My Implications And Learned Lessons In Business Negotiation
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My Implications and Learned Lessons in Business Negotiation
Being a salesperson like me, I must admit that it is a tough marketplace out there and strong negotiating skills are fundamental to achieving and more importantly sustaining career and business success, particularly within a competitive sales and marketing environment. Those of us who want to achieve better results, both at work and in our private lives, need to develop effective negotiating skills. It is worth to bear in mind that if the technique used is too aggressive or even too soft, revenue and profit will be lost. This all even made greater sense to me after taking the Negotiation Course. Not only did I learn the negotiation theories and related methodologies, but also I was able to practise the negotiation exercises where I observed the negotiation process and made it in a more systematic manner. Moreover, I was able to relate many different concepts that I have learnt from the class with my own work experience.
This paper is likely to be my Negotiation summary of what I have learnt from the class. To be more specific, I will discuss about four main subject areas in which I am most interested namely 1) Essences of Negotiation which sum up general ideas of Negotiation and later will focus on Distributive and Integrative Negotiations, and “Getting to Yes” by Roger Fisher & William Ury, 2) Negotiation Self-Assessment in relation with other human traits and behaviours reflected in negotiations and which affect negotiations outcome , 3) Cultural Influences in Negotiation with respect to Hofestedes Cultural Dimensions , and lastly 4) Two Articles on Contingency Contracts and Negotiation as Part of Corporate Capability articles respectively.
In all negotiation situations, there are two or more parties, individuals, groups or organizations who have a conflict of needs and desires , and the parties must search for a way to resolve the conflict. Negotiation takes place out side the system to invent their own solutions. The parties prefer to negotiate and search for agreement rather than to fight openly, have one side dominate and the other capitulate, permanently break off contact, or take their dispute to a higher authority to resolve it.
Parties negotiate because they think they can get a better deal by negotiating than by simply accepting what the other side will voluntarily give them or let them have. When negotiating, a give and take is expected. To reach an agreement, both sides will modify their opening statement to find a middle ground; they compromise.
Successful negotiation involves the management of tangibles (the price or the terms of agreement). The tangibles seem to be true especially for sale persons as it is a major issue in their daily business transactions. Also the resolution of intangibles:the underlying psychological motivations that may directly or indirectly influence the parties during a negotiation i.e. the need to “win” or avoid losing, the need to look “good” to those youre representing, the need to appear “fair” or “honorable” or to protect ones reputation, and the need to defend an important principle or precedent in a negotiation. These intangible factors are interrelated in various sales negotiations i.e. getting a market share in a fierce competition, being the most favored supplier to your key accounts, or pushing the new product into the market etc. They have an enormous influence on negotiation processes and outcomes, so it is crucial for negotiators to understand how they affect decision making and tangible outcomes.
Most relationships between parties may be characterized in one of three ways: independent, dependent, or interdependent. Independent parties are able to meet their own needs without the help and assistance of others. Dependent parties must rely on others for what they need; the dependent party must accept and accommodate to that providers whims and idiosyncrasies. When the parties depend on each other to achieve their own preferred outcome they are interdependent; they are characterized by interlocking goals. Working interdependently allows parties to achieve a possible outcome that is better than they could achieve by working on their own.
In my business to be the leading food supplier, we always position ourselves as a partner with the customers. Both parties have the same goal that is doing the business. We need the customers to make our business, likewise they too need us as their suppliers to get their business running. The business nature essentially requires interdependence to achieve the final out come that is profitability. With that in mind, both parties realize that building and maintaining long term relationship is indispensable.
Alternatives that shape interdependence between parties “BATNA” : Best Alternative to a Negotiated Agreement. Whether you should or should not agree on something in a negotiation depends upon the attractiveness of your best available alternatives. Negotiators need to understand their BATNA, as well as the other parties.
Interdependent parties have an influence on the others outcomes and decisions. As parties act to influence each other in a negotiation, they engage in a mutual adjustment. It is important to recognize that negotiation is a process that transforms over time, and mutual adjustment is one of the key causes of the changes that occur during a negotiation. The effective negotiator needs to understand how people will adjust and readjust, and how the negotiations might twist and turn, based on ones own moves and the others responses.
The best strategy for successful mutual adjustment to the other is grounded in the assumption that the more information one has about the other person, the better. Two dilemmas that all negotiators face in mutual adjustment: Dilemma of honesty – how much of the truth to tell the other party? And Dilemma of trust – how much should negotiators believe what the other party tells them. The search for optimal solution between negotiators is greatly aided by trust and a belief that you are being treated honestly and fairly.
Two types of bargaining that have been clearly categorized in Negotiation are distributive bargaining :the purpose this type of negotiation is to claim value–
to do whatever is necessary to claim the reward or gain the largest piece possible and integrative bargaining : the purpose of this approach to negotiation is to create value, or find a way for all parties to meet their goals and share the reward.
The former is directly related to sell-buy situation where a resistance price plays a major role. Disclosure of information and discovering each others resistance point will help both parties settle