How To Be A Good Negotiator?

Planning for Negotiations

Learning Objectives:

By the end of this chapter, you should be able to:

Identify the true issues of a negotiation.

Clearly define the primary objective of a negotiation.

Assess the strengths and weaknesses of your opponent and yourself.

We define negotiation as the process by which opposing sides resolve their differences by bargaining with one another to reach a mutually acceptable agreement. Such differences are the issues to be dealt with, so the first step in the negotiation process is to identify the issues.

IDENTIFYING THE ISSUES

There is no trick to identifying issues in most of our managerial and personal activities. However, in the give-and-take of the marketplace and in our relations with those above, below, and equal to us in our company's organizational structure, the identification of issues takes on a new dimension. Specifically, if we are preparing for negotiations, both sides must see the issue in the same light if a mutually acceptable agreement is to be reached.

Example 1

The experience of a broker of expensive, one-of-a-kind household furnishings serves as a case in point. The furnishings with which he deals are generally heirlooms, and the selling price is determined by the owner. When an article is sold, the broker receives a fixed commission. If a sale is not made, he receives no compensation.

At first, the broker declined to deal with customers who sought to reduce the selling price below the initial asking figure. He saw such haggling as an open and defiant challenge to his ability to set a fair market price. These customers, of course, saw the issue as nothing more nor less than standard business practice.

After losing some customers who wanted to bargain, the broker opened his eyes and was able to see the issue for what it actually was-a simple difference in commercial practice. In short order, he learned to increase the asking price by 45 percent. Both parties now bargain until they reach a mutually acceptable agreement on price, and the broker frequently obtains a higher figure (and more commission) than he originally expected.

Example 2

A participant in a recent seminar for mid-level managers raised a hypothetical situation for group discussion. The situation, which involved an interpersonal conflict, is outlined below.

Facts

A computer programming firm had for many years relied almost exclusively on contracts with various federal agencies. "Sam Jones," manager of the company's federal systems branch, was personally responsible for securing the bulk of government contracts. "Dorothy Brown," head of the company's public relations office, worked in a position with limited managerial status. She and Sam had worked closely with one another in the Dallas home office and each held the other's abilities in high regard.

The president of the company decided it was time to concentrate more heavily on the private sector and announced a plan to open an office in Boston. At issue was the question of who would head the new operation. Both Sam and Dorothy were candidates for the job.

Problem

Sam believed that he was the most qualified person for the job. He also felt that he was ready for the promotion. Sam decided that if he was passed over he would resign.

When it was rumored that Dorothy was the president's favorite for the new position, Sam was furious. He prepared his letter of resignation. He saw the issue as one of gender discrimination in reverse. However, he was advised by a friend to tear up his letter to the president and try to get the Boston appointment by negotiating with the front office. "After all," the friend said, "PR is Dorothy's field. She's good at it. But as a regional office manager, she is likely to bomb."

Sam framed his arguments carefully and negotiated with the president for additional consideration on the basis of his perception of the issue reverse gender discrimination.

The Result

Sam failed in his negotiation. Dorothy went to Boston and Sam resigned to go to work for another company.

Reason

Dorothy's selection had nothing to do with her gender. She was good at her job, and the company president saw the importance of a sound public relations effort in launching a new office structured to attract a new market. Also, Dorothy was born and brought up in Boston, so she had the added advantage of a thorough knowledge of the territory.

In each of these examples, there are inaccuracies in the way the issue was identified. Both the dealer in household furnishings and Sam, the manager of the federal systems branch, misread the elements of the situation with which they were dealing. Each saw the issue through his own eyes. Neither was able, at least initially, to step back and analyze the problem with an adequate degree of objectivity.

Analyzing the Situation

In the planning stages of negotiation, issue identification must be based on a series of assumptions. To achieve some degree of accuracy in the face of the sparse data generally available at this point, one must deconstruct the situation. This means breaking down an entity (the situational difference) into logical elements (issues), studying each facet objectively, and reassembling the results. There are several helpful guidelines for conducting such analysis:

Determine specific differences that could prevent agreement. Generally, these differences are relatively easy to distinguish.

Determine the extent of each difference by asking: "What am I willing to do to reach agreement and what can I realistically expect from my opponent?"

Determine what you would do if your role and your opponent's were reversed. If you can muster sufficient objectivity to make a sound case for your opponent, you can outline a realistic course of countermoves.

ESTABLISHING THE PRELIMINARY OBJECTIVE

Once the issues have been identified, the objective