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Business

The Art of Negotiation

Negotiations of a contract to gain consensus between parties is ultimately the clarification and agreement on what is going to be provided regarding the requirements and what will be exchanged for meeting those requirements prior to the actual efforts taking place.  The process to arrive at the desired end state is a balance of the art of negotiation and science of managing psychological and behavioral activities to manage and control the negotiation and communication.  The art of negotiation involves understanding how to create the behavioral and psychological reactions and interactions of the parties involved and to establish the bond or relationship between the parties of the negotiation.  In regard to the science or tactical side of the negotiation, it is imperative to understand the tools available to the negotiator as well as the knowledge and understanding of what negotiations actually involve. 

There are two types of negotiations, the integrative and distributive.  The distributive negotiation sees negotiation as dividing a fixed amount of items and is by definition finite.  This is representative of haggling for the best price or the best offer.  This is a tug-of-war between the buyer and the seller in which only a certain amount of ground can be gained or lost.  The distributive negotiation is more about keeping key information secret and not allowing any leverage to the other negotiation party.  Integrative negotiations are based on cooperation collaboration for a mutually beneficial objective.  These types of negotiations provide a win-win scenario which is normally used in trouble-shooting, problem solving or finding a resolution to a complex issue with multiple facets.  Distributive negotiations would be used when buying a vehicle or purchasing a house whereas integrative negotiations would be used when selling land to a new corporation that will bring new business opportunities to a community.

Understanding the two sides of negotiation will allow the negotiator to focus on the interactions between themselves and the other parties.  It is important for the negotiator to fully understand the requirements of the negotiation as well as they process required to achieve the requirements.  By understanding the process and ensuring a level of preparedness prior to negotiation the negotiator can focus on those behaviors that can provide a benefit or advantage in the negotiation.  There are certain triggers and reactions that a negotiator can focus on to place the other party at ease and build a bond between each side.  The negotiator must build a relationship while also watching for the pitfalls or roadblocks that could obstruct the pursuit of the desired end state.  These roadblocks include but are not limited to situations such as unsolicited criticism, whether good or mal-intentioned, and potential diversification issues that could lead to barriers in communication, understanding or acceptance of the proposed negotiations.  The negotiator must understand with whom they are communicating with, how their communication is interpreted and if it is received as intended.  Communication is key to negotiations.

Understanding the two sides of negotiation will allow the negotiator to focus on the interactions between themselves and the other parties.  It is important for the negotiator to fully understand the requirements of the negotiation as well as they process required to achieve the requirements.  By understanding the process and ensuring a level of preparedness prior to negotiation the negotiator can focus on those behaviors that can provide a benefit or advantage in the negotiation.  There are certain triggers and reactions that a negotiator can focus on to place the other party at ease and build a bond between each side.  The negotiator must build a relationship while also watching for the pitfalls or roadblocks that could obstruct the pursuit of the desired end state.  These roadblocks include but are not limited to situations such as unsolicited criticism, whether good or mal-intentioned, and potential diversification issues that could lead to barriers in communication, understanding or acceptance of the proposed negotiations.  The negotiator must understand with whom they are communicating with, how their communication is interpreted and if it is received as intended.  Communication is key to negotiations.

The appropriate communication method is not only a vessel to provide key information but it is also a basis for tactical operations within the negotiation as well as the tool to effectively and efficiently close the negotiation with a beneficial outcome.  Each person receives and perceives communication in different ways.  A message could be misinterpreted through subtle changes in the way the message is received.  The message can be altered in multiple ways.  This includes both verbal and non-verbal cues.  These communicative aspects of the negotiation are tools that can promote the success of the negotiation or derail the intentions.  Tailoring messages to specific parties becomes easier with experience and increased involvement with the parties in the negotiation.  These interactions create the psychological and behavioral bonds needed to achieve an on-going and strategically mutual relationship.  Building the relationships between each party also provides the ability for the negotiation teams to bridge the gaps between distance and culture.  As more communication occurs, the better the teams begin to know and understand one another.  Through this collaboration the bond that is built also facilitates the negotiation (Goldman & Shapiro, 2012).

OUTLINE

Thesis Statement:  Research shows successful negotiations are dependent upon the behavioral as well as psychological triggers of the negotiation process because an agreeable personality is crucial in communication, humans generally do not react well to criticism and cultural diversity will present challenges if not understood.

I.  Introduction to Successful Negotiations

a. Definition of the Negotiation (Templar, Herring, Thompson, & Fadem, 2012).

i. Negotiations of a contract to gain consensus between parties is ultimately the clarification and agreement on what is going to be provided regarding the requirements and what will be exchanged for meeting those requirements prior to the actual efforts taking place (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

ii. Negotiations are a balance between hard and soft skills (Gallagher, R. S. 2009).

iii. It is imperative to understand the tools available to the negotiator (Gallagher, R. S. 2009).

iv. Knowledge and awareness are key tools to the negotiator (Barry, B., & Friedman, R. A. 1998). 

iii. There are two types of negotiations, the integrative and distributive (Barry, B., & Friedman, R. A. 1998).

a. The purpose of Negotiations (Templar, Herring, Thompson, & Fadem, 2012).

            i. The purpose is to create a situation in which a party gains what they need. (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

            ii. The relationship can be win/lose, lose/lose or win/win           (Kochan & Lipsky, 2003).

II. The role of an agreeable personality (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

a. Understanding each side of the negotiation is imperative and allows the negotiator to focus on the interactions between themselves and the other parties (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

b. Understanding the process and ensuring a level of preparedness prior to negotiation the negotiator can focus on those behaviors that can provide a benefit or advantage in the negotiation (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

c. The Negotiator must build a relationship while also watching for the pitfalls or roadblocks that could obstruct the pursuit of the desired end state (Goldman, B. M., & Shapiro, D. L. (Eds.) 2012).

d. Communication is critical to successful negotiations (Long, Fisher & McGinn, 2012).

i. Clarity is the key to communication (Patton, 2011).

            ii. Concise communication facilitates negotiations (Patton, 2011).

            iii. The communication must be understood by sender and receiver (Patton, 2011).

 e. Utilizing a straightforward tactic alleviates unnecessary communication and interference that could hinder the process and negate the potential successful conclusion of the negotiation(DeRue, Conlon, Moon, and Willaby, 2009).

f. Straightforwardness sets the tone for the negotiation and creates a slight competitive advantage for the first party by creating a feeling of superiority, credibility and steadfastness (DeRue, Conlon, Moon, and Willaby, 2009).

III. The role of criticism.

  1. Fully understand the requirements of the negotiation as well as they process required to achieve the requirements (Templar, Herring, Thompson, & Fadem, 2012).
  2. Preparedness leads to successful negotiations(Templar, Herring, Thompson, & Fadem, 2012).
  3. Criticism is both a positive and negative tool (Patton, 2011).

i. Unsolicited Criticism puts the other party on the defensive and risks the relationship (Patton, 2011).

ii. Constructive Feedback builds the relationship and moves a potential pitfall to a building experience (Patton, 2011).

  • There are multiple pitfalls in negotiations (Barry, B., & Friedman, R. A. 1998).

i. Unsolicited Criticism (Patton, 2011).

ii. Diversity issues (Gallagher, 2009).

iii. Language Barriers (Gallagher, 2009).

iv. Un-communicated needs (Gallagher, 2009).

v. Misunderstandings (Gallagher, 2009).

III. Cultural diversity.

  1. Key interactions create the psychological and behavioral bonds needed to achieve an on-going and strategically mutual relationship (Goldman & Shapiro, 2012).
  2. There are many aspects of negotiation(Templar, Herring, Thompson, & Fadem, 2012).

i. Communication is important and the ability to create concise, clear and understandable communication is the keystone to the negotiation process (Patton, 2011).

  • Methods of Tactics.

i. The appropriate communication method is not only a vessel to provide key information but it is also a basis for tactical operations within the negotiation as well as the tool to effectively and efficiently close the negotiation with a beneficial outcome (Goldman & Shapiro, 2012).

ii. Diversity between cultures can lead to natural barriers (Kochan & Lipsky, 2003).

iii. Collaborative efforts create the bond that facilitates the negotiation (Goldman & Shapiro, 2012).

Negotiations expand beyond the requirements of one party and the acceptance of requirements by the other.  There is an underlying requirement to ensure the appropriate method of communication is used while also presenting that communication in a straightforward manner.  This straightforward method of communicating the requirements of what one needs enables a slight advantage in the negotiation.  The clear, concise and accurate description of the requirements establishes a level of credibility in the knowledge and understanding of the negotiating party and creates a scenario that is slightly in favor of the straightforward party.  This type of tactic utilizes the psychological and behavioral tendencies of negotiating parties to create an advantage and every advantage in a negotiation will help facilitate the ability to achieve the desired results.  Building relationships is also crucial in taking the negotiations to a higher level of expectations and results.  Understanding how people communicate and what cultural and diversity issues can strain interactions between parties will allow the ability to mitigate those risks and work on the core negotiations.  Eliminating the noise of communication and the barriers of poor delivery and receipt of that communication allows for a pure and focused negotiation on the key points of the requirements.  Understanding what negotiations include, maintaining a prepared and straightforward negotiation style while also maintaining clear and unobstructed communication will all play into the art of negotiation.

References

Barry, B., & Friedman, R. A. (1998). Bargainer characteristics in distributive and integrative negotiation. Journal of Personality and Social Psychology, 74(2), 345. Retrieved from: http://psycnet.apa.org/journals/psp/74/2/345/

DeRue, D. S., Conlon, D. E., Moon, H., & Willaby, H. W. (2009). When is straightforwardness a liability in negotiations? The role of integrative potential and structural power. Journal of Applied Psychology, 94(4), 1032. Retrieved from: http://psycnet.apa.org/journals/apl/94/4/1032/

Gallagher, R. S. (2009). How to tell anyone anything: breakthrough techniques for handling difficult conversations at work. American Management Association, New York. Retrieved from: http://books.google.co.uk/books?hl=en&lr=&id=aY6OR71CvIAC&oi=fnd&pg=PR7&dq=Gallgher,+R.+S.+(2009).+How+to+tell+anyone+anything:+Breakthrough+techniques+for+handling+&ots=wo-QGSdsQJ&sig=aa6IcwyopTAXs5ngHDI_afZ7nTA#v=onepage&q=summary&f=false

 Goldman, B. M., & Shapiro, D. L. (Eds.). (2012). The Psychology of negotiations in the 21st century workplace: new challenges and new solutions. Routledge Academic. Retrieved from: http://books.google.co.uk/books?hl=en&lr=&id=Zz-h37LKklcC&oi=fnd&pg=PP2&dq=The+Psychology+of+Negotiations+in+the+21st+Century+Workplace:+New+Challenges+and+New+Solutions+&ots=jTyVPMfh9o&sig=D6WOkfyn9Vosg_3fv-1e6iPADkk 

Kochan, T. A., & Lipsky, D. B. (2003). Negotiations and change: from the workplace to society. Cornel University Press, New York. Retrieved from: http://books.google.co.uk/books?hl=en&lr=&id=jj2UzQLKfUcC&oi=fnd&pg=PR9&dq=Negotiations+and+Change:+From+the+Workplace+to+Society+&ots=h28DsMzMGS&sig=JJ3eBQvrdyDl8dVaGKmDgzOdrbA 

Kulik, C. T., & Olekalns, M. (2012). Negotiating the gender divide lessons from the negotiation and organizational behavior literatures. Journal of Management, 38(4), 1387-1415. Retrieved from: http://jom.sagepub.com/content/38/4/1387.short

Lewicki, R. J., Saunders, D. M., & Minton, J. W. (1999). Negotiation: readings, exercises, and cases. Irwin/The McGraw-Hill Companies. Retrieved from: http://psycnet.apa.org/psycinfo/1998-07764-000 

Long, E. L., Fisher, C., & McGinn, K. L. (2012). Negotiation processes as sources of (and solutions to) inter-organizational conflict (No. 12-107). Harvard Business School Working Paper. Retrieved from: http://hbswk.hbs.edu/item/6983.html 

Patton, B. (2011). Gaining ground in difficult negotiations: training advanced negotiation & difficult conversations (Vol. 1). Maklu Pub. Retrieved from: http://books.google.co.uk/books?hl=en&lr=&id=xiZYUMw6j70C&oi=fnd&pg=PA6&dq=+Bargaining+for+Advantage:+Negotiation+Strategies+for+Reasonable+People+2nd+Edition+by+G.+Richard+Shell&ots=Tx4jWs2iKk&sig=aQveGPNVHIB0ht_-JIPUJzPwEdI#v=onepage&q=Bargaining%20for%20Advantage%3A%20Negotiation%20Strategies%20for%20Reasonable%20People%202nd%20Edition%20by%20G.%20Richard%20Shell&f=false 

Templar, R., Herring, J. J., Thompson, L., & Fadem, T. J. (2012). Negotiating to win: strategies and skills for every situation (collection). FT Press. Retrieved from: http://books.google.co.uk/books?hl=en&lr=&id=tPBSj1WlQpIC&oi=fnd&pg=PT1&dq=The+Truth+About+Negotiations+by+Leigh+L.+Thompson&ots=CrLodMnsdL&sig=Lgik2nUr2f21s8wEI_9SsPtNk5w   Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515. Retrieved from: http://www.annualreviews.org/doi/abs/10.1146/annurev.psych.093008.100458?journalCode=psych

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