Negotiation

What is Negotiation?
The term Negotiation actually means a discussion intended to produce an agreement. This discussion may encompass parties whose needs being different, come to an interface where they achieve a common solution. We certainly find examples of day-to-day negotiations whenever we are in dire need of buying articles and goods for maintaining our living. A negotiating party may as well be a consumer at one end and the seller at the other end. A transaction is not carried out unless the wants and needs of the customer are not given certain taste of satisfaction, keeping in regard of the profit earned. In order to add to this agenda of transaction the key point that is fundamental is Negotiation.

Introduction to Negotiation:
Negotiation is the process of two individuals or groups reaching joint agreement about differing needs or ideas. Negotiation applies knowledge from the fields of communications, sales, marketing, psychology, sociology, politics, and conflict resolution. Negotiations become an important aspect of business communication when resolving issues. Business negotiations can range from a worker's request for higher pay to discussions of an international business deal. Negotiation is the process of bargaining, where two parties, trying to reach an agreement on mutually accepted terms to acquire each others wants. Example: - Customer trying to negotiate with buyer over a price of a product.
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- Negotiation for salary between employee & employer.

DEFINITIONS OF NEGOTIATION
In the words of Bill Scott, a negotiation is a form of meeting between two parties: OUR PARTIES & OTHER PARTIES. According to J.A. Wall, negotiation is a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. Winstons Advanced Dictionary, the discussions & bargaining that goes on between parties before a contract is settled or deal is agreed upon.

NEGOTIATION PROCESS

OFFER
AGREE MENT
COUNTER OFFER

COMPR OMISE

CONCES SION

OFFER: First proposal made by one party to another in the negotiation stage.

 COUNTER OFFER: Offer made by second party to first party, or proposing their offer against first party offer. CONCESSION: Increase or decrease made in the offer or change in the idea. COMPROMISE: Sacrifice made by both or one party. AGREEMENT: Point where both parties agrees, which is beneficial to both.

Other Negotiation Process:

The process of negotiation is instrumental in achieving the desired results in the companys run of transactions. It is therefore necessary for a business deal to adhere to strict stages in the negotiation. The basic stages of negotiation may be enlisted as: (a) Preparation: The preparation for a negotiation may involve: Identifying what the needs are. Planning thoroughly. Identifying alternatives and prioritizing issues (BATNA-Best

alternative to negotiated alternative). Establishing a settlement range (ZOPA- zone of possible agreement). Focusing on long-term goals and consequences.

(b) Discussion: The next stage involves further discussion of the issues with the members so as to choose the best strategies before the actual negotiation. This again involves the following: Being aware that "no" can be the opening position and the first offer is often above expectations.
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 Being aware of the reluctant buyer or seller ploy. Revising strategies. Considering many options. (c) Proposal: The proposal that is to be presented depends upon the existing needs of the presenter and revolves around a set of issues and alternatives that maybe a threat or opportunity. The proposal is designed keeping in view that it appeases the parties at the other end of negotiation table. As such, the ultimate goal being a Win-Win negotiation. The few key points under this are: Increasing power by getting the other side to commit first. Adding credibility by getting agreements in writing. Being wary of splitting the difference. In handling an impasse, offering to set it aside momentarily. In handling a stalemate, alter one of the negotiating points. In handling a deadlock, bring in a third party. When asked for a concession, asking for a tradeoff. Being wary if the other party uses a "higher authority" as a rationale for not meeting negotiating points. Being aware of the "vise" tactics.

(d) Agreement: The agreement finally comprises of the accepted negotiated proposal that is in accordance with the norms of both the negotiating parties.

This agreement follows certain steps as under:

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 Counter the other party's asking for more concessions at the end by addressing all details and communicating the fairness of the deal in closure. Do not expect the other party to follow through on verbal promises. Congratulate the other side.

Negotiation is made up of five steps:-

1. Preparation and planning:- Before the start of negations one must be aware of conflict the history leading to the negotiation the people involved and their perception of the conflict expectations from the negotiations etc. 2. Definition of ground rules:- Once the planning and strategy is development one has to begin defining the ground rules and procedures with the other party over the negotiation itself that will do the negotiation. Where will it take place? What time constrains, if any will apply? To what issues will negotiations be limited? Will there be a specific procedure to follow in an impasse is reached? During this phase the parties will also exchange their initial proposals or demands. 3. Clarification and justification:- When initial positions have been exchanged both the parties will explain amplify, clarify, bolster and justify their original demands. This need not be confrontational. Rather it is an opportunity for educating and informing each other on the issues why they are important and how each arrived at their initial demands. This is the point where one party might want to provide the other party with any documentation that helps support its position.

4. Bargaining

and

problem

solving

:- The

essence

of

the

negotiation process is the actual give and take in trying to hash out an agreement. It is here where concessions will undoubtedly need to be made by both parties. 5. Closure and Implementation:- The final step in the negotiation process is formalization the agreement that has been worked out and developing and procedures that are necessary for implementation and monitoring. For major negotiations this will require hammering out the specifics in a formal contract.