Negotiation Strategies Help The Companies To Expand Their Business

Negotiation is something that we often encounter in our lives. Be it bargaining at a local vendor's shop or convincing our friends for an outing to a favorite destination. But when it comes to the business field, negotiation skills are the keys to unlock the doors of success, create profit and large turnovers for the company. Negotiation is inherently both, an art and a science. Art, in the sense that it involves excellent communication skills, leadership skills and tolerance. Moreover, negotiation is a science as it requires a thorough knowledge of the market, economy and finance. How well a firm would perform in the political landscape of a corporate world is totally dependent on the skills of its negotiators. For organizations, negotiators are generally their executives and managers.

Negotiation Strategies For Managers
Middle level managers and upper level managers are the chief architects in designing negotiation strategies for companies. There are various facets of a successful negotiation strategy that can increase the prospects of earning a lucrative deal.

Clarity in Objectives
It is a common saying that "If you fail to plan, you plan to fail." Before beginning any negotiation talks, make sure that there is a definite goal about what you exactly want from the deal. For example, you may need more time to pay off a loan, so a clear explanation to the bank is essential. A crystal clear goal conveys a positive message to the negotiating party. However, having a definite aim doesn't mean that you need to compromise on terms and conditions set by the other party. A flexible outlook is always helpful. Often, the interest of the other party must be taken into consideration. The idea is to make things better for both the negotiating partners, without hampering the core objective(s).

Communicate Correctly
Communication is an art and business communication is the best example of it. Before holding talks with the firm or a person, ask them if a mail, phone call or video conferencing technology can be used for their convenience. A concern about your client/partner's comfort shows your respect of good business etiquette. On the day of the appointment, try to be precise and yet effective in explaining your goal to the other party. You need not explain everything in the first go, just mention your goals and show that your deal/project has a long term prospect for both the parties involved. Mostly, face-to-face communication or meetings and conferences are preferred by companies. It is obvious because deals and projects are not just transactions or money transfer, instead they involve many facets of a business. A positive body language is bound to make a big difference in negotiating.

Maintain Trust and Influence
Trust is a necessary element that lubricates the negotiation process. When your aspirations are clear and you respond effectively to the negotiating partner, mutual trust evolves with time. Influence here, should not be confused with dominance. If you are a project leader and you are dealing with another firm, you can announce discounts, awards and bonuses on closing a deal or on achieving the targets after closing the deal. Similarly, you can put stringent rules (in case deadlines are not met) on failure to achieve a target. Such types of measures are adopted in civil engineering projects that have time constraints during which the deal must be finalized.

Negotiation Techniques For Executives
Negotiation skills involve understanding and applying negotiation techniques in order to increase your firm's competence in the challenging global economy. What are these techniques and skills that will set you apart from your business competitors?

Cross-cultural negotiations
Negotiations involving international companies require more in-depth understanding of the global market, not to mention knowledge about intercultural communication. Besides, the executives need to handle mergers and acquisitions in a careful manner as they need to follow the norms set by the international companies. Even while starting a joint venture with a firm, negotiation skills are of the utmost importance.

Negotiating in Teams
Nobody can deny the crucial role of teamwork. An excellent team has the ability to turn the fortunes of the company. However, view points of the team members about a certain deal may differ. An executive need to apply strategic thinking and resolve the differences among the colleagues. The fundamentals of conflict management can also be used for solving disagreements amongst the partners and negotiators. The role of a proper human resource management is very important in motivating and keeping the teammates connected.

Successful negotiations are a result of confidence, power and ability to convert threats into opportunities. The Indian based Tata group acquired the iconic British automobile giants, Jaguar and Land Rover from Ford Motors in June 2008. This is a classic example of a successful negotiation between large corporate entities. Negotiation skills sharpen with experience and play a vital role in shaping the future of a firm.

Win-win Negotiation Works Towards Securing Mutual Benefit

Do you realize how much time we spend negotiating with others in our day to day life? Whether it is sealing a high-powered deal at work, pleading with a traffic cop on a perceived violation or simply getting your ten year old to finish his homework, negotiations are found wherever relationships exist. Negotiating a way out of a conflict is probably the best way to handle a potentially tricky situation; but it's required as much when you're trying to strike a bargain at the local flea market. Love it or hate it, you just can't ignore it.

The popular perception is that such discussions generally run on parallel tracks, with each party trying to secure the maximum advantage for themselves. While some negotiations may well favor one party, a win-win negotiation works towards securing mutual benefit. The win-win negotiation technique is employed when there is a desire to maintain a long term, harmonious relationship.The objective is to ensure that both parties feel good about the outcome, once the deal is struck.

A win-win negotiation is based on the premise that the stance of the negotiating parties is rarely as opposed as it appears to be at first glance. It thus seeks to find and exploit common ground, and build an amicable solution that aims to maximize joint outcomes. If you're thinking that sounds a lot like motherhood and apple pie stuff, think again. A win-win negotiation is for real, and we'll show you how!

Believe in it. Get into the groove by wanting to reach a mutually beneficial solution. Experience shows that the outcome is strongly influenced by the way the two parties approach the negotiating table. Keep the other party's interest in mind, along with your own. If things are deadlocked, consider allowing low impact concessions - something that brings them value, without taking too much away from you.

Define your needs. When you plan your negotiations, take some time to think of your most important needs, as well as those of the negotiating party. Some people approach a discussion with the sole intention of "winning" every point - hey, that's not how it works. If you have a clear threshold in mind, you'll be able to devote your energies towards making the discussion work, rather than maintaining the score! This is also called a Best Alternative to a Negotiated Agreement (BATNA) - an alternative scenario should no conclusion be reached. In a win-win negotiation, it is important that the end result betters the BATNA of all partners. A word of caution, here - don't give away your minimum position too soon, or you might end up on the losing side of the bargain.

Don't get personal. Bringing personalities into it is an absolute no-no. Remember that the goal is to solve a problem, and driving people away by launching personal attacks will get you nowhere. Stay objective at all times, leaving your ego and emotions at home. If the other guy is letting off steam, let it blow over. You'll probably strengthen your position that way.

Stay in the game. A win-win negotiation is most likely to be a process, rather than a one-off event. There might be a past to it, and you can certainly expect a future. Therefore, be prepared for iterations, with proposals and counter proposals trading back and forth, till final agreement is reached. It's important to devise a clear strategy beforehand.

Set the stage. Reminding the other party of failed discussions in the past is not the best way to approach what you hope will be a win-win negotiation. Steer clear of the blame game too. Choose your tone of voice, facial expressions and body language with care, as indeed the actual timing and location of the meeting. Last but not least, give the other speakers your undivided attention, and impress them with the sincerity of your intentions. A successful win-win negotiation is but a handshake away!

The differences between influence and traditional negotiations:
Many professionals have to influence others internally to receive data, supporting materials, accounting information and implementation help. These internal departments or teams have many people who are requesting the same type of information or support. For example, a benefits plan representative may rely on a partner outside the company like a financial advisor or insurance broker to sell the plan to a client's human resources professional.

This same benefits plan representative may need marketing materials from the marketing department to support the sales arm and then different information to inform the client's employees once the plan is selected. The representative may need to co-ordinate the efforts of the IT department and the client company's technology department to ensure the technical requirements are met. There may be a training arm for implementing the plan, customer service functions and, of course, billing to ensure payment. Most likely, that benefits representative is under a strict time frame and can only rely on good graces, past dealings, wit and an ability to influence to get those resources aligned correctly.

Like the benefits representative, your success can depend on whether you can influence those people to process your requests first or at a high enough level of quality. You have no power over them and do not want to go around them if possible because you must continue to work with them in the future.

As You Progress Through The Negotiation Process

A key part of the negotiation process is preparation and the side that is best prepared normally has the upper hand.  This includes having a clear list of your objectives and the areas that you are willing to compromise.  It also means researching your adversary, their objectives and the underlying rationale.  The more information you have, the better.  The icing on the cake is to anticipate potential areas of disagreement and having alternative solutions ready.

A key concept introduced in the workshop was the concept of “Wish, Want, Walk”.  Before any negotiation, have these 3 things ready.  The ‘wish’ is your dream goal or result.  The ‘want’ is where you think the negotiation will end based on external market forces.  This is where a majority of negotiations are closed.  The ‘walk’ is the point at which it is better for you to leave the table.  In other words, you are losing too much money, pride, status, etc. and are simply not worth it.

It is important to frame an offer before actually making one.  By framing, I mean creating a positive atmosphere and building attraction towards the offer.  It can be viewed as the momentum building phase that leads to the offer.  An example from daily life is the rousing speech given by a presenter just before the big comedian, singer, etc. comes on stage.

Contrary to what most people think, your first offer should be well above your ‘wish’ point.  For example, if your dream result is to sell your company for $1 million, your first offer should be well above this point (e.g. $1.5 or $2 million).  Studies have shown that when one side throws out a number that is higher or lower than expected, the other party has a tendency to move their opening position closer to the opening offer.

Never make the first offer if you are unprepared.  You may be setting yourself up for a big loss.  Conversely, your opponent might call your bluff and ask you for your rationale, which will reveal your inexperience and lack of preparation.  The most advantageous situation is to make the first offer (above ‘wish’ point) and being prepared at the same time.  After you make your first offer, it is important not to say anything.  You already framed your offer and elaborated your points.  There is no further need to justify yourself.  It’s now up to the other side to make the next move.  This also applies for any counter offer you make.

As you progress through the negotiation process, don’t forget your ‘wish, want, walk’ list.  As well, be sure to really listen to what the other side has to say.  If things heat up, you can always leave the negotiation table and take a break.   When things cool down, you can resume talks.  A key thing to remember is that you should never get emotional or take things personally.  Negotiation is an everyday process and you should view it as such.  Furthermore, if you are well prepared, an offer you consider outrageous or ridiculous will be very easy to ‘deconstruct’.

Secondly, the negotiation process will go a lot smoother if parties adopt a ‘win win’ attitude.  It is always better when both parties leave the negotiation table content with the settlement.  They may not have won on every point, but they don’t feel cheated.  An exception to this is when one party has a clear need for the deal.  Naturally, the ‘needy’ side will have to compromise a lot more than the ‘less needy’ side.  For example, in the recent $4.75 billion purchase of NB Power by Hydro Quebec, many people were shocked at the thought of giving up energy sovereignty to an outside province.  However, the ‘needy side’, in this case, NB Power, had been crippled by financial debt and was a financial disaster in the making for many years. One side clearly needed the deal to be done.  The process described in this post is more applicable when two parties are on more ‘equal terms’.

Keep all these principles in mind the next time you are negotiating with a supplier for lower prices or an employee wanting a big raise.  It will increase your chances of success and make the overall process a lot less stressful.