Negotiation is called a strategic deliberation, where the problem is solved due to the parties agreement. In the course of negotiations each side strives to convince the opposite one and pursues its own ends. Both parties make efforts to avoid a dispute, at the same time accepting compromise.
Negotiating process contemplates concessions. As a result, one side always gets a winning position. Nevertheless, the opponent should cede, even if cession is formal.
Usually, the parties are various. Negotiations can be carried out between sellers and buyers, authorities of one or several countries, as well as recruiter and prospective worker.
Essence of Negotiation
Negotiation process engages two or more parties who intend to accomplish the common objective through compromise or solution acceptable for both. The first side sets forth conditions, while the second either approves the terms, or puts forward its own conditions. The process continues until both parties reach a settlement.
Participants in negotiations strive to learn as much as possible about the posture of the other side before initiating the procedure. Parties also try to find arguments to protect the position and think about the counterpoints. Notably, the aim is to sell its own idea to the opposite side.
Negotiating process takes a certain amount of time and depends on situational factors. For instance, in some circumstances several minutes are enough, while advanced cases can be time-consuming. A trade transaction between states will be a major time sink, as countries have to negotiate all the terms, and present sound arguments for its own benefit.
Stages of Negotiation process
The negotiation process can be divided into several stages. The structure has long been determined. One of the main stages is an introductory conversation, when the subject of the meeting is clarified, in order to resolve emerging issues on the process organization. It can also be a meeting of experts, which usually takes place before the negotiations’ start.
Key milestones of negotiation process include:
- Preparatory stage. A thorough warm-up for business negotiations is 90% of success. Despite the great desire to act impromptu, it is not recommended to ignore the data acquisition, preliminary informal consultations and development of alternative agreements before the meeting.
- Clarification. It’s not a good idea to act immediately and start bidding. Try to technically establish contact with the counterparty, determine its standards.
- Advancement of proposal. The stage is typical as a means of resolving disputes. The sides can exchange proposals, determine the aspects of misunderstanding. Usually the phase is used to covertly or overtly criticize the counterparty.
- Trading process. A stage affects the future agreements. It is dedicated to discussions that can take the pressure form or an unrestricted search for an integrative solution.
- Closing stage. The result can be both successful negotiations or not. It is necessary to fix all the agreements and results of the meeting. As a consequence, ambiguous situations in the future could be avoided.
Rules to be followed in Negotiations
The following mechanisms would be efficient during the negotiation process:
- Rationality. Behaving with restraint is a must in negotiation. Uncontrolled emotions have a negative impact on the process itself, as well as on the ability to make reasonable decisions.
- Understanding. Lack of proper focus on the partner’s point of view limits the development of mutually acceptable solutions.
- Communication. If a partner doesn’t demonstrate much interest, the counterparty should still negotiate and consult the views. These actions will help in maintaining and improving relationships.
- Reliability. Providing inaccurate data weakens the argument strength, and also affects the reputation.
- Mentoring avoidance. It is unacceptable to moralize a partner. The main method of negotiation should be a persuasion.
- Adoption. The counterparties’ views should be taken into account. Both sides have to be open for cooperation.
Negotiation in real life
Lots of individuals consider that prices and propositions mentioned in negotiation are ultimate and permanent. But it has nothing to do with reality. In fact, a majority of terms are flexible, as the negotiation process anticipates accord in different sectors: debt reduction, price drop on real estate, creating better contract conditions, etc.
Not only entrepreneurs negotiate with investors. Discussing salaries with the team and even receiving a job also presuppose concluding a settlement, where professional skills are required.
A case in point is the negotiations between the entrepreneur and clients. One of the most important qualities of a businessman is the ability to listen to the users. Everyone loves to be praised, but listening to critics can be challenging. Anyway, these critical comments usually bring the most value. That’s where the ability to perceive judgmental estimates is needed, as well as the competence to negotiate.
Or another example. When creating a product, the help of particular developers is necessary, as the contractor isn’t able to do everything on his own. In case the entrepreneur is making an online service, storage and analysis of data should be provided. Platforms such as Amazon AWS or Google Cloud may be used, but the terms with the companies need to be stipulated. Thereby, the negotiation process comes into play.