Steps involved in negotiation process

Key techniques for successful negotiation for each stage of the negotiation process are provided below:

1. Opening
It is desirable to establish control and set the tone from the opening moment of the negotiation

2. Exploring issues and inventing options
This is the stage where the parties from an understanding of each other‘s positions and the interests behind those positions. This stage allows identification of areas where mutually compatible interests exist. Identifying areas with potential for mutual benefit is an essential skill in this stage of negotiation. There are several techniques for attempting to identify the other party‘s negotiating interests and the potential for mutual benefit from satisfying these interests.

These techniques include:

  • Empathizing with the other party- try to imagine the issues from their perspective
  • Asking questions that demonstrate your interest in understanding the other party‘s position.
  • Considering possible reasons why the other party has not made a decision along the lines that you would like.
  • Analysing the short and long term consequences for the other party agreeing to the type of decision that you are asking them to agree to. Areas of potential mutual interest should then be explored together, with both parties generating options that might work and putting these on the table for discussion.

3. Making offers
At some point, clarifying interests and inventing options for mutual benefit must develop into the marking of an offer. However, making an offer too soon may make the other side feel like it‘s being pressured. Offers should be put clearly and firmly and without any hint of apology. Initial offers are very important because they create an impression of the sincerity and the realm for each party‘s position.

4. Offering concessions
A concession is a revision of a previous position that has been held and justified. Making concessions is essential in reaching a negotiated agreement. The challenge when making a concession is to make a concession on a particular point without creating the perception of weakness and developing the expectation that other points will be readily conceded.

5. Reaching closure in negotiation
In a practical sense, a negotiation closes when the parties agree on enough terms and details and are ready to formulate the agreement. In a legal sense, a negotiation closes when the parties have reached agreement on all the points under negotiation and have entered into a legally enforceable agreement with each other. This agreement is usually evidenced in writing. The most effective way to close the negotiation is to simply ask the supplier whether they will agree to the current terms. A negotiation cannot be effectively closed whilst the supplier still holds objections to some of the current terms. These objections must be identified and legitimate objections dealt with. This is easier in a climate of trust where there is willingness to work through the legitimate objections until both parties are satisfied. Failure to address and resolve objections will lead to deadlock, not closure.

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