How do different personality types on the purchasing side affect the negotiation style and outcome? In every negotiation, no matter if you're buying, selling, solving conflicts or negotiating your salary, there is always something laying beneath your negotiation, something that motivates people to dedicate the time to meet and negotiate with you.
In business and everyday life, each of us has something that drives us towards our desires, goals and aspirations. This drive makes us behave in a particular way and use different negotiation styles. What we want, why and how badly we want it creates and shapes our attitude towards negotiation, and with this our negotiating style.
Typically speaking, personalities of negotiators are visible through observing their approach to negotiation, whether purchasing or selling. Here are the three main approaches:. A win-lose attitude means a competitive approach to the purchasing negotiation process.
An example is when a purchaser wants the lowest possible price even when a seller will lose money. Conversely a seller wants to drive the price up because he is looking to maximise his profit. Competitive driven purchasers believe that knowledge is the power, which it is, and they try to get as much information about you as possible whilst not revealing much about themselves to the sales professional.
This approach is often supported by some manipulative and quite possibly with deceptive negotiation tactics. For people using this kind of orientation, a win-win business relationship doesn't matter.
A substantive outcome is what counts. The best possible and desirable situation is when the seller side is also eager to achieve a mutually satisfactory win-win outcome.
There are always some issues in terms of price, quantity, delivery dates or guarantee, but there is also a way to match and solve them through well thought through exchanges or trades. We remind clients on our Sales Negotiation Training that both the buyer and the seller must be willing to focus on maximising both their own the buyer's gains.
If this spirit of mutual satisfaction is not in evidence, it will turn the negotiation into a lose-win or lose-lose competition. If we negotiate with a spirit of negotiation cooperationwe may even have a chance to create a value added solution that will benefit both parties more than was considered before the negotiation began.
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It's time to replace stress with confidence.As the following points of win win negotiation will demonstrate, ensuring that your counterpart is satisfied with a particular deal requires you to manage several aspects of the negotiation process, including his outcome expectations, his perceptions of your outcome, the comparisons he makes with others, and his overall negotiation experience itself.
Prior to and during a negotiation, people develop expectations about the type of deal they will receive. Work by business school professors Richard Oliver and Bruce Barry of Vanderbilt University and Sundar Balakrishnan of the University of Washington demonstrates that negotiators automatically compare their actual outcome with the outcome they expected prior to negotiating. As a result of the process, two negotiators with the exact same outcome can feel very differently about their deal.
Skilled negotiators manage expectations prior to and during a negotiation in order to create a true win-win negotiation. Some managers do this instinctively. One common negotiation mistake that sabotages a win-win situation is to escalate expectations by making a steep concession that could lead the other side to expect another.
Rather than quickly agreeing to your offer, the seller might escalate her expectations regarding likely outcomes.
They found that negotiators whose initial offers were immediately accepted were less satisfied with their agreement than were negotiators whose offers were accepted after a delay — even if the former group reached better final outcomes than the latter group.
Those whose initial offers were immediately accepted were more likely to think about how they could have attained a better outcome than were negotiators whose offers were accepted after a delay.
As these results suggest, you can actually make your counterpart less satisfied by agreeing too quickly. In fact, a better win-win strategy may be to delay agreement and even ask for additional concessions, because you may be able to make your counterpart more satisfied with a deal.
Just as win-win negotiators evaluate how good a deal is for themselves, they also assess how good a deal is for their counterpart.
For example, when negotiating a labor agreement, unions often care not only about how much they gain in wage and benefit concessions, but also about how management is making out. After protracted negotiations, the unions finally agreed to wage cuts that ranged from The unions perceived that this deal was in their best interest — until they learned about the special deal American Airlines executives had worked out for themselves.
Six top executives at the company, including Carty, had arranged to earn large bonuses twice their salary if they stayed at the company through ; the company also set up a special pension fund for 45 executives in the event that American Airlines filed for bankruptcy. One week later, Carty was forced to resign. The American Airlines workers were willing to agree to wage concessions, but they wanted their sacrifice to be shared companywide.
As the initial American Airlines deal illustrates, these perceptions can be mistaken. The unions were unaware of the type of deal executives would be getting until management was forced to disclose their benefits. The lesson? As car salespeople have learned, be modest about your gains from a deal, and commend your counterpart for her hard bargaining in order to create a win-win situation. Wharton School professor Maurice Schweitzer and Yale University professor Nathan Novemsky identify social comparisons as another critical factor in guiding win-win negotiator satisfaction.
Not only do negotiators compare their profit from a deal with the profit they imagine their counterpart earned, but they also compare their profit with the profits of other negotiators who were in a similar situation. For example, a car buyer is likely not only to assess how much the dealership made off of him, but also to compare his price with the deal his neighbor got.
Social comparisons can drastically skew our perception of a particular outcome. Unfortunately, our ability to make comprehensive and accurate social comparisons is limited. We typically compare our own outcomes with those who are close to us — neighbors, coworkers, and family members.Do you dread entering a negotiation?
Do you worry that what you want will not match what the other person wants to give? Do you worry about having to "play hardball" and souring a good working relationship?
After all, for someone to win, someone else has to lose, right? Well, not necessarily. Chances are, you can find a solution that leaves all parties feeling like winners by adopting the aptly-named "win-win" approach to negotiation. In this article, we examine the meaning of win-win negotiation, and we explore how you can apply the concept of "principled negotiation" within win-win, to build mutual respect and understanding while getting result that you both want.
A win-win negotiation is a careful exploration of both your own position, and that of your opposite number, in order to find a mutually acceptable outcome that gives you both as much of what you want as possible.
If you both walk away happy with what you've gained from the deal, then that's a win-win! In an ideal win-win situation, you will find that the other person wants what you are prepared to trade, and that you are prepared to give what he or she wants. If this is not the case, and one of you must give way, then it is fair to negotiate some form of compensation for doing so. But both sides should still feel comfortable with the outcome. People's positions are rarely as opposed as they may initially appear, and the other person may have very different goals from the ones you expect!
So, try to keep an open mind and be flexible in your thinking. Establishing a strong position is a good starting point for a negotiation. But if you become too entrenched, conflict can quickly arise and the discussion may break down.
Former Harvard Law School professor Roger Fisher, and academic, anthropologist, and negotiation expert William Ury developed this approach in their book, "Getting to Yes. First, avoid identifying your opposite number as your "opponent. To do this, be aware of three factors: perception, emotion and communication. According to Fisher and Ury, perception means "putting yourself in their shoes," so you are better placed to see common ground or a compromise solution.
You may be convinced that your position is fair, reasonable and "right," but it's likely so will the other person. Examine and acknowledge your emotions, and to ask yourself why you feel the way you do. For example, could a previous bad experience in a negotiation be affecting your behaviour in this one? Observe the emotions of the other party, and try not to respond in kind if the discussion becomes "heated.
People are seldom "difficult" just for the sake of it, and almost always there are real and valid differences sitting behind conflicting positions. The way that each person sees the issue may be influenced by many factors, such as their values, beliefs, status, responsibilities, and cultural background.
Try to keep the conversation courteous and avoid attributing blame. Once everyone knows that their interests have been considered, they are more likely to be receptive to different points of view. For example, if you're negotiating with your boss to get more resources for your team, consider that he may be under pressure to reduce costs.
If you look beyond your two positions, you may find that you have a common interest, such as increasing your team's productivity. By now, each side will likely have a better understanding of the other's interests, and a solution might be obvious. You may even be on the verge of agreement. If not, stay open to the idea that a completely new position may exist and use the negotiation process to explore your options. To return to our example, let's say that you've identified increased productivity as a mutual interest, but your company can't afford new staff or equipment.
You could see this as an opportunity to assess working practices, training opportunities, and inexpensive ways to increase efficiency. This isn't just "setting out the facts," as different underlying needs, interests, opinions, and goals can cause people to interpret facts differently, or cause you to select only those facts that support your position.An SIM Membership like no other, provides you with an abundance of tools, resources and opportunities to help you achieve your professional and personal success at every step of the way!
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If you wish to subscribe to Singapore Management Review, please click here. Key decisions are made in the process of planned or impromptu negotiations at the workplace or at informal settings. This article examines negotiation styles and some strategic moves for winning outcomes. It is common to hear people say they seek win-win outcomes when negotiating.
Somehow, such outcomes seem elusive. Negotiators often fall back to old habits that are driven instinctively or learned through years of observing others negotiate, taking the view that such approaches are appropriate. The unintended consequence results in win-lose outcomes and could lead to long-term relational challenges when implementing the results of the negotiation.
In business, negotiations are a high-stakes game played by two opposing teams seeking to find a winning solution. How this game is played is largely reflected in the strategies, tactics, moves, and turns the players make. Every decision results in a counter-move by the other party, and how these moves pan out, will finally determine the outcome.
In this article, we hope to shed light on the underlying reasons behind the challenges of win-win outcomes and the strategies negotiators can take to manoeuvre negotiations towards win-win outcomes.
The ideas are underpinned by close to 10 years of working with professionals, training, and consulting. Challenges of Win-Win Outcomes Behavioural economics offer a powerful insight into human decision dynamics. It tells us how individuals make economic decisions based on how they perceive and feel about a particular decision. Knowing how such dynamics operate will not just provide insights, but offer opportunities when planning for a negotiation. Conventional economics believe that individuals are rational, have self-control, and seek to maximise their decisions.
Behavioural economics on the other hand suggests that individuals are not always in control, can be influenced by what they perceive, and could make sub-optimal decisions because of their fear of losing or aversion to loss or risk, and mental accounting. In the mids, a study was conducted to find out if New York cab drivers made rational, profit-maximising decisions, which was to work longer hours during rainy days and days when a large convention was held in the city, while working less hours on bad days.
And on a bad day, they found that the cab drivers would put in longer hours to break-even or earn a marginal profit, this is known as aversion to loss. As a result, decisions tend to be amplified and sometimes exaggerated. There are three reasons for this, two of which have been explained. The third reason is the effects of bias.
Bias refers to the preference for a certain point of view while ignoring alternative views that might be of value. Psychologists and sociologists have observed numerous forms of bias, but we observe that the three most common forms of bias in business decisions are:. Recall meetings where selected statistics were used to justify a point.
Perhaps the most instructive incident that best describes the effect and impact of bias is from the Challenger Space Shuttle disaster, which led to the deaths of seven crew members. Consequently, a Presidential Commission called the Rogers Commission, was established to identify the reasons, and one of the areas strongly criticised was the decision-making and communication process, which was heavily anchored in group-think and biases.By Michael C.
Donaldson, David Frohnmayer. You are about to end the negotiation, either by closing a deal or walking away from it. If you are going to close the deal, be sure that the deal is positive for both parties, producing a win-win situation.
Win Win Negotiation: Managing Your Counterpart’s Satisfaction
This may be the most valuable moment in the entire negotiation. In the commonly used sense of the phrase, a win-win negotiation is a deal that satisfies both sides.
In an ideal world, a win-win agreement is the only kind of deal that would ever close. Win-win negotiating does not mean that you must give up your goals or worry about the other person getting what they want in the negotiation. You have your hands full looking out for your own interests. Let others bear the primary responsibility for achieving their goals. Practice honesty and respect in all your negotiations. A good deal is one that is fair under all circumstances at the time the agreement is made.
It provides for various contingencies before problems arise. A good deal is workable in the real world. To be sure that you have a good deal and a win-win situation, ask yourself the following questions just before closing:.
In the ideal situation, the answer to all six questions is a resounding yes. If you are unsure about any one of them, take some extra time. Review the entire situation. Assess how the agreement could be changed in order to create a yes answer to each question. Try your best to make the change needed to get a firm yes to each question. Then, close the deal. You never know! When you work in a culture other than your own, being sure that you have a win-win solution takes a little extra effort.
Remember that the people you are dealing with are more important than the paperwork you draft. Know your counterpart very well before you enter into a long-term relationship.
No lawyer can protect you from a crook. Lawyers can just put you in a position to win your lawsuit. People do bad things all the time. Checking out references is one of the most overlooked resources. You can learn a great deal from checking out references, even from the most obviously biased sources. Your job as a negotiator is to get what you want. Remaining true to that objective may involve upsetting someone.It might be a brand new vendor contract. It could be a revision to existing terms and conditions with a trusted supplier.
It might even be an internal debate over the best materials and suppliers to support the launch of a new product or service. The traditional negotiation process is focused on victory with minimal concession.
But in the modern, global, and increasingly interconnected marketplace, working to achieve win-win outcomes through win-win negotiation is the new hallmark of principled negotiation.
Playing hardball might make for good drama and short-term gains, but a win-win approach achieves lasting mutual gain for—and stronger relationships between—all parties involved in business negotiations. But it may not work so well in modern, real world contexts.
Many business negotiations—from internal conflict resolution to strategic decision making to contracts with trusted suppliers—involve parties that will be in long-term relationships. In Getting to YesFisher and Ury acknowledge the importance of a strong, clear, and well-developed position, while simultaneously encouraging aspiring win-win negotiators to avoid playing hardball and instead pursuing negotiation outcomes that respect their own interests, the interests of their negotiation partners, and the long-term relationships that are certain to be affected by negotiation.
This approach is the heart of principled negotiation, supported by five conceptual pillars that promote a win-win situation for all parties. Your mindset sets the tone for negotiation.
Partners, after all, seek common ground and shared success. Viewing the other party in this way can help you remain confident in your position without heaping undue rancor or criticism onto theirs. In addition, remaining calm and working to maintain an emotionally stable environment, rather than one full of red-hot conflict, will make it easier for everyone to feel heard and understood. Being wedded to a position e. However, they also value your business and relationship, and are willing to discuss all the potential ways in which both your interests and theirs can be satisfied.
Shifting focus away from a position, which can be colored by everything from personal values and culture to external pressures and responsibilities, and toward interests, which are clear, negotiable, and focused on professional, rather than personal, factors, can help you move beyond conflict to find common ground.
Rather than settling for the first outcome that both parties can accept, principled negotiation encourages participants to put their negotiation skills to use brainstorming a range of options that both parties consider to be acceptable. In our example, it seems like your goals and those of your supplier may be in direct conflict.
In this way, their goals and yours become aligned, and both parties benefit. Establishing boundaries for the negotiation to operate within maintains flexibility and creativity while keeping things concrete and centered on interests, rather than positions. Your BANTA is your fallback plan—a contingency that allows you to achieve as much of your intended purpose as possible while still preserving the win-win outcome.
So while your original goal in negotiating with Vendor A was to reduce as much of your spend as possible for Product X, and their goal was to increase your total spend with them, your BANTA might include:.
Optimizing your supply chain is about more than just optimal pricing and terms. The core of your supply chain is supplier relationship management. The relationships you build, grow, and deepen with your suppliers—especially your best, most trusted ones—are the backbone of not just smooth operations and production, but the transformation of procurement into a value center instead of merely a source of cost savings.
By focusing on win-win negotiations, you can turn suppliers at all levels into collaborative partners working to support your shared success.Win:Win - Negotiation explained
Win-win negotiating is a key part of strengthening all your business relationships, both internal and external, and achieving the goals that will help your company innovate, expand, and thrive.Oftentimes, people view negotiating as one person trying to get something from another person. However, it does not have to be a process that leaves one party with a bad taste in their mouth, while the other is doing a victory dance. It is possible for both parties to come away from a negotiation feeling like winners.
This is what Dr. Tony Alessandra describes as win-win negotiating. Tony outlines 13 tips to help ensure that any negotiation you take part in can and should end with a win-win result! By Dr. Tony Alessandra. T he two ends of the negotiating spectrum are win-win negotiating versus win-lose negotiating. Win-Lose negotiators see the participants as adversaries. Tactics include exerting power and using subterfuge.
There is a lot of mistrust, tension and suspicion. The win-win negotiator sees the participants as problem solvers looking for a mutually satisfactory solution. The goal is a wise and fair outcome for all parties. The focus is on multiple options. Everybody should have a negotiating philosophy. Many people enter important negotiations without having a clear idea of what they would like to accomplish. A negotiating philosophy could be that you want to go for low price; or you may be willing to pay going rates, but you want to get as many additional amenities as possible.
However, when two people do not want to do business together, the details will rarely pull the deal together. Here are 13 specific actions to help ensure you are taking, and achieving, a win-win negotiating approach —. Develop a negotiation strategy that clearly spells out what you will and will not do during the negotiations. Collect as much background information as possible beforehand on the people and companies you will be facing in the negotiation process.
Evaluate your competitive exposure. What are the odds that another supplier will come up with a better offer than the one you are making? This information can help establish your maximums and minimums. Prepare and role-play with colleagues prior to your initial negotiation meeting. It provides you with confidence in facing questions and situations you are now prepared to handle. If it is a face-to-face negotiation, make sure that your clothing, grooming, materials, handouts, preparation and depth of knowledge project credibility, authority and strength.
Tailor your pace and presentation to the individual differences of the other people. Be prepared to speed up or slow down your presentation. Be prepared to do more initial relationship building or get down to business sooner than later.
It will reduce relationship tension and subsequently increase interpersonal trust, credibility, cooperation and productivity. Ask questions and listen with your ears and eyes. Try to determine the end results the other person is attempting to accomplish, not solely his position or demands. However, it would be important to find out the decision-making criteria must haves vs.
Show how your requests will also benefit the other person.