Negotiating and Decision Making (Part 1)

Understanding the Elements

When engaging yourself in a negotiation, it is important to know your scenario and playing field ahead of time.

Each scenario is composed of various elements. These elements are explained below.

Time – The pressure created by time can cause negotiators to make mistakes. Therefore, if you know how to use your time wisely and plan well, you can achieve a better outcome from you negotiation.

Information – Having more information or access to more information can create the leverage you’ll need for a successful negotiation. Information allows you to create more opportunities and alternatives.

Power – Power is more about how you’re perceived. You must appear to have power, even if you do not.

Passion – Passion will be the final factor that puts you ahead of your opponent. The more passionate you are, the greater your ability to win the negotiation.

There are certain factors that you must know about the other side to engage in a mutually successful negotiation.

These factors are:

  • Their goals and objectives broadly
  • What they want out of this particular negotiation
  • Pressures on them
  • Who makes the final decision
  • Their possible bargaining zone

The above will necessitate research on your part. You must have ample information available before you try and successful negotiate. There are many tools available. We have listed some below for your reference:

  • Internet
  • Publications
  • Vendors
  • Employees
  • Customers
  • Public information (financial reports etc.)

It is important to know not only know what you are negotiating about, but who you are negotiating with. Without proper research before hand you will not be successful in your negotiations. By having information, you will be able to test them on their level of honesty. You can ask questions about their situation and if you know the answer, you will know whether or not you are being lied to, which will allow you to assess their negotiation style rather quickly.

Possible Outcomes

Some negotiation experts recommend outlining possible outcomes

- Best Possible Outcome

o This is the best possible, but not necessarily realistic outcome

- Worst Possible Outcome

o The worst and least acceptable outcome

- Expected Outcome

o A likely and somewhat acceptable outcome

- Resistance Point (Walk-away Point)

- BATNA (Best Alternative to a Negotiated Agreement)

Build Communication

Share Information: Hiding all of the details creates a negative environment for negotiations

Active Listening: Show that you want to know about their position on the topic, as well as their wants and needs

Acknowledge their Needs: Show them that your business can help them and give them what they want. If you don’t they will find someone else who can.

Ask Questions: Discover what they need and whether or not you can meet those needs.

Control the Negotiation

The more control you have over certain aspects of the negotiation, the more likely you will be to gain an advantage. Here are some ways to gain control

1. Speak First – In many instances, if you speak first you will control the tone and tempo for the rest of the negotiation

2. Ask Questions – By asking questions you will control the content of the negotiation. By asking questions, you are also finding ways to come to an agreement

3. Don’t Argue – The key to negotiations is sharing information and not being combative.

4. Prepare to meet the other person’s needs – fully understand the other side’s position, motivations and needs and be ready to meet them

5. Listen – The more you understand of the questions you ask, the more control you will have on the outcome of the negotiation