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How to negotiate effectively
HOW TO NEGOTIATE EFFECTIVELY



1. What is negotiation

Negotiation is an essential part of the every-day business life. It can
take place at any time and in any place. Negotiation is a kind of meeting,
but contrary to the latter it may be held in some unexpected and
uncomfortable place such as the street or on the stairs.

There are several definitions of negotiation. It is said to be “the process
for resolving conflict between two or more parties whereby both or all
modify their demands to achieve a mutually acceptable compromise”. Thus, it
is “the process of changing both parties’ views of their ideal outcome into
an attainable outcome”.

The need of negotiation arises when we are not fully in control of events.
Negotiations take place to handle mutual differences or conflict of:

. interests (wages, hours, work conditions, prices: seller vs buyer)
. rights (different interpretations of an agreement)

The aim of a negotiation is to come to an agreement which is acceptable to
both sides, and to preserve the overall relationships. While specific
issues are to be negotiated, common interest are yet still to be
maintained. Negotiations do not mean “war”. Negotiators can still be
friends and partners.


2. The negotiation continuum

. Overlap

The situations of negotiation can be shown diagrammatically in terms of
ideals and limits.

Ideal
Limit
HIM

Bargaining area


Limit Ideal YOU


The limit may be the limit of negotiator’s authority, such as a minimum
(e.g. price) acceptable. If there is overlap it is possible to settle. The
final position within the bargaining area, where settlement takes place,
depends on the negotiators’ relative strength and skill.



. No overlap

The aim of the negotiator is to achieve a result, i.e. to find a solution,
within the bargaining area. However, it is possible that both parties set
limits which do not provide overlap. In this case the negotiators have to
move their limits, otherwise the negotiation will be broken down.

Ideal Limit

HIM
No deal



YOU

Limit Ideal


. Too much overlap

The opposite case is also possible. When one is careless and settles for
less than he could. In this case the limit of the opposite side should be
found and the ideal should be revised.

Ideal
Limit
HIM


YOU

Limit Ideal
Revised Ideal


3. The approach

There are four main stages of negotiation:

. Preparing objectives, information, strategy
. Discussing (argue) and signalling willingness to move
. Propose and bargain
. Close and agree

While preparing to the negotiation it is important not only to prepare
supporting arguments but also to define objectives. Objectives should be
realistic and attainable and have certain priorities. It is also necessary
to investigate the opponent’s plans and priorities, which can be rather
difficult.

The objectives should be classified basically as follows:

Like Ideal but least important
Intend Achievable, a range of possibilities
Must The real limit



Ideal
Limit

AREA OF NO DEAL
Like

Intend

Must



The general strategy for negotiation is to have a negotiating team of three
people, who will also be involved in the preparation.

. Leader The person who will do the talking and conduct the
negotiations
. Summariser The person who will ask questions and summarise for
control
. Observer The person not involved in the actual negotiations, whose
role is
to watch, listen and record

80 % of the negotiating time is spent arguing
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