J: Negotiation


Let us now turn to negotiation and negotiation techniques. As a general rule, Negotiation can be your best friend in difficult situations. You don’t get what you deserve, but what you negotiate.

What does negotiation mean? Negotiation is a situation where two or more parties with one or more common interests meet voluntarily and temporarily to try to reach an agreement, through the exchange of views. They meet with the aim of reaching an agreement in which the overall result is better than what the parties could achieve separately. What this agreement is about may be, for example, the price of a good, or the terms of a contract or treaty. Since negotiations include people, no two situations are the same, but on a general level you can talk about three different types of negotiations:

  1. The impromptu negotiation,
  2. The intuitive negotiation,
  3. The professional negotiation.

The impromptu negotiation. The negotiation that suddenly arises, where the negotiator is “caught” unprepared and unable to follow a certain plan and predict the future actions that the negotiation may entail. It could be a simple negotiation about who does what household chores or what to have for dinner. It could also be a negotiation about who is doing what in the office in connection with a new task.

The intuitive negotiation.  The intuitive negotiation is a little more structured than the impromptu negotiation, in that it is aware that a negotiation is being opened. However, the intuitive negotiation does not involve much preparation, but rather goes into the negotiation with the belief that we will be able to quickly pick up on the characteristics of the negotiation and act accordingly. Examples of intuitive negotiations are seen when we as consumers are out to buy goods in the slightly higher price range such as white goods, furniture or electronics. Here it is now common knowledge that you can advantageously go to the seller and ask about his best daily price, and you therefore begin a negotiation solely on the price of the product. A “counterattack” from the seller, in which he begins to include the product’s distinctive and unique specifications, favorable delivery conditions or alternative additional services to the product, is thus not welcome, since without the necessary preparation, a qualified dialogue on these negotiation parameters cannot be initiated and therefore does not immediately consider them to be interesting.

The professional negotiation.  A professional negotiation takes place when, with the help of theoretical knowledge and a certain kind of experience, a negotiation is prepared, conducted and evaluated in accordance with the rules of the game accepted at any given time for the area. The professional negotiation usually involves an official negotiation environment, as a kind of meeting room or other anonymous location where the parties are formally confronted with each other for a long period of time. An example of this could be a negotiation with a buyer about the supply of some goods or services. Here you will go to the negotiation prepared, have the arguments in place and have thoroughly familiarized yourself with what you are about to start negotiating. When talking professional negotiation, this will almost always have a soon of the intuitive negotiation, as you cannot always predict how the negotiation will go and you do not know the buyer’s arguments.

Negotiating parties

Parties are participants in a  negotiation, they  have a common cause, but have  needs or desires that go in different directions. One party will, for example, sell as expensive as possible and the other party will buy as cheaply as possible. And it is this that makes the parties sit down at the negotiating table and find a solution. Parties that negotiate do so at their discretion. However, there may be examples of feeling pressured to negotiate to close a case. But in the vast majority of cases, man has the opportunity to say no to negotiation. Parties that choose to open negotiations do so because they expect that they can get more out of negotiating than not negotiating.

Negotiation technique – Introduction

The first thing to do when you are in the middle of a negotiation is to clarify what is to be negotiated. Both internally in relation to oneself, but also externally in relation to the person with whom one is to enter into negotiations. The most important thing in a negotiation situation is to keep a cool head and try to be one step ahead all the time.

Internal clarification

The purpose of clarifying internally prior to a negotiation is to clarify what it is that is to be negotiated, ensure that when you meet your negotiating partner, that you are prepared and discuss the things that are needed and not someone else entirely. A negotiation can consist of a large number of meetings, and the topics to be discussed at each meeting may vary. But it can also be a simple correspondence by email that makes up the negotiation.  It’s also a good idea to prepare yourself for what weaknesses there are in your business that the buyer might want to address, in order to negotiate the price down, so that you already have prepared arguments against this in advance.

External clarification

The purpose of clarifying externally, prior to a negotiation, what is to be negotiated is to ensure that all negotiating parties are aware of and agree on the agenda. Otherwise, you risk that your own or the other party’s expectations are disappointed and that the negotiations will end without result. You can clarify the agenda for the meeting by sending your proposal to the other party prior to the meeting. Or that the other party sends the agenda to you. One should always make this communication in writing, as oral communication can often lead to misunderstandings.  When making the agenda, you should consider how much you need to go into in detail. There may be sensitive topics where it may be beneficial to bring them up to the meeting. Conversely, omitted details can also cause the other party to not be able to discuss them at the meeting. Finally, you should consider how long in advance of the negotiation you submit the agenda, because the longer the other party has to prepare.

Who will negotiate?

A very important thing about negotiation is who will negotiate on behalf of the company. This is of great importance for whether the company achieves its negotiating goals or not. It also matters whether you should be one or more parties representing the company. In addition, it is  equally important to understand who it is there, to represent the other party, during the negotiation. It affects which strategy, tactics, and technique to use. Before the negotiation begins, it is important that it is clarified between the parties and the company being represented whether a binding contract may be entered into on behalf of the company or whether the contract may only be negotiated.

Negotiation technique – summing up

To sum up, it is important when you are in a negotiation that you expect the unexpected, a negotiation can quickly take a different turn than you thought. That is why the impromptu negotiation is always part of any negotiation. An agenda is good and important, but things often develop in unexpected directions and therefore it is important to be well prepared so that you are equipped to solve what should come along the way and still steer the negotiation in a direction that is good for our company. Adapt to the situation and don’t mix emotions into it. Emotions are a difficult thing to control and you cannot know in advance what the other person is feeling and therefore it is better to build negotiation on argumentation and knowledge. And that is why it is important to be constructive, objective and factual to what happens in a negotiation.

  • Be prepared and strategize your negotiations.
  • You must prioritize your wishes so that you get the topics that are most important to you high on the agenda and less important topics, you may want to give up if you cannot get them fulfilled. They can be divided into “Must haves”, “Nice to haves” and “win-win”
  • Don’t be locked in beforehand, but still stick to certain basic principles.
  • Remember to listen, because listening is confidence-building and provides important information that you should use as arguments for your own views.
  • Expect the unexpected.
  • An agenda is good and important, but things often develop in unexpected directions.
  • Adapt to the situation and don’t mix emotions into it.
  • Instead, deal constructively, objectively, and factual with the unexpected.