We negotiate in our everyday life. And for us negotiation would be about getting what you want from another person. It is true, that everyone involved in negotiation would try and gain an advantage for themselves at the end.
However, as we move towards the corporate world of integrative negotiation, we can say negotiation is a give and take decision process involving two or more individuals or entities with different preferences. Hence, negotiation involves a collaboration of behaviors that involve assertiveness, flexibility, adaptability, persuasive communication, conflict resolutions and so on. We negotiate with a purpose, which could be about buying or selling a product, resolving a problem and to reach out to agreements.At the start of negotiations, the involved parties would be having their own predetermined goals. However, both parties may have to modify their positions, understand each other, go for resolution of conflicting matters and reach out to consensus so as to ensure an outcome for the negotiation.
The process of negotiation involves several stages or phases.
Preparation– Where we set agendas, understanding the individuals and organization at the other end, the time frame, the venue and also doing our homework, before the meet up.
Opening– Opening our conversations with offers far away from the target.
Probing– Identifying the needs and wants and also the interests behind these needs and wants. During the probing, we should be able to see the expected outcome from the other party’s mind.
Discussion– This is the time when parties try and reposition themselves, preventing a deadlock. The parties explore further possibilities and options, become more flexible, make agreements on certain areas and focus on resolving the remaining ones.
Consensus– Agreements made after considering the interests of both parties. It would be a win/win outcome.
Closure– Agreement on the list of issues, drafting of documents, action plan for implementation and drawing up procedures. It could also involve points to be reviewed.
We say that there are two different types of negotiations.
It runs on a win/lose philosophy, where one of them will win and the other will be a loser. However, the relationship between the parties seldom last and hence it is not an acceptable corporate model.
It runs on a win/win philosophy, where the parties are highly assertive as well as flexible, creating a collaborative deal. This model leads to greater bondage and sustained relationship.
There are two concepts which are in use, when a party goes in for negotiation.
BATNA– Best alternative to negotiated agreement.
The homework on BATNA, helps us find out when to accept and when to reject an agreement.
If the party’s PROPOSAL > your BATNA,
Then accept it
On the other hand
If the party’s PROPOSAL < your BATNA,
Then reject it.
ZOPA– Zone of possible agreement.
This usually takes place in sales. There would be a price band which we call as the buyer’s settlement range and there would a price band which we call as the seller’s settlement range. If these do not overlap, then the differentiating price range is known as the zone of possible agreement. It depends how far the buyer and seller moves and intrudes the ZOPA, which determines the ease of negotiation.
Wish you all the very best to become skilled negotiators.