Article Contents

Negotiation is a practice in which two or more parties make offers, counter offers and concessions to reach an agreement. Generally, both parties perceive different objects or interests. Yet, this is not always the case.

Both parties must reach an agreement during negotiations. Most managers do a lot of negotiating as part of their jobs. You may have to negotiate job offers and contracts with customers and suppliers. During the process, you may be able to share the resources with other departments. Make agreements with bosses and subordinates.

For more insights from experienced entrepreneurs, sign up for our EWOR Platform and gain access to over 17 courses and a plethora of resources.

Types of Negotiation Tactics

There are two types of negotiation tactics you can employ. 

Distributive – Distributive negotiation occurs under zero-sum conditions or an equal loss to each party. It distributes resources among the parties involved because it structures the conflict in a win-lose way. It tends to be competitive and adversarial.

Integrative – Integrative negotiation is a win-win negotiation in which the agreement involves no loss to either party. This type of negotiation is generally better than distributive bargaining because when it’s over, neither party feels like they’ve lost. It helps build positive long-term relationships and minimizes grudges between parties. This is particularly beneficial when the parties have to work together on an ongoing basis.

Fundamental Principles of Integrative Negotiation

There are four fundamental principles when approaching negotiation tactics:

Separate the People From the Problem

Separate relationship problems or interpersonal problems such as emotions, misconceptions, and communication issues. With this, you can understand where both parties stand. These issues are inverse to substantive issues and deal with them. It is in your interest to understand the other party is not an enemy, but your partner. You need the other person to support the idea. Otherwise, you might not get what you want.

Focus on Interests, Not Positions

Negotiate about things people want and need, not what they say they want or need. The interests of the people may vary and they may seek a workable outcome. You can examine the needs of the parties who are negotiating. Based on this, it is easier to come to an agreement.

Invent Options for Mutual Gain

Look for new solutions to the issue that will allow both sides to win rather than fight over the original positions. This assumes that one side will win and the other lose. It is critical to introduce a criterion that leads to an acceptable solution based on interest.

Insist on Goal Fairness Criteria

Set fairness criteria for the negotiated agreement. They can be ideal if they exist. Stay true to your goal. You should have many solutions to find an optimal solution. Develop the criteria to pick the most appropriate possible option from the available resolutions. The results can be more sustainable due to this.

Alternatives to Negotiation

Cultural differences might play a significant role in negotiation. This process is sometimes called alternative dispute resolution (ADR). There are three types of ADR.

Conciliation

In conciliation, a third party builds a positive relationship between the parties, improves communication and facilitates discussion. Conciliation facilitates a conversation, directs the parties towards a satisfactory settlement, and may issue a binding option if both parties agree.

Conciliation is often the first step in ADR processes. Its goal is to get the parties to communicate better and resolve the problem. Although, the conciliator may suggest a resolution that the parties can accept or reject.

Mediation

Mediation is voluntary and non-binding. It can be very effective if the conflict has not escalated too much. When both sides agree to resolve their dispute through bargaining, it may be helpful. The mediator offers a settlement that does not have to be accepted.

If the mediator is not perceived as neutral, they may not be effective in the situation. In mediation, the mediator facilitates a discussion using persuasion and logic, suggesting alternatives and establishing each side’s priorities.

Arbitration

Arbitration results are binding and pursue the idea of a fair outcome. Additionally, arbitration involves a third party. They usually have the authority to impose a settlement on the parties. If the parties agree, the contract or law may require arbitration. The negotiating parties can establish rules for the arbitrator, such as restricting the arbitrator to one of the negotiator’s final offers or freeing the arbitrator to make the judgment they wish.

Although arbitration always results in a settlement, it has a greater potential to leave at least one party dissatisfied. This could cause conflict. To resurface later, an ombudsman is someone who investigates complaints and mediates fair settlements between aggrieved parties. The Ombudsman helps to resolve disputes at an early stage.  

Effective Negotiation Tactics

  1. Don’t look at a deal as an either-or proposition. Negotiating is about compromise.
  2. Make sure each side knows the other’s perceptions of the issues and interests. Identify what you can and cannot part with.
  3. Try to identify and use sources of leverage. Leverage is anything that can help or hinder a party in a bargaining situation.
  4. Show the other side that you understand their position. Help the other person see you’re an ally by mirroring their emotions.
  5. Suppress your emotions. Negotiations can become tense and stir emotions.
  6. Reminding yourself of your goal may help you maintain an appropriate level of detachment and continue to see the deal. Stay focused on the negotiated issue and take a break if emotions flare up.
  7. Concentrate on the number of ideas. Don’t criticise other people’s ideas, but elaborate and build on them.
  8. Know your BATNA. The acronym BATNA stands for the “Best Alternative To A Negotiated Agreement”.

What if it fails?

When you cannot reach an agreement, and the negotiation process breaks down, you can reschedule the meeting. This would prevent parties from involving themselves in an argument. When you avoid heated discussions, you can reduce the chances of damage to future relationships.

During such situations, you may move through the stages of negotiation. When you start a negotiation afresh, you should look at both parties’ new ideas and interests. At this stage, it might also be helpful to consider alternatives in addition to a mediator.

That’s a Wrap on Negotiation Tactics

A successful negotiation is when parties find the outcome or the result of the situation acceptable to them. It doesn’t matter whether it is more acceptable or more favourable to one party or the other. 

Strategic negotiation involves more than choosing a cooperative or competitive posture. Approaching in binary ways can almost always be futile. Aavenier says that most people are not natural-born negotiators. The research shows that most people can strengthen their negotiation skills through education, preparation, and practice.

Want to start and grow your own business? We have the perfect solution for you. We built a platform with over 17 courses designed by serial entrepreneurs to help you build a sustainable business. You will get access to hundreds of resources, tools, legal templates, and much more. Save time and money and become more successful by subscribing to our EWOR Platform. What are you waiting for?

Sign-up now!

About EWOR

EWOR is a school conceived by Europe’s top professors, entrepreneurs, and industry leaders. We educate and mentor young innovators to launch successful businesses.

Learn More

Article Contents

Our Programs

Fellowship

An exclusive 10-month, fully-sponsored, program designed for aspiring entrepreneurs who want to make the world a better place.

Learn More

Academy

An 8-week online program that teaches you how to start a company with a lasting impact on the environment or society.

Learn More

Platform

Learn how to conceive, prototype, test, and launch an impactful venture with over 17 courses to help you start off.

Learn More

Newsletter

Don’t miss out on future content and subscribe to our newsletter!

Follow Us

About EWOR

EWOR is a school conceived by Europe’s top professors, entrepreneurs, and industry leaders. We educate and mentor young innovators to launch successful businesses.

Learn More

Our Programs

Fellowship

An exclusive 10-month, fully-sponsored, program designed for aspiring entrepreneurs who want to make the world a better place.

Learn More

Academy

An exclusive 10-month, fully-sponsored, program designed for aspiring entrepreneurs who want to make the world a better place.

Learn More

Platform

Learn how to conceive, prototype, test, and launch an impactful venture with over 17 courses to help you start off.

Learn More

Newsletter

Don’t miss out on future content and subscribe to our newsletter!

Recommended

10 Most Successful Businesswomen in the European Union

Males don’t dominate Entrepreneurship anymore. Despite the barrier, an increasing number of businesswomen worldwide have...

How to Make the Best of Ideation

‘Ideation’ is defined as the process of forming ideas. It forms the basis of a...

A Quick Guide to Empathy Maps

Empathy Map is a tool employed by user experience (UX) designers and product designers to...

All You Need to Know About Customer Equity

Loyal customers are a common trait among successful businesses. To keep the most customers, businesses...

A Quick Guide to Unicorn Companies

A Unicorn company is a private-owned startup that achieves a valuation of 1 billion USD...

Why is the Ideation Phase Essential for Business?

Many successful companies have a lot of ideas coming from workers, ideators or even a...

Follow Us

Rate this article

Want to start and grow your own business?

Learn how to conceive, prototype, test, and launch an impactful venture with over 17 courses.

Get access to over 300 resources including pitch-decks, investor term sheets, and contracts.

daniel

Daniel Dippold

Michael