ManagerToolProb&page=062000139.asp)
2.7.2 Other Elements
1. Communications
Be careful of using a right tone to communicate with you opponents. A right tone and right way of communication can enhance your negotiation process.
2. Your own personalities & style
Understand yourself. Negotiation strongly emphasis on understand your opponents but you must understand yourself first before applying with suitable strategy to their personalities. Your opponents will easily affect you emotionally if you do not understand yourself.
3. Physical space
Always select a meeting place, which is comfortable for both parties. A public but quiet would be a best choice so opponents would not show their temper and emotion easily.
4. Past interaction
You would be able to handle the negotiation process better if you have experience of negotiating with the opponents. But bear in mind your opponents also familiar with your personality well. So well prepare for the negotiation is necessary and more effort is required comparing to negotiating with strangers.
2.8 Negotiation Techniques
1. Study your opponent
It is the initial step in the negotiation process. You would not manage the negotiation process effectively without studying your opponent about their interest and needs. (http://www.franz.org/bc05.htm)
2. State your need
To understand the other party is not enough. It is also important to let them know what you need.
3. Understand each others
There is a story about two sisters fighting over for the only orange in the family larder. Each sister must have the entire orange for herself. After the parents ask why they need that orange and they discover one sister wants to drink the juice and the other wants to cook a pudding. This story reminds us perfect solutions come sometimes without putting effort but try to understand each other.
(http://pertinent.com/pertinfo/business/stevecohen.html)
4. Prepare options beforehand
It is essential to prepare some options and back up alternatives if your preferred solution is not acceptable. (http://members.nbci.com/_XMCM/cooperate/neg.htm)
5. Know your BATNA
Consider your BATNA (Best Alternative To a Negotiated Agreement). Your BATNA is the situation you want to improve by negotiating with a given party or set of parties. To have a clearer big negotiation picture, it is advisable to study the BATNAs of every possible party involved in the negotiation.
(http://pertinent.com/pertinfo/business/stevecohen.html)
6. Use an Objective standard if possible
It is advisable to set the objective standard to avoid the final decisions made are based on emotions or pressure rather than principles and results.
(http://www.cba.neu.edu/~ewertheim/interper/negot3.htm)
7. Separate people from the problem
¡§It is critical to address problems, not personalities and avoid the tendency to attack your opponent personality. Make sure you send signals that you know the conflict is about the issues at hand and not personal. This will help to prevent the other side from getting defensive.¡¨ (http://www.cba.neu.edu/~ewertheim/interper/negot3.htm)
8. Pay attention to the flow of negotiation
Negotiation is a process, which include of a sequence of events. Negotiators should pay attention to the flow of the negotiation so suitable action can be taken towards problems. (http://www.cba.neu.edu/~ewertheim/interper/negot3.htm)
9. Good Guy/Bad Guy Strategy
One solution if your opponent uses this strategy to listen to what the bad guy says, but do not ever try to argue back. Prepared yourself to walk away if necessary. Negotiate with the good guy instead and to use him to negotiate with the bad guy for you.
(http://www.franz.org/bc05.htm)
10. Consider timing
Negotiators should avoid to negotiate when a high degree of anger on either side, or a high level of stress and tiredness on one side or the other.
(http://members.nbci.com/_XMCM/cooperate/neg.htm)
11. Assume everyone else is smarter than you are
This technique is to prevent you from getting the idea you can outsmart other people, then you stop paying attention to them and you will fail to concern about the opponents¡¦ needs.
(http://www.findarticles.com/cf_1/m1471/n3_v20/20350497/print.jhtml)
12. Silence is golden
Keeping quiet can shut the aggressive and demanding opponents mouth up and cool down and to make them start to listen your ideas and opinions.
(http://pertinent.com/pertinfo/business/stevecohen.html)
12. Three Ds
Do not believe everything you see and hear but to explore and try to understand it by yourself.
Do not be angry when the other opponents being aggressive and unreasonable, which will not benefits the negotiation process.
Do not offer your bottom line too early in the negotiation process so you will have a higher chance to get more than your bottom line.
(http://pertinent.com/pertinfo/business/mikeschactzkiN1.html)
13. Others
Opponents will be more comfortable if you can present yourself to be fair and consider their needs. Be patient and active listening are also the key rules, so opponents will be conscious of your needs. Effective communication requires both parties to put consideration to each other.
(http://pertinent.com/pertinfo/business/stevecohenN2.html)
3.0 RECOMMENDATIONS
There is not one pre-packaged set of principles and applying them to all situations. To negotiate well, you must be prepared to use a variety of approaches. Experience is the best teacher and effective negotiation requires practice. To increase you negotiation skills, you need to increase your awareness of what you are doing. Always try to look for areas of agreement that can benefits both sides instead of being selfish to concern your own self. Satisfying each party¡¦s main interests is the fundamental to successful negotiation.
Negotiators should learn to enjoy the process of negotiation. Negotiation is not a disaster but it can bring in benefits to you, your team, your department and your organization. With you skill increases and experiences more effective negotiation, you will discover that negotiating can be fun.
(http://www.bbraham.com/html/negotiation.html)
4.0 CONCLUSIONS
Negotiation requires a high level of skills because it is not only rely on a person¡¦s performance but also how he/she handles the process with the opponents. To manage a negotiation process effectively, one golden rule is to be silent. Silent can give you time to think about your needs, to consider about your opponents and to construct a proper tone of sentence to explain your view. Also, a good negotiator requires to make use of their resources such as helping your colleagues and staff to negotiate better will save time, reduce stress, and increase productivity. Negotiation is all about learning and understanding, which there is no one best issue or way for negotiators to learn but from experience and other successful past examples. Therefore, personality is an important issue of negotiation, so always try to understand yourself first before adopting any strategy on your opponents. Happy negotiating!
Word Count: 2492
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