CHAPTER VI
NEGOTIATION
Francisco Javier Lemus Gallego, José Mª Salinero Aroca,
Guillermo Varela Arjona and Cándida Sevilla Solano.
1. INTRODUCTION
One of the definitions of “negotiation” is “the
management or resolution of a matter, especially diplomatically”.
The negotiations are processes through which two or more parts try
to limit or end a conflict among them. Therefore, a successful negotiation
is that where the parts subscribe to a commitment. A negotiation
does not imply the use of force, the parts should make concessions,
communicate and persuade to reach this commitment.
Let us make a list with different social situations in which we
should negotiate, identifying the person with which we negotiate:
One of the areas where negotiation is more evident is in the managerial
field. In the context of dynamic and competitive markets, many managers
negotiate with clients, suppliers, competing companies, the authorities
and other institutions. The profitability of the business and the
viability of the company depend in the long term on these negotiations.
The study about negotiation has evolved. In the beginnings, this
study followed two tendencies: one of them focused on specific areas
of negotiation like diplomacy, labour or commercial negotiations,
always according to experts. The other tendency referred to a generic
study of negotiation on giving advice to win the negotiation. At
the beginning of the 70’s, negotiation began to be considered
as an integrated discipline, as for the University of Harvard with
the Professor Roger Fisher at its head, who began an investigation
project based on the experience of experienced negotiators of the
entire world. The innovation of the Method Harvard consists on emphasizing
the communicational process of negotiation and on trying to reach
a beneficial result for all the parts involved in the conflict.
From the traditional scheme win-lose, we shift to a scheme win-win.
Of course, this does not mean that all the parts will obtain all
they want but they obtain more than they would have obtained with
other methods. The pattern provides a simple method in its theoretical
conceptualisation but requires abilities to reach it in practice
with good results. Some people have an innate capacity of negotiation,
but even learning the method is good to order the techniques that
they apply intuitively and provide them others that arise from the
theoretical framework. This group of investigators elaborated a
negotiation pattern that considers 7 elements.
1.1 OBJECTIVES
- To identify the situations in which we negotiate
- To know what are the basic elements of negotiation
- To be aware of the importance of planning a negotiation
- To know the phases of the negotiation process
2. ELEMENTS OF NEGOTIATION
2.1. Interests
To explain this element we will use the case of two sisters that
were arguing for an orange.
Two sisters already married and with their respective families
were told to clean the living room, in which other people had had
a meeting. The younger sister, as entering the living room, noticed
that there was nobody and that there were ten oranges left on the
table. She felt very happy, because she knew nobody would ask for
them. So she began to put the oranges in a bag she had, while she
imagined the delicious juice she was going to prepare with these
fruits she would drink that night at home.
Her elder sister entered suddenly the living room and when she
saw the oranges, she called out: Wonderful, they have left us 10
beautiful oranges."
The other answered: “Why do you say they have left us? You
may say, they left me 10 oranges."
"Do you think you are going to eat them all"? - The
older one replied.
"Of course! You know very well that the early bird catches
the worm. -The older sister answered-; so for this time I should
keep the gift that was in the living room."
" And won’t you even give me a single orange?"
she asked friskily the elder sister.
"I have already told you I won’t. In another occasion
you will be more lucky, like it did it before" – said
the younger sister.
"It is not fair! -Insisted the elder sister surprised -.What
would have happened if I had entered first the living room? Would
you think it would have been fair if I had kept the 10 oranges?
Would you think it is right if you I do not give you any orange?"
"All right, sister–corrected the young one -, I can
give you a couple of oranges."
But the eldest insisted: “ Only a couple? Only two oranges
for the sister who loves you so much? You almost give me the crumbs."
This discussion went on for several minutes, and finally, after
some difficulties, the eldest sister finally receives 4 of the 10
oranges.
The young goes home with her 6 oranges and made a delicious orange
juice. While she was sharing it with her husband and children, she
thought how lucky she had been finding the 10 oranges, and especially
for getting 6.
That same night, her eldest sister also got home with her 4 oranges.
Carefully she peeled them with a knife, and with the peels, she
prepared a delicious cake. And while she was sharing it with her
husband and daughters, she thought of how lucky she had been for
getting 4, when none was hers. After the dinner, she threw the pulp
of the four oranges to the rubbish, because she and her family did
not like the orange juice. Then she gave a glass of milk to each
member of the family, which they enjoyed with the orange cake.
This example is useful to make a clear distinction between positions
and interests. The basic essentials of negotiation processes focus
on the interests of the parties (motivations, aspirations, worries)
and not on their positions, constraint power or legal rights.
Identify the positions and interests of each sister
2.2. Options
It refers to the possible agreements that can be reached, considering
the different ways to satisfy the interests of the parties in negotiation.
In the case of a client and a supplier, we see that the position
of each one is opposed and is related to the price, and in this
case if one wins the other one loses. Can you consider other interests
where both may win?
2.3. Alternatives
It refers to what the parties can do, solutions to solve the conflicts
and their origin. The alternatives must be taken into account as
much the parts can do jointly as they can do separately.
2.4. Legitimacy
It refers to the attitudes used to judge, to the arguments that
each party uses. If a young person wants to negotiate with his or
her parents at what time he or she must come back home, and uses,
as an argument, his or her friends timetable, it can be easier.
An external point of view avoids the tiredness due to opposite positions.
Let us put different negotiation examples and look for arguments
that can give legitimacy.
2.5. Communication
The basic instrument for negotiation is communication. It is necessary
to take into account verbal communication and not verbal communication.
This must take into account the following characteristics: Active
listening, Empathy, Assertiveness, To eradicate communication barriers
and to transmit sincerity.
Let us go back to communication. Analyse and write those aspects
of the communication that can be important for credibility in the
negotiation process.
2.6. Relationship
The parties that participate into negotiation have a relationship,
an interaction. The condition of this relationship is going to be
one of the decisive elements of negotiation. A good relationship
allows to face better the conflicts than can arise from interaction.
There are two rules to achieve positive relationships:
- To consider the relationship and the content of negotiation
separately.
- To be constructive.
2.7. Commitment
There must not be commitment at the beginning; it should only arrive
when negotiation is sufficiently mature. Commitment must have the
following characteristics:
- o Clear and operative.
- o Realist.
- o Sufficient.
Here is a summary of the method to carry it out:
- To separate people from the problem.
- To focus on the interests, not on people.
- To give alternatives of mutual benefit.
- To insist on applying objective judgement.
3. STEPS OF NEGOTIATION
Many negotiations do not follow a preset plan, and this can lead
to a failure. For a successful negotiation, the personal abilities
are important, and some general steps must also be followed:
3.1. Preparation.
For the preparation of the meeting, it is necessary, like in every
plan, to realise a diagnosis. For this diagnosis, we give the following
points:
- To know yourself. We should answer to the following
questions: What do I want to get from this negotiation? We should
specify the operative objectives of negotiation; and why is it
important for me? Specifying our interests.
- To know the other part. It will give us the
lines of the strategy to be followed. We should investigate their
objectives, necessities, interests, resources, negotiation style,
and possibilities to reach an agreement, and the possible strategies
and tactics that they can use.
- To know the situation: we should know the context
in which negotiation will take place. Using a military simile,
we would analyse the field where the battle will take place.
- Negotiation strategy. Every strategy is based
on the previous diagnosis we have developed. One of the most used
methodologies to make a diagnosis is the SWOT analysis (strengths,
weakness, opportunities and threats), we have to strengthen the
strength, take advantage of opportunities, minimize threats and
work on weakness.
3.2. Management of negotiation
It is the concrete interaction where negotiation is carried out.
The main instrument that we will use is communication, and one of
the keys to success is a believable message. If we want our messages
to be believable, we should take into account the following advice:
- Let us speak
- In a natural way
- The message must have repercussions
- It must be interesting
- I believe what you say and you believe what I say
- We all should win in the conclusions
- These conclusions will last in time
- The conclusions will be respected because they are common
Sometimes it will be necessary to carry out a negotiation protocol,
it should be accepted by the two parties.
3.3. Implementation
It is the moment to carry out the commitments we have reached with
negotiation. Sometimes at this stage new issues of conflicts can
arise and these conflicts which lead to the following stage.
3.4. Renegotiation
You would begin a new negotiation cycle with the same characteristics
as the previous phases, with new offers until you take on a commitment.
Read the following story attentively and respond to the outlined
questions.
Juan is interested in buying a new computer. He got information
from different places and he finally chooses a store that seems
to have excellent prices. He studies what he really wants carefully,
in order to be sure of the price he should pay. When entering the
store he approaches an assistant, he memorizes his name and asks
him to call for somebody who knows about computers because he wants
to see different models.
The assistant offers to indicate Juan the computers they have.
He says that he wants to find a model that he likes and with a reasonable
price. "I was attracted by this store because you make profit
but at the same time you give the client a good opportunity to carry
out an excellent purchase and, I believe that both things are important”.
The shop assistant asks Juan the technical characteristics of
the computer he prefers, an also the maximum price he wants to pay
for it. Juan explains his necessities and the salesman confirms
him that his products satisfy his demands, but also some of the
chosen options are more expensive; so Juan answers: I don't understand
why it should be so".
Juan chooses a model and asks for the price. The shop assistant
indicates him that it costs €650, and Juan is surprised because
according to the ad it should not cost more than €490. The
shop assistant indicates him that in this very model there are two
extra elements that are not included in the sale models. Juan understands
it but he does not agree with the additional cost. After a short
discussion, Juan says he cannot pay so much and that he will look
for another place. The shop assistant presents him with a cheaper
model, but Juan does not change his mind. The shop assistant offers
him a new price: €580. Juan analyses it and thinks about it.
He adds that the price includes delivery and installation. Juan
responds that it cannot pay more than €510.
The assistant responds to Juan he cannot accept this new price,
but proposes him a new price: €550. Juan says: I agree, if
the price includes delivery and installation, you can do the bill."
Questions:
- When we are going to negotiate, do we begin to negotiate without
before knowing our rival?
- When we negotiate, do we exclusively look for our interests?
- When we carry out the purchase, are we only interested in buying
the product at the best price, keeping a defensive attitude and
mutual distrust?
- Is it important to analyse the details of a negotiation before
beginning a negotiation, or during the negotiation?
- In a negotiation, is it essential to avoid conflicts and disagreements?
- What purposes have conflicts in a negotiation?
4. Bibliography
Fisher, R.; Ury, W.; Patton, b. (1996). Obtenga el sí: el
arte de negociar sin ceder. Ediciones Gestión. 2000, S.A.
Herramientas de desarrollo profesional del siglo XXI (Revista emprendedores).
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