Negotiation is a major part of business tactics that helps companies to expand their businesses, win tenders for big projects, and sail safely in times of an economic crisis. It helps in cracking crucial big deals. Here's more.
Negotiation is something that we often encounter in our lives, be it bargaining at a local vendor's shop, or convincing our friends for an outing to a favorite destination. But when it comes to the business field, negotiation skills are the keys to unlock the doors of success, and create profit and large turnovers for the company.
Negotiation is inherently both, an art and a science; art, in the sense that it involves excellent communication skills, leadership skills, and tolerance, and science as it requires a thorough knowledge of the market, economy, and finance.
How well a firm would perform in the political landscape of a corporate world is totally dependent on the skills of its negotiators. For organizations, negotiators are generally their executives and managers.
Negotiation Strategies For Managers
Middle level managers and upper level managers are the chief architects in designing negotiation strategies for companies. There are various facets of a successful strategy that can increase the prospects of earning a lucrative deal.
Clarity in Objectives
It is a common saying that, 'If you fail to plan, you plan to fail'. Before beginning any negotiation talks, make sure that there is a definite goal about what you exactly want from the deal.
For example, you may need more time to pay off a loan, so a clear explanation to the bank is essential. A crystal clear goal conveys a positive message to the negotiating party.
However, having a definite aim doesn't mean that you need to compromise on terms and conditions set by the other party. A flexible outlook is always helpful. Often, the interest of the other party must be taken into consideration. The idea is to make things better for both the negotiating partners, without hampering the core objective(s).
Communication is an art, and business communication is the best example of it. Before holding talks with the firm or a person, ask them if a mail, phone call, or video conferencing technology can be used for their convenience. A concern about your client/partner's comfort shows your respect of good business etiquette.
On the day of the appointment, try to be precise and yet effective in explaining your goal to the other party. You need not explain everything in the first go, just mention your goals and show that your deal/project has a long-term prospect for both the parties involved.
Mostly, face-to-face communication or meetings and conferences are preferred by companies. It is obvious because deals and projects are not just transactions or money transfer, instead they involve many facets of a business. A positive body language is bound to make a big difference in negotiating.
Maintain Trust and Influence
Trust is a necessary element that lubricates the negotiation process. When your aspirations are clear and you respond effectively to the negotiating partner, mutual trust evolves with time. Influence here, should not be confused with dominance.
If you are a project leader and you are dealing with another firm, you can announce discounts, awards, and bonuses on closing a deal or on achieving the targets after closing the deal.
Similarly, you can put stringent rules (in case deadlines are not met) on failure to achieve a target. Such types of measures are adopted in civil engineering projects that have time constraints during which the deal must be finalized.
Negotiation Techniques For Executives
What are these techniques and skills that will set you apart from your business competitors so that you can get the best deal?
Negotiations involving international companies require more in-depth understanding of the global market, not to mention knowledge about intercultural communication.
Besides, the executives need to handle mergers and acquisitions in a careful manner as they need to follow the norms set by international companies. Even while starting a joint venture with a firm, negotiation skills are of the utmost importance.
Negotiating in Teams
Nobody can deny the crucial role of teamwork. An excellent team has the ability to turn the fortunes of the company. However, view points of the team members about a certain deal may differ.
An executive needs to apply strategic thinking, and resolve the differences among the colleagues. The role of an efficient human resource management is very important in motivating and keeping teammates connected.
Successful negotiations are a result of confidence, power, and ability to convert threats into opportunities. The Indian-based Tata group acquired the iconic British automobile giants, Jaguar and Land Rover, from Ford Motors in June 2008.
This is a classic example of a successful negotiation between large corporate entities. Negotiation skills sharpen with experience and play a vital role in shaping the future of a firm.