Sunday, 23 February 2014

Negotiation

Negotiation
1.1 Introduction

I have something you need and you have something I need. For instance, I have money and you have products or services, say, legal, computing, security, advertising. Either I come to you and say I want your product or a particular service from you or you come to me and say I have a product to sell or a particular service to offer. In both cases, negotiating has begun.

Whether we are aware or not, negotiating goes on all the time. When we engage a baby sitter, when we drop our child at a play school, when we buy a car or cell phone, when we sell a property, when we are bidding, when we send our daughters to a B-school of management, when we seek election to a seat in the Assembly or Parliament, when an agreement is total or when compromise occurs.
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1.2 A description
A negotiation is an attempt to reach an agreement or a compromise by discussion with
others (Oxford Concise); it’s a formal discussion between people who are trying to reach an agreement (Advanced Learner’s); it’s obtaining an agreement, deal etc. by having a discussion with others (Reader’s Digest)

A negotiation is also a conflict resolution effort because during discussion, in reaching an agreement, conflict of interests arises; generally, no negotiation is complete without dealing with conflict[s]. Conflict arises because it is people who negotiate and people can become emotional: how comfortable both parties feel with each other, how they perceive each other, assumptions about themselves and the others, the level of trust, how important winning is, how important it is not to look foolish by losing the deal.

Conflict can be resolved in two ways: i. collaborative  ii. competitive. Of these, the more important is collaborative since most of your negotiation and conflict resolution in your personal and professional life will [should] be of this nature. This is because most negotiations involve situations where we want or need an on-going relationship with the others.

Negotiation is bargaining; this is of two kinds: competing [win-lose] and integrative [win-win]. Win-lose will break or prevent relationships. Win-win will continue or promote relationships. 

In a successful negotiation, everyone wins. The objective should be agreement or compromise, not victory. win-win negotiation is a solution acceptable to both parties and leaves both parties feeling that they have won, in some way, after the event. It is a collaborative (integrative) effort where both sides approach negotiation, wanting to “create value” or satisfy both their own needs and the others’.
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1.3 Is negotiating a learnable skill?
You have to constantly negotiate and resolve conflict in your professional and personal life. If you didn’t, you might lead a miserable life.

You may be inherently good at bargaining, at negotiating. I may not be. But I may be good with plants or animals, and you may not. You may be good at forming concepts and I may be good at performing. But I believe that you, like me and others, have all the skills you need to lead life happily, that some skills are natural to you [you seem to use them extremely well without any conscious effort, without any training], that the other skills are latent in you [existing inside you but not active or developed], that you can develop the negotiating skill. Yes, negotiating is learnable.
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1.4 How do you go about learning it?
Probably you can join a course offered by an institution. Probably your employer will invite negotiation experts to enlighten you. However, the best possible training you can go through will be observing and learning from or listening to those colleagues of yours who negotiate on behalf of your employer. Of course backed up by information in print!
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1.5 Negotiating environment
You don’t negotiate in a vacuum. You are a person and your partner is a person, too. You move around, you act, you delay, you bargain, you listen, and there is another person who does all you do. Now, all that you think or don’t think, all that you say or don’t say, all that you bargain for or don’t, all that your partner depends on
             the image(s) you have of your partner(s)
                                       and
             the image(s) your partner(s) has/have of you.
What does ‘image’ mean? Whether it is yours or your partner’s, image includes concepts, (say, negotiation) attitudes, values, mediums, thinking/interpreting/analyzing skills, feelings/emotions, confidence—how good or poor you are or your partner is. Besides the images, environment includes ‘health’ and relationship [community/race etc., stranger/acquaintance/friend,] 

The negotiating environment is the backdrop against which you need to prepare for a negotiating event.
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1.6 Preparation
A Negotiation can conclude in a few hours or it can prolong for days, even weeks sometimes. Whether brief or long, it requires planning, organizing [getting ready] and implementing [starting and completing].
¨Goal —what you want out of the negotiation, what you think others want

   Negotiation is not a casual conversation where you may expect to give away or
   receive nothing. Buying or selling goods or a property, appointing a baby sitter or a
   housekeeper or a programmer, renting a place and other similar activities are goals.
   Generally speaking, you want to buy at minimum cost but sell at maximum price.
   You’ll want to get excellent help with minimum payment. You’ll want all comforts in a
   rented accommodation at a cheap rate. Getting a contract or orders for your products,
   takeover bids, signing a deal are also goals. Again, your goal will be to gain maximum
   advantage.

   However, you must remember that what the person you’re going to negotiate with will
   want will affect the shape of your goal. If you know or can guesstimate this prior to the
   event, you’ll have a huge advantage. Or, with clever information-seeking questions,
   you must be able to glean it as the negotiating event is progressing and modify your
   goal if necessary.  

   Is the negotiating event a one-time relationship or one that can or should result in a long   
   partnership?  Deciding a goal without a clear answer to this question might harm your
   interests.

   Your goal[s] then must be clear, specific and flexible. Also, have your goals at three
   levels: i. What exactly do I want?  ii. How much of this will I be content with? iii. How
   much of this can I live with? 

¨Trades—what you have and others have that both of you can trade, what are those that
                  you each are comfortable giving away 

   No negotiation is a total success. You must be ready to make a concession or two to
   achieve your goal. Here you’ll have to know your constraints and the other’s limitations
   and consider them carefully as the bargaining gains momentum. Time, money, prestige,
   status are big constraints for both you and your negotiating partner[s]. If you can
   redefine your negotiating terms realizing the effects of these constraints on the
   negotiating process and the result before your partner does, you will gain because you
   will now be able to decide about the concessions you can make or offer that will not
   result in a heavy loss for you. 
  
   Knowing the market trends is another aspect that will also help decide the concessions
   and the gains. Let’s say you want to buy a piece of land as a first step to owning a
   house. You or your agent must know everything about all pieces of lands available for
   sale—the location and the kind of neighbours, the closeness or the distance and the
   quality of the facilities and the amenities you expect to provide your family with—like
   school, market, bus stop, hospital, water quality.      

   If you’re negotiating on behalf of your organization, you should consider your
   organization’s basic philosophy, its present and future needs, its growth, its image and
   the like in order to formulate an approach that will not undermine all these.

¨ Alternatives—In case of failure, what alternatives are there—yours and the others? 
                           How much does it matter if you do not reach an agreement—future
                           business, continuing contact?   

    You may have planned well, you may have tried hard, you may have made some
    concessions; yet, success may elude. So, in the planning stage, you must also assume
    failure and see what would happen to your plans, how it could affect the functioning of
    your organization: can I get what I want from others? how satisfactory their offers will
    be? will relations break? how will this failure affect my commitment to my customers?
    This precautionary analysis will help you get ready with a contingency plan or make as
    many concessions as necessary to the other party so that you get what you want
    without undue delay. Go with as many solutions as possible so that you and your
    partner leave with something to take home.

    Sometimes, failure may result. Prepare for this contingency, too. What should be my
    options? Do I have other sources I can go to? Can I get what I want from them?  

¨Relationship—building or continuing a relationship

   Is this your first negotiation? Do you wish to build a relationship because it might be to
   your advantage? If you have been doing business, what’s been your success rate? how                  
   will this affect your present negotiation? is it to your advantage to continue the
   relationship or is a break okay?
                            
¨Solutions—based on all these what possible compromises might there be?

   Do you expect a solution to your liking? Should you be ready to concede? Will such
   concessions dilute your success? Will you make no concessions?
                             
You should deliberate on these and other issues that should cross your mind while planning for your negotiating event. Have clear frank or honest answers. 
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1.7 Strategies for success
Hope moves people. Hope strengthens efforts. People cling on to life, strive, struggle in hope. You can do better a job if you

  · know your partner[s]
     People come in different hues. Your partner[s] may be aggressive; they make you feel 
     small, inefficient, unimaginative. They may be bullies; they upset you with their
     belligerent behaviour. They may be incommunicative; they irritate you enough to get
     you to lose your composure. They may be pretenders; they appear to be reasonable but
     make impossible demands. They may be principled; they exhibit integrity, they are
     reasonable, they listen well, they want solutions. They may be timid; they don’t offer
     solutions nor will they easily accept those that you may offer. 

  · handle them well
     Be patient but be firm with the aggressors. Don’t attack them personally but bring out
     the weaknesses in their efforts by the thoroughness in your preparation. Ignore the
     insulting behaviour of the bullies. Listen well, praise their efforts, present them with
    offers they cannot refuse. Observe closely the body language of your uncommunicative
     partners, surprise them with offers, concessions, using the conclusions you arrive at
     from your observations. With the pretenders, you must arm yourself, as part of your
     preparation, with how badly they need what you have. You can use this as leverage   
     and make offers you know they’ll be happy with, telling them that it would be their
     pleasure to accept or reject your proposal. You will have no problem dealing with
     those who are principled. With the timid, communicate to them that you are a friend,    
     praise their efforts, suggest solutions in such a fashion that they feel they said them,
     not you, make them feel comfortable; you may even tell a lie that you were unsure,
     uncomfortable but got over them because you wanted to succeed in your career.

  · keep your goals flexible
     Avoid taking a predetermined position and move towards that. Rigidity can cause
     more harm than good.

  · look at issues, problems and solutions, not people
     If you made ‘who’ [you] more important that ‘what’[your need[s]], you’d lose the
     bargain.

  · treat your partner on equal terms
     A cornered animal is always dangerous. So is cornered partner. Don’t put your
     negotiating partner in a corner from where there is no escape. If you can, save their
     face but never humiliate.
 
  · are ‘objective’ and look at issues also from your partner’s angle 

  · exercise immense patience
     The other person[s] may not cooperate, may even be hostile; yet, if you are patient,
     you are likely to score more than you would otherwise. Returning empty-handed from
     a negotiation helps neither you nor your partner.

  · listen well
     Indicate this very clearly to your partner verbally and nonverbally. Ask questions,
     seek clarifications, paraphrase what you hear, indicating respect to your partner and
     exhibiting interest in what they are saying. Especially in the initial stages of
     negotiation instead of talking. Listen more, speak less.
 
· be ready to compromise
   Accept concessions. Let you partner feel he’s made you happy. Make concessions as
   reciprocal gestures and let your partner feel he’s won something tangible from you.


· develop a sense of timing the closure
   When you are in an advantageous position, don’t get greedy for more concessions. If
   you did, you might lose rather succeed.
         
To conclude, you also need to use people skills, you need to communicate efficiently and effectively in order to persuade someone or to negotiate with someone for something. You’ll thus ‘managepeople through persuading or negotiating [communicating]. 
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