How to conduct effective negotiations

Posted on April 05, 2024 by Martin Hahn, One of Thousands of Career Coaches on Noomii.

Negotiating is something that most people have experienced in their lives. For instance, inquiring about an increase in salary or the price of a car. Negotiation can be defined as a process by which two or more interdependent parties use bargaining to reconcile their differences. The negotiating process demonstrates a fundamental tensionbetween the claiming and creating of value. This institutes that Value claimers view negotiations simply as an adversarial process. An adversarial process is one that sets up a specific and focused conflict. Each side tries to claim as much of a limited pie as possible by giving the other side as little as possible.

Each party claims value through the use of manipulative tactics, forcible arguments, limited concessions, and hard bargaining. Value creators, on the other hand, try to find a way which is beneficial for each party: a win-win solution. They try to find this win-win solution through emphasizing shared interests, developing a collaborative relationship, and negotiating in a cooperative manner. Their main goal is creating additional benefits for each side in the negotiations.

There are basically two general strategies in negotiations: (1) Distributive bargaining which translates into a win-lose approach; (2) Integrative bargaining which translates into a problem-solving or win-win approach. A negotiator incorporates these strategies individually or in combination in one of two basic paradigms. Distributive bargaining is the classical view. This bargaining is considers as a win-lose situation, where one party’s gain is the other party’s loss. Known also as a zero-sum type of negotiation (because one party’s gain equals the other party’s loss, thus a gain of zero), this approach characterizes the purchase of used cars, property, and other material goods in organizations. Salary negotiations and labor-management negotiations can also be put in this category. Distributive bargaining highlights the claiming of value. Winning the negotiation in this case depends to a large extent on the choice of opening offers, the ability to influence the opponent to view the situation in a way favorable to the negotiator, and the careful planning of offers and counteroffers. It must be realized that power plays a key role is successful distributive bargaining. This is because power can increase a party’s leverage and its abilit to shape perceptions.

Recent research encourages negotiators to transform the bargaining into a win-win situation. This is known as Integrative Bargaining. Here, both parties gain as a result of the negotiation. Integrative Bargaining is also known as a positive-sum type of negotiation, simply because the gains of each party yield a positive sum. This approach has recently characterized international negotiations, labor-management negotiations, and specific job-related bargaining.

Effective Communication Skills during Negotiations

1. Be an alert negotiator. A successful negotiator must be assertive and open to challenge everything. Skilled negotiators know that everything can be negotiated. Challenging is not synonymous with refusing all the offers given by an opponent. All offers must be analyzed separately. You must ask the right questions when an offer is given. This implies that you have to be critical about everything you read in the newspapers and see on television. You will not be able to negotiate if you cannot challenge the validity of the information exposed by your opponent. Being assertive means that you need to ask the right questions in order to gather all the information you need to know. You are also not willing to always “no” for an answer. Train yourself to hide your feelings of anxiety or anger. Let others know what you want without feeling threatened.

Train yourself to use “I” messages. For example, change “I do not want you to do that” into “I feel uncomfortable when you do that.” Realize that there is a big difference between assertiveness and aggressiveness. You need to become assertive when you defend your own interests while respecting the interests of others at the same time. If you do not show consideration in the interests of others, you will look aggressive. Assertiveness is part of effective negotiations.

2. Be a good listener. A good negotiator is like a detective. They often ask probing questions and then listen. The other negotiator will inform you about everything you need to know; the only you have to do is listen. Many conflicts can be solved easily if we try to learn to the words of others. We all much too often busy speaking and forget to listen to the words of others. You can become an effective listener by letting others speak. Follow the 70/30 rule: 70 percent of the time is used for listening and 30 percent for speaking. Stimulate the other negotiator to speak with open questions: these questions cannot be answered by simple “yes” or “no.”

3. Be prepared. Acquire as much as possible information related to the negotiation at hand. What are their needs? What pressures are they experiencing? What kind of options do they have? Knowledge about all these will strengthen your position when facing the “opponent.” In short, the more information you have, the more prepared you will be for the “war.”

4. Set a high target. Good negotiators will set a high target to get the best out their negotiations. If you expect to get a lot, you will end up with a lot. A good negotiator is always optimistic. All sales persons usually ask for more than what they expect and all buyers will offer less than what they are willing to pay for.

5. Always be patient. If we want to persuade someone, we must be flexible with the time we have. Our patience will be advantageous if the other negotiator is in a hurry. Always thin rationally. Do not be reckless in making important decisions. This will have a big impact on your future.

6. Focus on satisfaction. Help the other negotiator to become satisfied. Satisfaction means that their primary interests are fulfilled. Do not confuse the primary interests with their desires. Try to accommodate their needs.

7. Do not make the first move. The best way to find out the aspirations the other negotiators is to persuade them to make the first move. The might be asking less than you thought. If you start with an initial offer, you might be offering them more than they need.

8. Do not accept the fist offer. If accept the first offer, the other negotiators will think that they have won. They will be more satisfied when you refuse to accept their first offer. If you say “yes” to their first offer, they will think that the have successfully pushed you to the limits of your abilities.

9. Do not make easy concessions. If you make concessions, try to get the other negotiator to also make concessions in exchange. “I shall do this if you do that.” This tactic will usually make your opponents uncomfortable. They will think that you are smart and have a strong position.

10. Do not hesitate to back off. Do not negotiate without options. Prepare yourself for the worst outcome. Prepare several options as alternative strategies you have during the negotiations. This will give you the chance to think and reconsider the offers of your opponents. If you lose, you can at least say to yourself that you have done your best in the negotiation process.