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Negotiation

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  • 1. Negotiation is a dialogue between two or more people or parties, intended to reach anunderstanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce anagreement upon courses of action, to bargain for individual or collective advantage, to craftoutcomes to satisfy various interests of two people/parties involved in negotiation process.Negotiation is a process where each party involved in negotiating tries to gain an advantage forthemselves by the end of the process. Negotiation is intended to aim at compromise.Negotiation occurs in business, non-profit organizations, government branches, legal proceedings,among nations and in personal situations such as marriage, divorce, parenting, and everyday life.The study of the subject is called negotiation theory. Professional negotiators are often specialized,such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, ormay work under other titles, such as diplomats, legislators or brokers.Negotiation can take a wide variety of forms, from a trained negotiator acting on behalf of aparticular organization or position in a formal setting, to an informal negotiation between friends.Negotiation can be contrasted with mediation, where a neutral third party listens to each sidesarguments and attempts to help craft an agreement between the parties. It also be comparedwitharbitration, which resembles a legal proceeding. In arbitration, both sides make an argument asto the merits of their case and the arbitrator decides the outcome.Negotiation theorists generally distinguish between two types of negotiation. Different theorists usedifferent labels for the two general types and distinguish them in different ways.[edit]Distributive NegotiationDistributive negotiation is also sometimes called positional or hard-bargaining negotiation. It tendsto approach negotiation on the model of haggling in a market. In a distributive negotiation, eachside often adopts an extreme position, knowing that it will not be accepted, and then employs acombination of guile, bluffing, and brinksmanship in order to cede as little as possible beforereaching a deal. Distributive bargainers conceive of negotiation as a process of distributing a fixed [1]amount of value.The term distributive implies that there is a finite amount of the thing being distributed or dividedamong the people involved. Sometimes this type of negotiation is referred to as the distribution of a“fixed pie.” There is only so much to go around, but the proportion to be distributed is variable.Distributive negotiation is also sometimes called win-lose because of the assumption that onepersons gain results in another persons loss. A distributive negotiation often involves people whohave never had a previous interactive relationship, nor are they likely to do so again in the nearfuture. Simple everyday examples would be buying a car or a house.[edit]Integrative NegotiationIntegrative negotiation is also sometimes called interest-based or principled negotiation. It is a set oftechniques that attempts to improve the quality and likelihood of negotiated agreement by providingan alternative to traditional distributive negotiation techniques. While distributive negotiationassumes there is a fixed amount of value (a “fixed pie”) to be divided between the parties,integrative negotiation often attempts to create value in the course of the negotiation (“expand thepie”). It focuses on the underlying interests of the parties rather than their arbitrary starting
  • 2. positions, approaches negotiation as a shared problem rather than a personalized battle, and [1]insists upon adherence to objective, principled criteria as the basis for agreement.The word integrative implies some cooperation. Integrative negotiation often involves a higherdegree of trust and the forming of a relationship. It can also involve creative problem-solving thataims to achieve mutual gains. It is also sometimes called win-win negotiation. (See Win-win game.)A number of different approaches to integrative negotiation are taught in a variety of different booksand programs. See, for example, Getting to YES, Mutual Gains Approach, Program onNegotiation, Gould Negotiation and Mediation Teaching Program. Scholars who have contributed tothe field of negotiation include Roger Fisher and William Ury; Holly Schroth and Timothy Dayonot atUC Berkeley; Gerard E. Watzke at Tulane University; Sara Cobb at George Mason University; LenRiskin at the University of Missouri; Howard Raiffa at Harvard, Robert McKersie andLawrenceSusskind at MIT; Adil Najam and Jeswald Salacuse at The Fletcher School of Law and [citation needed]Diplomacy; and John D. Males.EtymologyThe word "negotiation" originated from the Latin expression, "negotiatus", past participle ofnegotiare which means "to carry on business". "Negotium" (from "Nec Otium") means literally "notleisure".Barriers to negotiations Die hard bargainers. Lack of trust. Informational vacuums and negotiators dilemma. Structural impediments. Spoilers. Cultural and gender differences. Communication problems. The power of dialogue.The negotiation process begins with an analysis of the needs, desires and interests of all parties concerned, aswell as any outside issues - such as culture, background and experience - that can come into play. Thisinformation will form the basis of negotiations going forward.The next step is planning: what are the goals of the business negotiations? What terms are to be settled? Whatis each side willing to give up in order to gain something else? These are all vital issues to be considered in thenegotiating process.Streamline the Negotiations ProcessYou and your company staff can learn more effective business negotiation skills through negotiating trainingfrom qualified providers. These professionals will design a negotiation course specifically tailored to the needs
  • 3. of your company that offer learners the opportunity for hands-on, "real-world" practice as well as valuabletheory of business negotiations.When considering negotiating training, its important to begin by taking stock of where you and the companyare currently. What are the long term goals, the short term objectives, what are your companys strengths andweaknesses? With whom will you be negotiating and over what? In what kind of setting will the negotiatingprocess take place?Few understand the nuances of the negotiating process that involve things as subtle as physical positions,seating locations and even the decor of the room. These are kinds of issues that can be covered in anegotiation course. There are few natural-born diplomats in the world; negotiations are an art, but also ascience and a skill that must be practiced like any skill. Effective training means a smoother negotiatingprocess for all involved.A course in negotiation training by expert Jonathon Blocker helps to improve your business negotiation skillsand provides insightful and expert knowledge of negotiations.To have a good negotiation1) Learn to flinch.The flinch is one of the oldest negotiation tactics but one of the least used. A flinch is a visiblereaction to an offer or price. The objective of this negotiation tactic is to make the other peoplefeel uncomfortable about the offer they presented. Here is an example of how it works.A supplier quotes a price for a specific service. Flinching means you respond by exclaiming, "Youwant how much?!?!" You must appear shocked and surprised that they could be bold enough torequest that figure. Unless the other person is a well seasoned negotiator, they will respond inone of two ways; a) they will become very uncomfortable and begin to try to rationalize theirprice, b) they will offer an immediate concession.2) Recognize that people often ask for more than they expect to get.This means you need to resist the temptation to automatically reduce your price or offer adiscount. I once asked for a hefty discount on a pair of shoes hoping to get half of what I askedfor. I was pleasantly surprised when the shop owner agreed to my request.3) The person with the most information usually does better.You need to learn as much about the other persons situation. This is a particularly importantnegotiation tactic for sales people. Ask your prospect more questions about their purchase.
  • 4. Learn what is important to them as well as their needs and wants. Develop the habit of askingquestions such as; "What prompted you to consider a purchase of this nature?" "Who else have you been speaking to?" "What was your experience with…?" "What time frames are you working with?" "What is most important to you about this?"It is also important to learn as much about your competitors as possible. This will help youdefeat possible price objections and prevent someone from using your competitor as leverage.4) Practice at every opportunity.Most people hesitate to negotiate because they lack the confidence. Develop this confidence bynegotiating more frequently. Ask for discounts from your suppliers. As a consumer, develop thehabit of asking for a price break when you buy from a retail store. Here are a few questions orstatements you can use to practice your negotiation skills: "Youll have to do better than that." "What kind of discount are you offering today?" "Thats too expensive." Wait for their response afterwards. Learn to flinch.Be pleasant and persistent but not demanding. Condition yourself to negotiate at everyopportunity will help you become more comfortable, confident and successful.5) Maintain your walk away power.It is better to walk away from a sale rather than make too large a concession or give a deepdiscount your product or service. After attending my workshops, salespeople often tell that thisnegotiation strategy gives them the most leverage when dealing with customers. However, it isparticularly challenging to do when you are in the midst of a sales slump or slow sales period.But, remember that there will always be someone to sell to.Negotiating is a way of life in some cultures. And most people negotiate in some way almostevery day. Apply these negotiation strategies and you will notice a difference in your negotiationskills almost immediately.ImportanceNegotiation reduces conflicts and improves the relation among individuals.Negotiation is also important when you are dealing with vendors.