1.0 INTRODUCTION
Negotiation is a communication skill that
must be mastered by every business
organization. Businesses are set up to
produce products or goods and services. This make
business organization to interact with people
who are in most cases their customers. Skill
of negotiation helps the organization to make
a head way in achieving the primary motive
of making profit. This note will explain how
to acquire the skill of negotiation. Those
things that need to be done in the
negotiation process will be discussed.
2.0 OBJECTIVES OF THE NOTE
After completing this note, you will be able
to do the following.
· Define the meaning of
negotiation.
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· Explain what is needed to negotiate.
· Identify the necessary
plans to make before negotiating.
· Enumerate and describe the
different styles of negotiation.
· Describe the Negotiation
Strategies to maximize a salary offer.
3.0 MAIN CONTENT
3.1 What is Negotiation?
Negotiation is a dialogue intended to produce
an agreement upon courses of action, to
bargain for individual or collective
advantage, to resolve disputes or to craft outcomes to
satisfy various interests. It is the primary
method of alternative dispute resolution.
Negotiation occurs in business, non-profit organizations,
government branches, legal
proceedings, among nations and in personal
situations such as employment salary,
marriage divorce and everyday life. The study
of the subject is called negotiation theory.
Professional negotiators are often
specialized, such as union negotiators, leverage buyout
negotiators, peace negotiators, hostage
negotiators, or may work under other titles, such
as diplomats, legislators or brokers.
3.2 How to Negotiate
Before reaching a negotiation stage of
selling the business, a lot of hard work must have
been carried out on both sides. A vendor
should ensure his company is totally ready for a
sale and any of the potential purchaser must
have carried out a due diligence
The Negotiations could be complex and
time-consuming, and more often than not break
down, sometimes at the very late stage; this
could be very stressful for both the parties.
Saying all this if a right approach is been
taken by both the parties from a outset there is
better chance of deal being struck which both
the parties are happy with.
Prior to research, due diligence was and is
always invaluable during any of the
negotiation process. It will show the vendor
that you do have the true picture of their
company; this could be used to strengthen the
bargaining position. The good purchaser
will attempt to discover any of the
weaknesses in the company so this could be exploited,
while on the other hand the good vendor will
attempt to highlight a company’s strengths.
The use of the basic psychology in a
negotiation process is often used: the common tactic
is for a purchaser to try and understand the
aspiration of a vendor. Most of the people
become emotionally attached to business and
could have the personal friends within staff.
Understanding this is the very important tool
for the successful negotiator. The good
tactic used by a vendor could be to highlight
how well the particular sector is growing
year by year and how well an economy is doing
and how well a purchaser will fair in
future. While preparing for the important
negotiation, be sure to invest a time which it
takes to answer the following questions
· What are other team's "hot buttons? What
kind of facts, tactics, or evidence would
they perceive to be
convincing, meaningful, or "powerful?"
· What
will they hope to achieve from a negotiation at company level, group level,
and also the personal
level?
· What
will they hope to achieve from the other team’s previous negotiation?
· What are other team’s needs and how you can
gather the information for their
needs?
· Who
are all interested parties for the negotiation?
· Are
there any of the penalties associated with negotiation, such as the penalty for
bluffing?
· What
are time limits associated with a negotiation both as disclosed and
undisclosed?
· Who wants the change and who wants to keep
the things in the way as they are?
· What
are best means of communication between two teams?
· What
is the cost of stalemate for their team and your team too?
· What options do you have if you fail to reach
the negotiated agreement?
A complex sales situation should be navigated
by the sales professionals who do know
how to successfully handle the challenge.
Negotiating Success provides the proven
methods to overcome the objections without
relying on the price as a solution. This
programme is non-manipulative; allows the
customer-focused process of ensuring that
both sides win and leaves the company in a
stronger position for future opportnoteies.
Negotiation is the natural process in the
business; both sides must be fully prepared and if
possible should enjoy the process. Through
good negotiation it is possible for both the
sides to come out of a deal happy.
3.3 The Successful Negotiator plan
Each of the negotiation will, if done
properly, be concerned with trading the concessions
against each other. There will be usually
more issues and the variables than could be used
for such a trading than are immediately
obvious. Good negotiators should consider all the
possible variables before meeting, calculate
or do estimate what each will cost, then
decide which he/she will prefer to use and
which others would prepare to use if it came to
crunch. It can't be emphasised too strongly
that the essence of a good negotiation lies in
obtaining the concessions from the other
party, which will totally or largely compensate
for what you have extended.
3.3.1 What variables can I use?
o Price
o Discount
or rebate
o Bonuses
o Delivery
times
o Financial
arrangements
o Training
o Packaging
o Spare
parts
o Deposit
arrangements
o Balance
arrangements
o Credit
terms
o Guarantees
There are many other variables and you will
undoubtedly be able to produce the core list
of the variables for most of your common
negotiations. What each one would cost us at
different levels of the business? What will
it cost them? What each one would be worth to
us? What worth would it be to them? These are
the two crucial questions in the effective
negotiations because they will start the
thought process of: What is cheap for me to give
but valuable for the one who gain? Also, what
can I value which is cheap for them to
agree to? Once you have answers to these
questions you will quickly realise that a
negotiation can be an art as it is a science.
3.4 Different Styles of Negotiation
There are varieties of styles of negotiation,
depending on the circumstances. Where you
do not expect to deal with the people ever
again, and you also do not need their goodwill,
it might be appropriate to play the hardball.
Here you can seek to win the negotiation,
while other person losing out. Many people do
go through this situation when they buy or
sell a house; that is why buying a house can
be such a confrontational and an unpleasant
experience. Similarly, where there is a great
deal at stake in negotiation, for an example,
in the large sales negotiations, then it
might be appropriate to prepare the detail, and use
the gamesmanship to gain advantage. These
approaches usually are wrong for resolving
disputes within the team. If the person plays
the hardball, then this will put the other
person at a disadvantage. Similarly, using
tricks and manipulation during the negotiation
could severely undermine trust, damaging the
subsequent teamwork. While the
manipulative person might not be caught if
the negotiation is infrequent, this is not a case
when the people work together on a day-by-day
basis. Honesty and openness are best
policies in the team-based negotiation.
3.5 Preparing for the Successful Negotiation
Depending on a scale of disagreement, the
level of preparation might be appropriate for
conducting the successful negotiation. For a
small disagreement, excessive preparation
could be counter-productive because it does
take time, which is better focused in reaching
the team goals. It could also be seen as
manipulative because just as it does strengthen
your position, it weakens the other person.
If the major disagreement needed to be
resolved, preparing thoroughly for that is
required, and worthwhile. Think through the
following points before you could start
negotiating.
Goals:
What do you want to get out from the
negotiation? What do you expect from the other
person?
Trading:
What you and the other person have which you
can trade? What do you and the other
person have so that the other wants it? What
might you both be prepared to give away?
Alternatives:
If you do not reach the agreement with
him/her, what alternatives do you have? Are these
things good or bad alternatives? How much
does it matter if you do not reach the
agreement? Will the failure to reach the
agreement cut out future opportnoteies? What
alternatives may the other person have?
The relationship:
What is a history of the relationship? Can or
should this history impact on the
negotiation?
Will there be any of the hidden issues that
might influence negotiation? How will you
handle these?
Expected outcomes:
What outcome would people be expecting from
the negotiation? What was the outcome
in the past and what precedents are being
set?
The consequences:
What are the consequences of winning or
losing this negotiation by you? What
are the consequences of winning or loosing by
the other person?
Power:
Who has the power in the relationship? Who
controls the resources? Who stands to lose
most if the agreement is not reached? What
power does the other person have to deliver
what you do hope for?
Possible solutions:
Based on all considerations, what possible
compromises might be there?
3.5.1 How well have you thought through the
options?
Negotiation is an art form – the more you
practice, the better you are at it. Do the
homework and feel confident. Know all your
worth. Doing it right requires the
preparation, studying the comparative
situations, role playing and getting the other
Perspective.
3.6 Negotiating Your Value
Each new job offer or the performance review
is the opportnunity to negotiate the basic
salary, the bonuses, the benefits, stock
options and the various other incentives which will
add to the job satisfaction and ultimately,
provide a more financial security. You will
need to take control over your job search
before the new job offer and plan ahead of the
time for the annual performance review to
reach the ultimate goal of the financial security
and the happiness. So are you all prepared to
negotiate?
First step in negotiating is making a
decision to reach the goal. Once you have made the
decision, there is a need for you to plan
your approach, gather all the supporting
information, consider the alternatives and
the viewpoints, do communicate specifically,
and understand the strengths and weaknesses.
You should be able to respond effectively
to a negotiating party, and knowing all your
competitors will enable you to bargain for
your position more efficiently and
accurately.
3.6.1 Tips to Focus on During the Research
and Negotiation.
1. Be Persuasive
It is very hard to force your boss to
increase the compensation, and by trying to do so
could potentially damage the working
relationship you currently have. Think about a
process to convince him/her, which might
benefit organization to increase your pay.
2. Do
aim high and be realistic
Many researchers have found the strong
correlation between the people's aspirations
and results which they do achieve in the
negotiation. At same time, you do want to
suggest the ideas for which your boss
realistically could say yes
3. Start
with a right tone which you want
To let your boss to know that you will listen
and will try to understand the views. At
same time, you do expect your boss to do same
for you so you could work together to
address this issue. Avoid the ultimatums,
threats and the other coercive behavior.
4. Clarify the interest.
Your compensation must satisfy the range of
needs, not just the salary. Make sure you
do have thoughts about the other points of
value for you as well -- like the profit
sharing, stock options which vest
immediately, the bonus, the greater work
responsibilities, the quicker promotion
schedule, the increased vacation or the flexible
hours
5 Anticipate
the boss's interests
Just like you, your boss does have needs and
concerns. To make him to say yes,
your ideas should have to address the things
which are important for him
6. Create
several of the options
The joint brainstorming is a most effective
way to find the ideas which satisfy
everybody's interests. It works best when you
separate it from the commitment – first
create the possible solutions, and later
decide among them
7. Focus
on the objective criteria
It is very easy to make someone to agree with
your proposal if he/she looks at how
that proposal is firmly grounded on the
objective criteria, such as what similar firms
do people of like experience want or what do
others in the company make of such
experiences.
8. Think
through the alternatives
In case you cannot persuade your boss to say
yes, you have to backup the plan. Part
of the preparation is creating the specific
action plan so that you know what you will
do if you do have to walk away from a table.
9. Do
prepare thoughtfully to achieve your goals
This is only an aspect for your negotiations
which you can completely control. To
take the advantages of all the above advice,
you should invest significant amount of
time and energy in preparing for negotiation
by studying or reading materials related
to the object of negotiation.
10.Review
to learn
Only way by which you can really improve the
ability to negotiate is explicitly to
learn from the experiences. After finishing
the negotiations, you reflect on what you
did which worked well and what you may want
to do differently. Ultimately you will
be successful in achieving the goal of the
financial security and the happiness!
3.7 Negotiation Strategies to Maximize Salary
Offer
The best approach for the negotiation within
the team is to adopt the win-win approach,
i.e. the one in which both the parties feel
positive about a situation when a negotiation is
concluded. This will help to maintain the
positive working relationship later on. This will
govern the style of a negotiation.
Histrionics and the displays of emotion are clearly
inappropriate because they do undermine
rational basis of negotiation and will bring the
manipulative aspect to it. Despite this,
emotion can be an important subject of discussion.
For a team to function effectively, the
emotional needs of team members must be fairly
met. If emotion is not discussed where
needed, the agreement reached can be
unsatisfactory and temporary. Be as detached
as possible when discussing your own
emotions. Perhaps it would be best to discuss
your emotions as if they belonged to
someone else. Take some time always to
consider the salary offer. Ask for the least of 24
to 48 hours. Silence is golden - or it could
become so - when do you just let it hang up
awhile following the initial offer. Do not
rush to fill a quiet void. Weigh any of the offers
against a company's expectations of you in a
position rather than your own needs. A
company has put itself on line with its
offer. Rest assured they do have a cap, but you
might have some of the wiggle room based upon
how much value a company perceives
you could bring them
Write the "counter-offer" letter
thanking the company for its entire offer to you, recap
why do they say they want you, and will
enthusiastically proclaim the desire to join their
team provided they will reconsider an amount
of their offer. Accept a risk involved with
this approach and will be prepared to walk
away if it will not work
Know when it is no longer in the best
interest to keep the negotiating and then move on to
next opportnunity. Usually, if a situation
does not feel quite right, it is not. You will not be
happy working wherever you do feel you are a
proverbial square peg in the round hole –
especially if you do feel you were taken
advantage of
4.0 CONCLUSION
Negotiation skill, as a skill that gives
business organization headway in its profit motive,
needs to be carefully studied. The aftermath
of a negotiation exercise should be able to
put smile in the faces of the party involved.
This can only be if the parties involved play
their role perfectly well. Negotiation skill
study is vital to business organization.
5.0 SUMMARY
Explanation of what negotiation is and how to
negotiate were treated in this note. Also
treated are: successful negotiation plan,
different styles of negotiation, negotiation
strategy and negotiating your value
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