Business Negotiation

Business negotiation is a process in which two sides reach a conclusion to a disagreement. Negotiation is a skill that can be learned and sharpened. Often, businesspeople rely on negotiation techniques they have developed during their everyday interactions. They can assure success by using tested business negotiation techniques.

Negotiation differs from argument. While arguments can occur during negotiations, arguments and negotiations differ on several points. Arguments usually involve emotion and devotion to a single point of view. During an argument, participants rarely listen to the other‘s points. At the end of an argument, each participant retains the belief that the other was wrong. By contrast, negotiation involves persuading others to see one's point of view. Good negotiators encourage others to change their minds about issues.

Negotiation also differs from discussion. Discussion involves reviewing points about topics, without need for reaching a conclusion. Discussions do not persuade people to change their points of view. Rather, discourse allows people to explore alternative points of view without coming to an agreement. Unlike discussion, negotiation has a purpose.

Compromise might be an end result of negotiation, but it is not a substitute for negotiation. Setting out on a negotiation with intentions to compromise is poor practice. Good negotiators should seem firm in their convictions and not be prepared to compromise immediately.

At the same time, negotiators should not entirely focus on getting their own way. Successful negotiators consider the needs of their opponents. Without that consideration, the stage is set for conflict.

Business negotiation involves persuading others, attempts to resolve differences and affects relationships. It follows certain rules, norms and conventions. There are many reasons to engage in negotiation. The motivating drivers can be logic, emotion, power or a desire to problem-solve.

There are two key concepts that should be implemented by business negotiators: winning relationships and satisfying needs.

To start, those involved should view negotiations as a chance to win relationships. Almost every negotiation occurs with an opponent with whom you will continue a relationship. Therefore, it is important to lay the groundwork for a lasting relationship during every negotiation. If representatives from other businesses believe they have lost negotiations, they will be tempted to get even or take revenge. Business negotiators should be careful to create a result in which both sides win something. Otherwise, the business relationship can sour, preventing future opportunities to interact.

Next, business negotiators have to think about satisfying needs. Every negotiation occurs because someone has a need to be met. In the planning stage, negotiators should figure out what their needs are. Recognizing their needs will drive the negotiation. In addition to their own needs, negotiators have to think about satisfying their opponents' needs. Again, in the planning stage, negotiators should figure out what their opponents need and recognize what they can offer them. One way of fulfilling the needs of both sides of the negotiation is to have two items on the table. One side can have its needs fulfilled with one item, and the other side can fulfill its needs by winning the other item.

Good business negotiators ask questions. Often, people are afraid that questions betray their ignorance. In reality, asking pointed questions demonstrates control. If one person asks questions while the other answers, the questioner actually directs the negotiation. Questions can yield information and opinions, and they test our understanding of what our opponent has said. They can also give a negotiator time to think, by asking the opponent to repeat points.

Another important business negotiation skill is listening. Negotiators often believe they are listening, while they are actually waiting for the other person to finish talking so they can have their say. Other times, they are formulating their own comments instead of listening well. In negotiation, it is particularly important to hear the other's points. The other party's words signal how he or she is thinking, and listening to those words can help you plan your own strategy.

To improve listening skills, business negotiators can try the following techniques:

• Taking copious notes, and writing down exactly what the opponent has said

• Repeating to yourself what the other has said, immediately after it has been said

• Frequently summarizing aloud and testing your understanding of what has been said

Business negotiations among people of different cultures are common. Those who do not take cultural differences into account risk losing negotiations and angering business associates. Cross-cultural negotiators should take the time to learn the cultural heritage of the other side, and pay adequate attention to details.

Selected full-text books and articles on this topic

Best Practice Workplace Negotiations
Richard Luecke.
AMACOM, 2010
Mastering Negotiations: Key Skills in Ensuring Profitable and Successful Negotiations
Eric Evans.
Thorogood, 1998
The Bargaining Manager: Enhancing Organizational Results through Effective Negotiation
Bernard A. Ramundo.
Quorum Books, 1994
The Expert Negotiator: Strategy, Tactics, Motivation, Behaviour, Leadership
Raymond Saner.
Martinus Nijhoff, 2005
The Savvy Negotiator: Building Win-Win Relationships
William F. Morrison.
Praeger, 2006
Cross-Cultural Business Negotiations
Donald W. Hendon; Rebecca Angeles Hendon; Paul Herbig.
Praeger, 1996
Entry and Cooperative Strategies in International Business Expansion
Yadong Luo.
Quorum Books, 1999
Librarian’s tip: Chap. 11 "Joint Venture Negotiation, Cooperation, and Termination"
Integrating Writing and Negotiation Skills. (My Favorite Assignment)
Lawrence, Carolena Lyons.
Business Communication Quarterly, Vol. 65, No. 2, June 2002
PEER-REVIEWED PERIODICAL
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
Teaching Business Plan Negotiation: Fostering Entrepreneurship among Business and Engineering Students
Ulijn, Jan M.; Duill, Micheal O.; Robertson, Stephen A.
Business Communication Quarterly, Vol. 67, No. 1, March 2004
PEER-REVIEWED PERIODICAL
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
Japanese-U.S. Business Negotiations: A Cross-Cultural Study
Don R. McCreary.
Praeger Publishers, 1986
Chinese Negotiating Style: Commercial Approaches and Cultural Principles
Lucian W. Pye.
Quorum Books, 1992
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