Strategic Negotiation in The Corporation

STRATEGIC NEGOTIATION
in the Corporation
by Head E-book Press

1
KIT
STRATEGIC NEGOTIATION in the corporation

INTRODUCTION
People negotiate to achieve a desired objective. It has become an essential tool in all circumstance and anywhere in this world. Just like in a battlefield or a hostage situation, effective skills in conciliation are needed by the astute businessman. In other words, an entrepreneur who wants to be successful must be adept in the art of strategic negotiation.
The National Defense University has a very appropriate definition for negotiation which is the procedure wherein two persons or groups strive to reach agreement on issues or courses of action where there is some degree of difference in interest, goals, values or beliefs. The job of the negotiator is to build credibility with the other side, find some common ground (shared interests), learn the opposing position, and share information that will persuade the other side to agree to an outcome.
J. Glenn Ebersole, Jr., CEO of J.G. Ebersole Associates and the Renaissance Group, says that one of the major points that a person must
grasp to become proficient in this practice is that this skill must be mastered to get almost any deal that you want with less effort than you could imagine.
On the other hand, Gavin Kennedy explains that the focal point of this approach is in the generation and implementation. It is not a series of axioms to be rote learned; it is about the application of thoughtful analysis to realworld problems. It follows this advice into the implementation phase of strategy and is organized around case examples to demonstrate the application of the concepts from its process model to the real world. The cases are drawn from consultancy work in various industries and business situations and they also draw upon the work of colleagues who have demonstrated competence in this field.
The theories advocated by these two experts give credence to the fact that it is a significant benefit to business enterprises to have people who are proficient in strategic negotiation.

APPROACHES TO NEGOTIATIONS IN BUSINESS
Different methods have been identified regarding how to conduct negotiations in a business setting. Sales peoples are expected to be good at this so a certain time is required

to develop competence in this arena. Carol Smalley, a veteran writer and business practitioner has come out with a useful primer in sales negotiation techniques. These are aimed at fostering self-confidence, strengthening relationships with clients, transforming very demanding customers into contented patrons and enhancing overall performance.
Smalley identified the following procedures that can help the marketing professional: invest in negotiating skills, be prepared to walk away if the deal
will not be advantageous to you and the company, ask questions instead of telling the customer reasons for purchasing a product or service, anticipate objections as an opportunity to learn more about the customers needs and solutions that you can offer and assess the type of personality of your prospects.
There are seven so-called tips and tactics that the author suggested to obtain the most out of the Guide in making a successful strategic negotiation. 1. Focus on building a long-term relationship with the client since a short-term sale may not be for the best interest of a long-term seller-buyer relationship. 2. Sometimes, its what you dont say that closes the deal. Remaining silent at key moments in a negotiation can work in your favor. 3. 4. 5. 6. Be realistic with expectations. Leave your ego and emotions at the front door. Be flexible and willing to adjust strategies as necessary. Realize that the buyer may be as well trained as you are in the art of sales negotiations.

7. Apply these strategies to other situations where negotiation skills would be beneficial such as employer-employee relationship issues.
This being the case, the salesperson has the obligation to work hard to achieve the required expertise in strategic negotiation.
EASY NEGOTIATIONS
Management advisor and executive coach Brian Babcock has formulated a comprehensive format that is also easy to recall and master to facilitate negotiations with clients. He calls this, Negotiations Made Easy and spells out the basic ideas. These are; understanding their interests, changing the rule of the game if necessary, preparing your strategy, tactics and negotiations communications, understanding your Best Alternative to a Negotiated Agreement (BATNA) and testing theirs, negotiating with results and relationship in mind to create an agreement and, remaining principled with commitment in all of the above.
Best Alternative to a Negotiated Agreement (BATNA):
CORPORATE PROCUREMENT AND STRATEGIC NEGOTIATION

The ability to consummate strategic negotiation also applies in selling to private corporations. The first thing that you must do is to identify the market of corporations and map out a sales plan that will help you implement this plan. The Corporation Procurement Exposed eBook charts a competitive strategy line of attack that will educate you in distinguishing the weak points of competitors and avoiding their strengths. Likewise, there is a need to create a higher customer value by promoting customer intimacy and value innovation.

You must be ready to provide radical innovations and let your clients perceive your distinct capabilities by focusing on core competencies.
The eBook discusses further that you need to sell yourself through a unique selling before being able to sell your products and services to corporations. This will permit you to pinpoint what makes your business different from the rest in the world of highly-engaged competitors to succeed in your sales ventures.
This is where the need for proficiency comes to fore because you will have to negotiate with corporations why they must purchase from you and give them reasons for choosing you as a supplier.
According to the eBook, corporate procurement is a very demanding and time-consuming occupation. You need to fulfill and keep in step with the varying demands of corporations globally. In corporate procurement, you must be costcompetitive and your product or service must be of excellent quality but sold at customer-friendly rates. At the same time, it is necessary to put more focus
on your investment. You will have to assure added value to best value products and services. The improvements and attractive features on your products and services will be demanded by corporations more and more as your partnership progresses. You will have to adapt and be more flexible. Be sure that you are able to keep up with ever-changing demands of consumers as well as those of the corporation. This will prove to your market and the corporation that you are an ideal supplier despite changing times. Finally, you need to make sure that your products and services are of absolute highest quality. It is important to maintain the excellence of your product or service without compromising the reasonable rates that you offer.
STRATEGIC NEGOTIATION IS AN ART

Exceptional negotiation skills are required to be able to close a sales transaction According to Elise Farnham, negotiating is the ability to influence events or people of a desired outcome. Becoming a skilled negotiator will give claims adjusters the power to influence and control the outcome of their cases. Skilled adjusters understand the importance of strategic negotiation and

begin the process from the first day that a claim is assigned to them. Farnham states that from the standpoint of marketing and sales, the negotiating process can be classified into four major components. These are approach, probe, presentation and closure.
In a nutshell, negotiations take place as soon as the first contact is established. The objective is to foment trust and this is the preferred outcome after the first communication. It is not an easy process. Claims representatives know how to create trust and fulfill their promises. They must believe in and practice old-fashioned virtues such as truthfulness, fairness and common courtesy. During the ongoing contacts and discussion, they continue to clarify and manage expectations. It is an innate propensity of human beings

to strive to be understood.
Successful claims adjusters
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realize that this compels them to persuasion and not understanding. The crucial strategy of the successful negotiator is to work hard to comprehend the point of view of the claimant.
Source: creinvestmentopportunities.blogspot.com
MODEL OF STRATEGIC NEGOTIATION

In strategic negotiation, key elements that are relevant to the business setting have been identified in a publication of Colleen Hanycz:
These are preparation which entails deciding important objectives, defining goals and thinking ahead in collaborating with each other and the other party; relationship-building that consists of knowing the other party, understanding the difference and similarity between you and the other party, and building a commitment towards achieving a mutually beneficial set of outcomes; information gathering which is learning what you need to know about the issues and the other party, issues, feasibility of possible sentiments
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and possible failure to reach an agreement with the other side; information using or the stage when negotiators assemble the case that they want to make for their preferred outcomes and settlement, one that will maximize the negotiators own needs. The presentation is often used to sell the negotiators preferred outcome to the other; Closing the Deal: the objective of this stage is to build commitment to the agreement achieved in the previous phase. Both the negotiator and the other party have to ensure that they reached a deal they can be happy with, or at least accept; implementing the agreement: determining who needs to do what once the agreement is reached. It is not uncommon for parties to discover that the agreement is flawed, that key points were missed, or that the situation has changed and new questions exist. Flaws in moving through the earlier phases arise here, and the deal may have to be re-opened or issues settled by mediators, arbitrators or the courts.
GOLDEN RULES IN STRATEGIC NEGOTIATIONS

Many pieces have been written about the effective methods in negotiating with
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colleagues, clients and competitors. Anthony Tjan explains his four golden rules in Strategic Negotiation which can be very applicable to those in the business.
1. The background homework: Before any negotiation begins, understand the interests and positions of the other side relative to your own interests and positions. Put these points down and spend time in advance seeing things from the other side. 2. During the process: Dont negotiate against yourself. This is especially true if you dont fully know the position of the other side. Much is learned about what the other side really wants during the actual negotiation process. Stay firm on your initial set of positions and explain your rationale but dont give in too early on the points. Wait to better understand which points are more important to the other side. 3. The stalemate: There will often come a point in a negotiation where it feels like there is zero room for either side to budge. Two sides are stuck on their positions and may have lost sight of the overall goals of the negotiation. Emotion may have overtaken logic at this point. If you recognize that youve reached this point, see if you can give in to the other side on their issue in exchange for
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an unrelated point that is relatively more important to you. 4. To close or not to close: The golden rule of negotiation is to always let someone else walk away. Whether you drive too hard a bargain, cannot

reconcile on key terms, or feel that the deal is just too rich for your blood, make the offer you want and let the
other side walk if they dont want it. This is not to say to be offensive or to low ball, but rather to be honest, straightforward on what you are willing to do and explain that you understand if it does not work for them and that it is the best you can do.
PLANNING IS CRITICAL IN NEGOTIATIONS

So much effort and research was poured in by experts to build up the aspects of theory and practice in strategic negotiation. The purpose of
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experts behind this is to elevate this art beyond competitive negotiation to a much higher plane which is to solve problems. In coming up with definite solutions, the parties involve deal with their fundamental concerns instead of just purely emphasizing attitudes and demands. Effective Solutions must be formulated to satisfy the concerns and at the same time make special considerations that are in accordance with their requirements, needs and expectations.
People who are given the responsibility to negotiate must be acquainted with the requirements and concerns of those they deal with. According to Cathy Harris, There are differences that allow the negotiation to become an inquiry to find differing needs and the solutions that will satisfy them. While problem-solving negotiation often deals with money, as most negotiations do, it can become one element of a solution that has many other aspects. Negotiation is a side-by-side dialogue where parties can trade on their differences, rather than a battle over a limited resource. It is a mistake to approach negotiation as a casual encounter without much forethought. Such sessions are likely to become reactive and meandering meetings rather than
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being proactive with specific goals in mind. Lack of planning often appears at the negotiating table as too much reliance on demands and ineffective attempts to persuade the opponent. Good planning can provide a negotiator with the direction needed to do effective problem solving at the negotiation table.
There are a number of guidelines in strategic negotiation that have been proposed by Harris to assist negotiators and make their jobs much easier.
The first is to decide on priority interests and rank them. To make the most of the negotiating sessions, each party should initially decide upon its goals for the session. After identifying its goals, each party should determine the priorities of these items. Negotiation is, after all, a matter of both parties conceding and reaching a solution. The key to interest-based concessions is to trade items of less importance in order to secure items of more importance.
The second is to assess the other sides priorities. Each party to a negotiation should spend some time in the other partys shoes, imagining what the other side might really want to achieve. The more one can understand
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the values, needs, and issues from the other sides perspective, the better the chance of guessing at what they might want as their priority needs. Guessing may not always lead to the right answers. Even so, this analysis can identify potential nonmonetary solutions and get the ball rolling during the negotiations.
The third is the fact that money represents other needs. It is often forgotten that money is a substitute for many other genuine human needs. Lawsuits offer a limited solution set of either money or preliminary injunctions or declarations, such as ordering a person to perform a certain obligation. When negotiating, there is the potential to explore exactly what the money means to the other side and then look for ways to satisfy those needs more productively. Thinking outside the box about why a person is claiming specific monetary recovery can offer options that meet both sides needs more productively. If that option doesnt work, an invitation to the other side for suggestions might reveal what they really want and establish a problem-solving focus.
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The fourth is to plan factual inquiries carefully. A superior plan for a specific and fruitful information inquiry during the early stages of the negotiation usually arises after analyzing the other sides possible underlying interests and priorities, and options that might satisfy them. The best negotiators spend time asking questions, staying curious, and uncovering the other sides views of the situation, facts, interests, and priorities. The informationacquisition phase can confirm some of the planning analysis or reveal new data. Of course, having two skilled negotiators will help ensure that each side is securing this type of data. They use and respect the norm of reciprocity: If information is shared by one side, that side should receive the information it requests.
CONCLUSION:
Comprehensive planning in preparation for strategic negotiation will eventually result to the achievement of renewed confidence in the negotiating table. It is also equally important to chart a plan of action for uncovering factual data, interests, and priorities that can be used to craft the best solution
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possible. The most successful deals can develop from sharing valuable information.
It facilitates the creation of feasible solution options. It also generates a climate between negotiators that concentrates on problem solving rather than positional bargaining. By offering creative solutions, you can also set a tone of exploration, and avoid the harsh dynamics connected with the more unbending positional bargaining. Negotiators will always be cautious about revealing damaging information, to avoid being taken advantage of by the opposing side. However, since reciprocity is respected, two negotiators can develop a trust that provides for better information flow.
We are all aware of the fact that the business environment changes constantly. The sweeping shift that is taking place in the art of negotiations over the years is so enormous that it requires the same modification in the thinking process. The best way to meet the challenges of negotiation in the business environment is to put in place the process of strategic negotiation. It will provide you with a methodical, realistic and reasonable technique that will
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allow you to create a win-win situation. You need to establish a quantifiable business value and permit both you and your customer to meet and surpass your targets and objectives.
REFERENCES:
1. Ebersole, Glenn J. Powerful Negotiation Tips From Your Strategic
Thinking Business Coach http://www.evancarmichael.com/BusinessCoach/223/Powerful-Negotiation-Tips-From-Your-Strategic-Thinking-BusinessCoach.html
2.
Kennedy, Gavin. Strategic Negotiation: Moving Through the Stages
Edinburgh Business School, Herriot-Watt University. http://www.ebsglobal.net/ programmes/strategic-negotiation
3.
Smalley, Carol. Guide to Sales Negotiation Strategies and Techniques
www.business.com
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4.
Babcock, Brian. Strategic Negotiations Babcock Business Strategies.
http://www.brianbabcock.com/strategic-negotiation.shtml
5.
Farnham, Elise. The Art of Strategic Negotiation Ilumine Consulting,

http://www.irmi.com/expert/articles/2010/farnham01-
January, 2010.
personal-insurance-claims.aspx
6.
Hanycz, Colleen. Strategic Leadership and Decision Making Strategic
Negotiations, Chapter 4
7.
Tjan, Anthony. Four Rules for Effective Negotiations Harvard Business
Review. http://blogs.hbr.org/tjan/2009/07/four-rules-for-effective-negot.html
8.
Harris, Cathy. Negotiation Strategy: Planning is Critical The CPA

http://www.nysscpa.org/cpajournal/2004/1204/essentials/p44.htm
Journal.
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IMAGES AND ILLUSTRATIONS:
Photo 1: http://www.flickr.com/photos/37794586@N08/3470610680/
Illustration 1: BATNA (Babcock)
Photo 2: Source: creinvestmentopportunities.blogspot.com
Photo 3: Saudi Arabia and Indonesia begin negotiations: Photo by Kazuyoshi Nakano
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STRATEGIC NEGOTIATION

by Head E-book Press