“Negotiation and discussion are the greatest weapons we have for promoting peace and development,” said Nelson Mandela.

Mahatma Gandhi and Mandela are regarded as two of history’s greatest negotiators. They applied their intelligence and displayed their fortitude as they negotiated the futures of their respective nations.

Negotiation comes in handy to achieve individual as well as collective goals. Without team members having good negotiation skills, no business is successful.

Every professional should acquaint themselves with the proper negotiation process. Negotiation skills can be developed with proper insights, mentoring, and training.

What Is Negotiation?

Negotiation is a strategic process of arriving at an agreement by two or more individuals, teams, or groups. It is defined as ‘an interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly.’

During a negotiation process, an issue is addressed, a problem is resolved, and a conclusion is derived. Actions are based on what is agreed upon in the negotiation. Having great negotiation skills is an asset.

Let’s look at an example. Sabeer Bhatia, the Hotmail co-founder,  struck a massive deal with technology giant Microsoft in1998. He managed to bump up the acquisition price for his company from $160 million to $400 million. Later, he reportedly credited his negotiation skills to the bargaining he used to do in the vegetable markets of Bengaluru.

We have to negotiate in many situations in our daily personal and professional lives. They include:

  • Negotiating a salary with a potential hire

  • Asking your supervisor for a few days off and planning the work schedule accordingly

  • Negotiating some time for entertainment when your child is preparing for a competitive examination

  • Negotiating a project deadline assigned to you by your boss

  • Negotiating the price of the property you want to invest in

Types of Negotiation

Negotiation is an important skill for the modern professional. Sometimes, negotiation also involves meeting each other halfway as a compromise when both sides are on opposite sides of the spectrum. There are various types of negotiation:

1. Distributive Negotiation

Distributive negotiation is when two parties bargain over a single product or issue, such as price. For example, negotiating with a dealer over the price of a second-hand vehicle or bargaining with a street vendor. Here, one party wins and the other has to take a step back and suffers a loss. Your success eventually depends on your distributive negotiation skills.

2. Integrative Negotiation

Do you know what happens when representatives of an employees’ union meet the management with their demands? They discuss, argue, present, oppose, convince, and so on. Then, they strike a deal on salaries and other benefits. This is called integrative negotiation.

It is one of the types of negotiation where there is more than one issue that has to be put through the negotiation process. Both parties gain something from the negotiation. An integrative negotiation process ensures a win-win situation.

3. Multiparty Negotiation

The multiparty negotiation process involves three or more parties undertaking various negotiation strategies to drive home their points. When six friends are deciding the venue of the party and discussing its pros and cons, the type of negotiation can be said to be multiparty.

4. Team Negotiation

This type of negotiation process takes place between the two teams. For example, negotiation strategies between the teams of two companies that are looking to merge are called team negotiations.

While putting together a negotiation team, a company looks for members with excellent negotiation skills and highly-developed strategic thinking capacities.

5. Positional Negotiation

Positional negotiation is when you spell out the position you are in, at the outset. Then, you defend that position against the attack. Important among the types of negotiation, positional negotiation sees both parties having fixed stances and sticking to them obstinately. They may not consider the other party’s interest or see where they are coming from. Positional negotiation is not considered very productive.

Being a master negotiator is not rocket science. Neither is it an overnight miracle. It is a five-stage framework that can be learned, practiced, and applied. Here are the five stages of the negotiation process:

Five Stages Of The Negotiation Process

1. Prepare

Research is a building block of the negotiation process. While preparing, you must weigh both sides, identify the strengths and weaknesses of both sides, and then determine your negotiation strategies. Define 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 creating value for the negotiation process. It also helps in building rapport.

Both parties should explain their interests and exchange their viewpoints to achieve the desired results. Unless there is a transparent exchange of information, even sophisticated negotiation strategies won’t work.

3. Bargain

In all types of negotiation, a bargain is of utmost importance. It is the beginning of give-and-take deals. Each party proposes its demands and seeks to secure benefits. During the bargaining process, it is imperative to keep yourself in check. Don’t lose your cool or become emotional during negotiations. To achieve your desired outcomes, train yourself to be composed and diplomatic.

4. Conclude

Once a solution that is acceptable to both has been reached, both parties should thank each other. They should confirm that interests have been secured and the outcome has been successful. A good summing-up and amicable closing always lead to rewarding long-term relationships.

5. Execute    

All types of negotiation lead to effective implementation. The steps to implement the negotiated result should be categorically chalked out. Often, in the corporate context, a written contract is entered into to confirm the intent to execute.

Barriers To Good Negotiation

Ego is considered the biggest obstacle to good negotiation. Knowing the other side is important before you put your cards on the table. That’s the reason why big corporations send a multi-functional team for an important negotiation.

Other barriers that may hamper a negotiation are:

  • Taking negotiations as personal battles and focussing too much on winning

  • Maintaining a know-it-all attitude and failing to ask genuine questions

  • Being hostile and thinking negatively during the negotiation process

  • Inability to grasp the problems and positions of the other party in the negotiation process

  • Entering a negotiation unprepared and uninformed f and having no credible answers for the questions asked

  • Being short-tempered, sarcastic, lacking listening skills, and criticizing too much

How To Develop Good Negotiation Skills

  • Look at negotiation as a puzzle to be solved rather than a battle to be won

  • Listen with attention and be empathetic

  • Ensure that the negotiation is a win-win situation or it creates frustration

  • Instead of focussing on compromising, gear your efforts to achieve your interest

  • Work on your people skills and communication skills

  • Practice your negotiation skills and strategies with friends and family

  • Learn to accept mistakes and improve on them

  • Know your genuine value and learn to say no whenever required

  • Treat negotiation as a presentation. Improve your body language so that it will give you a winning edge

  • Be smart and strategic. It is said that let them win the first negotiation, and they will usually be happy enough to let you win two to three more

  • Define your personal strengths and use them positively to impress and convince

Being a champion of persuasion is an art. It requires smooth handling of conflicts and reaching agreements that are acceptable to both sides.

Harappa’s Negotiating Wisely course can help you become a results-oriented negotiator. It trains you to focus on and anticipate the interests of all stakeholders, to sharpen collaborative skills, and build a strong case for your position.

You will learn about the concept of BATNA which will help you arrive at the Best Alternative To Your Negotiated Agreement. The term BATNA was coined by negotiation experts Fisher and Ury when they taught negotiation at Harvard Law School.

BATNA is the best option you are left with if you don’t get what you want. Having a good BATNA allows you to be more confident in a negotiation because it reduces your dependence on the other party.

So, begin your journey to becoming a successful negotiator with Harappa!


Explore our Harappa Diaries section to know more about the topic related to the Collaborate habit such as What is a Conflict & Importance of Strategic Management in order to develop your collaboration skills.

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