The Process of Negotiation

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As it was stated at the beginning of this elaborate, negotiations take place both in business and the private life, the same way like professional life and the private one are mixed and affecting each other. In all cases there are the same rules of negotiations which can be assumed as base and clear, but these rules must be understood as top important ones. Following these rules and having in mind some theoretical knowledge as well as best practice from lessons learned we can successfully go through negotiations or maybe avoid them each day if possible:

- one of these rules, namely “do not negotiate unless you need to” sounds maybe ridiculously but it means that we should not waste the time on artificial negotiations if the identified target is to be accepted without it.

- The second most important rule is “not to negotiate with yourself”. The meaning of this rule is perfectly clear if one puts it into area of human psychology. The deeper we go into the subject the more we care about details and situation of the others. It creates explanations to possible changes within our initially set targets, while these should be agreed and clearly stated from the very beginning and kept till the very end of the negotiations.

- The third rule comes from consideration of the rules stated above as well as from the general idea of negotiation process. It is namely “never accept the first offer because there is always a better one behind it”. It must be clearly stated that each negotiations independently of background, have some area of acceptable consensus, such the area is defined by first proposals with consideration of affection from the other party. Most probably the more qualified is the negotiator the bigger is the difference between what is initially stated and what can be assumed as minimum required. Discussion and negotiation must be done in steps to find the point in between only after settlement of the limits.

- Rule no. four is to “never make the first offer if it can be avoided”. By first given proposal you simply indicate your position of negotiation area which will not be accepted anyway because of the rule no. 3. The same time your opponent gets the best information and can react possibly changing his first offer that also could possibly be the best one ever received.

- Some technical idea considered as rule number 5 is “Listen more and talk less”. Proceeding this way one can collect all the incoming information without disturbance and bad affection. There is a rule 80/20 coming from two ears and two eyes as information collectors in relation to one mouth only and an idea behind to follow this proportion. By acceptance of this rule you can also get less chance to brake all the other rules by giving to much commitment.

- Another very important rule is to “never give any free gifts”. Such kind of kindness in relation to negotiations can only led to bad results. First of all by giving something for free you immediately show to the counterparty that this is the new starting point, the new first offer and such a gift will always be considered only as the correction of an initial offer both in actual negotiations and in future ones. The other party, while receiving and offer for future subject, will directly consider existence of such discount without bargain, but the same time will also expect more because of negotiation process. In contrary to this, you should always let him fight for any detail that could be possibly given. That improves his respect to your offered conditions and gives an opportunity to enjoy his small success giving more space for you because of empathy.

- The rule which is considered as number 7 is “watch the salami effect”. From the selling party perspective, the total, fixed offer for whole cumulated activity without slicing it into small pieces gives a better position and avoids easy price reduction by cutting not needed pieces out of the whole value. By revealing small parts you can create opportunity of refusal and further negotiations while according to rule number 1 these may not be needed at all. What comes after, you should also avoid the other party trying to slice your offer into pieces because it leads to the above presented situation the same way.

- “Avoid the Rookies Regret” is the next thing to be considered with relation to best practice in negotiations. It is about a personal feeling if one could have done something better or even should have done things better. To avoid such feeling it is perfect if one can answer positively to three trading questions. First question is about the cost of potential concession to be given to the other party. The second question is to be stated right after the first one and it follows accordingly: What is it worth to the other party? And the third question would be: What do I want in return? It would be the best if one’s low cost concession can give large extra value to the counterparty, right after this counterparty is supposed to give back extra thing of at least the same value. If such a procedure exists there is no field for any rookie regret effect.

- Rule number nine which is “Never make a quick deal” leads to understanding of negotiation nature. Each of such negotiations has its own speed that can be easily recognized by participating, sudden change of such tempo implemented by the counterparty should put a red light on inside one’s mind. There are usually two potential reasons for such change, the one is that the opponents recognized some particular advantage or mistake of yours willing to get into conclusion and take this advantage or they noticed an advantage for themselves that you haven’t yet valued. Both cases of course should to be avoided and corrected during further discussion after this signal recognition.

- And the last but not least rule comes, named “never disclose your bottom line”, which seems to be completely clear if thinking about negotiation period and the game of discussions, figures, bluffs and persuasion. The most important is to keep this in mind and also never disclose any bottom line even after negotiation is closed. That could change a win-win situation into a win-lose one and totally change a perception of already concluded deal in the eyes of counterparty. Perhaps it could also affect some future activities related to further cooperation steps or affect financing matters.[10]

All of above stated can lead us to one and only correct opinion on negotiations. This is the large scope of cumulated knowledge and practice coming from mixed sciences researches and approaches. This living scope of knowledge must always stay in line and be developed together with negotiations practice. Every single negotiating party learns from lessons learned, from tests done during the real life, from trials on mixtures