Dynamics that shape and direct the outcomes of the negotiation process

Negotiation between two parties is the process of reaching a mutually advantageous solution for both sides; managers in business transactions frequently refer to it as a 'win-win' formula. According to Kennedy, Benson, and McMillan, it is "a procedure for resolving dispute between two or more parties in which both or all of their demands are modified to create a mutually acceptable compromise" (Benson, et al., 1994). The two participants on either side of the metaphorical "negotiating table"—the future partners in the agreement—each believe that he or she received the lion's share or the greatest bargain. We have seen possibility of a negotiated settlement that is hard bargained by both the parties to be mutually benefitting in many situations. Before we move on to reflect upon and discuss the dynamics that shape and direct the outcomes of the negotiation process, we shall look into the traits of a negotiator that lead to this ‘win-win’ formula. We will further study what are the ideal conditions needed for a balanced dialogue where both the parties get to express their point of view and are listened to. I will set the background for this paper with what the parties bring to the table picking ‘frames of reference’ and the importance of ‘level playing field’ from the most exiting cases in the available literature.

Is trust the most important trait that makes him effective or is it the power? Are there any traits needed to be an effective bargainer? So much has been written on the subject and many examples of ‘good’ negotiations at workplace are available for us to learn from. I have very little first-hand experience so with the simulation that was performed in the classroom was my closest feel of what it takes to be ‘good’ negotiator. I ran a quick survey with other students and later, I interviewed two experts a lawyer and a purchase manager to pick their thoughts on the traits of person who could lead the negotiation process. I will elaborate my thoughts as against other thinkers, from the available literature, on role of ethics and what is ethical and what is not to drive the dialogue to a conclusion. I shall delve deeper to explore the role of culture in the negotiation process and elaborate on what are the key forces that shape negotiation outcomes in practical sense. I would conclude with my views on the wider dynamics that shape and direct the outcomes of the negotiation process. I am restricting my views to situations involving two parties and in corporate scenario the exclusion of political as well as multilateral negotiations is due to the limited knowledge of the author.

When I discussed with my peers, the traits of an effective negotiator -the one who we could look up to for finding the middle path, the one who has equal focus on results as well as the relationship, the one who does not look at the other party as a challenger or opponent but as a collaborative partner. These are key describing words that come up from this informal group dialogue are listed below, in no particular order:

Open mind

Knowing what one wants

Assertiveness

Staying detached

Charming

Well thought out

Articulate and vocal

Experienced

Perseverance

Patience and Listener

Flexible

Insightful

Understands the other side

Persuasive

Compassionate

There is not much agreement on what are most needed traits as also the acquired skills or abilities are being used interchangeably with the traits that are more natural. Almost everyone is in agreement that experience plays an important part in driving a conclusive outcome from a conflicting situation. Power or Trust does not come up as a basic trait or skill as everyone agreed that power and trust are derived from how effectively one is able to apply his skills. Both power and trust are outcomes

Here is what the chosen two experts said are the must have knowledge and skills of a great negotiator; both are of the opinion that the knowledge as well skills can be acquired:

Preparation and planning skill

Knowledge of the subject matter being negotiated

Ability to think clearly and rapidly under pressure and uncertainty

Ability to express thoughts verbally

Listening skill

Judgment and general intelligence

Integrity

Ability to persuade others

Decisiveness

Considers lots of options

Aware of the process and style of the other person

Is flexible

Thinks and talks about possible areas of agreement

Besides the negotiation skills of the leaders, both the parties bring ‘an issue to solve’ or ‘a deal’ to the table and with that they bring their respective viewpoints or what they want from the dialogue such that they feel that the issue is solved or the deal is stuck. They also bring to the table their concerns, a level of trust (or mistrust) for each other, some bargaining power to exercise their opinion including walking off from the discussion and a culture which includes the value system as well as ethics. They both have some information with respect to ‘the deal’ or ‘the issue’, as the dialogue progresses, more information gets exchanged resulting in change of the power equation. How openly does the one party shares the available information with other party may bring in the level of trust needed to reach a consensus and therefore mutual benefit. The hidden agenda or rigidity of thoughts is not likely to help anyone.

The diagram below are 6 principles from ‘Getting to YES’ (Fisher, et al., 1991) which also lays down the overall process, I found the principles to be very useful and would like to use then like building blocks for becoming and effective negotiator

I also liked the approach of BATNA given by Fisher and Ury (Fisher, et al., 1991); the full form of the acronym is:

–Best

–Alternative

–To a

–Negotiated

–Agreement

BATNA could be way out when you are thinking what you will do or what will happen if you fail to reach agreement in the negotiation. As a participant in the process, one needs to estimate the probability of getting what one wants and identify the alternatives if this desire is not met.

As per the journal International Negotiation, “the literature on cross-cultural negotiation has expanded considerably over the past few decade but the findings are often ambiguous and sometimes even contradictory. The critical areas where objections are commonly raised about the relevance of national culture, the applicability of typologies that treat cultures as static, and the problem of ambiguous terminology. It may not be surprising that studies contradict each other given the ambiguity of the national cultural construct and variations in the context of the negotiating situations that are studied” (Bülow & Kumar, 2011).

Right to equal opportunity is the strength on which one negotiates what one feels he deserves and the dynamics that shape the outcomes of the negotiation process, in my view, are:

Environment in which the discussion happens; ideally there should be no place for fear, violence, un-truth or favoritism as also a sense of equality and freedom must prevail

Willingness of both the parties to come to discuss and remain open to dialogue irrespective of the outcome

Decisiveness of the parties to elect a leader to represent them – ability of the leader to drive a mandate within the group and persuade the other group to yield to his demands

Experience of the Leader and his/her application of mind in different situations as they arise in the negation process and influence the terms of settlement

Both parties to look for best available alternatives while maintaining integrity at all times.

Conclusion

There is little conclusive evidence on which one is the best approach to reach the win-win formula but following a few principles may be beneficial. It is difficult to ascertain the role played by cultural differences but application of certain leadership skills would increase the probability of reaching an agreement. The environmental factors play a vital role in leveling the playing field without which the negation process cannot start. As a learner, I would like to apply some principles learned, continue to develop skills that would make me a better deal maker and read more literature on the subject to acquire necessary knowledge on the subject.

References

Benson, J., McMillan, J. & Kennedy, G., 1994. MANAGING NEGOTIATIONS. 3rd Revised ed. s.l.:s.n.

Bülow, A. M. & Kumar, R., 2011. Culture and Negotiation. International Negotiation, Issue 16, p. 349–359.

Fisher, R., Ury, W. & Patton, B., 1991. Getting to Yes: Negotiating Agreement without Giving in. Second ed. New York: Houghton Mifflin Company.

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