Characteristics of Negotiation
There are certain characteristics of the negotiation process. These are:
(i) There are a minimum of two parties present in any negotiation.
(ii) Both the parties have pre-determined goals which they wish to achieve.
(iii) There is a clash of pre-determined goals, that is, some of the pre-determined goals are not shared by both the parties.
(iv) There is an expectation of outcome by both the parties in any negotiation.
(v) Both the parties believe the outcome of the negotiation to be satisfactory.
(vi) Both parties are willing to compromise, that is, modify their position.
(vii) The incompatibility of goals may make the modification of positions difficult.
(viii) The parties understand the purpose of negotiation
Steps of the Negotiation Process
The negotiation process can essentially be understood as a four-stage process. The four stages of the negotiation process are preparation, opening, bargaining and closure.
Stage 1: Preparation
Preparation is instrumental to the success of the negotiation process. Being well-prepared generates confidence and gives an edge to the negotiator. Preparation involves the following activities:
(i) Gathering Information: One needs to learn as much as one can about the problem and ascertain what information is needed from the other side. Understanding clearly the issues involved is also needed.
(ii) Leverage Evaluation: Evaluation of one’s leverage and the other party’s leverage at the outset is important because there may be a number of things one can do to improve one’s leverage or diminish the leverage of the other side.
(iii) Understand the people involved: It is important to know the people with whom the negotiation is to take place. An understanding of their objectives, roles and the issues likely to be raised by them will facilitate better handling of the situation during the negotiation process.
(iv) Rapport: It is helpful to establish a rapport with the opponent during the early stages, that is, before the bargaining process begins is helpful. This was, one can determine early on how cooperative the opponent is going to be.
(v) Know your objectives: Clarity of objectives is absolutely essential. It needs to be decided in advance how much you are willing to concede to the opponent and what your priorities are. All arguments and justifications should be ready.
(vi) Type of negotiation: Anticipate the type of negotiation expected, that is, ascertain whether it will be highly competitive, cooperative or something unusual; whether the negotiation will be face to face, by fax, through a mediator, or in some other manner.
(vii) Plan: Decide on the negotiation approach and plan accordingly.
Stage 2: Opening Phase
Here the two sides come face to face. Each party tries to make an impression on the other side and influence their thinking at the first opportunity. Psychologically, this phase is important because it sets the tone for the negotiation to a large extent. It involves both negotiating parties presenting their case to each other.
Stage 3: Bargaining Phase
The bargaining phase involves coming closer to the objective you intended to achieve when you started the negotiation. In this phase, the basic strategy is to convince the other side of the appropriateness of your demands and then persuading the other party to concede to those demands. For this, one needs to be logical in one’s approach and frame clearly-thought-out and planned arguments.
Stage 4: Closure Phase
The closing phase of a negotiation represents the opportunity to capitalize on all of the work done in the earlier phases. The research that has been done in the preparation phase, combined with all of the information that has been gained is useful in the closing phase. It also involves the sealing of the agreement in which both parties formalize the agreement in a written contract or letter of intent. Reviewing the negotiation is as important as the negotiation process itself. It teaches lessons on how to achieve a better outcome. Therefore, one should take the time to review each element and find out what went well and what needs to be improved.
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