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