Effective Negotiation Strategies: Techniques & Tactics
Negotiation
Negotiation is the mutual arrangement and discussion of the terms of a transaction or agreement.
The Types of Negotiation
Distributive negotiation occurs when one side wins (or, more accurately, gains) and the other party loses. This is called a zero-sum game in Game Theory.
Integrative negotiations are when both sides win, often achieved through compromising.
Pyrrhic negotiations occur when both sides lose. Cases include situations where sides want to appear strong and do not want the other party to gain, where damaging the other party is more important than mutual gain, or when parties want to preserve their prestige or control damage, and therefore end up losing more.
Four Keys to Negotiation
BATNA (Best Alternative to a Negotiated Agreement) is the best you can do if the other person refuses to negotiate with you.
Reservation price is the least favorable point at which one will accept a negotiated agreement.
ZOPA (Zone of Possible Agreement) is the range where deals are made that both parties find acceptable.
Value creation demonstrates how to create value for the other party to develop a collaborative and cooperative framework to achieve more at the negotiating table.
Table Tactics
Anchoring is an attempt to establish a reference point (anchor) around which a negotiation will resolve. Negotiators will often use this reference point to make negotiation adjustments.
A frame offers a perspective by managing the alignment of the observer in relation to an issue.
Giving a range, final price, or nothing at all while negotiating can be the best solution in some cases. For example, if you want to hear the other party’s number, you can say nothing. Or, if the other party states an unrealistic number, you can state your final price.
If the other side gives you an unreasonable price, you have several options to choose from: asking why the price is so high, presenting facts to convince them that the price is unrealistic, or telling them to be realistic and frame the price to avoid wasting each other’s time.
Bluffing is generally unfair, but in rare situations, it can be valid or smart, such as in a student-teacher situation when a teacher suspects a student is cheating. However, usually, it is not.
Another issue is whether to start with the complex or the simple issues. Usually, the complex issues are the important ones and are time-consuming. Moreover, people like to be done with them. However, the easy issues can foster collaboration among partners, which is essential if the partners are foreign, and it can also give the feeling of success.
Chapters from the Book
Part One: Chapters One and Two
Chapter one’s principle is: do not criticize, condemn, or complain. Criticism is dangerous, as it hurts people’s pride and sense of importance, and it arouses resentment. Think about when Theodore Roosevelt criticized Taft. Instead of condemning people, try to understand them; it will breed tolerance and sympathy. An example could be “Father Forgets,” which is about a father who forgets that his son is still a little boy and scolds him all day for little things. However, the son hugged and kissed his father at the end of the day, and then the father realized his mistakes and decided to be a “real daddy.”
Chapter two’s principle is to give honest and sincere appreciation, but be aware that appreciation is not equal to flattery. Moreover, giving people the feeling of importance is as important as getting an appropriate salary, food, and so on; to put it simply, it is a basic need. The relating example is the story of the handsome and not-so-experienced manager who had a senior manager who was not so bright and, among other colleagues, a head secretary. In a short time, they found out that the senior manager was not too clever, so they started to arrange things behind his back, the handsome managers did his work, etc. However, he found it out, and the end of the story was not nice.
Part Three: Chapters One, Two, Three, and Four
The only way to get the best of an argument is to avoid it. You can’t win an argument. You can’t because if you lose it, you lose it; and if you win it, you lose it. Useful advice can be taken from the “Bits and Pieces” article, such as listen, welcome the disagreement, etc. Show respect for other person’s opinions. Never say, “you are wrong,” since the other party will never agree with you. Just think about the example of the Supreme Court justice with the young attorney. The young New York attorney, Mr. S, corrected the justice in front of the court. If you are wrong, admit it quickly and emphatically, since every fool can defend his/her mistakes. Think of the story with the policeman and the author; he admitted his mistake and, instead of getting punished, he was not, and he did not commit the same mistake a second time. Begin in a friendly way; “a drop of honey catches more flies than a gallon of gall,” since people cannot be forced to agree with you, but they can be led to if we are gentle and friendly. A good illustration is the story of the tenant and the engineer, when the engineer wanted to get the rent fee reduced, and instead of complaining, he told his tenant how much he loved living there and how sad he was that he had to move out.
Part Four: Chapters One and Two
Begin with praise and honest appreciation when you must find fault, as the sandwich tactic (praise, criticize, praise) does not trigger defensiveness. A relevant example is when the teller, who was doing her work perfectly except for balancing out, with a little friendliness and a feeling of confidence in her, managed to master this function. Call attention to people’s mistakes indirectly, just think about the woman who cleaned her yard with his family instead of the workers, or the preacher’s wife, who actually praised the preacher’s speech instead of telling him directly that his speech is not good. Be aware that the use of “but” can destroy the praise before the “but.”