Being able to conducting successful negotiations is an essential skill employees need to develop. Win-Win or Win-Lose negotiations are approaches that can be used to achieve certain objectives, such as building relationships or achieving the discounted prices.
Win-lose is the most familiar form of negotiation where both parties will haggle to meet in the middle. Win-Win approach allows both sides to feel they have both gained something positive from the negotiations. Employees will learn about which approach is best to implement.
For larger scale negotiations preparation is key to to achieve positive outcomes. Employees will need to consider some of the following in order to adequately prepare for negotiations:
- Goals- what do they, and the other side want to achieve from the negotiations?
- Relationships- is there a history behind the relationship? Have preparations been made to deal with any histories influencing the negotiations?
- Expected outcomes- what are the expected outcomes from the negotiations?
- Consequences- What will be the likely consequences of winning or losing these negotiations?
How to open negotiations?
It’s important for employees to open negotiations effectively as this can quickly impact on the outcome of the negotiation and the relationship with the supplier. Opening negotiations will involve one side laying out their proposal and then listen to the other side’s proposals before a decision is made.
How to bargain?
Opening the negotiations positively is the first step, the next step for employees is to learn the skills to bargain effectively for the best value/outcome. Bargaining will require a range of skills such as:
- Good communication skills
- Being knowledgeable about the supplier
- Being well prepared
Closing a negotiation
The goal of negotiation is to find a middle ground where both parties are happy with the outcome. Sometimes negotiations can carry on longer than needed. Closing a negotiation generally revolves around asking questions about the other party’s thoughts on the deal, then making the deal official through signing of paperwork etc.
For those new to negotiation this section will talk about tips that can help beginners to gain confidence and improve their negotiation style. Tips will be practical and easy to to apply in many negotiation situations.
Game theory is a model which considers how the relationship between stakeholders can achieve optimal results. It is essentially a means of studying how people make decisions. In understanding this and applying it to negotiations employees can hope to achieve the most desirable outcome for the organisation.
Influencing skills, Part 1 & 2
This part of the syllabus will cover the influencing skills employees can learn to best achieve their procurement objectives when negotiating with suppliers and other parties.
Biases in Negotiations, Part 1 & 2
Biases are tendencies of the individual which will cause them to come to conclusions that are incorrect or inaccurate. When dealing with complex negotiation, people can become overwhelmed and not process the information in front of them in such a way that creates errors. Errors can influence negotiations in a negative way.