The Four Stages Of Negotiating

By | April 9, 2018
  1. Preparation
  • Gather all the relevant facts from as many sources as possible to have the widest view of the situation.
  • Having done so you will be able to assess your bargaining power and that of the other party and as a result, the scope for either party to apply leverage.
  • You need to be clear of what you want to achieve.
  • Your opening bid should be higher than your desirable requirements. Thus the difference between your opening bid and your minimum requirements will be your bargaining ground.
  • What are you prepared to concede? How will these concessions be viewed by the other party?

Be aware of the following pitfalls before going into a negotiating situation:

  • Mirror image – each party regards the other’s position as being exactly the opposite to their own. This leaves little room for compromise.
  • Different interpretations of the same facts – check out with the other party exactly what they mean.
  • Double standards – judging the other party’s acts by a different standard from your own standards.
  • Assumption that there is a fixed ‘pie’ – this prevents both parties from thinking laterally.
  • Thinking that solving their problem is ‘their’ problem – the fact that you are in a negotiating situation means that it is also your problem.
  • Do not pre-judge the issue before going into a negotiating situation.

2a.  Establishing The Climate

The climate is set very early in the negotiating situation.  It is important to have a positive influence on it.  Always begin as you mean to go on.  If you aim to create a win/win climate, emphasise points of agreement from the start.

  • Room layout – a round table helps create a collaborative mood.
  • Positive body language – being neat and well dressed demonstrate a business-like approach; smiling and nodding suggests agreement.
  • Talk about neutral topics – the type of journey that the visitor has had, the room setting, the weather!

2b.    Exploration

Having established the climate, exploration is the next area of the negotiating process.

You can form a shared view of where the meeting is going and how the two parties are going to get there together.

Focus On The 4 P’s

PURPOSE                    The reason for having met should be re-stated.

PLAN                          Agenda – what topics are to be discussed and who should discuss them.

PACE                           Length of time both parties are prepared to give to the meeting.

PERSONALITIES        The people in each party, who they are and what they can do to help the  negotiating process.

 

3a.    Bidding

Having decided during the preparation stage on your opening bid, it is necessary to state it confidently and then listen to the other party’s opening bid, checking that you have understood what they have said.

Conflict may arise at this stage.  If the climate so far has been a co-operative one, you will be able to explore together the reasons behind any disagreement.  State your willingness to continue to negotiate, indicating that your opening bid is not your last word.

3b.    Bargaining

Having stated their opening bids, both parties negotiate to gain the best advantage for their side.  In doing so, each party uses its own resources to meet the other party’s needs and certain tactics can be applied.

  • Try to avoid being the first to make a concession. You can do this by asking ‘why’ which may expose a weakness in their demands.
  • Check out the other party’s willingness to move – “if we could…. would you…?”
  • State what your conditions are first, then make any concessions. Ensure that the other party hears and understands your conditions.
  • Keep an open mind – be willing to re-negotiate an issue which has already been settled if this enables you to achieve your overall aim.
  • Recess – each party moves out of the negotiating forum to reconsider progress to date and to discuss how to handle the next stage.
  • Setting deadlines – the time schedule should be agreed at the start of the negotiation and a reminder can be a helpful way to achieve an end.
  • Lateral thinking – it is very important to look outside the confines of the problem in looking for a solution.
  • Sub groups – these are useful when a negotiation gets bogged down – a sub group can brainstorm a specific area and report back to the main room.

 

4.      Clinching The Deal

Once the negotiation is complete, summarise what has been agreed on every point and check that consensus really does exist.  Ensure that all details agreed are confirmed in writing.  Remember to inform those who need to know the outcome and to thank those who have contributed to the success you have achieved.

It may not have been possible to achieve all the objectives in a single meeting – a further meeting or series of meetings should be organised, in which all stages of the negotiating process need to be addressed again.

 

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