Everything is negotiated.
The word "negotiation" originated from the Latin expression, "negotiatus", which means "to carry on business".
The process of conferring to arrive at an agreement between different parties, each with their own interests and preferences.
“A give-and-take decision-making process involving interdependent parties with different preferences.”
FEATURES OF NEGOTIATION
• Minimum two parties
• Predetermined goals
• Expecting an outcome
• Resolution and Consensus
• Parties willing to modify their positions
• Parties should understand the purpose of negotiation
Why do we NEGOTIATE?
To reach an agreement
To beat the opposition
To compromise
To settle an argument
To make a point
TYPES OF NEGOTIATION
• Distributive Negotiation Parties compete over the distribution of a fixed sum of value. The key question in a distributed negotiation is, “Who will claim the most value?” A gain by one side is made at the expanse of other. The Seller’s goal is to negotiate as high a price as possible; the Buyer’s goal is to negotiate as low a price as possible. Thus, the deal is confined: there are not much opportunities for creativity or for enlarging the scope of the negotiation.
• Integrative Negotiation In Integrative Negotiation, parties cooperate to achieve maximize benefits by integrating their interests into an agreement. This is also known as a win-win negotiation. The key question is: “How can the resource best be utilized?” Integrative negotiations tend to occur in following situations: – Structuring of complex long-term Strategic Relationships or other collaborations. – When the deal involves many financial and non-financial terms. In an integrative negotiation, there are many items and issues to be negotiated, and the goal of each side is to “create” as much value as possible for itself and the other.
NEGOTIATION TIPS
1) Do not underestimate your power.
2) Do not assume that other party knows your weaknesses.
3) It is a mistake to assume you know what the other party wants.
4) Never accept the 1st offer.
5) Don’t fear to negotiate.
SKILLS FOR EFFECTIVE NEGOTIATION
Preparation and planning skill
Knowledge of the subject
Ability to think clearly and rapidly under pressure and uncertainty
Ability to express thoughts verbally
Listening skill
Patience
General problem-solving and analytical skills
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