Negotiation

Negotiation is everywhere in our life, whether we are trying to settle a dispute, strike a business deal, or even persuade kids to eat vegetables they don't like. As Rucker put it, every relationship we have is a negotiation because we are social beings that need to interact with each other; it is a critical part of our life.

Keep on reading if you are interested in negotiation and applying its many aspects in your daily life; this explanation will give you the tools to achieve this purpose. We will discuss the rules, strategies, techniques, and principles of negotiation that will help you become a better negotiator.

Negotiation Definition

Let's start this explanation with a definition of negotiation; we will then talk about its importance and the different stages of conducting an effective negotiation.

It's a relatively broad definition, as a negotiation can be many different things. For example, people conduct negotiations between business partners who are trying to strike a deal, between a couple who are having a dispute, between countries who are settling a new trade agreement, or even between kids who are exchanging playing cards.

Importance of Negotiation

The purpose of a negotiation is to come to an agreement with another party. For this reason, the success or failure of a negotiation can have significant consequences.

A successful negotiation is generally considered very positive: disputes can be resolved, new trade agreements can be struck, new deals can be made, etc.

On the other hand, when parties cannot agree to settle, it's another situation: if deals cannot be made, then companies can go bankrupt; if countries cannot negotiate a peace treaty, then war will continue, and people will die; if a dispute cannot resolve, then people will cut their relations, etc.

Principle of Negotiation

There are five steps that can help you effectively conduct a negotiation:

1. Preparation: preparation is critical before any negotiation. You need to know your goals and what you want to achieve. But you also need to guess what your counterpart's goals are and what they are trying to achieve. Learning this information will help you develop your strategy: knowing what you can give away, what has value to your counterpart, etc. You should gather as much information as possible about the meeting and the topics you will discuss.

2. Definition of ground rules: Once well-prepared, it's time to define the negotiation rules with your counterpart. At this stage, you will discuss how you will conduct the negotiation and its extent. For example, you will determine where the negotiation will take place, who will be negotiating, the topics, the exact scope, etc. The parties will also generally define their initial position in this preliminary step.

3. Clarification: At this stage, the different parties will argue and justify their initial position in the negotiation.

4. Bargaining: This part is the center of the negotiation, where people will bargain, give, and take. The result of this stage will determine the negotiation's success or failure.

5. Closure: this is the final negotiation step, where people agree to settle, the deal is officially formalized, and the bargain is stroke.

Negotiation Style

There are various negotiation styles; you shouldn't adopt one just because of your personal preference but select it based on the situation. You can define a negotiation style based on two factors:

• The importance of the outcome,

• The importance of the relationship.

You can use the following diagram created by Roy J. Lewicki and Alexander Hiamto to help you determine the best negotiation style according to the situation³:

Accommodating (lose-win): In this situation, you prioritize the relationship with your partner, as the negotiation outcome is not that important to you. This negotiation style aims to strengthen the relationship with the partner rather than strive for the best result.

Competing (win-lose): it's the opposite of the accommodation strategy. In this case, the result of the negotiation is more important than the relationship with the partner, and therefore, the negotiator will try to get as much as possible.

Collaborating (win-win): in this case, the outcome and the relationship are both critical. The negotiator will try to find a positive outcome for both parties.

Compromising (I win some, you win some): in this case, both parties compromise and accommodate each other. Although it is not the best outcome for any, it's not the worst. It also shows that both are willing to have concessions for one another.

Avoiding (lose-lose): Sometimes, people don't want to negotiate because the relationship is unimportant, and neither is the outcome. In this case, they both lose in the negotiation as it.

Rules of Negotiation

I would like to conclude this explanation by giving five rules that are a good summary of the most critical points of being a good negotiator:

1. Be prepared: the best way to start a negotiation is to be well-prepared. At the very least, you must know your goal and your BATNA, have ready-made answers about the critical points of the negotiation, and anticipate your counterpart's objectives and strategy.

2. Create a strategy: use your preparation to create a strategy in advance and know how you can handle every topic of the negotiation.

3. Negotiation is a conversation: remember that a negotiation is, first and foremost, a conversation between two parties. It's not a one-way speech where someone will blabber their arguments repeatedly without listening to the other.

4. Adapt your negotiation style to the situation: as we have seen earlier, you have to define your negotiation style based on the importance of the outcome and the relationship with your partner.

5. Use various negotiation techniques: we have seen several negotiation techniques, and you should use as many as you can to have a more profitable outcome.