Compromising /Compromise (I Lose / Win Some - You Lose / Win Some) /Soft bargaining

Parties that value fair and equal deals in negotiation tend to prefer the compromising style. This style tends to get fast results from a negotiation. In soft bargaining, the parties try to reach an agreement by giving concessions very freely. A pitfall of this style is that concessions often come too fast, without properly discovering the underlying issues.

Too many people confuse the word 'Compromise' with 'negotiation'. Compromising often involves one or both negotiators settling for less than they want or need. In the absence of a good rationale or properly exchanged trades, half way between the two positions seems "fair". What compromising ignores however, is that the people that take the most extreme positions tend to get more of what is on offer.

When to use?

When you are pushed for time and you are dealing with someone who you trust. They also need to be clear that it would not be in their best interest for them to "win" a cheap victory. Both parties win and lose - but make sure you win the right things and lose the right things.
Meeting half way reduces strain on the relationship, but usually leaves precious gold on the table.

What's the Danger?

When you use compromising as an excuse for not preparing properly. If the outcome of the negotiation is critical, then you should not compromise on things that you absolutely must have.
One of the problems with compromising is: if you make concessions within your position with no strong rationale, the other party may assume that you are going to continue to make more concessions. If you get known for being a compromise styled negotiator, look out! Your trading partners will wise up to your negotiation style and they will start to make more and more extreme opening positions. Bigger opening positions result in greater chances of deadlocks. Compromises cheat both sides out of innovative solutions.
Self Defense

Only retreat within your position when you have a solid rationale for doing so, and when you're being rewarded in another way. i.e. make a reasoned exchange. Trade across goals and interest. All too often negotiators try resolve 1 single goal at time, before moving on to the next tabled agenda item.
Stay with the problem or opportunity for longer. Don't give in so easily to the temptation of splitting differences until you've explored other alternatives.
If the other party starts with an extreme opening position, be sure to quickly bring them back to reality, or counter balance with your own extreme position. Caution: extreme positions can lead to drawn out dog fights that result in more deadlocks.

Collaborating / Collaborate (I Win - You Win)

Collaborating style is also known as Principled negotiating. In their book, Getting to Yes, Fisher and Ury introduced the term Principled negotiating. It refers to a style which focuses on discovering the interests behind the position. The principled negotiator separates the person from the issue and concentrates on mutual gain in order to reach agreement. In short, it leaves both sides with a sense of achievement, i.e. a win-win situation.

Collaborating parties tend to enjoy coming to creative solutions during negotiation. This can potentially lead to positive results or transform simple problems into difficult solutions. Either way, parties that prefer a collaborating style make a real effort to understand the issues of the opposing party of the negotiation.

Most people confuse "Win/Win" or the collaboration style with the compromising style. This is most definitely not the case. "Win/Win" is about making sure both parties have their needs or goals met, while creating as much mutual value as time and resources allow. "Win/Win" negotiators usually evolve through the other profiles, growing into collaborative negotiators. This means collaborative profile negotiators can revert to one or two of the other styles when pushed or when the situation calls for it. Collaborative profile negotiators are adamant that their needs must be met - and they acknowledge that the other party has needs that must be met too.

Often referred to as 'expanding the pie', collaborative negotiators are willing to invest more time and energy in finding innovative solutions, feeling secure in the fact that there will be more value to share out later on. The mantra of collaborative negotiators is: 'it's not enough that I win, I will not be happy until you have won too.'

When to use?

Under most circumstances collaboration is the primary style you should use for most goals in business to business negotiations. If a relationship is important to you, and if your market reputation is important, if the other party needs to perform and not just exchange a standard product for cash, high risk (e.g. new market or new product or both), if there is a large amount of money at stake, then you are best advised to think about all the ways in which you can build a more trusting collaborative working relationship. If you need to understand the feelings and deeper interests or motivations of all negotiators, then collaboration is your best path.

What's the Danger?

Be careful not to collaborate with competitive style negotiators – unless they agree to and live up to your agreed (written or unwritten) rules of collaboration. Die hard competitive negotiators can be treated in transactional trading manner - e.g. "I'll only give you this if you give me that".

When we share information we need to make sure that we share information at the same level of detail. Too much and we could be exploited - too little and the other party can lock up like a clam.

Collaboration requires more time and needs to be at the right level. So if you're a vendor and your buyer doesn't have the authority or knowledge or won't invest the time, save your effort. Same advice goes for buyers in reverse.

Self Defense

So when might you need to defend yourself against a Collaborative negotiator? If you have decided that it's not in your interest to use a collaborative style with a negotiator, then decide on your alternative style. So a commodity supplier who suffers a great deal of competition in their market place will try to get their foot in your door. A wise procurement manager will be careful to not investing too much time, or give any time - unless there is value. Your time is short, so be careful who you collaborate with.

Remember

Before you negotiate, stop and ask yourself:

· What is my preferred style of negotiation? Once you know your style, you've taken the first step to gaining flexibility in your negotiations. There is much you can do as a member of a negotiation team, if you know your fellow team members' profiles.

· Which of these 5 styles best describes your business client or vendor negotiation relationship?

In a successful negotiation, everyone should leave the negotiating table happy with the outcome: there should not be winners and losers. The negotiators should try to reach a win-win solution. This can be achieved in a number of ways.

One way of furthering negotiations is probing (asking the right questions and listening carefully to the answers). If you want to succeed in a negotiation, find out as much as you can about the needs and concerns that underlie a party's position. Clearly, different interests generate different results. Use questions (i.e. who, what, when, where, why, how) to gather information on interests. Here are some probing questions:

· What is the situation on production at your plant at the moment?

· What sort of quantities are you looking for?

· What are we looking at in the way of discount?

· What did you have in mind regarding specification?

· What were you thinking of in terms of delivery dates?

· How important to you is the currency for payment?

Another way of furthering negotiations is a proposal (offer) and counter-proposal (counter-offers).

A proposal is an offer made by one party to the other. Proposals can be made in written and/or verbal form. They provide the basis for the negotiation and a possible settlement, i.e. the deal. A successful proposal is one that results in an agreement.

A counter-proposal offers an alternative proposal that may suit both parties. This can happen when one party refuses or does not agree with the original proposal.

Through a series of proposals (offers) and counter-proposals (counter-offers) the two sides work towards an agreement which will benefit them both.

Useful language

Here are some ways of presenting / making proposals and counter-proposals and asking for / clarifying information:

presenting / making proposals and counter-proposals	asking for / clarifying information
I/We propose …	…is correct, isn't it?
I/We suggest …	Can you tell me how…?
How about …?	Is it alright with you if …?
Would it be possible …?	Would it be possible …?
How do you feel about …?	It seems … What is your opinion?
Would / Could you consider …?	Do you suggest…?
Would / Could you accept …?	Do you mean…? / What do you mean by…?

One more way of furthering negotiations is a concession and a trade-off. In order to succeed in a negotiation the parties make concessions or trade-offs. When you offer to change your position to one that is less favourable to yourself, you make a concession. Perhaps this is in exchange for a concession from the other side, although there is no guarantee of this. Your concession may be a goodwill gesture: a concession you make hoping that the other side will see this as friendly and make a concession in return. But even in a friendly negotiation, there may be horse-trading, with each side making a series of concessions in return for concessions from the other side. If you argue about something for a long time, especially about the price of something, you haggle. A series of concessions in exchange for concessions from the other side is a series of trade-offs. If you make a concession, you may not get anything back. If you make a trade-off, you give something away and get something in return.

Assignment 2. (Test)

A. Choose the correct option to complete each sentence.

 

1. At the start of a negotiation, it can be important to establish a............ with the other side.

a) rapport b) stalemate c) guarantee

 

2. When both sides give something away in order to make a deal, they reach a.............

a) concession b) compromise c) guarantee

 

3. When one side gives something away, they make a.............

a) compromise b) breakthrough c) concession

 

4. Something which stops a negotiation going smoothly is a............

a) limit b) sticking point c) lock

 

5. A situation in a negotiation where no progress can be made is a.......

a) deadweight b) deadline c) deadlock

 

6. A............ is a creative solution which allows the negotiation to progress.

a) breakthrough b) breakout c) breakpoint

 

7. If both sides in a negotiation leave the table without a deal (empty handed), the negotiation process.............

a) breaks down b) breaks off c) breaks out

 

8. The minimum offer you are willing to accept is

known as your.............

a) opening position b) fallback position c) bottom-line position

 

9. Some negotiations may involve a time restriction or.............

a) deadlock b) deadline c) dead end

B. Which of the ideas in the tes t could contribute to the success or failure of an international negotiation?

Assignment 3.