Purpose of Negotiation
The purpose of negotiation is to improve the price for the negotiated product.
Desired outcome
The desired outcome presupposes the increase in the price for an item sold by the company and the attainment of higher revenues.
Pertinent information
The negotiated product has outstanding quality and almost does not have alternatives in the market. For this reason, the price can be high. Another party emphasizes the fact that it is the only distributor who has the appropriate resources to sell the product.
Interests/desires/motivations
The central motivator is the high quality of the product, meaning that it can have a high price. Another party can object, emphasizing its need to earn and ability to sell more items if the price is lower.
Sources of Power
Power in the negotiation process is the ability of a party to influence the behavior of another negotiator and attain desired conditions (Lewicki et al., 2019). It usually comes from the existence of particular backgrounds or factors that empower the position of one actor and provide him/her with an opportunity to demand new terms. For instance, in this case, the high quality of the product and the absence of alternatives is the power of the party as it can expect better proposals because of the features of the product. Another party’s power is its ability to sell the product better than others due to its big client base.
Influence in the negotiation process is linked to power as it presupposes that parties can impact the negotiated terms and discuss them to attain the most beneficial conditions and outcomes. The ability to influence another negotiator is a critical aspect of the process, and most negotiation strategies are focused on the creation of this opportunity (Lewicki et al., 2019). In such a way, power and influence are two basic elements of the process, providing actors a chance to discuss the existing conditions and debate, trying to find the solution meeting their current needs.
The sources of power are elements that can increase a party’s chance to attain better outcomes. The strength of the proposal is one of the first sources of power (Lewicki et al., 2019). If a negotiator is sure that there are no alternatives and his/her product is the best on the market, he/she acquires the ability to influence another party and get better conditions. Moreover, the quality of the negotiated product and the demand for it from customers can precondition the higher price for it. In such a way, this source of power is critically important and should be considered by parties during the negotiation.
Another essential source of power is information possessed by parties (Lewicki et al., 2019). Today, knowledge is one of the most valuable resources as it can affect the work of firms and their competitive advantage. For this reason, if one of the parties has data that can affect negotiations, it becomes an essential source of power. Correctly using these sources of power, parties can engage in negotiating process, hoping for better outcomes and influencing other actors to make them accept the proposed conditions. For this reason, prior to engaging in debates, companies have to consider their resources and conclude whether they can be viewed as levers that can be used to affect the decision-making of another firm.
Walk-Away Alternative
However, in some cases, parties cannot agree because of different desired outcomes and visions. Under these conditions, it is possible to discuss other options and try to outline the best alternative to a negotiated agreement (BATNA). It is defined as the most beneficial alternative available to parties if previous negotiations fail (Lewicki et al., 2019). In such a way, BATNA becomes a tool that can be used by actors to find new options meeting their requirements and helping to avoid the inability to make a deal. However, the generation of possible alternatives can be a complex process as it demands consideration of the needs of all representatives and their incorporation into a single offering.
For this reason, parties can use hardball tactics to attain the desired result. One of the common strategies presupposes extreme demands followed by concessions (Lewicki et al., 2019). In such a way, the party is sure that the initial offering will not be accepted; however, reducing its demands, it wants to attain conditions that are still beneficial for it. It is one of the most common negotiation tactics; however, it can also be viewed as a destructive one as it is initially aimed at the failure to agree on initial terms.
Another hardball negotiation tactic is called take-it-or-leave. It presupposes hard demands and the readiness to stop negotiations immediately if the proposed conditions are not accepted (Lewicki et al., 2019). The given strategy might distract a party from the terms of the agreement and contribute to making the deal even if it does not promote the desired outcomes. For this reason, it is vital to focus on the content and ignore such assumptions.
Finally, negotiators can use bluffing as one of the hardball tactics available for them. They can exaggerate facts or emphasize the existence of other better options that can be employed if this process fails (Lewicki et al., 2019). The given tactic is also used to attain better conditions and confuse another party.
In such a way, the failure to make an agreement might precondition the use of some hardball tactics or attempts to find BATNA. It also means that negotiation is a complex process that demands the correct use of sources of power and influence to outline the desired outcome and insist on adding some terms that will help to generate additional benefit and enjoy the results of the discussion. The use of hardball tactics can be destructive; however, it can also help to achieve the needed results, meaning that they remain a practical tool.
Reference
Lewicki, R., Barry, B., & Saunders, D. (2019). Negotiation (8th ed.). McGraw-Hill Education.