MANAGEMENT ARTICLES

How To Negotiate Effectively.

(Robert Sarwono - International Business Consultant - Trimitra Consultants)

Negotiation is the process of arriving at mutual satisfaction through discussion and bargaining. Managers negotiate to settle differences, vary agreements or terms, or to value commodities or services. Although there is a large area of overlap with ‘cooperation’, as different interests emerge among ‘cooperators’, negotiation is required to resolve conflict.

For negotiating to succeed, each party must genuinely desire agreement, which can be expressed as a lasting contract. Agreement that can not be applied is useless. Solutions must be viable or the negotiators – who are only representatives of an interest – will lose their credibility and authority, and lack of lasting agreement will result. Negotiators have to perform several skilled functions. They must be able to plan in the knowledge that they may not be allowed to proceed in the sequence they desire.

The case relating to each point of the negotiation must be prepared as if the other parties did not exist. Every argument should be complete. Negotiators must be flexible enough to argue cases in context and according to the priority given them by the other side.

Good negotiators understand how to resolve conflict. Denying the conflict antagonize the opponent. Accommodation is dangerous – it is the slippery slope to appeasement and leads to submission. Domineering behavior intensifies resistance.

There is no single comprehensive theory governing the complex practice of negotiation, although some of the world’s foremost business education establishments – notably Harvard – devote much effort to developing strategies to help negotiators achieve positive results.

Types of negotiations

There are three major types of negotiations namely ‘positional’, principled’ and ‘situational’ negotiation.

The distinctions are less clear in practice. For example, situational negotiation usually takes place before both positional and principled negotiation.

Positional negotiation is the traditional form of negotiation. Participants often work to tight mandate. If their positions afford no compromise, the result will be deadlock. Success is usually achieved only after all aspects of opposing positions have been explored to try to find common ground.

Typical examples include union/management bargaining, disputes between customers and suppliers and boundary or territorial difficulties.

Principled negotiation is the ‘Harvard Model’ whereby negotiators are encouraged to search for the underlying principles which support ‘positions’.

This is a more relaxed and creative process for the negotiator, who ids briefed to deliver objectives, not solutions. The will to succeed is often greater than in positional negotiating, because both parties feel a sense of achievement rather than loss.

Principled negotiation degenerates into positional negotiation or deadlock if emotions are allowed to cloud the issues at stake.

Situational negotiation usually takes place before both positional and principled negotiation in the form of leaks to the press or via the grapevine. It is an indirect and pre-emptive form of negotiation. Sending messages via a third party before a meeting can prevent wasting time. Deadlock can be avoided and solutions quickly found.

How to negotiate

The art of negotiation is to avoid reaching a fixed position too quickly. Well before the meeting, messages should be exchanged.

Negotiation should then follow a well-prepared, logical sequence:

1. Introduction

Be sociable with the other party and set a tension-free atmosphere.

2. General overview

Confirm both parties’ broad objectives and feelings. Assess any differences between positions.

3. Background

Review proceedings leading up to the present negotiation. If you have different interpretations of the ‘facts’, iron out the differences.

4. Definition if issues

Specify in detail what you want to resolve, if possible starting with an issue on which agreement is probable. Link issues if advantageous. Specify if one issue can be settled only if another is also resolved.

5. Negotiate the issue

Start by asking for what you want. Both parties want as much as they can get, but both must accept that goals may have to be modified. Conflict should not be avoided – it ventilates the issues and leads to settlements.

6. Compromising

Give, to get something in return, but make sure you give points at a consistent rate. If compromising becomes difficult, go ‘situational’, exchanging messages outside the meeting ground through others.

7. Settlement

Agree on what you have agreed.’ Unless agreement is fully understood by both parties the settlement will not last.