The Philosophy of Negotiation

It is fair to say that people have now been negotiating since birth. We started as children, negotiating with our parents, family and friends.

Once we were given options such as 'if then else', we tried to increase the conditions by negotiating a better deal. Occasionally, we even negotiated with ourselves.

Our ancestors negotiated with God in the creation and soon after with everybody else. We have improved and expanded our negotiating skills and today they truly are widely applied, not merely known and practised by attorneys. Negotiations are conducted in diverse arenas, each requiring different negotiation skills, but we can find commonalities included in this.

We must negotiate with terrorists, kidnappers and bank robbers, where in actuality the outcome could be deadly, and then we may save lives if we succeed.

We negotiate in shops and markets, where no sale may be the worst case scenario.

You can find mild and aggressive negotiations. We negotiate contracts for purchasing and selling and 'if then else' is amongst the basic elements in negotiation.

One-sided ultimatum negotiation is common as well, such as for example: 'These are my terms', 'Take it or leave it' and 'It's not negotiable'.

The philosophy of negotiation takes under consideration that the parties are interested in executing a common deal.

Each party, however, sets certain standards, conditions and limits that they will accept or consent to.

As an example, A has certain goods for sale and B is thinking about purchasing. Listed here are several scenarios:

1. The goods have a set price set by A, like drugs in a pharmacy or goods in some stores. B doesn't have negotiating options; either he agrees towards the price and buys the goods, or refuses to pay the asking price and goes shopping elsewhere.

2. The goods have a hard and fast price set by A, but there could be a special discount. The discount can be at the mercy of submitting previously published coupons or based on certain conditions, such as for example store membership or seasonal sale. In this case, the buyer is given a conditional or unconditional price discount, but without negotiating options.

3. The goods have a set price set by A. the cost caters for a certain discount, in line with the buyer's negotiating skills. Buyer B has got the option to offer a diminished price and A in return may either accept or make a counter offer, until they reach agreement; otherwise there is no deal.

We shall analyse an over-all negotiation case between seller A and buyer B.

The obvious aim of a would be to sell for the highest possible price, plus the opposite goal of the customer is to pay the minimum price. The assumption is the fact that both are able to get into the negotiation phase to summarize the deal.

We shall try to comprehend the philosophy behind their thoughts and methods for optimally achieving their goals.

The vendor understands that he is getting into a negotiation arena and accordingly has embedded into the selling price a certain acceptable discount margin.

In his mind, the seller might have set a minimum price that he would accept, and below that minimum you will have no sale.

A has set his price tag at $100, but he realizes that the chance to sell during the selling price is very slim. He has set the absolute minimum selling price a priori at $60.

Buyer B may have similar thoughts. She knows that the selling price has a lot of discount, that is susceptible to negotiation. Therefore, she decides to not agree to the selling price of $100. In her mind, she decides to pay no more than $80.

Seller A encourages buyer B to produce an offer. B tries a 'fishing trip' and provocatively offers only $50.

Hearing the ridiculous offer, A overcomes his inclination; he really wants to sell, but will not accept $50 and then he responds with a counter offer of $80.

B is hooked now, as she realizes that the brand new offer may be the price she is ready to pay. Although she may have the option to get rid of the negotiation by accepting the brand new offer, B as a professional negotiator makes another attempt and will be offering to pay $60.

Seller A realizes that they usually have reached the sum he could be ready to accept; he has the possibility to terminate the negotiation as well, but a can also be a skilled negotiator so he uses the 'meet them halfway' system. This can be a classical negotiation method, where both parties want the deal and each thinks that the middle of both offers is a fair solution to close the deal. The parties agree the deal together with negotiation closes for $70.

In this case both parties are content, the customer who thought she will have to pay $80 got the goods for only $70, lower than she expected, and also at the same time frame the seller, who thought he could be willing to sell for $60 actually received significantly more than he anticipated.

A great and a fair deal occurs when both parties wind up happy using their decisions. Both parties made their optimal choices and both will leave the negotiation with a fantastic feeling.

Obviously, this is basically the ideal scenario and it has many different endings with regards to the closing price or in walking out of the deal.

In an auction sale, the last price is set by the auctioneer's hammer and no direct negotiation is possible. The process of bidding from the starting price until the hammer comes down involves a lot of psychology, however.

Potential buyers are bidding, or maybe more precisely fighting, among themselves, in order the obtain the item they desire.

Often these are generally caught up by their emotions and pay more than they decided a priori to cover, or even more than they can afford. The auction hall may be the ground for the hunt.

Ego, usually male ego, is among the parameters that may decide a final price many times above market value or even the buyer's real need.

'There is a less expensive item over there', said the potential buyer into the seller. The seller asked for $100 therefore the buyer said: 'But over there, they asked only $70'. The seller replied: 'OK, so buy it there'. The client said: 'however they have sold it already'. The vendor said: 'Thanks for the knowledge, so now my price is $120'.

Another version might be: 'So why not buy it over there?'. The buyer: 'Unfortunately they will have sold their entire inventory'. Seller: 'OK, when my inventory runs out, I'll sell it for only $50'.

Pricing is a science with lots of psychology. When the price is way too high, individuals will not buy; too low an amount isn't only lack of extra profit for the vendor however it is not appreciated by the buyer.

Pricing is affected among others by context and location. Exactly the same item sold in a market, in a little shop or in a boutique in an affluent neighbourhood will make a significant difference in cost. Pricing is obviously impacted by the uniqueness and the rarity of the item.

An uncommon nineteenth-century silver and enamel object produced by Fabergé may fetch a significantly higher price than the same item made elsewhere an additional period by an unknown maker.

In an open trading market environment, price is often not displayed or fixed by the seller. Experienced sellers do not label products with a price if they are prepared to negotiate. They are going to however make an ad hoc decision, based on buyer's image, origin, sex as well as other factors and set the initial selling price accordingly.

It is interesting to observe the diverse negotiation skills and methods deployed worldwide.

There was culture-oriented negotiation such as for example at the center East, where there is an important gap between the asking in addition to final selling price.

Price may be afflicted with the gender of both the vendor plus the buyer, whether she or he is local or a tourist as well as by appearance, smell, voice as well as other factors.

Don't ever bid against yourself

If you since the seller have set an asking price, usually do not start to alter it when you see and feel that the client just isn't interested. In the event that buyer is really interested, s/he will come into the negotiating arena. In cases like this, if you decrease your initial selling price, you will lose the starting negotiation point. Ask the client to really make the first counter offer to your first price tag. This case is obviously demonstrated in the example described above.

The more you appear to be wanting to sell the less you will succeed

Try not to run after buyers, play it cool. In most cases, you can not persuade a potential buyer to get if s/he just isn't interested. The buying and selling possibilities available on online trading websites such as for example eBay are: fix,auction,make an offer orbuy it now.

The 'fix' pricing is the situation of 'take it or leave it' with regard to the indicated fixed price.

The 'auction' option requires one buyer to bid for the starting auction price and it also may increase if other bidders have an interest to buy; eventually the highest bidder wins.

Into the 'make an offer' option, the seller enables the client in order to make an offer. In cases like this, the seller may accept the offer or make a counter offer, until they reach an understanding.

The 'buy it now' option might be combined with 'auction' option, whereby the client may bid and contend with other potential bidders, or accept the 'buy it now' price and win immediately.

Negotiation skills are required in conflict management, arbitration, conflict resolution and mediation. If A has a conflict with B and A is our client, the most effective advice to A is to bring a third partyC in to the equation.

This could yield a stronger and a significantly better result. By bringing C into the conflict, we consider future situations and relations which may evolve after the negotiation is terminated. It holds true particularly in cases where A has to keep personal or business relations with B.

Negotiation is quite often regarded as confrontation. Effective negotiations need not be confrontational, however. Setting the mood as aggressive and seeking to win implies that there has to be a loser.

The correct attitude for the opposing parties really should not be to win the confrontation but to find a mutually agreeable solution.

It's important to manage our emotions through the negotiation process. The greater amount of we lose control and be emotional, the less we will be in a position to achieve an efficient, desirable and mutually agreed solution.

We should try and focus on the issues in hand and never on the specific and often annoying personality of your counterpart. Blaming one other side is a definite distraction and an unproductive one.

Perhaps one of the most important factors in efficient negotiation is to analyze and understand the needs regarding the other party.

To get a mutually agreeable answer to the problem, we have to measure the gap between our needs and any disagreements. We are able to do so only after comprehending the needs and worries of your opponent.

A typical example of how such understanding may be effective is the following scenario. Let us assume that a couple have found a coconut and each is claiming it should be theirs.

That you are there and you're chosen to function as arbitrator. What will be your ultimate answer to this conflict?

The majority of arbitrators would simply suggest splitting the coconut in two. In this case each claimant will have only 50% of what they want. Could it be the best ultimate solution? Well, not necessarily.

In the event that you had talked first to each party to master their demands before making your ruling, you have found out that one of these is an artist interested only in the coconut shell for carving, whereas one other just wanted the milk as well as the coconut meat.

With this specific information you'd be able to satisfy 100% of every party's needs and reach a classical win-win situation.

Timing is everything. Negotiations, like a great many other things in life, are time-dependent. You can find better and worse times and places to conduct negotiations. When getting into the negotiation process, you should be prepared, find out about our opponent, prepare alternative solutions, not spend your time on futile arguments, never get emotional and present persuasive arguments to guide our claims. Essentially, the aim of negotiation would be to cause a modification of our opponent's perspective which could lead him/her to agree and come nearer to our desires and needs.

A good and efficient negotiator is certainly one who has got the capability to persuade. Sometimes a negotiator needs to use his/her persuasive skills for the sole reason for encouraging the parties to open up, to talk, to pay attention and also to start a dialogue.

There are numerous persuasion techniques that are utilized by negotiators. Most are positive and some are negative. On the list of positive techniques are basic physical touch and gestures like handshake, smile, compliments, respect and other small-talk to generate a particular atmosphere of familiarity.

The negative attitude utilized in the persuasion process may contain obvious or hidden threats such as 'if then else'. Monetary threats are usually very effective tactical methods, especially in financial arguments. Failing is another negative technique, and certainly will be viewed as a significant psychological punishment. Therefore, when entering into the negotiation process, we should set aside our fear of failing or losing.

One of several basic and a lot of primitive human motivators is fear. The fear of losing property, wealth, a game title or other things puts us in a weak position when you look at the negotiation process.

We must try to control and monitor our non-verbal signals. The body language sends out revealing messages, specially when our company is angry, frustrated or eager to accept and agree to a proposal or even to a compromise.

Inside our everyday life we face conflicts that require negotiation so that you can resolve them. A typical example is conflict between employees and employers, Employees want additional money and better working conditions and employers wish to make more profit and minimize their labour costs.

In certain countries as well as in specific cases, employees are united under a local labour union in charge of the particular negotiation with the employer. Such negotiation will normally take several rounds of meetings, in which different scenarios emerge.

You will find instances when the union may demand certain changes, such as for instance salary increases. There are several negotiation styles and methods you can use either because of the union or even the employees acting independently.

They may go into the negotiation arena with an ultimatum such as for example: 'If then else... ' or alternate demands and response may take place between employees and employer.

Experienced negotiators will increase the basic minimum demands a supplementary demand or several demands that will be given up later, as an act of goodwill, so that not totally all demands are going to be met.

Consequently, at the conclusion of the method, both sides may declare themselves the winner. This mutually agreed compromise is really important when it comes to ongoing relationship involving the parties as they have to continue to come together.

In conclusion, negotiation is a dialogue between two or a team of people.

The key intention is to reach an understanding and understanding or even to resolve conflicts involving the parties.

It is vital that the parties come into the negotiation phase willingly and that they agree to accept and execute the resulting outcome. Normally, an excellent negotiation process is terminated by a compromise acceptable to both sides.

This is of an excellent negotiating process, however, is certainly not when one side wins but when all negotiating parties turn out as winners. This could easily happen only when a win-win situation is achieved.

So what does it take to persuade people? How can an attorney cause an arbitrator, judge, businessperson or other lawyer to reach the specified conclusion of one's own volition?

Should you want to persuade me, think my thoughts, feel my feelings and speak my words (Cicero).