Negotiation is the process by which people communicate to establish a mutually acceptable agreement on an issue. When faced with several options, individuals are expected to carefully weigh the pros and cons to make the best decision possible for themselves and the organizations they represent. Rational negotiators are those who operate based on a logical assumption and self-interest. The actors expect to use as much knowledge as possible to make a decision that maximizes gain while minimizing the possibility of loss.
Negotiation is frequently a zero-sum game; hence, a true collaboration, in which all sides work together to achieve a win-win outcome, is rare. According to Lussier and Achua (2015), negotiating, like politics and power, is not about exploiting people; it is about forging bonds and assisting one another in achieving the goals. Essentially, it should be perceived as a win-win situation for all parties involved rather than a lose-lose or win-lose outcome. For example, if employees need a pay rise, their union leaders can present the amount to the organization. After a careful review, they can settle at a value less than the proposed one but still an increase for the workers. Generally, the goal is to achieve the “I win some, you win some” situation, in which both parties give up something while still believing they got a good offer.
The negotiation process requires the parties to have the necessary skills to convince each other by selling their ideas. Essentially, since not everyone is a great negotiator, following the procedures in the negotiating process might assist individuals in honing their expertise (Lussier & Achua, 2015). According to Lussier and Achua (2015), the “negotiation process has three, and possibly four, steps: plan, negotiations, possibly a postponement, and an agreement or no agreement” (p. 167). The planning phase entails learning about the opposite party to identify the major power players. In a business setting, it is critical to network with people who have previously negotiated with them to learn about their attributes and style. The second stage is establishing objectives, including a lower threshold, a target goal, and a long-term objective. The key to effective bargaining is for all sides to compromise between their specified range of objectives (Lussier & Achua, 2015). After being adequately prepared, one can start the actual process. Postponing the conversations is prudent if there appears to be no progress. Finally, once the parties have reached an agreement, they should reaffirm it in writing.
Influencing power is essential in the negotiation process and the overall outcome. Mediation often occurs when there is a dispute, and persuasive techniques, politics, and power can all be used during the exercise. For example, when a company like Amazon is involved with the government in a dialogue to improve their corporate social responsibility (CSR), they are likely to reach a favorable solution due to experience. However, a small firm such as Project N95, which is new to the e-commerce industry, may not have the expertise to represent them and develop a better CSR outcome from the arbitration. Therefore, they are likely to compromise or postpone the implementation of such dialogue, especially if it can lead to losses.
In brief, negotiating is a procedure in which two or more parties have something in common and try to work out a deal. Organizations bargain to obtain a more favorable outcome or compromise to avoid losses. Everyone is naturally a negotiator, whether they recognize it or not because life requires people always to aspire to achieve their desires. Therefore, negotiation is a crucial job skill since strong parties obtain more desirable results.
Lussier, R. N., & Achua, C. F. (2015). Influencing: Power, politics, networking, negotiation. In Leadership: Theory, application, & skill development (pp. 145-182). Cengage Learning.