Negotiation Skills - Literature Review

Kotler [1999] defines the negotiation process as a process where two or more parties exchange goods or services and attempt to arrive at mutually agreeable terms. On the other hand, Tipler [2005] defines it as a journey where you need to know both your starting point and your destination.

Illustration 01: Definition of Negotiation

Peters [1998] defines the process of negotiation as a process involving both concealing and revealing. In other words, he refers to it as a process of gradual unfolding of the maximum and minimum expectations of the parties concerned.

The Oxford dictionary defines it as conferring with a view to compromise or agreement, transferring to another for a consideration, converts into cash or notes get or give value for money. Interestingly, it refers to the concept of value for money, not merely the exchange of goods and services.

According to Lee and Dobler[1992] marketers who find them selves in bargaining situations need certain traits and skills to be effective. The most important are perception and planning skills, knowledge of subject matter being negotiated, ability to think clearly and rapidly under pressure and uncertainty, ability to express thoughts verbally, listening skills, judgment and general intelligence, integrity, ability to persuade others, and patience.

Lee and Dobler [1992] have listed the following circumstances where negotiation is an appropriate procedure for concluding a sale. They are listed in the following table.

Table 01: Circumstance of Negotiation.

Cohen [2002] refers to negotiations as universal human activity. He says that we all engage in bargaining at one level or another on a pretty regular basis and while we all need good negotiation skills in Business, these skills are valuable in our personal lives as well.

Savage, Blair, and Sorenson [1989] say that the marketer should consider both relationship and substance when negotiating strategically. They further state that negotiation is a basic, generic human activity. What is more, they say that labour management relations, in business deals like mergers and sales, in international affairs, to keep peace between nations, or to end a labour strike he advises the marketer to dramatize the need for bargaining and its capabilities as a dispute management process.

Lipton and Steinberger [1978] say that another point of negotiation is to seek to provide that in the event the number of voting securities drops and the result is to cause the acquirer to exceed the applicable ownership limitation, the acquirer must dispose of the excess.

Bob and Randall [1989] refer to negotiation as an alternative to conflicts. Negotiation, in its broadest implication they say is seen as an alternative to conflict & strife at interpersonal, Organizational & International levels. Because of importance of negotiation on some cases, a life or death matter they say that we should consider the meaning of “Winning”

Steels and Beasor [1999] refer to the negotiation process as a process through which parties move from their initially divergent positions to a point where agreement may be reached. He further speaks of the zone of agreement in a negotiation. This is given in the following illustration.

Illustration 02: The Zone of Agreement

Gavin [2004] speaks of poor interpersonal skills that may increase the risk of strong negotiation skills. He goes on to point out that almost every aspect of business and indeed human life involves negotiation skills, whether you are striking a deal, organizing a team working on a project, seeking a pay rise or a pay-off or simply settling such important matters as who is going to do the shopping or the household chores.

Kozcki [2000] refers to the bargaining process as the art of reaching an agreement by resolving differences through creativity”. He advises marketers to use soft words and hard agreement.

Tipler [2002] looks at successful negotiation as an important Communication skill and says that only by mastering it can one increase ones chances of gaining the outcomes that you want in you business life. Whether it is negotiating your salary or a large contract with customer or supplier, the guidelines are the same. She advises that one should reach the agreement that is win- win in nature.

Lewicki and Joseph [1994] says that whatever the outcome of the discussion you should have conducted the process in a professional way that reflects well on you and your company, if you are representing them. They also conclude that one should have laid a good foundation for any further dealing that you may need to have with the other person

John [2003] illustrates a model of negotiation strategy that is useful to a marketer which is given below.

Illustration 03: A Model of Negotiation Strategy Choice

He also says that today, in modern negotiations, thankfully a much healthier approach is emerging to the whole process of negotiation. There seems to be a recantation that the old regime meant that everyone eventually suffered and that the resulting bad feelings made subsequent business harder to conduct.

John [2003] further states that an emphasis on partnership today’s business environment is much more geared towards working together for mutual benefit. He says therefore that you will hear terms such as” partnership “and strategic alliance being used to describe the relationships between customers and their suppliers

Minton[ 1997] referring to building relationships advises that the current emphasis on quality issues means that cost can not be the sole criterion for a deal. According to him, you must also consider the need to build relationships that continue for a long time with both parties feeling satisfied where problems can be sorted out amicably and where future negotiations can be conducted in an atmosphere of mutual interest and support.

Saunders [2002] says that modern businesses are prepared to take much longer-term view and to apply a cost/benefit analysis to the outcome of any agreement. What initially appear to be a low –cost deal that can turn out to be expensive in the longer term if both parties do not have a vested interest in maintaining the relationships.

Mark [1997] goes on to specify the who, what, when and where of the negotiating process.

Table 02: Who, What, When and Where of the Negotiating Process.

Nierenbery & Zeif [1973] proposes that the need theory is applicable at all levels of approach. They say that when you closely analyze the techniques of negotiation under each need are seen to repeat certain forms called the varieties of application of the need. They have divided them in to six groups it in the male gender for uniformity and understanding

The following variety of applications are placed in an order corresponding to the amount of positive control that we may ordinarily have over each negotiating applications in a particular life situation

In other words a negotiator has more control over his working for the opposer’s

1. Negotiator works for the opposer’s needs

2. Negotiator lets the opposer work for his work

3. Negotiator works for the opposer’s & his own needs

4. Negotiator works against his needs

5. Negotiator works against the opposer’s needs

6. Negotiator works against the opposer’s & his own needs

Mark [2004] speaking of warfare negotiations say that in this style of negotiation, there is little or no acknowledgement of joint interests. The other side is regarded as the enemy, the negotiation is the battle and the belief that “all’s fair in love and war” justifies all behaviour, no matter how childish or unreasonable. Money becomes the only issue and concessions are never given willingly.

Mc Cormack [2000] speaks of the what, where, when, why and how of negotiations. When the time comes to negotiate, certain principles do apply he says. Also according to him, all five of the question asked above should be answered during the course of negotiation. Each can be expanded, limited or traded off as the negotiation dictates. He further documents advice to potential negotiators. These are given in the following table.

Table 03: Advise to Potential Negotiators

Janosik [1997] says that the relation between culture and negotiation styles has been the topic of much investigation and research in recent times. She argues that the term "culture" is understood differently by different authors. These different notions of culture yield different understandings of the culture-negotiation link. Having surveyed the literature, Janosik finds four distinct approaches to understanding the impact of culture on negotiation.

The first approach views culture as learned behaviour. It focuses on actions, without giving much attention to the reasons behind those actions. Researchers following this approach observe that certain types of behaviour are common to certain cultures, and attempt to catalogue those behaviours. Some of the earliest investigations into cultural differences take this form. The approach tends to yield cross-cultural negotiation etiquette guides, or how-to manuals. Such general yet definite advice is often helpful to practitioners. However, Janosik notes that this approach has difficulty accounting for individual variations in negotiation styles.

The second approach views culture as a matter of shared basic values. For this approach "the assumption, simply put, is that thinking precedes doing, and that one's thinking patterns derive from one's cultural context behaviours.

A third approach understands cultures as shaped by the dialectic tension between paired, opposing values. American culture, for instance, can be seen as shaped by the tension between the values of collectivism and individualism, or pragmatism and idealism, or spirituality and materialism. This approach has the advantage of being dynamic where the previous approaches were static.

The fourth approach draws on a systems theory and offers multi-causal explanations of negotiating behaviour. Basic values are seen as only one cause among many. Human behaviour is shaped by a complex set of factors including individual personality, cultural values, and the social context. Negotiating behaviour will vary depending upon a wide range of factors, such as the participant's age, religion, class, or character, relations of authority, institutional setting, the opponent's behaviour, and even the presence or absence of an audience.

Janosik [1997] further states that academic analysts currently favour this approach. According to her, its complexity gives more nuanced explanations. However this same complexity makes it even less useful as a predictive tool, and so as a useful guide for negotiation practitioners.

Janosik [1997] concludes by locating the above approaches to understanding negotiation behaviour within an even greater split in the field of negotiation theory. She cautions however that this appeal should not prevent us from undertaking studies which rely on rather more sophisticated notions of culture. Such approaches are messier but are potentially more accurate and ultimately more rewarding.

Fisher & William [1981] gives the marketer some valuable tips to getting the other party to say “yes”. These tips are summarized in the table below.

Table 04: Tips for Marketer to Getting the Other Party to Say Yes

According to Gavin [1996] negotiations are of paramount importance in ensuring effective teamwork, negotiation must be carried out in a systematic process. The negotiation process involves the following steps.

He further states that such an approach takes very short – time view of the relationship between the negotiating parties, and means that the next time you have to deal with the other party the discussion will be coloured on both sides by a desire to settle scores from last time. If you “Lost” last time, you will be motivated to try even harder next time to outdo the people you are dealing with.

Kennedy [2001] says that only a couple of decades ago the standard view of negations was that there were two sides with seemingly opposing objective and that the game was to gain as much as possible while giving as little as possible. One side bid high (usually higher than they actually expected to achieve) and other side bid low (usually lower than they expected to settle for). Each side resisted making concession and the one that lost least was seen at the winner.

Estbrook [2005] says that he who has learned to disagree without being disagreeable has discovered the most valuable secret of a diplomat On the other hand, Karrass [1997] says that in business, you don't get what you deserve, and you get what you negotiate.

Samfrits [1997] points out that the ideal negotiator has a quick mind, unlimited patience, he knows how to be modest but assertive, how to mislead without being a liar how to inspire trust without succumbing to their charms.

Flemming [2002] illustrates the deal relationship cycle in the negotiation process in the usual way as follows.

Illustration 05: Deal Relationship Cycle (Usual Ways)

He then goes on to illustrate the same deal relationship cycle that can be done in a better way.

Illustration 06: Deal Relationship Cycle (Better Approach)

Anastasi [1995] says that there are four ways in which the personality theory in personality negotiating can help in reaching agreements, they are by revealing how communication flows most comfortably & Effectively, The types of information that sways peoples best, what convinces people to come to an agreement and what perspective people where about time when they make a decision.

According to Musial [2001] good negotiation skills are essential for all managerial functions, it is particularly important in the function of leading. Since approximately 70% - 80% of managers time is spent interacting with subordinates and others, the managers must process effective negotiation Skills. To achieve the goal of an organization, the managers must interact with his superiors, subordinates, and various external parties. The interaction between a manager and other organizational participants can be productive only if he is able to negotiate effectively.

Bywaters [1999] claims that actions are just as important as words when negotiating. It is critical to ensure continuity between words and actions. He also points out that an open, attentive and interested posture portrays positive communication. He also says that because much communication is nonverbal, it can frame a positive negotiation environment,

Bywaters [1999] also advises never to enter a negotiation unless you are prepared to listen and make an educated decision before reacting to a stimulus. Base a decision on the objectives of the negotiation, not your emotions. Don’t fear telling the other party that this is a big decision, Camp advised. Suggest the other party ponder it overnight. The negotiation, which has been conducted systematically and will stick because every possible reason for remorse is out on the table, is a deal that can withstand and benefit from a final invitation to say “no.”

Gerard [1998] wrote of the type of personalities of soft and hard negotiators. These variations in the two types of negotiators are given in the table below.

Table 05: Type of Personalities of Soft and Hard Negotiators

Appold [2001] points out that how well we negotiate in life may very well determine our success. After all, negotiations cover every aspect of a job, including the social and economic.

Camp [2003] says that negotiating is what business is all about. He said that if you’re dealing with people, you’re negotiating in one way or another. Think about everyone you conversed with today. Every encounter had a purpose and had multiple ways it could have concluded. That’s called negotiation he says.

Dave [2000] comes out with the six traits of a great negotiator. They are given in the following illustration.

Illustration 07: Six Traits of a Great Negotiator

Flory [1995] says that the ‘right time’ to negotiate is probably when you have least need for a deal and your opponents need is greater. However, collaborative negotiators minimize the fallout from such relationships. Otherwise, the opponent may feel beaten and determined to beat you next time.

Thomas [2004] divides the different areas of negotiation in to three main levels. Firstly, interpersonal that is negotiation of the individual. Secondly, organizational referring to the negotiation of large organizations excluding nations and thirdly international negotiations between nations.

Herb [2002] says that the important thing in negotiation is to follow a process. He also refers to the skills of negotiation that the tem needs to master. Roster says that the most useful two letter word in the negotiation vocabulary is the letter “if”. He says that marketers need to learn the art of using the word “if” in the correct context and to use it to increase the productivity of the negotiation.

Philip [1999] says that those who insist on everything to be negotiated and settled in a week or ten days are going to be disappointed. His advices we to think of our behaviour from the other parties point of view. He points out that when you hurry the negotiation process too much the other party thinks to themselves whether there is something in our proposal that they had not noticed.

Roger [1995] agreeing on a deal is only part of the commercial relationship. Keeping the deal via implementing it is also important for the success. He further advises not to just complain but to negotiate remedies

Charles [1998] says that people face with a business grievance is that they have a remarkable facility for doing the one thing that is least important to them while at the same time, they display an astonishing inability to see the other side of problem

Fred [2002] advisers that negotiation all boils down to how you are the other person see your relationship if you can influence his perception you get a better deal. He further says that almost all sellers suffer from a twisted obsession the power of the buyers and the extent of the competition

Michal and Wayne [2005] refer to the variable in the negotiation process and these variables are given in the following illustration

Illustration 08: Variable in the Negotiation Process

Chester [2000] states that the power is the very essence of the negotiation process it is through our perception of power. Ours and other person that we conduct ourselves as negotiation. Chester further state one must remember that in negotiating there are two heads yours and the other persons.

0 Sperber [1996] advices that all that glitters not gold. He asks whether we have wondered why some corporations go in for highly expensive waste space; locate themselves in glass places, downtown in a most exclusive real state they can find. He says that when you arrive for an appointment you are treated as it you are in danger of becoming a lost parcel.

Coulson [1994] speaks of the criteria for reviving negotiation which is illustrated in the following diagram

Illustration 09: Criteria for Reviving Negotiation

Warsthaw [1993] speaks of the three faces of negotiation namely initiation stage, problem solving stage and the resolution stage. refers to the sixteen personality factors associated with negotiation processes. He says that whether purchasing goods for your company or discussing starting salaries with new recruits, negotiation is a critical skill for managers.

Cattell [1993] points out that if threats of some kind are necessary, he advises us to use deterrent threats, such as "I cannot agree to that," to underline your interests. Believing negotiation power comes solely from superior force, resources or position. Negotiation power comes from skills, knowledge, strong relations, developing good alternatives and building solutions. Failing to seek information about the other side's needs and wants. Even experienced negotiators miss this one. Ask questions and keep communicating, even when you're not agreeing, he says.