Outline
- Introduction.
- The nature of the negotiations in the world.
- Prenegotiation planning and differences.
- Strategy and tactics of distributive and integrative bargaining.
- Communication, bias, managing difficulties and individual approaches
- Applying leverage in negotiation.
- Conclusion.
- References.
Introduction
In a narrow sense, negotiations should be examined as one of the methods of alternative dispute settlements. However, in a general sense, it means communicative between parties for achievement of an objective on condition of equality of these parties. The aim of this paper is to reveal the nature of negotiations, their role in human relationships, and also certain strategies, tactics, and ethics.
The nature of the negotiations in the world
The significance of negotiations in the world can not be underestimated. According to Oxford dictionary, negotiations mean “discussion aimed at reaching an agreement” (Oxford Dictionaries Online, 2011). In other words it is a conflict resolution. In international context, this conflict is defined
“as the existence of competing interests between parties in absence of interests that are shared, is an anomaly in international relations where the defining feature of the relationship between states is mutual dependence” (Alfredson & Congu, n. d., p. 1).
Negotiations became one of the most wide spread tactics of international communication and dispute settlement between the countries in the post-war period. Very often, negotiations are intended to find a conflict solution that would meet the interests of all the parties. Negotiations may result in signing of a treaty.
Negotiations are practiced at organizational and individual levels. Each level determines certain organizational behavior, its own strategy, tactics and ethics. For example, a flower company wants to facilitate the delivery process of its plants to various city offices. To resolve a problem, the representatives of this company want to cooperate with a transport company that would meet their needs. The negotiation process, in this case, is based on searching mutual interests. However, a transport company pursues its own interests. The representatives of this company present their demands: a flower company is obliged to use their service for 5 years. During the negotiations, the companies arrange about the price of the service, the terms and other conditions of the treaty.
On individual level, one should follow the policy that would lead to the desirable result. To get what one wants is probably, the main aim of any negotiations. For this reason, there are useful instruments that may help to achieve an objective: necessary information and data about party, persuasive arguments, ability to come to an agreement with another party regardless of different initial positions, take advantage from weak points of the party’s policy, etc.
Renegotiations planning and differences
Renegotiations planning is the first step to negotiations. Moreover, it is essential procedure, because it helps the parties to define their goals, outcomes and objectives. In addition, planning framework specifies the negotiation scenario. For example, Ghauri and Usunier (2003) investigated the negotiation behavior in the USA practice, and concluded that negotiation is
“a linear process, a sequence of stages, that typically begins with prenegotiation, advances to the opening moves of the formal negotiation, continues through a probing middle phase, and culminates in an end game and a binding agreement” (Ghauri & Usunier, 2003, p. 189).
Thus, any negotiations need a preplanning period. Before the parties come to the negotiating table, it is necessary to conduct a thorough analysis of the problem, and diagnose the situation in general. Primarily, a party should set certain objectives and goals which it wants to achieve in the end of the negotiations. Second, a party needs to collect certain data and information that would enforce its persuasive arguments. Also, it is essential to project favorable conditions for another party, elaborate tactics and methods of negotiation process, distribute the roles among the negotiators.
Patience is also required in the prenegotiation period (Ghauri & Usunier, 2003). Consequently, the more thorough and circumspect planning framework is, the more successful will be the process of negotiation itself. Of course, negotiation scenario is tightly connected with the behavioral strategy. If the prenegotiation period is over, a person is ready to conduct the negotiation. One knows what can be said, and what is not; it is effective to use the information about weak and strong points of a party, and put theory into the practice.
Strategy and tactics of distributive and integrative bargaining
There are two main strategies in negotiations, practiced by the parties. One of them is a distributive bargaining, or “win-lose” bargaining (Ghauri & Usunier, 2003, p. 3). This competitive strategy helps a party to distribute limited or fixed financial resources for its own benefit. Ghauri and Usunier believe that “here, the objective of the parties is to maximize their own benefit, quite often at the expense of the other party” (Ghauri & Usunier, 2003, p. 3). In this strategy, one party wins, and the other one loses or gets less money. The negotiation experience shows that this type of strategy is incompatible.
The essence of a “win-lose” bargaining may be expressed in the following statement: “anything that isn’t yours, is mine” (Ghauri & Usunier, 2003, p. 112). This approach to negotiations is used by the parties in the case, when there is a conflict over an issue, and the outcome represents gains for one party and losses for another one. On this condition, the pie won’t be divided in half. Usually, the negotiators who practice this approach neglect the importance of relationships in the future. Here, the parties may use bluffs, demands, threats, blame statements. This strategy is quite out-dated, and may be practiced in labor management situations.
In contrast to distributive strategy, integrative one seems to be more cooperative. This is a “lose-lose” bargaining, where “people settle for terms worse for both parties” (Thompson, 2008, p. 24). Both parties are concerned with the solution of the problem. Thus, the conflict is minimized, and by means of cooperation, the parties want to achieve “win-win outcomes” (Thompson, 2008, p. 92). Following this approach, the parties want to maximize joint gains. Some researchers revealed the essence of an integrative bargaining:
“Because integrative approaches emphasize problem solving, cooperation, joint decisionmaking and mutual gains, integrative strategies call for participants to work jointly to create win-win solutions. They involve uncovering interests, generating options and searching for commonalities between parties” (Alfredson & Congu, n. d., p.15).
Soft tactics is used here. For example, partners share the information openly, may use supportive statements for other party; both parties contribute to the problem-solving process. The experience proves that it is a more productive and effective strategy.
Communication, bias, managing difficulties and individual approaches
Communication plays a key role in negotiation. Some researchers state that “Good communication can change attitudes, prevent or overcome deadlock and misunderstandings and help to improve relationships” (Alfredson & Congu, n. d., p. 24). Probably, in integrative strategy, the value of communication is more notable. Communication helps to manage all the possible difficulties, and overcome bias of the parties. To improve negotiating effectiveness, parties may follow the following communication model.
First of all, “Listen actively to both verbal and non verbal cues” (Alfredson & Congu, n. d., p. 24). One should know the meanings of all the words and gestures or glances during the negotiation. Verbal and non-verbal means of communication should contribute to the mutual understanding, and not provoke confusion or negative impression. Second, it is necessary to ask the questions to learn more about a party. To show one’s own interest is a positive feature that contribute to the process of negotiation. Third, it is essential to operate and describe veracious data about a company, its background experience, goods, etc.
Communication should have credibility. Forth, one should remember that inquiry is better than persuasion. All these tactics put communication in a favorable stream of negotiation process. Sometimes, it is necessary to collect all the data about a party, and apply an individual approach. It is possible, when one knows that the mentioned tactics will not be suitable for communication with particular people; the elaborated individual tactic is more effective in this case.
Applying advantage in negotiation
However, right advantage in negotiations is also essential. According to Oxford dictionary, advantage is “the power to influence a person or situation” (Oxford Dictionaries Online, 2011). One of the effective mans to influence other party is to provide strong and persuasive arguments. For example, a company may offer extremely low prices, or its goods are unique, in comparison with its rivals.
Some researchers believe that one of the powerful leverages is “intellectual property (copyrights, inventions, trademarks, patents, trade secrets) or other proprietary information that makes your company stand above the rest” (MEA, 2009, p. 5). In addition, the question “What do you have for me?” focuses the party on one’s needs, and reminds about equality of the parties that create a favorable ground for the mutually beneficial agreement. Reputation is a powerful leverage, as well. If a party is respected for its experience or quality of its goods, it has many chances to influence the decision-making process of another party.
A company should have a positive “window dressing”: a powerful and persuasive image of equal rival that show itself through different signs: position on a market, customer’s attitude, positive impression, good performance in ratings, etc. Finally, company’s prices should be competitive and flexible. Adequate prices may attract attention of another party.
Conclusion
Negotiation is an integrative part of diplomatic relationships between countries, companies or individuals. Being a means of conflict resolution, negotiations determine certain behavioral tactics, strategies, and stages. One should remember that each party is equal, and pursues its own goals; the result of the negotiations should meet party’s interests. Successful preplanning period increases the chances of both parties to conduct beneficial negotiations.
Distributive and integrative strategies may bring either losses or gains fro the parties, and determine their future relationships. Nevertheless, communication seems to be the basic instrument for any negotiation that influences its result; each party should follow certain principles to make it effective and productive. Besides, advantage plays an essential role, as it gives opportunity to influence the decision-making process of the negotiations.
References
Alfredson, T., & Congu, A. (n. d.) Negotiation Theory and Practice. Web.
Ghauri, P. N., & Usunier J.-C. (2003). International Business Negotiations. Kidlington, UK: Emerald Group Publishing.
MEA. (2009). Determining Your Negotiation Leverage in Teaming Agreements: a Five Step Formula. McLean, VA: Ecomplex.
Oxford Dictionaries Online. Web.
Thompson, L. L. (2008). The Truth about Negotiations. Upper Saddle River, NJ: FT Press.