Posted by Shivali Anand
February 2, 2022 | 3-minute read (466 words)
Good negotiators are made, not born. It is a skill that takes practice. By definition, a negotiation is a strategic discussion among two or more parties aimed at resolving an issue in a manner all parties find acceptable.
The trick is to avoid argument and instead work toward compromise or agreement despite opposing goals.
Businesses often select between four types of negotiations:
1. Integrative (principled) negotiation:
Integrative negotiations are possible when the involved parties have shared interests or opportunities to realize mutual gains.The goal is to resolve a disagreement. Integrative negotiations use both sides’ interests to come to an agreement, hence the term “integrative.”
2. Multiparty negotiation:
More than two parties attempt to resolve perceived differences of interest to achieve a collective objective. An example would be when a company’s department heads meet to represent the interests of their respective teams.
3. Team negotiation:
A style of negotiation in which both parties have many people playing different roles. For example, each side may have a spokesperson, a person who tracks developments and a person whose role is to build ties with the other party.
4. Distributive (confrontational) negotiation:
This type of negotiation frequently does not satisfy both sides' interests. One side wins, while the other loses. Typically, in distributive negotiations, both sides take adversarial postures — and sometimes bully their way — to get their desired outcome without regard for the opposing side.
How to negotiate like a boss
A negotiation requires advance consideration of what you want as a business leader, what possibilities are feasible and what the other party may value.
Whatever form of business negotiation you find yourself in, these four methods will help you negotiate like a pro:
- Establish a rapport: Before beginning the discussion, astute negotiators establish a connection with the adversary. This lets them assess the other party. Integrity, honesty and dignity serve as the foundation for productive negotiations.
- Be polite: The expression "you catch more flies with honey than vinegar" applies to negotiations. It is easier to get what you want by being pleasant, not nasty. Again, it is important to be sincere with your kindness or your opponent may perceive you as manipulative.
- Be open to a win-win outcome: The ideal situation is one in which both sides get what they want. Understanding what the other party wants and working for the benefit of all parties involved may help you get on the same side of the fence. But not every negotiation will result in a win-win situation. Therefore, it is vital that all sides feel they were treated respectfully.
- Respect the pace: Avoid hurrying a negotiation. Taking a breather and allowing others the time and space to reflect is respectful.
How do negotiations help businesses?
There are four primary reasons effective negotiating is critical for your business.
Negotiations can help you get better pricing from vendors, present the right compensation packages for employees, hold a successful fundraising round and expand your firm faster.
If you intend to sell your company, a good negotiation can help find a suitable buyer at a reasonable price.
A well-performed negotiation can assist with cutting corporate costs and boosting profits.
Negotiations foster mutually beneficial transactions while building long-term relationships.