THE SIX BASIC STEPS IN NEGOTIATING

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Write two pages about a real-life situation where you need to negotiate. Describe this process. Please illustrate how the 6 basic steps in negotiation could help you structure your negotiation. Please be as specific and detailed as possible. Feel free to consult background readings. Expectations: 1. Answer questions with clarity. 2. Show depth and breadth in your paper to enhance the quality of your paper. 3. Try your best to search in our library to find some papers/articles to support your argument and show them in the reference list.

THE SIX BASIC STEPS IN NEGOTIATING

Write one page about a real-life situation where you need to negotiate. Describe this process. Please illustrate how the 6 basic steps in negotiation could help you structure your negotiation. Please be as specific and detailed as possible. Feel free to consult background readings.

Expectations:

1. Answer questions with clarity.

2. Show depth and breadth in your paper to enhance the quality of your paper.

3. Try your best to search in our library to find some papers/articles to support your argument and show them in the reference list.

Background Readings:

STEP1 —GETTING TO KNOW ONE ANOTHER Negotiating is like any other social situation that has a business purpose. It moves more smoothly when the parties take a little time to get to know one another. It is helpful to assess those involved before negotiations begin. Individual backgrounds will provide an excellent guide to the level of importance placed on the issues, and the degree of expertise brought to bear on the subject. As the process starts, you should observe, listen, and learn. A good rule of thumb is to keep the beginning friendly and relaxed, yet businesslike.

STEP 2 —STATEMENT OF GOALS AND OBJECTIVES Negotiating normally flows after the opening, into a general statement of goals and objectives by the involved parties. Specific issues may not be raised at this time because the parties are just beginning to explore the needs of the other. The person who speaks first on the issues may say, for example, “I would like to insure this agreement works in a way that is beneficial to everyone concerned.” No terms have been suggested yet, but a positive statement has been made on behalf of an agreement being reached, which is favorable to all concerned. The person making the opening statement should then wait for feedback from the other party to learn if they have similar goals and objectives. If there are differences, now is the time to learn them. It is normally a good idea to make the initial statements positive and agreeable. This is no time for hostility or defensiveness. You need to build an atmosphere of cooperation and mutual trust.

STEP 3 —STARTING THE PROCESS Some negotiations are complex and have many issues to resolve. Others may only have a few. Also, individual issues may vary greatly in complexity. No one can predict the direction negotiations will take until both parties have presented the issues. There may be hidden needs neither party has raised, but these will surface as things proceed. Often issues are bundled, so the solution to one is contingent on the solution to another. For example, “I will not agree to buy the new furnace at that price unless a free one year maintenance warranty is included.” Conversely there may be an attempt to separate issues to make them mutually exclusive. For example, in the sale of a furnished house, the seller may prefer to discuss the house and furnishings as separate negotiations. The buyer may feel they should be combined. In some negotiations, all issues are connected. No one issue is considered resolved until all have been resolved. A skilled negotiator will study the issues closely before negotiations begin in order to determine where advantages lie insofar as splitting or combining issues. Once the negotiators have reviewed the issues, they must begin dealing with them one by one. Opinions vary about whether to begin with a minor or major issue. Some feel negotiation should be started with a minor issue that has the potential of being easily resolved, because this will establish a favorable climate for additional agreements. Others feel that beginning with a major issue is best because unless it is satisfactorily resolved the others are unimportant.

STEP 4 —EXPRESSIONS OF DISAGREEMENT AND CONFLICT Once the issues have been defined, disagreement and conflict often will occur. This is natural and should be expected. Good negotiators never try to avoid this phase because they realize that this process of give and take is where successful deals are made. Disagreement and conflict handled properly will eventually bring the negotiators together. If handled poorly, it will widen the differences. Conflict has a way of bringing out different points of view, and crystalizing the real wants and needs of the negotiators. When presenting the issues, most negotiators will explain what they “want”. It is the task of the other negotiator to find out what they “need”, or will settle for. Few negotiators will get all they want, even in a successful negotiation. But good negotiators will work to get as much as possible, yet understand compromise may be necessary, and a modification of goals may be required. This confrontation can involve stress. It is important to remember, therefore, that conflict resolution under these circumstances is not a test of power but an opportunity to reveal what people need. Properly understood this should lead to possible areas of agreement or compromise.

STEP 5 —REASSESSMENT AND COMPROMISE At some point, normally one party will move toward compromise. Statements reflecting this often begin with words like, “Suppose that…?”, “What if…?”, “How would you feel about…?” When these statements begin, the other negotiator should listen carefully to see if an attempt to compromise is being offered. The response should be carefully stated. Too quick an attempt to pin something down may cause the other party to withdraw because the climate may not seem conducive to giving and getting. When responding to offers it is a good practice to restate them back. “You will sell me this vehicle, as is, for $750 less than the sticker price?” This response has at least 3 advantages: 1. The offer may be improved because the seller may get the impression your echo is a negative. 2. The seller may attempt to justify the price. This will provide opportunities for challenge. 3. An echo gives you time to think about a counter offer. Remember, however, if the other negotiator echos your offer, you should simply confirm it, not sweeten it. Your confirmation forces the other negotiator to accept it, reject it, or suggest an alternative.

STEP 6 —AGREEMENT IN PRINCIPLE OR SETTLEMENT When agreement is reached, it will be necessary to affirm it. A decision about how the final settlement will be obtained is needed, especially if additional approval is required. This normally means placing the agreed terms in writing. If possible, this should be done while the parties are together so they can agree on the language. This will reduce the danger of a misunderstanding later. Since agreement is the ultimate objective of any negotiation, it is important to determine the level of authority of the party you are negotiating with at the outset. Some sellers, for example, will negotiate in order to determine your position, and then inform you they do not have the authority to accept your terms. They then go to some unseen person who will reject the tentative “agreement” in order to attempt to leverage a better deal for the seller.