Elements of negotiations in business activity
Another topic related to economic activity is business negotiations. Just like communication, they are an integral part of the business. Negotiations are not just about talking to the client. They also have their place in the internal structure of the company. They are used in dialogue with employees and business partners. So let's consider using specific conversation techniques that can increase your chances of success. Learn the most important elements of business negotiations.
Elements of business negotiations - preparation first!
The first, and at the same time the most important and time-consuming stage of negotiations is preparation. The main issue of preparation is to define the purpose of the negotiations. It is beneficial to set a main goal that will bring the maximum benefit and a minimum goal that we will not go below during the negotiations. This will allow you to establish the rules and set the profitability limit below which the agreement will not make sense.
Another issue is deciphering the other side of the negotiations. And here, depending on whether it is an individual customer, business partner or employee, the characteristics that are useful in predicting the position they will take in the interview are determined.
What information should we have about the other side before starting the main negotiation phase?
- personality traits, type of temperament;
- “Role swap” - what the client wants to achieve and what he cares about the most;
- getting to know the other side's capabilities.
- personality traits, type of temperament;
- getting to know the organizational structure of the company - whether the person with whom we negotiate has the ability to make a decision or is it only a representative who cannot really decide about the offer;
- company's position on the market;
- if we have already established cooperation with him, let's follow its history - in the event of irregularities, we have a tender argument;
- clarifying its requirements and goals.
- personality traits, type of temperament;
- his values;
- career goal;
- family situation;
- assessment of his competence;
- evaluation of the motivating stimulus.
The next stage of preparations is defining and clarifying the negotiation space. This point is about creating as many interview scenarios as possible. It is admittedly a certain "guess" and many entrepreneurs skip this stage, but the definition of many scenarios for the course of negotiations immunizes and largely eliminates the element of surprise. It is thanks to the anticipation of the other party's steps that the entrepreneur can create such a range of arguments that will allow you to quickly fight off the attack and convince you to do what you want. Cost calculations are also carried out at this stage. The calculations will help us determine the benefits and losses of individual solutions. They will also be helpful in developing auxiliary materials that the entrepreneur can use during the negotiations.
The last element of the preparations is the location of the negotiations. Here you should rely on your own feeling. It is assumed that we feel more confident in the environment known to us, so when the person conducting the business is aware that his or her penetration power is low, we should try to make negotiations take place in our company. This will strengthen us and give us more confidence. The most neutral negotiations are outside, where both sides are in the same, foreign environment. After the initial analysis, it is also worth determining which person will be suitable for conducting interviews. If the partner is a specialist, it will be best if the negotiator is represented by a specialist who knows the details and functioning of the goods or services.
Among them, two basic ones are distinguished, Fighting and Cooperative (cooperating), additionally taking into account the possibility of active and passive attitudes in these styles. The negotiation style indicates what the conversation will be like. Will it be quite aggressive, fast-paced, argument for argument, or rather calm, giving the opportunity to consider the arguments of each party and work out a common effective solution.
Another division of negotiation styles distinguishes between:
- soft style - interlocutors treat each other as partners, they know that negotiations consist of concessions from both sides, which means that they usually end within the lower limit;
- tough style - interlocutors treat themselves as enemies, a tough negotiator wants to achieve the goal at the lowest possible cost, exerts pressure and is not afraid to use manipulation and blackmail techniques;
- matter-of-fact style - negotiations are substantive and quite real, both sides recognize both their own values and those of the opponent, therefore they jointly consider the problem and build a compromise.
Rules of exerting influence
How to provoke the other party to agree during negotiations will be suggested by the rules of influence. Knowing them will also help prevent their being applied to us.
- The rule of consistency - it is triggered when a given person adopts a certain regularity. From then on, everything else, which in consequence is a confirmation of this one regularity, will be accepted by her. In other words, it is a commitment to a certain pattern that results in the acceptance of all postulates resulting from it. It is worthwhile to perceive a given topic widely, because you can fall into the trap of consequences. The fear of being perceived as a maneuver even more provokes to be consistent and not necessarily in a good sense.
- The rule of reciprocity - uses the principle of return. In business, it can be positive, e.g. a contractor trusted us despite a difficult financial situation, and now he is in a difficult position, so we agree to extend the payment deadline. But it can also be negative when we rejected the company's offer and now we want them to accept ours. However, it should be remembered that business is governed by different laws than private life and the given actions will not always look schematic. The reciprocity rule can also be used in other ways. By giving something to others, we consciously force them to feel a certain gratitude and create a sense of commitment. This way, you can use the other person to meet your expectations.
- The rule of social proof of rightness - it is a rule whose application is aimed at reducing the ability to think independently. By showing the examples of a hundred people who did so anyway, it provokes the assumption that it is right. After all, so many people think so. This rule uses the crowd effect (during a match, everyone gets up, so I'll stand up too).
- The rule of authority - based on the role of authority. That is why some negotiators do not act alone, but support themselves with specialists who act as an expert-authority. However, be careful with pseudo authorities - people who have only learned to use a professional language, but do not have practical knowledge.
- Rule of inaccessibility - occurs when a given item grows to a higher shelf, unattainable. This often results in the possibility of increasing our expenditure to achieve it. This rule can be used to induce the other party to make a faster decision. Of course, it must first prove that the issue is unique and small - not everyone gets such a chance.
- The rule of liking - causes greater sympathy for people who made us like us. It is more difficult for people you like to say no. Therefore, the attitude of the interlocutor is very important. If we do not win someone's sympathy in the first contact, it will be more difficult to establish a relationship with him. Therefore, in business contacts, it is worth taking care of your attitude in the conversation and paying attention to your appearance. It is very difficult to meet this rule because we know very well that some people have an "innate ability" and it is impossible to dislike them, while others, while working on their attitude, give the impression of artificiality, which is badly perceived in the eyes of the interlocutor.
Some of the six rules of influence are applied unknowingly. Getting to know them should increase our awareness when establishing contacts with clients, employees or business partners.
In practice, negotiators use many tactics for conducting talks. A good negotiator can quickly sense the "opponent" and choose the appropriate technique that brings success to the style of conversation. So let's explore some of the tactics used in business negotiations.
Prudent yield. Negotiations are there to achieve the goal. They usually start with the highest rates, which is why each party is most often prepared for certain concessions, which are an incentive to sign an agreement. They can also be used to check the lowest acceptance limit of the other party. Retirement rules:
- in important matters, do not give up first - you weaken your position;
- do not make concessions too quickly - they will then have more value for the interlocutor; be careful not to give in to the pressure of the interlocutor - the concessions should be smaller and smaller;
- pay attention to the effect of "give your finger and they will take your whole hand" - you should stick to the predetermined plan and not be brought below the border established in the preparation process;
- remember that there are two sides - not only you can give way - also require such moves from the other side;
- Beware of the end of the negotiations - do not loosen up too quickly because you can "swim" with concessions.
Aim for the highest possible stake. In negotiations, be optimistic and measure as high as possible. In this way, we leave ourselves room for maneuver. Even if we do not achieve this highest rate, we will be able to complete negotiations at a high level. However, you should remember to avoid making too high demands that are unjustified, which at the outset may be badly received by our conversation partner.
The good and the bad policeman. Some negotiators do not work alone, but in pairs. They share the roles of one bad - who has high demands and refuses to make concessions, the other - the good one immediately gains favor with the interlocutor, because he is calm and agrees to more things. Of course, this is a game of appearances, which, thanks to the substituted competition, prompts you to accept "good".
Limited competences. Some negotiators should not be involved in the talks. This applies to people who do not have the competence to make decisions regarding, for example, price changes. So be careful with whom you are negotiating. The position of incompetent negotiators can be used by provoking one party to concessions, and by explaining that we cannot change anything due to our limited competences. It is quite a risky technique because it may discourage the partner from cooperation.
These are just a few of the many negotiation techniques. If the entrepreneur becomes interested in this topic, he can use, among others from training and special Guides on Negotiation in Business issued as part of projects co-financed by the European Union "Man - the best investment".
Principles of negotiations focused on cooperation
- Rules for negotiation should be established. Simple rules indicated at the beginning will allow you to relieve tension and avoid misunderstandings. Being honest from the start can cause the other party to reciprocate.
- Formulating interests. Clearly named interests of both parties, as well as specific common and contradictory interests will allow us to look at the whole matter clearly and realistically.
- Identify the problem and name it. Don't be afraid to change your mind. Often, during negotiations, we learn more about the partner's interests. Let's try to see our chances in them.
- Searching for solutions together. Treating the other side as a partner and not as an opponent may result in finding better and more interesting solutions. "Two heads are better than one." Analyzing your ideas together may be a good solution.
Solving difficult and conflict situations
When negotiating, the ability to resolve conflicts is useful. The conflicting interests of both parties are a sufficient reason for the emergence of disputes. It is best to avoid them, but what to do when a conflict arises?
There are some psychological solutions to conflicts:
- using diminutives - in some way soothes the conversation, tames the other party;
- keeping distance - self-control, although it can throw the other side off balance, is a better solution than shouting over each other. Let the interlocutor get out of frustration;
- inhibition of bad emotions - anger causes an impasse (seemingly no way out, source of the uprising: fruitless conversations);
- clear target on the horizon, find argument for silence. However, this does not mean changing the subject or avoiding conflict issues. On the contrary. One should ask and try to understand the other party's intentions;
- not looking for a second bottom - do not find the problem if you see that it stimulates a conflict. Try to change the technique and style of conversation;
- determining your position - specify again what you are fighting for, indicate your intentions - maybe the other side does not know them. Show a common goal, propose your solutions, but also listen to what others have to say;
- in a stalemate, it is worth stopping the negotiations and considering transferring the talks to another day. Let your emotions cool down;
- Citing common goals and talking about the benefits of an agreement also makes the conflict less important.
The course of negotiations
The negotiation process itself can usually be divided into three phases:
- Initial - starting negotiations and getting to know the participants. A preliminary presentation of each party's proposals follows. In this phase, the first relationship is established. Usually both sides take neutral positions and are keen observers.
- Developments - this is the duration of proper negotiation talks. At this stage, we develop proposals, present arguments and conduct discussions. The distance between interlocutors is reduced, and you can also notice the adoption of specific positions and conversation style of each party. The generally accepted principle of negotiation says that no one agrees to the first proposal, as it usually benefits mainly one of the parties and includes an "upper stake". Then we move on to the concessions stage, bearing in mind the principle that they should be reciprocal, not unilateral. Sometimes, however, the conversation comes to a standstill.It is possible to get out of it on the basis of a general discussion and joint discussion of a general problem or brainstorming - looking for solutions to the problem, evaluating them and rejecting those methods that are unacceptable to both parties. It is in this phase that the ability to apply the rules of exerting influence and negotiating tactics emerges.
- Final - ending the talks. Acceptance of arguments and summary of conversations. One should remember about the formal termination, so that the agreed solutions do not disappear before the contract is signed. It is therefore advisable to make notes during the talks that will not allow you to omit any of the issues agreed during the negotiations.
The final phase of negotiations lasts until the contract is signed. It should be carefully checked whether the negotiated conditions have actually been included in the contract.
Remember that the elements of business negotiation are mainly based on communication between two parties with different interests. Only as a consequence, identifying common benefits can lead to agreement and achievement of the goal.