Introduction
Negotiation is an integral part of daily life for all of us. It comes into play in all areas of human relationships. When two or more people have different objectives or positions in regard to the same subject, negotiation takes place in some form or another. And when two or more people negotiate to reach a mutually acceptable settlement, two elements are essential: reasonableness and flexibility. Their opposites—unreasonableness and inflexibility—produce distrust and tend to result in retaliation.
The word positive relates to negotiation benefits in that the process must be shared, not only between the parties in conflict, but also by others directly or indirectly involved who would be affected by the settlement. For example, managers who played no part in the executive-level negotiations that were directly related to changing the operation of their departments may feel threatened by the new approach. In such situations, these managers could be expected to function less effectively than those managers who participated in the negotiations and are eager to show their ability to ensure that changes that they helped to bring about will benefit the overall performance of their departments.
Negotiation applies equally well to the give-and-take between purchaser and vendor, which results in a contract or a purchase order, depending on the value, complexity, and circumstances of the deal, or to any transaction between two parties in which agreement must be reached on a decision to be made and/or action to be taken. A compromise has been negotiated, for example, when a decision about dividing up office space is made. One party may agree to give up two windows in return for six additional square feet of space.
BASIC COMPONENTS OF SUCCESSFUL NEGOTIATION
Over the years numerous authors have written about negotiation. Many have placed particular emphasis on those characteristics an individual must develop before he or she can negotiate. The technique has assumed an aura of mysticism that leads many businesspeople to conclude that they could not function as negotiators. They feel that they would not be able to win at the negotiation table.
The fact is, in this field, as in any other, there are a gifted few. But the art of negotiation is an important aspect of a manager’s job, and it can be learned and practiced. Given sound direction and perseverance, any one of us can realistically expect to improve his or her chances of success at negotiation. Negotiation is a technique, a somewhat sophisticated job skill, that can be dramatically improved through willingness to learn how to apply the four basic components of successful negotiation:
• Preparation. Thoroughness here is a primary requisite to success.
• Objectivity. A sound assessment of actual strengths, weaknesses, and goals prevents misusing limited resources. The successful negotiator makes it a point to “accentuate the positive.”
• Strategy. Plan a realistic course of action based on sound preparation and an objective appraisal of resources.
• Technique. Combine a wide range of skills; draw on experience and self-discipline.
These four cornerstones are discussed throughout this course. Regardless of individual objectives or the varying environments in which negotiations are conducted, the importance of these four principles is never diminished. The better you understand and apply the principles of successful negotiation, the more often you will leave the bargaining table with those positive results that identify the skilled negotiator.
IMPROMPTU NEGOTIATION
It should be noted that negotiations can be impromptu, taking place on a spur-of-the-moment basis. They can involve no more than two people who come together unexpectedly (or in an entirely unbusinesslike social situation).
These days, for example, few people are unaware of the significance of the Washington cocktail party. Here, individuals representing two very different sides of a domestic or international question may find themselves settling the matter—often bargaining about serious elements relating to great sums or issues—in some quiet corner of a private home. Follow-through on the details is done by subordinates in a more classical business setting.
This type of negotiation is not limited to Washington cocktail parties, or to matters of government. Industry also has its business lunches, patio parties, and the like. In fact, there is virtually no time and no place where managers may not find themselves suddenly called upon to undertake negotiations relating to business or personal interests. After only a short period, they learn to be alert for such opportunities—to be able to conduct themselves with poise and skill at such unlikely bargaining tables as seats on an airliner or commuter train, counters in a coffee shop or bar, dinner tables of friends, or even elevators.
The key phrase here is conducting oneself with poise and skill, because, while negotiations may be impromptu or unexpected, they must never be unplanned. Successful negotiators are those who have rehearsed the issue so thoroughly that they can present their position in an abbreviated, informal manner or they can extend and ritualize it. They have developed the facility to switch on the role of negotiator, using all the necessary techniques in whatever manner the situation demands.
In other words, successful negotiators make these approaches so completely their own that they adopt (and adapt) them when confronted with a sudden, perhaps very brief, opportunity to negotiate. The facts will be in hand and sufficiently well organized so that only the most significant and the most persuasive elements are pulled forward when time is sharply compressed.
Successful negotiators learn to think on their feet in order to adjust their position and put forward or accept compromise with great speed. They will have their alternatives carefully spelled out at all times and will be very sure of those points on which they cannot concede. They will be so well prepared that they can sidestep any possibility of rushing into an agreement they later may regret.
CULTURAL DIFFERENCES IN NEGOTIATION
Successful negotiators learn certain rules appropriate to less traditional negotiating. These rules vary from one part of the world to another. The American businessperson (often well equipped for out-of-the-office bargaining in his or her own country) is sometimes perceived as inept in negotiations abroad.
Americans tend to rush, eager to press every opportunity for discussions. If lunching with an associate, they are barely able to wait through prelunch amenities before getting down to business with the entree. This tendency is particularly noticeable at those Washington gatherings mentioned earlier. As officials in that city are known to leave parties early to prepare for an early start the following workday, business conversations in Washington often begin immediately after guests arrive.
In other countries, it is usually important to move more slowly in such situations, to allow time for full enjoyment of the social aspect of the meeting before bringing up business matters. Americans are learning to combine a greater degree of tact with pure management skills as they become more successful in dealing with foreign counterparts.
This text will not attempt a rundown of the wide range of interesting customs associated with the impromptu side of international bargaining. Suffice it to say that students will benefit from opportunities to observe managers with experience in this area and from careful attention to their own conduct when such negotiations take place.
APPROACH OF THE COURSE
The material that follows describes classical negotiation techniques—with brief references to ways in which these are used in personal transactions. Such an approach has been chosen because, in this field, classical and basic are very closely related. In describing the arena in which negotiators duel, certain elements almost always represent an advantage, others almost always constitute a disadvantage. If, for example, one’s place at the bargaining table is significant or the choice of the site for negotiating sessions can affect outcome, these points should be retained and adapted to fit unconventional settings.
The text may suggest to the reader a particular set of circumstances that are most readily identifiable with scheduled, formal, multiperson business meetings. This is done to achieve simplicity in communicating the basics. Once learned, these tools can be utilized as frequently outside the business environment as in it.
It should be noted, however, that a significant number of federal and private transactions are conducted in precisely the settings outlined in this text. All too often the salesperson who is accustomed to comfortable one-on-one dealings, the householder who has experience in successful personal transactions, or the manager who has demonstrated leadership in shirt-sleeve bargaining will collapse when presented with formal negotiations.
Repeatedly, senior officials of major corporations lament that intelligent and promising staff members lack the skills appropriate for the large, highly ritualized confrontations in private industry and the federal government. Middle managers sent to negotiation classes by such firms tend to be deficient only in technique; they respond well when supplied with the basics and the opportunity to use them in a formal setting.
The small-business person often has a particular problem when faced with a battery of skilled negotiators arrayed against him or her in a conference room. Such people can ill afford the trial-and-error experience involved in seeking to match personal, often untutored, salesmanship against the precision-drill approach that facile, team-oriented negotiators are equipped to take.
Thus, it is important to be prepared for both traditional and informal negotiating situations. This course is designed to provide this preparation.