March 19, 2021

The Art of Negotiation

Juliet Hinga

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Effective negotiations play a significant role in your individual life, career advancement, and business success since they help in building better relationships. Negotiation is a part of everyone’s day to to day life, whether you are negotiating to buy something, or when negotiating business deals, or even when negotiating with your employer.

The Oxford English Dictionary defines negotiation as a discussion aimed at reaching an agreement.  It also defines negotiation as a formal discussion between people who are trying to reach an agreement be it peace, trade, or wage agreement.

In her book, The Mind, and Heart of the Negotiator, Leigh Thompson refers to negotiation as an “interpersonal decision-making process” that is “necessary whenever we cannot achieve our objectives single-handedly (Thompson, 2012).

Negotiations are not always successful, however, you may be able to strengthen your position by identifying what is important to the other person. There are 4 main negotiation styles you can adopt for effective negotiations.

  • Distributive Negotiation/Win-Lose Approach. With this approach, one side ‘wins’ and the other ‘loses’. Parties put their personal positions and differences before their counter-party.
  • 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. This is the most undesirable type of outcome and hence this negotiation approach is best avoided.
  • Compromise Approach. In this negotiation style, 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 both parties fail to come to an agreement.
  • Integrative Negotiation.  This style focuses on win-win situations for both parties. Unlike distributive bargaining, the driving question is, ‘how can we create the most value together?’. Parties use this approach when the issues at hand are complex.

There are seven elements of negotiation that are crucial in any negotiation. The seven elements of negotiation serve as the essential tools needed to identify our goals, prepare effectively to minimize surprises, and take advantage of opportunities as they arise in negotiation (Moffitt, Bordone, & Program on Negotiation at Harvard Law School, 2005). Whichever approach you decide to use determines how the negotiation elements apply.

  • Interests. Each negotiation approach shares similar components. Understanding a party’s interests is key to integrative negotiation. Understanding the other party’s interests can then be a powerful negotiation tool.
  • Alternatives. Interests allow you to measure your alternatives to the agreement and paint a picture of your best alternative to a negotiated agreement (BATNA) and worst alternative to a negotiated agreement (WATNA). Ideally, you should not negotiate for anything south of your BATNA. This isn’t always possible and understanding your alternatives – as well as the other party’s – will be determinative in a successful negotiation.
  • Relationships. In a negotiation, the relationship between the parties can help determine how fixed your stance can be, how aggressive you can be, and what negotiation approach to can take.
  • Options. These are the different combinations of possible outcomes. When you have reached this element of a negotiation, it means you are progressing towards reaching an outcome.
  • Legitimacy. How do you substantiate the fairness of your offer? How do prove that your counter-party’s offer is unfair? You need some objective standard of fairness for the claims made and not just something that you have discussed at the negotiating table.
  • Communication. This goes beyond voicing your position and your offer. It also involves listening, the tone of your voice, and even body gestures and movements. Here are some communication tips to keep in mind: Ask open-ended questions to gather as much information as possible, listen actively, and be relaxed – body gestures, movements, and body postures can send the wrong message
  • Commitment. The final element of negotiations is ensuring that there is a commitment by both parties. Commitment is two-pronged. Firstly, you want to ensure that the outcome that you have agreed to is realistic. Secondly, both parties must be able to uphold their end of the bargain. Where these outcomes are non-existent, it is likely that the parties will have to negotiate their deals again.

At the end of the day, we all engage in negotiation in one way or another, daily, whether consciously or unconsciously. It is therefore important to refine your negotiation skills, you’ll need to leverage them at one point or another.

About our Master Negotiator Programme

The negotiation process is a part of every manager’s day-to-day activities with people inside and outside the organisation, people whose cooperation is essential to attain your goals. A good negotiation leaves each party satisfied and ready to do business with each other again. Your approach should foster goodwill, regardless of the differences in party interests.

The Master Negotiator Programme will focus on equipping you with the right tools to help you achieve successful negotiation outcomes in the business environment e.g. successful deals. It aims to formalise your experiences, with the skills and ability to think critically about what may now be an intuitive process for you. Learn more about the Master Negotiator Programme

References

1.Moffitt, M. L., Bordone, R. C., & Program on Negotiation at Harvard Law School, The Handbook of Dispute Resolution. (2005) San Francisco, CA: Jossey-Bass.

2.Thompson L.L., Mind, and Heart of the Negotiator. (2012), 6th Edition

Article by Juliet Hinga

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