Negotiation is an art. The key is to find a satisfactory middle ground for two or more people with differing objectives and goals so they can move forward in unison.
Businesses usually choose from among four main types of negotiations: integrative negotiations, multiparty negotiations, team negotiations and distributive negotiations.
- The focus of a principled or integrative negotiation is conflict resolution. It uses the principles and interests of both parties in order to reach an agreement. Since it is integrative in nature, this type of negotiation looks to serve the interests of both parties.
- As the name suggests, in a multiparty negotiation, there are more than two groups or parties at the bargaining table. One example of this type of negotiation is several department heads in an organization joining a meeting in order to represent their respective team’s interests.
- A team negotiation is a type of bargaining whereby both sides have multiple individuals serving various roles. For instance, each side may have a representative or a spokesperson, someone who keeps track of progress and someone else whose job is to develop relationships with the other side.
- The fourth type of negotiation is distributive or adversarial negotiation that often does not serve the interest of both parties. Here, one side wins, while the other suffers a loss and has to take a step back. Usually, in adversarial negotiations, both parties take hard-line stances — and even bully their way — to arrive at their desired result without any concern for the other side.
How to negotiate like a boss
A thorough, well-prepared negotiation requires taking plenty of time to think about what you want as a business leader, what options are available for the current deal and what the other side may value.
Irrespective of the type of business negotiation you may find yourself in, these four strategies can help you negotiate like an expert:
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Establish a rapport
: The smart negotiator develops a relationship with the counterparty before the negotiations begin. This allows them to get an idea of whom they are dealing with, and vice versa. That said, it’s crucial to always be open, genuine and sincere. Integrity, honesty and dignity are appreciable qualities, and the foundation upon which productive negotiations are built.
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Always be polite
: Like the saying goes: “You can catch more flies with honey than with vinegar,” meaning it is much easier to get what one wants by simply being polite instead of being rude. Again, it is important to be genuine with the sweetness, or else the opponent may think of you as being manipulative.
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Be open to the win-win situation
: The situation where both parties win is the ideal one. Understanding what the other party needs as well as working for all concerned will help getting on the same side of the fence happen more quickly and easily. However, not every negotiation will be a win-win, but it is crucial that both parties feel like they have been dealt with fairly.
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Respect the flow of the relationship
: Never rush a negotiation. Often, taking a pause and giving yourself and others the time and space to reflect upon everything can be a very powerful negotiation tactic.
How negotiations benefit businesses
Here are four reasons why learning to negotiate is important for growing your company.
- Negotiations can help you get better pricing deals from your vendors, find the right compensation package for your staff members, have a lucrative fundraising round and even help you scale your organization faster.
- If you have plans to sell your firm in the future, a successful negotiation can help you find the right buyer at a significant price.
- A negotiation can help lower business costs and increase profits, if done right.
- A negotiation can enable you to make mutually beneficial deals that are profitable and also build long-term relationships.
Negotiation is all about building and maintaining relationships. A good relationship with the counterparties allows all players to win. And once you master the subtle art of negotiation, you can establish yourself as a top-drawer business person, which may lead to even greater opportunities in the future.
