Negotiation skill important in business
THE body of Michelle “Moana” Amuli still lies in a morgue somewhere in Harare. The three other victims who lost their lives in the tragic accident that claimed Genius Kadungure the multimillionaire socialite, have all been buried.
In her case, we have seen some really “dirty family linen” being hung out into the public domain. At the time of writing this article, Justice Pisirayi Kwenda had not yet made a judgment on the case.
When I look at these tragic events, I can only think of the reason behind this — poor negotiation skills. Each party is not willing to negotiate a “win-win” settlement. And we certainly see the results of that through the applications that have been done at the High Court.
That a High Court judge should settle a burial case is unfathomable. Sadly, in the business arena, we witness long standing feuds brought by poor negotiation skills.
What is negotiation?
According to Investopedia, “A negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable.” The website goes on to argue that; “In a negotiation, each party tries to persuade the other to agree with his or her point of view. By negotiating, all involved parties try to avoid arguing but agree to reach some form of compromise.”
I like this definition on negotiation, by Mark Kilgour and Kevin W Hoper. These two authors point out that “a negotiation is a strategic conflict”.
What are the results of failed negotiations?
There are three major outcomes of failed negotiations. Firstly, these might result from one walking away from a good deal. Sometimes this is caused by emotions, overconfidence, lack of knowledge and sometimes just plain arrogance.
Another negative outcome of the failed negotiation process is that, both parties might hastily seal a deal which they might later regret. This might have been caused by quickly signing contracts without fully comprehending the key tenets of those contracts. The problem manifests itself in court cases leading to unnecessary legal costs.
Another negative outcome might be that the other party might think they are “too big” to negotiate with other smaller parties. Ross Perot billionaire, and one-time presidential candidate, thought that the US$50-million price tag Bill Gates had negotiated for Microsoft was too high. Instead, he passed on the opportunity, and Microsoft would go on to change the world as we know it with modern computing.
Sometimes both parties are too hasty to reach the “finishing line” without thinking too much of implementation modalities. If roles and cost implications are not clearly spelled out, then the negotiations usually meet a dead end.
Basic types of negotiation
Experts in this field generally agree that there are two types of negotiation techniques. These are distributive and integrative negotiations techniques.
What is distributive
negotiation?
Distributive negotiation techniques are techniques that are generally referred to as “lose win” or “fixed pie” dialogues. According to a negotiation expert these techniques “operate under a “zero sum game” These negotiations usually function under the premise that, the gain made by one person is normally the loss incurred by another individual.
Usually the issues that are involved are singular in nature. Examples of this type of negotiations, are usually within the retail sales sector.
The seller wants to get the highest price where possible, while the buyer is looking to get the smallest price “by any means necessary”. These platforms normally involve people who previously have never had any prior interactive relationship nor are likely to do so again in future.
What is integrative negotiation?
These negotiation platforms are normally referred to as “win-win interactions” and these normally involve multiple parties looking to negotiate on an array of wide issues.
The negotiation table is a joint arena where both parties are looking to gain a positive outcome. Normally both parties look at creative ways of solving the issues at hand. In addition, the negotiation process is designed to build long term relationships and ties.
Considerations in the negotiation process
Firstly, it is important that both parties should feel positive about the negotiation process. In addition, both parties should be clear on what outcomes they are expecting. A general understanding of what the other parties want to get out of the negotiation process should suffice here. To this end, thorough research should be conducted before going to the negotiating table.
It is important to analyse the trade-offs for the purposes of continuation of the talks. Thorough preparation is thus must improvisational actors prepare a great deal before they act, the more prepared you are to negotiate, the easier it is to improvise.
Relationship building is also a key factor of the negotiating process. William Ury, a leading negotiation expert, notes that; “The negotiating parties should develop a strategy for maintaining the relationship before and during the relationship. It is always best to develop long term relationships which in turn build trust between the two parties.”
Claire Danes the famous actress believes that; “Seamless negotiation process is the ability to build trust between the negotiating parties.”
The acronym “BATNA” meaning Best Alternative to a Negotiated Agreement” is a must know for all business people. Basically your BATNA will be your best alternative if the current negotiation fail. As a result, astitute negotiators always identify their BATNA.
In conclusion, it is always best to learn how to negotiate effectively. Carrie Fisher says, “Everything is negotiable. Whether or not the negotiation is easy is another thing”.
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