The Importance of Negotiation in Daily Life
Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organized lobby; it is something that everyone does, almost daily’ Discuss this statement.
Negotiation is a very obvious present in everyone’s life and whether people like it or not, but it is true that they are negotiators. Everyone does negotiate in one or the other manner. For example, negotiation with the employer regarding raising the salary or negotiation with the customers regarding service or product purchasing or negotiation among different countries on the WTO accession or even negotiation in between couples about what to eat and where to hang out. All these are negotiated. Hence, negotiating is a part of life and each and everyone in this world, plays the role of a negotiators. Apart from the above mentioned examples, there are also many more situations that need to get negotiated, nevertheless, it is also true that not much importance is laid to negotiation in daily life as it is a routine affair (Greenwood and Jenkins 2015). Nevertheless, although negotiation takes place daily, yet achieving effective negotiation is not an easy task. Especially, in the business context, where the desire of each and every organisation is getting highest profit, diplomatic negotiation of the entrepreneur on the market is the only thing in which they all depend a lot. The economic negotiations is the only diverse and rich discussion that promotes its crucial role in the social production development at higher levels and it is more developed and complicated in terms of integration. Lewicki (1986) in this context has stated that- “Negotiation is not a process reserved only for the skilled diplomat, top salesperson, or ardent advocate for an organized lobby; it is something that everyone does, almost daily”. According to him, negotiating is not a process that is reserved only for the ones who are skilled diplomats, ardent advocate or any salesperson. It in fact, is something which is done by everyone and that too, almost on a daily basis. This paper is going to critically evaluate on the act of negotiation as a multi-disciplinary practise. It would shed light on a wide range of skills that negotiators need to draw upon, including styles and techniques, in the process of conducting effective negotiations.
The process of negotiation
As discussed by Goodwin (2014), negotiation is a process through which two or more different parties, each of whose goals and perspectives basically coordinates in the areas of interest through compromise and concessions in order to reach to an agreement. It ultimately ends up in taking a joint decision regarding the areas of common concerns. In other words, it can be said that negotiation is simply a process of discussion in between two or more participants who tries to work out on a solution for their problem. Hoppe and Hisschemoller (2018) have further stated that the process of negotiation does not end up until and unless the problem is resolved successfully. Furthermore, Bandura (2017) has argued in this context that the process of negotiation has been invented by the civilized people as they do not prefer the use of violence. It is also demonstrated by Macaulay (2018) that it is a process in which two or more people exchange their services in an attempt to agree upon the exchange rate for them. Through means of negotiation, the common interests of two people are met and the solutions of the most complex questions are achieved in a way that both the parties are satisfied.
Definition of Negotiation and its Process
Types of negotiation
There are two type of negotiation, namely, the integrative negotiation and distributive negotiation (Barry, Lewicki and Saunders 2015). The integrative negotiation refers to the type in which both the parties cooperate with each other in order to achieve the maximum benefits through means of integrating their interests into a specific agreement while competing with each other to divide the value. For example, it is a situation when a buyer of marble tiles is approaching the seller and both of them are sharing their requirements and interests. The seller is offering a tacit knowledge about marble tiles that could assist the buyer to enhance the beauty of the floor as well as catering his requirements too. On the other hand, distributive negotiation is the type of negotiation in which both the parties complete over distribution of any fixed sum of value. It is sometimes also referred to as constant sum or zero sum negotiation (Lopes and Coelho 2014). For example, in a sale of clothes where both the buyer and the seller do not know each other and there is no relationship in between them. All that matters is the product price and each of the side haggles for best deal.
For most of the people, negotiation and bargaining mean the same thing but they two are different. Bargaining is a sort of negotiation of price alone, while negotiation might apply to much more than just price and might not consist of price at all. All type of negotiation involves exchange of values, promises and agreement while bargaining often done verbally (Rubin and Brown 2013).
Styles of Negotiation
According to Richard Shell (2001), there are five styles of negotiation and they are the competitive style, accommodating style, compromising style, avoiding style and collaborating style. The competitive style, the negotiator is generally uncooperative, assertive and he typically favours hard approach. The compromising negotiators are neither assertive nor unassertive. They just typically favours compromising. The negotiators who seek the accommodating approach are unassertive, cooperative and they favours soft approach and unlike, them the collaborating style favours a principled approach while negotiating (Shell 2001). Lastly, the negotiators possessing avoiding style of negotiating are uncooperative as well and they avoids any kind of engagement (Schneider and Brown 2013). There are also various, tactics, techniques and strategies involves in the process of negotiation. Hence, it is important for both the union and the management in this context to understand the negotiation process in depth as well as to understand to what extent is it critical for achieving their goals.
Types of Negotiation
Furthermore, to this regard Kennedy (1967) has used the well-established 'Four Phases' model as the structure around which he critiques constructively the numerous competing theories and models. He argued that there are different styles of negotiation apart from the ones that are universally accepted by many. According to him, negotiation is an important skill for every manager. Therefore, there are almost as many 'patented' techniques for negotiation as there are managers, each proclaiming to be the definitive route to success.
As a skill, negotiation is an important requirement for every job profile where dealing and management with various parties are involved. Katz, Lazarsfeld and Roper (2017) have stated that the main focus during negotiating must be on the interest more than on the position. The key to every successful and fruitful negotiation is patience, planning and advance preparation as the main objective to establish terms on which parties with different and conflicting aims would come together and co-operate. According to Tomlinson and Lewicki (2015) it is a set of skills which could be practices and learned so that the capability to use the knowledge, relationship, time, power, personality and money for negotiating gets improved with every negotiation. In all the successful negotiation, every party wins. Nevertheless, it is to note that not all negotiation involves the use of money (Macaulay 2018).
The level of negotiation skills of a person is based on two different competencies and they are strategic competencies and execution competencies. Strategic competencies refers to the ability of a person to use proper mixture of time, knowledge and power for conceptualising the process of negotiation governs the strategic competency level (National Research Council 2013). On the other hand, the execution level refers to the ability of a person to efficiently implement the strategy of negotiation that determines the execution competency level. According to McDonald et al. (2014), a person needs to have an effective communication skills in order to be competent executive. In the negotiation theory, BATNA is the Best Alternative to a Negotiated Agreement and WATNA is the Worst is the Alternative to a Negotiated Agreement. BATNA is the most beneficial alternative course of actions that a party could take in case if the negotiation fails and if they could not reach to an agreement. It is the key doucs or say, the driving force behind any successful negotiator. On the other hand, WATNA is the worst that the negotiators could realistically fear. Furthermore, as per the Linkage theory, there is an effective relationship in between a negotiation and its relevant environment. The skills of negotiation consists of methods of persuading and influencing, communicating, strategizing, too setting, system and processes, employing tactics and teamwork. It can be learned through practising and taking knowledge about it. The successful negotiators are the ones who develop various skills from various different disciplines. The business negotiations deals generally with the services, products, ideas and assets. As negotiations are usually required for face to face interaction (often phone interaction as well), not all the negotiation skills could be learned from text books alone. Better negotiation skills need better training programs that are involves in a great deal of practical role plays which are followed right after personalised feedback discussions. Nevertheless, Snodin (2013) has further elaborated his views on the negotiation skills, stating that the modern negotiation skills are showed not only through face to face or phone interaction but also through various website based platforms. It typically requires a two way discussion and communication and the resulted outcomes are influenced through the abilities, mind set and the techniques that are used by both the parties who are involved in negotiation process. Also, Mazei et al. (2015) have argued that the outcomes of every negotiation is based upon getting the right timing. In order to achieve this, the negotiators need to plan and organise the circumstances for the negotiation beforehand. This process also involves examining all the possible outcomes of the negotiation in order to better understand the most important variables. McDermott, Mahanty and Schreckenberg (2013) have further discussed that there is another point that too needs to be considered. It is that during the process of negotiation all the parties evaluate themselves. The skills of negotiation is very important for every person to pursue. It is one of the most consistent part of human lives. For example, a process of labour relations consists of three different phases and one among them is negotiation of labour agreements. As it is stated earlier that a negotiation process involves of two or more different parties. Similarly, in the negotiation process of labour agreement, there are two parties, namely the management or the employer and the union (who represents the employees) (Rubin and Brown 2013). The result of those negation process have a drastic effect on the work lives of all the employees as well as on the employers. In term of employees, they would be affected through the change in working hours, hourly wages, working conditions, any benefits or policies. On the other hand, the employers would be affected through the change in labour costs, management control and operation costs. Hence, it can be said that it is of most importance for both the involved parties for ensuring that the team of negotiating who are representing their interests have the required skills, knowledge and the abilities for securing the best for themselves.
Styles of Negotiation
In the process of negotiation, the process of creating value starts with sharing of information. Negotiation is not a one-sided process and if a person expect to gain information, he must also wilfully share it as well. The concept of reciprocity is the most important aspect of successful fact finding process and this is because of the fact that it is the only method through which he would be able to find out creative solutions which would benefit both the parties (Sounas, Caloz and Alu 2013). There are few negotiations that constantly revolve around one single issue and most of them revolves around the process of creation of partnership which would entail various issues. A strong and powerful partnership should always be based upon respect and trust as its cornerstones. A person can only enhance his negotiation skills through maintaining his focus on developing and building a long lasting work relationship from which both the parties continuously makes profit (Katzenbach and Smith 2015). The issues that are prevailing must always be identified and they should be given high priorities at their stage of preparation. There are a large number of issues that are likely to takes place and could increase further for enhancing the number of resources that are to be shared and this in turn is likely to create value creating opportunities. Nonetheless, one of the very common errors that man of the negotiators make is to propose and present only single offer. It is an error because of the fact that it could act as anchor where everything revolves around it as it has a very narrow scope. With the same, because of such a narrow scope, the interaction or conversation could easily be affected this will also encourage in limiting or restricting the attitude in working (Mansbridge 2018). If a person propose a package that contains many offers at the same time, he will be much more able to discuss creatively about the trade-offs in addressing the issues that he would face. Multiple package of negotiation would assist him to add more value to the agreement as he would be able to make a comparison as well as identify the difference in the issues when he would discuss about the trade-offs. Turan et al. (2013), in this context have stated that, if more issues are proposed and are put on the table, people will be getting the chance of having more flexibility for negotiating the trade-offs like the valuations, time preferences, capabilities and valuations. With the same, it is also to note that the person must also resist the temptation for compromising as it would not yield much value to the issue and would also tend to decrease the resources that are to be negotiated. He must therefore, go for a bit difference. He must instead negotiate the trade-offs which are of more relative values to him. It is to note that anything less would only reduce the value of the agreement. Hence, there is a high need of more in each and everything. The value creating process in the negotiation process could only take place once both the parties that are involved are adopting the mind-set of creative problem solving. .
Tactics, Techniques, and Strategies Involved in Negotiation
Culture and negotiation
The impact of culture on the negotiation could be categorised into cross cultural and intercultural and they could be compares along the cultural characteristics. The cross cultural negotiation is the one that concerns negotiation in between the individual belonging from different cultures. For example, negotiation among the individualistic versus collectivist cultures. According to Ting-Toomey (2015), negotiators in the collectivist cultures have the tendency to reach integrative outcomes as compared to the negotiators in the individualist cultures. With the same, the intercultural negotiation refers to the process of negotiation within a person’s own culture. Peters (2014) has stated that culture does not influence the outcomes of negotiation but it may have an indirect influence on it as it could affect the negotiation process in different culture. It is also to note that the cross-cultural negotiations would result in poor outcomes when compared to intercultural negotiations (Mor, Morris and Joh 2013). It is to note that the negotiations gets broken down when the negotiating parties makes use of their differences as a devise for driving the wedge in between them. Rather than this, they must try to make use of contingency contract in order to build up some bridges. Contingency contracts addresses all the differences in between the parties and the expectations because of the fact that a contingency itself is postulated on ‘if’- ‘then’ design of tier-type and considers the changes in the circumstances (Fisher 2016). Here, they draw up an agreement for addressing their different types of viewpoints by saying that- “If circumstance A takes place, we would agree to the following process” or “If things change and circumstance B takes place, we would agree to this step”. Such kind of contracts are multi tired structure that consists of many layers and they are not that easy to handle. It is also to mention that this does not allow them greater flexibility and latitude for keeping the negotiations moving forward and is a practicable means of addressing their differences in the negotiation expectations
Context of negotiation in today’s globalised environment.
Today, the most important of all the necessities is to be ready for facing different rules and culture in the process of negotiations. It is now present in every spheres of life and is especially important in terms of economy, both for the firms and the individuals and even for the entire state. Every time when people wants something from someone else, they are negotiating. Each and every thing in this world is negotiable and whether it be with customers, colleagues, suppliers, wife or children, man negotiates every day. Especially, in business world, people make use of the process of negotiation at various levels and contexts such as in the business and departmental units, in between different companies, in between different departments or even in between various industries. There can be many reasons behind negotiating. It is done by the people to agree on the method to share and divide limited resource like the property, land or time. It is also done for creating something new which could not be done by either of the parties individually (Greenhalgh and Lweicki 2015). Also, the process of negotiation is done for resolving the disputes and problems in between the parties. Pillar (2014) has stated that most of the people fail to negotiate as they fail to recognise that they are in a situation where negotiation is required and in this way, through choosing some options other than the one of negotiating, they might fail to attain their desired targets and goal as well as to manage their problems in a smooth way as they intended to do so. Also, Witten et al. (2016) in this context have stated that there are people who might understand that there is a need for negotiating but they do it poorly as they do not possess proper knowledge of the process or they do not have proper skills of negotiating. Hence, it is very important for the managers to have a good knowledge about negotiations in order to be very effective in the negotiating process in between, across, within all the prevailing business environment.
Competencies for Successful Negotiation
Hence, from the above analysis it could be stated that negotiation skills are basically the same everywhere they are practiced but they do differ to some extent in different environments. It involves a set of two or more different person who coordinates and compromises among themselves in order to achieve their goals and interests for reaching an agreement. In other words, it is a process of making adjustments in the view of both the parties about their ideal outcomes in order to attain a desired outcome. Each and every one negotiate in their personal lives as well as in their business lives and therefore, the scope of negotiation ranges from highly complex multination and multiparty interactions to one-on-one interactions. People create value through working together in a collaborative manner for using their differences as opportunities for enhancing their scope of agreement through expanding the issues and making various offers, contingency agreement, and constructive trade-offs and looking for how to tackle the disagreements (Lewicki 1986). Hence, it is clear from the above discussion that the ways and means of enhancing the skills of negotiations through adding value to the agreement are most readily acquired and are achieved if there has been an application of creative problem solving method.
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Importance of Negotiation Training
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