Negotiation

NEGOTIATION

Author: Santoshi karasi

Meaning

Negotiation is self-counseling to resolve disputes; the aim of negotiation is the settlement of disputes by the exchange of views and issues concerning the parties.

 It is a part of the ADR (Alternative Dispute Resolution) system of resolving disputes out of court.

Negotiation occurs in business, non-profit organizations, and government branches, legal proceedings, among nations, and in personal situations such as marriage, divorce, parenting, and everyday life.

It is the Voluntary method of ADR and no party is forced to participate in a negotiation.

In simple terms, negotiation is the process of communication between two or more parties in order to reach an agreement.

Essential requirements

• It involves two parties or two groups of parties.
• It must involve the voluntary consent of both parties to negotiate on the dispute.
• It is fundamentally  a communication-based process
• It involves the common interest of parties
• There must be a conflict of interest between two or more parties
• The resolution arrived by means of negotiation is non-binding in nature.

Advantages of Negotiation

• Negotiation reduces the conflict and improves the relationship among individuals.
• Negotiations ensure that there is absolute freedom of the parties. Freedom to set agendas of their choice and to ensure the objective of the negotiation is achieved.
• One of the reasons for the absolute success of a negotiation is that negotiation only involves the parties related to the dispute.
• It involves complete privacy and does not include any other party as a result of which the negotiation process remains an absolutely private affair.
• It involves a quick resolution of the dispute between the parties
• It is a relatively informal method of resolution.
• Opting for negotiation instead of litigation may be less expensive for the parties and may reduce delays.
• It aims to prevent any unnecessary time or stress 
• It is Risk-Free – parties can always escalate
• This is one of the most flexible methods of resolving disputes

 Disadvantages of Negotiation

• There is no guarantee of a resolution at the end
•  Power imbalances may go unchecked
•  No guarantee of good faith on the part of parties
• Lack of neutral 3rd party reduces the chance of agreement of complex, multi-party disputes
• The parties to negotiation may not always be of equal stature and power.
• The unsuccessful rounds of negotiations sometimes lead to bitterness in the relationship
• The agreement that the parties arrive at the time of negotiation can be unequal when there is one is a powerful party than the other.

Right of first refusal

A right of first refusal, also known as a matching right or right of the first offer, is a contractual guarantee that one party to a business deal can match any offer that the other side later receives for the item or issue being negotiated.

Solution for avoiding intercultural barriers at the negotiating

• Research your counterpart’s background and experience:

Find out who exactly will be your negotiation partner and do some research to learn about their past and experience.

If your counterpart has a great deal of international negotiating experience, you can probably assume that cultural stereotyping is likely to create new communication difficulties rather than solve old ones.

If you have trouble getting information about your negotiating partner, ask an intermediary with contacts at that firm or organization to make inquiries.

Also, try to solicit information about your counterpart by going through a contact that has ties to their firm to do some research for you

Never underestimate the information you can find online through a simple Google or LinkedIn search.

• Enlist an adviser from your counterpart’s culture:

If you discover that the person with whom you are likely to be negotiating has little or no international or cross-cultural experience, consider enlisting someone from his culture to serve as your “second” in negotiations. 

It could be a good idea to plan out signals before the negotiation to indicate when you should take a break for additional advice.

• Pay close attention to unfolding negotiation dynamics:

Listen carefully during the talks. If you’re unsatisfied with the answers you receive, reframe your questions and try again.

Don’t dismiss questions that you believe could’ve been misunderstood, try to reword them and ask again.

In the same manner, if you are unclear on what the other side has said, reiterate the information for clarification.

• Separate Discussion of Problems From Exploration of Solutions:

Seek to clarify an issue and evaluate the nature of the disagreement before exploring solutions to it. Discussing solutions before the problem is fully defined can lead to trouble later because there might have been premature agreement on a problem that was not really fully understood by both parties.

Usage of bias as an advantage in business negotiation: Specific Biases You Can Use as Tools When You Negotiate.

1. Influence the negotiation and also change the other side’s beliefs about the nature of an appropriate agreement.

• Try to influence the other side’s judgments through susceptibility to the availability bias- the tendency to rely on readily available information. By carefully choosing comparisons to the current situation, you can persuade the other party about the appropriate settlement.

• When you are trying to reach a negotiated agreement, you should frame the negotiation in terms of potential gains for the other party, or even a win-win situation benefiting both parties.
•  The behavioral decision approach can also influence negotiation; the behavioral decision literature has identified a large number of systematic errors that affect decisions.

• The status quo bias may play its most significant role in the contracting phase. Negotiators who wish to wield psychological influence may be in a stronger position to do so when their proposals happen to be the default option.