Effective Method

What is Negotiation?

Negotiation is the interactive social process in which people engage, when they aim to reach an agreement with another party or parties on behalf of themselves.
Negotiation is primarily a common mean of securing one's expectations from others. It is a form of communication designed to reach an agreement when two or more parties have certain interests that are shared and certain others that are opposed.

-    According to Shorter Oxford Dictionary, 1977-
Negotiation: To confer with another for the purpose of arranging some matters by mutual agreement; to discuss a matter with a view to settlement or compromise .

-    Ginny Pearsom Bames sayes, Negotiation is a resolution of a disagreement using give and take within the context of a particular relationship. It involves sharing ideas and information and seeking a mutually acceptable outcome .

-    The Pepperdine University of USA has developed an explanatory definition of negotiation:
Negotiation is a communication process used to put deals together or resolve conflicts. It is a voluntary, non-binding process in which the parties control the outcome as well as the procedures by which they will make an agreement. Because most parties place very few limitations on the negotiation process, it allows for a wide range of possible solutions maximizing the possibility of joint gains .

-    According to Williams, Legal and Settlement 1983, Negotiation is a repetitive process that follows reasonably predictable patterns over time. Yet in legal disputes so much of the attorney's attention and energy are absorbed by the pre-trial procedure and the approach of the trial, that they fail to recognize the important identifiable patterns and dynamics of the negotiation process
-    M Anstey explains core elements of negotiation as follows:
1.    A verbal interactive process;
2.    Involving two or more parties;
3.    Who are seeking to reach agreement;
4.    Over a problem or conflict of interest between them; and
5.    In which they seek, as per as possible, to preserve their interests, but to adjust their views and positions in the joint effort to achieve an agreement.

Broadly speaking, negotiation is an interaction of influences. Such interactions, for example, include the process of resolving disputes, agreeing upon courses of action, bargaining for individual or collective or crafting outcomes to satisfy various interests. Negotiation is thus a form of alternative dispute resolution (ADR).

Characteristics of Negotiation:

o    Negotiation involves two or more parties who need (or think they need) each others involvement achieving a desired outcome. There is a common interest that connects the parties.
o    The parties start with different opinions or objectives. It is these differences that prevent agreement.
o    The parties are willing to co-operate and communicate to meet their goals.
o    The parties can mutually benefit or avoid harm by influencing each other.
o    The parties realize that any other procedure will not produce desired outcome.
o    The parties think that negotiation is the best way to resolve their differences (or at leas, a possible way)
o    They also think that they may be able to persuade the party to modify their original position.
o    Even if they do not get their ideal outcome, both retain the hope of an acceptable outcome.
o    Each has some influence real or assumed over the others actions. If one party is completely powerless, negotiation will have little point for the other.
o    The negotiation process itself involves interaction between people. This interaction might be in person, by telephone, letter etc. or it might use a combination, because it is personal, emotions and attitudes will always be important.

Conditions for Negotiation :

A variety of conditions can affect the success or failure of negotiations. The following conditions make success in negotiations more likely:

Identifiable parties who are willing to participate: The people or groups who have a stake in the outcome must be identifiable and willing to sit down at the bargaining table if productive negotiations are to occur. If a critical party is either absent or is not willing to commit to good faith bargaining, the potential for agreement will decline.

Interdependence: For productive negotiations to occur, the participants must be dependent upon each other to have their needs met or interests satisfied. The participants need either each other's assistance or restraint from negative action for their interests to be satisfied. If one party can get his/her needs met without the cooperation of the other, there will be little impetus to negotiate.

Readiness to negotiate: People must be ready to negotiate for dialogue to begin. When participants are not psychologically prepared to talk with the other parties, when adequate information is not available, or when a negotiation strategy has not been prepared, people may be reluctant to begin the process.

Means of influence or leverage: For people to reach an agreement over issues about which they disagree, they must have some means to influence the attitudes and/or behavior of other negotiators. Often influence is seen as the power to threaten or inflict pain or undesirable costs, but this is only one way to encourage another to change. Asking thought-provoking questions, providing needed information, seeking the advice of experts, appealing to influential associates of a party, exercising legitimate authority or providing rewards are all means of exerting influence in negotiations.
Agreement on some issues and interests: People must be able to agree upon some common issues and interests for progress to be made in negotiations. Generally, participants will have some issues and interests in common and others that are of concern to only one party. The number and importance of the common issues and interests influence whether negotiations occur and whether they terminate in agreement. Parties must have enough issues and interests in common to commit themselves to a joint decision-making process.

Will to settle: For negotiations to succeed, participants have to want to settle. If continuing a conflict is more important than settlement, then negotiations are doomed to failure. Often parties want to keep conflicts going to preserve a relationship (a negative one may be better than no relationship at all), to mobilize public opinion or support in their favor, or because the conflict relationship gives meaning to their life. These factors promote continued division and work against settlement. The negative consequences of not settling must be more significant and greater than those of settling for an agreement to be reached.

Unpredictability of outcome: People negotiate because they need something from another person. They also negotiate because the outcome of not negotiating is unpredictable. For example: If, by going to court, a person has a 50/50 chance of winning, s/he may decide to negotiate rather than take the risk of losing as a result of a judicial decision. Negotiation is more predictable than court because if negotiation is successful, the party will at least win something. Chances for a decisive and one-sided victory need to be unpredictable for parties to enter into negotiations.

A sense of urgency and deadline: Negotiations generally occur when there is pressure or it is urgent to reach a decision. Urgency may be imposed by either external or internal time constraints or by potential negative or positive consequences to a negotiation outcome. External constraints include: court dates, imminent executive or administrative decisions, or predictable changes in the environment. Internal constraints may be artificial deadlines selected by a negotiator to enhance the motivation of another to settle. For negotiations to be successful, the participants must jointly feel a sense of urgency and be aware that they are vulnerable to adverse action or loss of benefits if a timely decision is not reached.

No major psychological barriers to settlement: Strong expressed or unexpressed feelings about another party can sharply affect a person's psychological readiness to bargain. Psychological barriers to settlement must be lowered if successful negotiations are to occur.

Issues must be negotiable: For successful negotiation to occur, negotiators must believe that there are acceptable settlement options that are possible as a result of participation in the process. If it appears that negotiations will have only win/lose settlement possibilities and that a party's needs will not be met as a result of participation, parties will be reluctant to enter into dialogue.

Styles of Negotiation:

There are different styles of negotiation. Style of negotiation is also a strategy. In some occasions the style reflects the attitude of the party and an experienced negotiator can guess the result from such a conduct of the party as becomes evident by the style. Negotiation style is reflected in communication skills, interpersonal behavior of negotiators, language, voice tones, choices, listening power, non-verbal gestures and judgment. Generally there are three main styles of negotiation. A brief description is given below:

-    Co-operative Style :

In this type of negotiation style, strategies which are typically used include the making of concessions, the sharing of information and the adoption of behaviors which are fair and reasonable. Thus a co-operative negotiator typically explains the reasons for her concessions and proposals and attempts to reconcile the parties' conflicting interests; her proposals are measured against standards which both parties can agree, such as the legal merits of the case and fairness between the parties.
The advantage of the co-operative style of negotiation is that it tends to produce fewer breakdowns in bargaining with subsequent recourse to litigation, and to produce more favorable outcomes for both parties. This leaves both clients and negotiators in a position where they can 'do business' again. However, the co-operative style is subject to certain difficulties in operation where the parties to the negotiation are unequal in wealth or power or where one party will not bargain for joint or mutual gain;

-     Competitive Style :

Thus the competitive negotiator makes concessions reluctantly because they may 'weaken his position' through position loss or image loss. He tends to make high initial demands, few concessions and have a generally high level of aspiration for his client.
It is often suggested that this style leads practitioners into specific negotiation strategies, for example, never making the first offer, always attempting to conceal the client's true objectives always being the person who drafts the final offer; and the use of exaggeration, threat and bluff to create high levels of tension and pressure on the opponent. If used effectively these tactics cause the opposition side to lose confidence in there case and reduce their expectations of what can be obtained for there client It is therefore, an essentially manipulative approach, designed to intimidate the opposing side into accepting a negotiator's demands.

-    Problem-solving Style:

A problem solving style to a dispute over access might be based on the assumption that whilst both parents want access to their children for some of the time, neither would, in practice, want access for the whole of the time. On this basis a negotiated settlement advantageous to all parties (including the children) may be effected.
The problem-solving style thus commence with both negotiators trying to ascertain the underlying needs of their clients. This can best be achieved through client interviews in which the lawyer explores with the client how he wants the dispute to be concluded in social, economic, ethical and psychological terms. Focusing on the actual (rather than the assumed) needs of clients leads to solutions often more complex and yet more satisfactory in terms of social justice than those which a court could order, or which could result form competitive negotiation.

The four basic tactics which Fisher and Ury describes as being essential to the process of problem solving negotiation are :
1.    Separate the people from the problem; In the other words, separate the interpersonal relationship between the negotiators and their clients from the merits of the problem or conflict
2.    Focus on interests not positions; that is, consider the interests of the clients so that is party's motives, goals and values are filly understood by each side
3.    Generate a variety of options; for example, brainstorm to develop new ideas to meet the needs of the parties
4.    Insist that the result of the negotiation be based on some objective standard that is, assess proposed outcomes against easily ascertainable standard base on objective criteria.

Basic structure of the negotiating process :

It is important to note that there are some basic structures of negotiation process. These structure increase the ability and skills of negotiator also helps to create successful environment for the effective negotiation. The most essential structure may be described as:

Agenda-setting:

Unless an agenda has been agreed in advance you will agree with the opposing lawyer the practical issues of how the negotiation will be conducted, what the agenda for the discussions will be, recorded and minute

Clarification of the facts:

A possible first is for you, or your opponent, to identify and agree the relevant available facts of the dispute and the law relating to those facts. This could then be followed by your identification of and agreement on, any missing or conflicting facts, or difference in documentation. At this point you cold seek to resolve such difference through further investigation, and through listening to and questioning the order side.

Evaluation and repositioning:

-    You will next assess alternative solution in relation to the needs of both parties (co-operative problem solving style) or you will make strong counter proposals to your opponents position (competitive style)
-    You will eliminate unworkable proposals (co-operative problem-solving style) or use a variety of negotiating tactics to enhance your position and discredit that of your opponent (confrontational style)
-    You will generate new proposals (co-operative problem-solving style) or identify trade-offs and concessions (competitive style)
-    You will consider ending the negotiation if the tradeoffs are too high for both parties (co-operative problem-solving style) or if the trade -offs are acceptable to your side although not to the other(competitive style)

Closing:
Finally you will need to find a way of closing the negotiation. The alternatives at this stage include:
-    Adjourning to obtain further information, and instructions from your client
-    Adjourning to report a final offer from the other side to your client and seek his instructions
-    Reaching a final agreement as authorized by your client

If the outcome is successful and a settlement has been reached, you will need to check your understanding of the settlement with that of your opponent to make certain that you are in agreement. You must next decide how the settlement is going to be made legally enforceable (if it is), and who will draft the terms of any written settlement.

Review:

Throughout the whole of the process referred to above, it is helpful from time for the lawyers to review the stage that has been reached in the discussions. This is especially recommended if you appear to have reached a deadlock, or there is an uncomfortable silence. A review gives each side the opportunity to compare their original objective with that has been achieved so far and consider how the negotiation should proceed. This can lead to one or other of the negotiators stating a revised or more innovative position as a potential solution to the problem.

Stages of Negotiation:

Stage 1: Evaluate and Select a Strategy to Guide Problem Solving
o    Assess various approaches or procedures--negotiation, facilitation, mediation, arbitration, court, etc.--available for problem solving.
o    Select an approach.

Stage 2: Make Contact with Other Party or Parties
o    Make initial contact(s) in person, by telephone, or by mail.
o    Explain your desire to negotiate and coordinate approaches.
o    Build rapport and expand relationship
o    Build personal or organization's credibility.
o    Promote commitment to the procedure.
o    Educate and obtain input from the parties about the process that is to be used.

Stage 3: Collect and Analyze Background Information
o Collect and analyze relevant data about the people, dynamics and substance involved in the problem.
o    Verify accuracy of data.
o    Minimize the impact of inaccurate or unavailable data.
o    Identify all parties' substantive, procedural and psychological interests.

Stage 4: Design a Detailed Plan for Negotiation
o    Identify strategies and tactics that will enable the parties to move toward agreement.
o Identify tactics to respond to situations peculiar to the specific issues to be negotiated.

Stage 5: Build Trust and Cooperation
o Prepare psychologically to participate in negotiations on substantive issues. Develop a strategy to handle strong emotions.
o Check perceptions and minimize effects of stereotypes.
o    Build recognition of the legitimacy of the parties and issues.
o    Build trust.
o    Clarify communications.

o    Stage 6: Beginning the Negotiation Session
o Introduce all parties.
o Exchange statements which demonstrate willingness to listen, share ideas, show openness to reason and demonstrate desire to bargain in good faith.
o    Establish guidelines for behavior.
o    State mutual expectations for the negotiations.
o    Describe history of problem and explain why there is a need for change or agreement.
o Identify interests and/or positions.

Stage 7: Define Issues and Set an Agenda
o Together identify broad topic areas of concern to people.
o Identify specific issues to be discussed.
o Frame issues in a non-judgmental neutral manner.
o Obtain an agreement on issues to be discussed.
o Determine the sequence to discuss issues.
o    Take turns describing how you see the situation. Participants should be encouraged to tell their story in enough detail that all people understand the viewpoint presented.
o    Use active listening, open-ended questions and focusing questions to gain additional information.

Stage 8: Uncover Hidden Interests
o    Probe each issue either one at a time or together to identify interests, needs and concerns of the principal participants in the dispute.
o    Define and elaborate interests so that all participants understand the needs of others as well as their own.

Stage 9: Generate Options for Settlement
o Develop awareness about the need for options from which to select or create the final settlement.
o Review needs of parties which relate to the issue.
o Generate criteria or objective standards that can guide settlement discussions.
o Look for agreements in principle.
o Consider breaking issue into smaller, more manageable issues and generating solutions for sub-issues.
o Generate options either individually or through joint discussions.
o Use one or more of the following procedures:
o Expand the pie so that benefits are increased for all parties.
o Alternate satisfaction so that each party has his/her interests satisfied but at different times.
o Trade items that are valued differently by parties.
o Look for integrative or win/win options.
o Brainstorm.
o Use trial and error generation of multiple solutions.
o Try silent generation in which each individual develops privately a list of options and then presents his/her ideas to other negotiators.
o Use a caucus to develop options.
o Conduct position/counter position option generation.
o Separate generation of possible solutions from evaluation.

Stage 10: Assess Options for Settlement
o Review the interests of the parties.
o Assess how interests can be met by available options.
o Assess the costs and benefits of selecting options.

Stage 11: Final Bargaining
o Final problem solving occurs when:
o One of the alternatives is selected.
o Incremental concessions are made and parties move closer together.
o Alternatives are combined or tailored into a superior solution.
o Package settlements are developed.
o Parties establish a procedural means to reach a substantive agreement.

Stage 12: Achieving Formal Settlement
o     Agreement may be a written memorandum of understanding or a legal contract.
o Identify "what ifs" and conduct problem solving to overcome blocks.
o Establish an evaluation and monitoring procedure.
o     Formalize the settlement and create enforcement and commitment mechanisms.
o Judicial review

Influencing factors of Negotiation :
There are some influencing factors or elements of negotiation which are essential and plays vital role in making effective negotiation. A short description is given below:
-    Negotiator: Negotiation process is influenced by various factors. The first such factor is the skill and ability of negotiator, his character and credibility. Another ability, which is a major factor in negotiation, is that the negotiator should keep control over the process. A negotiator should review the progress of the negotiation process; time and again endeavor to build bridges between the parties. He or She should try to create a positive attitude towards agreement. A great deal of skill and experience are necessary to control the entire process of negotiation, which can be gained by keen observation of strategies adopted by other parties, past experience and studying the best negotiation processes in the contemporary world.
-    Parties: Parties are a major influence on the negotiation process. The parties, their interests and the way they react and respond decide the process. Parties to a dispute have their own mindset when they come to a negotiation table.
-    Selection of the team: The team of negotiation should be selected basing on case and circumstances, so that each member contributes towards achieving the goal with productive working.
-    Place of negotiation: Sometimes the place of negotiation matters. Unfamiliar surroundings may cause stress to the opposite party in comparison to a familiar place.

-    Layout of the room: The layout of the room has an influence on the conduct of the negotiation to some extent. Ideally the layout should be chosen taking into consideration the circumstance in which the parties operate. For example, if the negotiation in with regard to any industrial dispute, negotiators should ensure that the distance between the parties is not too much. The seating arrangements should be such so as to encourage a relaxed mood. The design of layout should reflect attitudes and perceptions and issues being discussed in negotiation.
-    Psychology in negotiating: Psychology of the negotiators, as well as the parties plays an important role in the activity of negotiation. The people involved in the process work with different attitudes, approaches and activities. According to Maslows' 'Need Hierarchy Theory', behavior of people is influenced by their needs. People's needs are classified by him into:
1.    Physical and survival needs;
2.    Security and safety needs;
3.    Social needs;
4.    Ego needs;
5.    Self realization needs.

Effective Negotiation Skills :
The key to effective negotiation is clear communication. Communication involves three important skills: Speaking, Listening and understanding. You can't have one skill work without the others--for example, you can't have good understanding without good listening and speaking. Negotiation is most effective when people are able to clearly identify and discuss their sources of disagreement and misunderstanding.

Speaking:
Negotiation begins with a clear, concise explanation of the problem as each person sees it. Facts and feelings are presented in a rational manner from the individual's perspective, using "I" statements. Communication between people will go more smoothly when statements such as "I become very upset when you "are used rather than more aggressive statements such as "You make me mad when you," which blames the other person and puts him or her in a defensive position. Shared concerns rather than individual issues remain the focus of discussion throughout negotiation. The negotiation process will be most effective when people take time to think through what they will say. When possible, plan ahead to meet at a time and place convenient to everyone. A quiet, neutral spot where there are few distractions or interruptions is perfect for open discussion.

Listening:
Listening is an active process of concentrating all of one's attention on the other person. Encouraging the other person to share thoughts and feelings, giving feedback on what has been heard, and maintaining eye contact are skills that show you are interested in understanding what he or she has to say. It is always helpful to simply ask, "I understood you to say Am I correct in this?" or "I hear you saying that you are that how you feel?" Active listening assures the other person that he or she is heard, accepted and respected. The ability to listen actively supports open, ongoing negotiation. Thinking ahead or anticipating the course of the discussion is distractions that interfere with listening. Poor attention and listening can lead to misunderstandings, inappropriate solutions and continuing conflict.

Understanding:
Before two sides can look for solutions; a common understanding must be reached. If two people do not understand each other's problems and concerns, then the process of negotiation will either be broken off or will end with solutions that do not work. Active listening encourages understanding. It is important to pay close attention to what someone says as well as to how he or she behaves. Body language, including facial expressions, hand gestures and degree of eye contact, can provide clues about the other person's thoughts and feelings. Observations, however, are shaped as much by the observer as by the person being observed. It is good practice never to assume to understand the other person without first asking, "Did I hear you correctly?" or "I have noticed that you appear" or "I sense you are under strain. Do you want to talk about this?" and "I'd like to hear from you about how you are feeling" are all good examples of statements that encourage communication and better understanding between people.

Best Negotiation Tips :

Generally negotiation depends on the ability, skill, technique and knowledge of negotiator. The tips of the negotiation are varies from negotiator to negotiator. Some best negotiation tips with example are given below:

-    Be willing to negotiate in the first place:
Some people are too shy to talk about money. Others think it's rude or demeaning. And in many cases they're right. However, when it comes to doing a deal - and we all have to sometimes - being unwilling to engage in "money-talk" can be a very expensive business. There are a lot of experienced negotiators out there. If you're buying a house or a car, or taking a new job, you can be sure you'll have to deal with such a person. If they can see you're timid about the whole business, many will take advantage of that fact. You also shouldn't be shy about turning something that may not immediately appear to be a negotiation into one. If I'm buying a few expensive things from the same store, I'll often ask them to throw something in for free or reduce the price. Just because there's no sign saying you can do that, doesn't mean you can't. Often, simply by asking for something extra I'll get a better deal
-    Don't get emotionally involved:
One big mistake many amateur negotiators make is to become too emotionally attached to winning. They shout, threaten and demand to get their way. This is all counter-productive. Most deals are only possible if both people feel they're getting something out of it. If the person across the table feels attacked, or doesn't like you, they probably won't back down. Many people hate bullies, and will be more willing to walk away from a transaction if it involves one. Keep calm, patient and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You are more likely to do well that way.
-    Don't get suckered by the "rules" trick:
When someone sends me a contract to sign, if there's something on there I don't like, I'll cross it out. I'm also happy to write things I want added in if I think they should be there. Sometimes, the other party will come back to me and say "You're not allowed to make changes to our contracts like that". Oh really? Since I'm the one signing the thing, I'll make any changes I want, thank you very much. There's no law that says they're the only one allowed to add things to a contract. If they're not happy with my changes, let me know and we can work it out, but don't simply tell me I don't have permission. This highlights a common tactic used by experienced negotiators such as real estate agents, employment agents, car salespeople and the like. They know many people are sticklers about following rules. So they'll make up official sounding pronouncements and insist that "this is the way it's done" or "you're not allowed to do that". If someone starts trying to box you in by adding rules to the deal, ask them to provide proof that such rules really exist.
-    Never be the first person to name a figure:
This is an expensive lesson to have to learn, but a good one. I do a lot of contract work, and one of the first questions I'm usually asked is "What's your hourly rate?" This is a high pressure question, and I often found myself blurting out a figure that was lower than what I really wanted. These days, I've learned the importance of getting the other person to say a number first. Now, I respond to that question by asking "What's the budget for this contract?" Often, I'm surprised to discover they're offering me a better deal than I thought they were.

-    Ask for more than you expect to get:
Once the other person's given their figure, even if it's much better than you expected, say something like "I think you'll have to do better than that". Don't be arrogant or aggressive. Just say it calmly. When they enquire about your expectations, ask for more than you expect to get. Few people will walk away from a deal once it's commenced, and you can let the other person feel as if they're winning by lowering your "unrealistic expectations" a bit at a time.
-    Just giving the impression that you're willing to walk away can do wonders for getting a better deal. Always play the reluctant buyer or seller.

Salary Negotiation

Not very many people agree that negotiation is actually a skill, until they end up in a situation where they have difficulty negotiating. When negotiating, it is important that both parties come out as winners. If you want something from the other party, you have to be able to show what you can offer them in exchange for what you want. Same goes for when you want to negotiate for your salary, you have to be able to show the company why you deserve to be paid a higher amount. Discover all about the art of salary negotiation right here so you can have that pay you want and deserve.

Communication is the most important thing when learning the art of negotiation. This involves speaking clearly, listening, and understanding the situation. When applying for a new job, or asking for a raise, it is necessary that you follow this by communicating to the company why you deserve that salary from your experiences as well as what you have to offer to deserve that salary.

Being prepared is another step to the art of salary negotiation. You need to do your research well about the right salary for your position and experience and also have a list of all your achievements in the past. Think of yourself as a product that you are trying to sell because this is the time to brag about why you are an asset to the company and why they should hire you.

Of course, it is also important that you know if you have a right to negotiate or not. The salary that you will be given is dependent on how well you perform and what you bring into the company. If you have been performing poorly, don't expect to get a raise or get a high salary in a new job. To get paid well, you actually need to work your butt off to show you deserve that compensation.

When negotiating, you also need to show that you are confident and know exactly what you want. It is important that you now your worth and that the company sees that. There's a difference though with confidence and aggressiveness so you need to make sure that you aren't crossing over to the latter.

Salary negotiation is not the only time that you may need negotiation skills. You may not even realize it but you negotiate in day-to-day activities not only with business, but possibly with bargains as well. If you want to be successful in getting a good salary, simply keep these skills in mind.

How to go about negotiating for salary isn't always an easy task which is why learning what to do is necessary. To gain knowledge on this matter, visit the site on salary negotiation and get all the assistance you need to be confident in getting the salary you deserve.

Tactics, Tricks And Threats

Most successful negotiators recognise that the way people involved in negotiations behave does not always reflect their true feelings or intentions. We are going to look at negotiating tactics that may be used by you or on you. Whether or not you choose to use these tactics, it is vital to understand:

o Tactics work

o They can be being used on you, and can be used by you

o Once they are recognised as tactics, their effects are reduced, or eliminated

You may feel that there is no need in your particular case to negotiate or resort to tactics. in negotiation. This is a matter of personal choice.

In general, tactics are used to gain a short-term advantage during the negotiation and are designed to lower your expectations of reaching a successful conclusion.

There are many tactics available to negotiators. Here are some you may recognise.

Pre-Conditioning:

This can begin before you even get together, or start your negotiations with the other party. Let us take a sales example:

You telephone for the appointment and the other side says, aggressively:

"Don't bother coming if you are going to tell me about price increases. You'll be wasting your time and I will be forced to speak to your competitors".

When you do arrive you are kept waiting in reception for half an hour, without being told why. As you walk through the door into the other person's office they indicate for you to sit down, but they don't look up. Instead, they sit leafing through your competitor's brochure, in silence, ignoring your efforts to make conversation.

You are given an uncomfortable low chair to sit in that happens to be directly in line with the sun shining into the office. At this stage, how confident do you feel?

The Monkey On The Back:

Some negotiators have the irritating habit of handing their problems to you so that they become your problems. This is the "monkey on their back" that they want you to carry around for them.

A classic example is the person who says, "I have only got £10,000 in my budget".

This is often used tactically to force a price reduction. Here is what you can do.

When one side says "I have only £10,000 in budget", look concerned and say something like:

"That is a problem. As you are no doubt aware, the cost of our systems can be anything up to £20,000 and I really want to help you choose the best system that meets your needs. Does that mean that if one of our systems has everything you are looking for, but costs £20,000, you would rather I didn't show it to you?"

The "monkey" has been returned and they have to make a choice. If the objection is genuine and the budget figure is correct, you must try to look for an alternative that meets your needs as well as theirs.

If they genuinely can only spend £10,000 that is not a tactic but the truth. In dealing with tactics the first decision you must make is whether it is a tactic or a genuine situation. If it is genuine, you have a problem to solve, rather than a tactic to overcome.

The Use Of Higher Authority:

This can be a most effective way to reduce pressure in the negotiation by introducing an unseen third party and can also be effective in bringing the negotiation to a close.

"I need to have this agreed by my Board of Directors." "If they agree to the terms we have discussed, do we have a deal?"

However, be careful to use this device sparingly so that the other side does not begin to feel you have no decision making authority yourself.

One way of countering this tactic is to say before the bargaining begins: "If this proposal meets your needs, is there any reason you would not give me your decision today?"

If the other side still wishes to resort to higher authority, appeal to their ego by saying: "Of course, they will go along with your recommendations, won't they? Will you be recommending this proposal?"

Nibbling:

Negotiations can be a tiring process. As the point draws near when an agreement is likely, both sides exhibit a psychological need to reach agreement and get on with something else.

You are very vulnerable as the other side reaches for their pen to sign the order form or contract, to concede items that don't significantly affect the final outcome. "Oh, by the way, this does include free delivery, doesn't it?" or "Oh, by the way, the price of the car does include a full tank of petrol?"

Nibbles work best when they are small and asked for at the right psychological moment. Like peanuts, eat enough of them and they get fattening.

Good negotiators will often keep back certain items on their want list until the very last minute when the other party is vulnerable. Watch out for this.

The Good Guy And The Bad Guy:

You may have come across this tactic before or else seen it used in films or on television. This is a tactic designed to soften you up in the negotiation.

For example, you are negotiating the renewal of your service contract with the Buying Director and his Finance Director. You present your proposal and the Buying Director suddenly gets angry and walks out in disgust muttering to himself about how unfair you have been and how the relationship is well and truly over.

You pick up your briefcase and are being shown the door when the Finance Director smiles at you sympathetically and says:

"I'm terribly sorry about that. He is under a lot of pressure. I would like to help you renew your contract, but he really will not consider the price you have suggested. Why don't I go and talk to him for you and see if we can agree a compromise? What is the bottom line on the contract? If you give me your very best price, I will see what I can do".

The best way of dealing with this tactic is to recognise the game that is being played and assess exactly what the quality of the relationship is. You may be able to say something like:

"Come off it, you are using good guy, bad guy. You are a superb negotiator, but let's sit down and discuss the proposal realistically".

If you don't have this kind of relationship, stand firm and insist on dealing with the bad guy, or else bluff yourself and give a figure that is within your acceptable range of alternatives.

One way of combining good guy, bad guy. with higher authority is by saying things like:

"Well, I'd love to do a deal with you on that basis, but my manager refuses to let me agree terms of this nature without referring back and he refuses to talk to salespeople. Give me your best price and I will see what I can do"

Body Language:

It is important in negotiation to react verbally and visually when offers are made. You may have seen the more theatrical negotiators hang their heads in despair or accuse you of being unfair and souring a perfectly good relationship when you present your proposal. Human nature is such that we can believe and accept these outbursts against us and our negotiating position becomes weaker as a result.

Ensure the next time you are in a negotiation that you react to the other party's offer. If you show no reaction, they may be tempted to ask for more and more and you will lose the initiative in the negotiation. Also, it is almost certain that their opening offer is higher than the figure for which they are prepared to settle, so it is important that you clearly signal your unwillingness to accept the opening position.

If you reach the point below which you will not go, it is important that you show this with your body language. News readers, when they have finished reading the news, have a habit of picking up their script and tidying up their papers. This tells the world that they have finished their task and are preparing to leave.

Similarly, when you make your final offer, it can be very powerful to collect your papers together and indicate with your body that it really is your final offer. Put your pen away, sit back in your chair and remain silent. Look concerned and keep quiet.

If your voice says final offer but your body is saying let's keep talking, the other party will disregard what you say and keep negotiating.

The Use Of Silence:

During the negotiation, you may make a proposal and find the other party remains silent. This can be very difficult to handle and often signals disapproval to the inexperienced negotiator. Just as nature abhors a vacuum, so silence induces the need in people to talk.

If you have a proposal to make, make it and ask the other side how he or she feels about it. Having asked the question, sit back and wait for the answer. Whatever you do; don't change your offer as this could seriously weaken your position.

The Vice:

A common technique used by negotiators when presented with a proposal is to say:

"You'll have to do better than that."

The most powerful way of dealing with this is to ask them to be more specific. Whatever you do, don't weaken your negotiating position in response to the vice by giving anything away, too easily. This will only encourage repeat behaviour.

The Power Of Legitimacy:

People believe what they see in writing. We all assume that if a thing is printed or written down, it is non-negotiable. This is what can make price lists so powerful. If you have to present a customer with a price increase or you wish to encourage an early order to beat a price increase, show something in writing such as an office memo from your boss announcing the increase. This will have a far greater impact than just saying your prices are about to go up.

When presented with a price tag in a shop, ask to speak to the manager and make him an offer. You could be surprised at the results.

And Finally -The Low Key Approach:

Don't appear too enthusiastic during negotiations. Over-enthusiasm can encourage skilled negotiators to review their strategy and demand more.

If you are in a negotiation and the other side is not responding to your proposal, recognise this could be a tactic and avoid giving concessions just to cheer them up. Salespeople like to be liked and will often give money away in a negotiation, if the other side appears unhappy.

For example, if you are buying a car avoid saying to the seller things like:

"This is exactly what I'm looking for. I really like the alloy wheels".

Develop a low-key approach. Say things like:

"Well, it may not be exactly what I'm looking for but I might be interested if the price is right".

BEDROL Method

The principles of Negotiation can work for you in any situation, but often people ask me, “Well, its often a fact that conflict happens unexpectedly. What if I don’t have time to prepare? Can negotiation skills be used on the spur of the moment?” The answer is YES. The principles of Street Negotiation were created and battle-tested on the streets and it’s power lies in its ability to be used to resolve any conflict anytime. Conflict can be resolved in six easy to learn steps, acronymed as BEDROL(TM). That is: Back-up plan, Emotional control, Defusing their anger, Reframing, Options, and Letting them choose their fate.
Step 1--Back Up Plan.
Having a back-up plan before you step into a conflict is absolutely crucial. Police officers sometimes are so accustom to having people do as they say, they become complacent and fail to have a plan B ready in case the person doesn’t want to comply. An unfortuanate number of police officers have been killed in the line of duty because they didn’t know what to do once the subject refused to comply with their demands. Their lack of a back-up plan made them freeze up, giving the suspect enough time to overpower them. By having a plan B in your pocket prior to dealing with any conflict, you can remain confident that you can still move forward even if your negotiation fails. Remember that your plan B is your best solution that you can come up with on your own without having to talk with your counterpart. For the hostage negotiator, this could mean using the tactical team to take control by force. For two angry neighbors, this could mean going to court. Your plan B gives you the confidence to deal with your counterpart and the ability to move forward, whether you reach an agreement with them or not.
Step 2--Emotional Control
Your anger is the biggest challege towards resolving the conflict peacefully. You need to control your anger by separating the person from the problem. Have pity on the person for attacking you because their real anger lies in the problem, not with you. View the situation rationally without allowing anger into the equation. You always have to remember that if you react with anger—then you’ve lost the battle.
Step 3--Defusing their anger
The other obstacle to overcome is your counterpart’s anger and frustration. These emotions are blinding them from seeing things rationally. Their primary focus is that they were wronged and now they want retribution—often from you. Think of their emotions like a pressure cooker on a stovetop. There are two ways of releasing the pressure: (1) you can pop the lid and the have the contents explode out of the pot from the sudden change in pressure, or (2) you can engage the pressure-release valve and slowly let that steam pressure out of the cooker which will enable you to open the lid without injury. The same is true for an angry person. You want to hit their pressure release switch by using active listening skills. Listen and acknowledge this concerns. Engage them in empathetic responses by trying to walk around in their shoes. Paraphrase back to them what they told you in your own words. You will see a dramatic difference in their level of hostility as they get to vent their anger.
Step 4--Reframing
Now comes the time when you must reframe their position into interests. Do this by first reframing them from an enemy into a partner. Then reframe all their personal attacks on you back on the problem. Then finally, uncover their interests behind their demands with nonconfrontational questions.
Step 5--Options
Discuss options with them and get them involved in the process of thinking about possibilities for a solution. You might have to present some various options that they have available to them. Strive for a cooperative effort to find mutually-satisfying options that will benefit both parties.
Step 6--Letting them choose their fate
Empower your counterpart with the choice to make their own fate. Don’t back them into a corner by telling them what to do. Human beings need control over their own life, otherwise they feel threatened. Let them pick the option that you both have discussed. If they still fail to comply at this point then ask them what the possible consequences are if no agreement can be made. As a last resort, use your back-up plan as an alternative to the negotiation.

Corporate Executive

I would like to comment on the “A Beautiful Mind” movie and the book, which was actually much better. I just finished reading another book on the similar side of John Nashs’ assertion of working together rather than competing against. That book was “Co-opetition.” By Adam M. Brandenburger (Havard guy)and Barry J. Nalebuff (Yale Dude). Many have been aware of such theory for quite a while and practice such occasionally for the betterment of an industry or through the art of diplomacy, sometimes through misdirection and other times as an experiment (nothing more, nothing less) especially when it really does not matter and it is not really core to our direction and market domination strategy for any given region. I would have to differ from the movie version in that if you tried to run your business in the fashion that Jim Nash discussed in theory you might do well for a while, but would eventually get hammered in the market place, whether or not you actually were able to sleep with a brunette when you wanted the blond with the big bust (go see the movie, you will understand that comment). In theory it sounded wonderful in the movie yet would not take you very far in the cut throat world of business, even though the regulators always want to level the playing field, more often then not they are manipulated agents for the competition as indicated by Adam Smith, Carl Marx and Rodney Dangerfield in “Back to School.” The fact is that even the referees of business, namely the regulating bodies who want to see the playing field leveled usually tip it in the favor of a politically powerful and well connected companies which fund the campaigns of the over see’ers (politicians). Once the regulatory bodies find they have been duped rather than bring it up with the politicians, they want to punish all the players in the industry and kick them out of the game, of course this hurts the fans (consumers) and then the game (industry) and then the referees and fans are not needed (read; “When Atlas Shrugged” By Ayn Rand).
Unless a perfect and fair playing field exists John Nash’s dream of a perfect system and economic structure cannot exist and that is pretty straight forward with the study of human psychology, Machiavelli, Maslow’s hierarchy of needs, the prisoners, dilemma or a multitude of truisms surrounding human nature. The world does not work that way, it is not a perfect world and therefore such theories are not worthy of attempt although obviously interesting from an academia standpoint or discussion at the geological societies random coffee house dialogues.
The win-lose scenario keeps forcing someone to lose, if we were to really see the true picture here we would find that what John Nash was saying is that you need to take into consideration giving someone else what they want so you can get what you want. I say Obviously John is right. Too bad regulators condemn the greatest contributors of mankind, while the competitors cheat, the playing field is not leveled and the true voter of the monetary unit of trade called a dollar cannot see thru the clutter and scatter of the advertising and behind the scenes truisms of a system which is not all it seems.
When looking at the true methodology of John Nash’s achievements it is fair to say that being able to put simple concepts into mathematical formulas will significantly help the future of computers capable of fuzzy logic calculate the answers to game theory, war efforts, strategic thinking and competition exposure in business. That will be one of the great achievements of his work, which will be in the future. However one who is at the helm of a business has other responsibilities such as the survival and profitability of the company and using John Nash’s strict modeling in an imperfect world is dangerous to the ongoing vitality of a once going concern. Be careful to prematurely adopt perfect systems in an imperfect world.

Embarrassed To Discuss

Last week, a wonderfully-skilled electrician installed a new light fixture for us. He was competent, courteous and efficient. He answered all our questions simply, with skill and eloquence. I was amazed, as you might imagine, when I asked him, “How much do we owe you?” and his embarrassed reply was, “Gee, is $50 okay?”
With the quality of work he’d done and the amount of time he put into it, I would have expected to pay double that amount. His resistance to naming his price reminded me of my small business clients who have the same problem.
All entrepreneurs feel fear at some point, including attorneys, consultants, coaches, and writers. It’s a natural part of starting or growing your business. It can be uncomfortable to take risks, to name your price and tell a prospective customer that you want to work with them.
Roberto Goizueta, the late chairman of Coca-Cola, said, "If you take risks, you may still fail; but if you do not take risks, you will surely fail. The greatest risk of all is to do nothing." Put this mantra into your head: Risk equals reward.
So, what’s the problem?
I’ve discovered seven common reasons why we’re afraid to discuss our fees:
1. Do you feel your fees are too high?
2. Do you think you’re not qualified or experienced enough to charge that rate?
3. Are you afraid of rejection? (Or, possibly, afraid of acceptance, which will mean you’ll have to perform?)
4. Are you afraid the prospect will raise an objection to the fee, and you won’t know how to reply?
5. Are you shy and uncomfortable talking with strangers?
6. Are you afraid to take risks?
7. Are you generally uncomfortable talking about money?
Where does this come from? Is it part of your personality or is this a behavior you learned from your past experience or culture? In many families and cultures, it’s taboo to talk about money or to ask to be paid. While it might be personally beneficial to look inside yourself for the reasons why you act this way, it’s also important to get unstuck by using techniques which help you move forward, such as:
• Have a good pricing strategy. Research the average fees for your type of business so that you know your prices are in line with expectation. If you can’t get competitor pricing information, try Brenner Books (http://www.brennerbooks.com/). If your experience warrants it, increase your pricing to reflect your higher skills, knowledge and experience. If you’re not sure how to create a pricing strategy, research it online or talk with a small business consultant or mentor.
• Establish that the prospective customer needs your services before discussing price. You’ll feel more comfortable discussing your fees if you know the prospective customer really want to hire you. Ask a lot of questions to see if their problem and your solution are a good match.
• Put your fees on your website and brochure. In this way, prospects will know your fees before the sales conversation begins.
• Be honest. Tell the prospect what the options are for your services or products, any quantity discounts you offer, and how payment is delivered. Practice saying this over and over again until the words and phrases slip comfortably from your mouth.
• Act confidently when delivering your fees. Don’t downplay your fees. State your fees, then shut up. Don’t make excuses for your fees, or ramble on about them. Look directly at the prospect while delivering your fees.
• Don’t automatically offer discounts. This tells the prospect that your fees are soft and that they’re negotiable. Instead, state your fees and options and ask them to tell you which package is right for them.
• Act “as if.” How would an experienced person in your industry act, when discussing her fees? Act as if you are that person and you’ll find your confidence increasing with each conversation. Practice, practice, practice.
• Get training. If you’re uncomfortable with the whole sales process, get sales training. By attending a class, you’ll learn different ways of saying the same thing, and you’re bound to find a way that’s right for you.
• Refer out. If the prospect really can’t afford your fees and you can’t afford to offer a discount, refer that prospect to someplace where they can find an alternative. Say, “If you can’t afford my fees, you can try these online referral services where you might find someone in your price range.”
Talking about your prices can be uncomfortable. But with practice and persistence, and a willingness to overcome your fears, you can begin to have comfortable conversations with your prospective customers.

Cultural Negotiation Style

Cultural and national negotiation styles reflect communication behaviors and the priorities of that culture. Priorities such as trust, teamwork, non-confrontational situations, and openness are all along a sliding scale with each culture. The communication behaviors of each culture reflect these priorities and can dictate how a culture will engage in negotiations. Often, Japanese and other Asian negotiators will plan a social event and dinner before any real negotiations occur. Likewise, Americans place an emphasis on taking clients out to dinner and a round of golf. Engaging in this type of activity builds trust and opens the line of communication between the two parties. Using persuasive techniques to “connect” with another person can lead to trust and the sense of a relationship being built. The negotiation styles of these two cultures mesh well, thus allowing them to understand the priorities of each other’s culture.
Once a relationship has been built on trust, the negotiators can begin sharing information. This level of openness is highly dependant on the level of openness for that country. This stage in negotiations require each party to fulfill their end of reciprocation – which can sometimes make one party feel like they are being confronted - but if done correctly can develop “quick trust” (Brett, 207). Quick Trust develops when two groups share information and allow the other party to see their weak side. Obviously developing trust is important, however some cultures simply may not be comfortable with divulging information quickly.
Getting Down to business: Using Culture to Persuade Arguably one of the most important factors in negotiation is an understating of the culture in which you are engaging in negotiations. Cultures vary in their openness and in the time that business in conducted. Terms of agreements should be taken into consideration; for example, Italy has a 90-day billing cycle versus the “normal” USA 30-billing cycle. These cultural norms are very important for understanding how to succeed in negotiating on a global scale. Building relationships is the key for building trust among partners or potential clients. Trust can become an all encompassing factor when it comes time to make a final decision, the understanding of what is expected and following through will allow negotiations to flow smoothly.