Mb0038 – Management Process and Organization Behavior
Explain the process of negotiation. Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests.
It is the primary method of alternative dispute resolution.
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Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory.Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers. Negotiation typically manifests itself with a trained negotiator acting on behalf of a particular organization or position. It can be compared to mediation where a disinterested third party listens to each sides’ arguments and attempts to help craft an agreement between the parties.It is also related to arbitration which, as with a legal proceeding, both sides make an argument as to the merits of their “case” and then the arbitrator decides the outcome for both parties.
There are many different ways to segment negotiation to gain a greater understanding of the essential parts. One view of negotiation involves three basic elements: process, behavior and substance. The process refers to how the parties negotiate: the context of the negotiations, the parties to the negotiations, the tactics used by the parties, and the sequence and stages in which all of these play out.Behavior refers to the relationships among these parties, the communication between them and the styles they adopt. The substance refers to what the parties negotiate over: the agenda, the issues (positions and – more helpfully – interests), the options, and the agreement(s) reached at the end. Another view of negotiation comprises 4 elements: strategy, process and tools, and tactics. Strategy comprises the top level goals – typically including relationship and the final outcome.
Processes and tools include the steps that will be followed and the roles taken in both preparing for and negotiating with the other parties.Tactics include more detailed statements and actions and responses to others’ statements and actions. Some add to this persuasion and influence, asserting that these have become integral to modern day negotiation success, and so should not be omitted. Skilled negotiators may use a variety of tactics ranging from negotiation hypnosis, to a straight forward presentation of demands or setting of preconditions to more deceptive approaches such as cherry picking. Intimidation and salami tactics may also play a part in swaying the outcome of negotiations.Another negotiation tactic is bad guy/good guy. Bad guy/good guy tactic is when one negotiator acts as a bad guy by using anger and threats.
The other negotiator acts as a good guy by being considerate and understanding. The good guy blames the bad guy for all the difficulties while trying to get concessions and agreement from the opponent This is a unique combination framework that puts together the best of many other approaches to negotiation. It is particularly suited to more complex, higher-value and slower negotiations. Prepare: Know what you want.Understand them. Open: Put your case. Hear theirs.
Argue: Support your case. Expose theirs. Explore: Seek understanding and possibility. Signal: Indicate your readiness to work together. Package: Assemble potential trades. Close: Reach final agreement. Sustain: Make sure what is agreed happens.
There are deliberately a larger number of stages in this process as it is designed to break down important activities during negotiation, particularly towards the end. It is an easy trap to try to jump to the end with a solution that is inadequate and unacceptable.Note also that in practice, you may find variations on these, for example there may be loops back to previous stages, stages overlapping, stages running parallel and even out of order. The bottom line is to use what works. This process is intended to help you negotiate, but do not use it blindly. It is not magic and is not a substitute for thinking. If something does not seem to be working, try to figure out why and either fix the problem or try something else.
Although there are commonalities across negotiations, each one is different and the greatest skill is to be able to read the situation in the moment and adapt as appropriate.