Business negotiations

Communication plays an important role in any type of business activity. The ability to find a common language with different people is the key to success both in business and in everyday life. However, in business communication, situations sometimes arise when one’s own authority may not be enough to influence employees, partners or representatives of other companies. Then there is a need for negotiations.

Many people think that “bargaining” and “negotiating” are the same thing, but there is a significant difference between these terms. When we say “negotiate,” we mean a conflict situation where only one side wins in the end, such as a dispute over the price of an item at a flea market or thrift store. In turn, “negotiation” involves finding and accepting a solution to a complex business issue that is mutually beneficial for all participants (signing trade agreements, contracts for the supply of goods and services, etc.).

It is quite common to think that a prominent place in negotiations belongs to mutual concessions, which contribute to the achievement of mutual agreement between the parties. Finding a compromise is really quite important, because such dialogues are a rather complex social process. However, most of the most important factors that determine the outcome do not arise directly during the negotiation – they appear either before the discussion begins or form the context around it.

You can get an understanding of the negotiation process from three sources. The first of them is personal experience from everyday life. The second source is the thematic mass media — news channels, specialized magazines and Internet publications, which daily report on negotiations (and their results) in various spheres of life, especially political and economic. The third means of obtaining the necessary information is the study of thematic scientific studies that are publicly available.

The need for negotiations may arise in various situations, but they all have common features:

• The presence of two or more parties (individuals, groups or organizations).
• The presence of a conflict of interests between the parties — the wishes and needs of the participants in the negotiations are usually different, so there is a need to find a solution to the conflict.
• Voluntariness. The parties choose negotiations when they expect to receive better, compared to the initial, terms of the agreement.
• Waiting for concessions. Each party expects the opponent to give up part of its claims in favor of a mutually beneficial compromise.
• Striving for agreement. For all participants in the negotiations, reaching an agreement by consensus will be more beneficial than losing the contract and breaking the business relationship.

Revision and change of all factors, both material (contract value) and intangible desire to “defeat” the other party, or not to appear “defeated”; the need to look “competent” and “cool” in the eyes of those people whose interests the interlocutor represents; the desire to protect one’s principles in the process of negotiations; the need to maintain good relations with other parties upon completion of negotiations). Intangible factors are motivating in the negotiation process and can influence both the process and the outcome.

Insufficient attention to intangible factors and excessive attention to material factors are often the reasons for failed negotiations, because the negotiators themselves often do not realize how much it affects the ability to objectively assess the situation and make adequate decisions.

When should you not negotiate?

For some situations, negotiations are not the best way to resolve a conflict. Let’s consider the most common cases in which negotiation should be avoided.

Excessively strict conditions. If too many obligations are imposed on you, do not negotiate, it is better to choose another solution.

Unethical requirements. In cases where the opposite party insists on actions that contradict the law or are ethically and morally unacceptable (for example, receiving or giving a bribe), immediately interrupt the negotiations. If your organization or reputation is compromised, you will lose in the long run.

Lack of benefit. If the result of the negotiations does not bring you profit, it is not worth starting.

Limited time. When time is running out, there is a high possibility that you will make a mistake in making a decision.

Bad faith of opponents. Never negotiate with people or companies that have a bad reputation – it’s contagious. In addition, by refusing to cooperate, you can avoid the risk of being deceived.

Insufficient preparation. You should not start the negotiation process without preliminary “reconnaissance”. Collect and analyze all the available information about the opposite side – and it will turn a page.

The need to organize and conduct negotiations can be due to various reasons — the distribution of a limited amount of resources, the impossibility of independently creating a new product, a way out of a conflict situation, etc. The success of such processes largely depends on the awareness and experience of the negotiators, as well as on their skills and skills However, regardless of the reasons, the outcome of the negotiations must be satisfactory to all involved, otherwise it may harm the future business relationship.