Negotiation Skills for Project Management | Learn from the Basics
Last updated on 24th Aug 2022, Blog, Tutorials
What is a negotiation?
A negotiation is a discussion in which two or more parties attempt to reach an agreement through the bargaining. Here are a few examples of negotiation in the business:
Salary negotiation: Candidates for jobs can bargain with an employer about the salary and the benefits.
Vendor negotiation: More businesses negotiate with vendors on the pricing and services offered in contracts.
Conflict-resolution: Often, conflict-resolution in the workplace contains a negotiation between two or more parties that can result in an agreement.
Negotiation approaches: Every type of negotiation falls into one of two categories. Below is a description of every negotiation approach and tips for making the most of every approach:
Distributive negotiation: Distributive negotiation, sometimes called zero-sum negotiation or win-lose negotiation, is a bargaining approach in which one person succeeds only if the other person loses. A distributive negotiation usually involves discussion of a single problem.For example, a sales business needs to enter a contract with a vendor for IT services. The business needs the most IT services for the lowest price possible. while the IT vendor needs to provide the lowest number of resources for the highest price. Every party’s desire to get a better deal represents a distributive negotiation approach.
Below is a list of tips for success in a distributive negotiation:
Be persistent: When you’re taking a distributive approach to a negotiation, persistence and polite assertiveness can help to fulfill the interests.
Make the first offer: In a distributive negotiation, can make the first offer to begin the bargaining in a favor. Don’t communicate the minimum favorable outcome. It’s important to aim more in distributive negotiations to ensure successful bargaining. Can withhold any data on the minimum , willing to accept from bargaining for the best results.
Integrative negotiation: Integrative negotiation, also known as win-win negotiation or collaborative negotiation, is a negotiation strategy in which the parties to the discussion work to find a solution that benefits both of them.Unlike distributive negotiations, integrative negotiations can involve multiple problems.For example, an established fashion company and a cosmetics startup company agree to collaborate on a product geared towards the shared target market. They negotiate a contract that permits the cosmetics startup to gain greater exposure and the fashion company to reach its financial and marketing goals.
Here are a some tips can use in an integrative negotiation:
Take a principled approach: Can discuss the principles during an integrative negotiation to build trust with the other party.
Discuss your needs and interests openly: Communicating about the goals in an integrative negotiation can promote transparency and enable a positive relationship.
Use bargaining to solve problems: In an integrative negotiation, both parties can use negotiations as an opportunity for collaborative issue-solving.
Four types of negotiation:
Follow is a list of negotiation types:
1. Principled negotiation: Principled negotiation is a type of bargaining that uses parties’ principles and interests to reach the agreement. Conflict resolution is frequently the main focus of this kind of negotiation. This type of bargaining used an integrative negotiation approach to serve the interests of both parties.
There are 4 elements to a principled negotiation:
Mutual gain: The integrative approach to a principled negotiation invites parties to focus on found mutually beneficial outcomes through bargaining.
Focus on interests: Negotiators can identify and communicate the motivations, interests and requirements in a principled negotiation.
Separate emotions from issues: In a principled negotiation, parties can deduce emotional responses and personality conflicts by focusing on the problems at hand, rather than how the issues made them feel.
Objectivity: Parties in a principled negotiation can agree to using the objective criteria as a baseline for negotiations. Market pricing, professional judgments, legal restrictions, and industry norms are a few examples of objective factors in negotiations.
For example, the leaders of two departments for a big company often argue over the resources for every department. The two leaders enter a principled negotiation to discuss the solutions. They listen to each other’s positions and decide to base resource allocation on the percentage of revenue each department creates for the company. The department leader who receives more resources agreed to encourage the other department’s functions, and the 2 leaders reach a compromise.
2. Team negotiation: In a team negotiation, multiple people bargain towards an agreement on every side of the negotiation. Team negotiations are common with big business deals. There are few personality roles on a negotiation team.In some circumstances, one individual may play many roles.
Here are few common roles on negotiation teams:
Leader: Members of every team in a negotiation usually appoint a leader to make the final decisions during negotiations.
Observer: The observer pays attention to the other party’s team during the negotiation, discussing the observations with the leader.
Relater: A relative on a negotiation team works on building relationships with members of the other team during the bargaining.
Recorder: A recorder on a negotiating team can take notes on the discussions of the negotiation meeting.
Critic: While this may sound like a negative role, having a critic on the team during negotiations can help to ensure that you understand the concessions and other negative results of an agreement.
Builder: A builder on a negotiation team generates the deal or package for a bargaining team.They can perform financial functions during negotiations, calculating the cost of the agreement.
3. Multiparty negotiation: A multiparty negotiation is a type of bargaining where more than two parties negotiate towards an agreement. An example of a multiparty negotiation is bargaining between the multiple department leaders in a big companyThe following are a few difficulties that multiparty discussions face:
Fluctuating BATNAs: The best substitute for a negotiated agreement is BATNA. With multiple parties in a negotiation, every party’s BATNA is more likely to change, which can make it harder for parties to agree.Every party can evaluate their BATNA at each stage in negotiations to understand the output of a proposed agreement.
Coalition formation: Another challenge of multiparty negotiations is the possibility for various parties to form coalitions, or alliances.These alliances can add to the difficulty of bargaining.Coalitions can agree to a particular set of terms to help all parties reach an agreement.
Process-management issues: Managing the negotiation process between the multiple parties can lead to a lack of governance and miscommunications.People in multiparty negotiations can avoid these problems by choosing a leader who’s willing to collaborate with others towards an agreement.
4. Adversarial negotiation: An adversarial negotiation is a distributive approach in which the most aggressive party in the negotiation achieves an agreement that serves their interests.Here are a some examples of adversarial negotiation tactics:
Hard bargaining: Hard bargaining is a strategy in which one party refuses to compromise agreement.
Future promise: A person using this tactic can promise the other party a future benefit in exchange for the current concessions.
Loss of interest: Another adversarial negotiation tactic is loss of interest, in which one party pretends they have lost their interest in pursuing an agreement.
Five Stages Of The Negotiation Process:
1. Prepare: Research is the building block of a negotiation process. While preparing, we must weigh both sides, identify the strengths and weaknesses of both sides, and then find the negotiation strategies.Explain the kind of interaction you want to have and the bond you intend to form with the other party.
2. Information Exchange: The information exchange involves discovering and generating value for the negotiation process. It also helps in building rapport.Both parties should define their interests and exchange their viewpoints to achieve the desired results.Unless there is a transparent exchange of data, even sophisticated negotiation strategies won’t work.
3. Bargain: In all types of negotiation, a bargain is of most importance.It is the initiator of give-and-take deals.Every party proposes its demands and seeks to secure benefits.During the bargaining process, it is imperative to keep in check.During discussions, keep your composure and try not to become upset.To achieve desired outcomes, be composed and diplomatic.
4. Conclude: Both sides should express gratitude to one another once a compromise that pleases both has been achieved.They should confirm that interests have been secured and the outcome is successful.A good summing-up and amicable closing always lead to rewarding the long-term relationships.
5. Execute: All types of negotiation lead to efficient implementation. The steps to implement the negotiated result should be categorically chalked out;in the corporate context, a written contract is entered into to confirm their intent to execute. Negotiators do not want to sacrifice effective negotiation in favor of a positive relationship between parties.Rather than conceding, every side can appreciate that the other has emotions and motivations of their own and use this to their advantage in discussing the problem.In fact, understanding perspectives can help to move parties towards a more integrative solution.
Illustrate a few techniques that effectively increase perspective-, and through the following, negotiators can separate people from the problem itself:
- Put yourself in their shoes
- Discuss each other’s perception
Find opportunities to act inconsistently with his or her views –
- Active listening
- Speak for a purpose
Skills in Negotiation
An effective negotiator will use few of the skills during the process of negotiation.
- Active listening
- Asking good questions
- Communication skills (Specially verbal communication)
- Decision making ability
- Emotional control
- Interpersonal skills
- Setting up BATNA (Best alternative to a negotiated agreement, your alternatives)
- finding solutions
- evolution of wise trade-offs
- Integrity and cooperation
Negotiation skill is one of the more important skills. It is through efficient negotiation that we are able to remove differences and arrive at common agreements. While it can suit a structured approach for negotiation, negotiation is an art which one can master only with time and experience.
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