Learning the art of negotiation

In an extreme example of the importance of negotiation in business, a California jury ruled in August 2012 that Samsung would have to pay Apple more than $1 billion in damages for patent violations of Apple products, particularly its iPhone. The judge eventually reduced the pay-out to $600 million. Later, another jury ruled that Samsung would have to pay Apple $290 million of the amount overruled by the judge in the 2012 case.

Negotiation is a type of discussion used to settle disputes and reach agreements between two or more sides. Negotiation is a process of “give and take” resulting in a compromise where each side makes a concession for the benefit of everyone involved. There are many situations which demand to negotiate at work, no matter what your role is. You may be part of negotiations between co-workers, departments or clients. You may negotiate salary, your position, contract terms, project timelines or more. Most negotiation outcomes will fall into one of two categories: "win-win" or "win-lose." By understanding the different types of negotiations, the most relevant skills for one’s role and work to improve them. Distributive and integrative negotiations are the most common types of negotiation. The workplace is ever-changing, but negotiation remains constant. Keep in mind that changing business practices can present new challenges. In addition to learning negotiation skills, it also necessary to know how to adjust them to a specific situation.

Distributive negotiation is when two parties bargain over a single product or issue, such as price. For example, negotiating with a dealer over the price of a second-hand vehicle or bargaining with a street vendor. Here, one party wins and the other has to take a step back and suffers a loss. Your success eventually depends on your distributive negotiation skills.

The multiparty negotiation process involves three or more parties undertaking various negotiation strategies to drive home their points. When six friends are deciding the venue of the party and discussing its pros and cons, the type of negotiation can be said to be multi-party.

This type of negotiation process takes place between the two teams. For example, negotiation strategies between the teams of two companies that are looking to merge are called team negotiations.

While putting together a negotiation team, a company looks for members with excellent negotiation skills and highly-developed strategic thinking capacities.

Positional negotiation is when you spell out the position you are in, at the outset. Then, you defend that position against the attack. Important among the types of negotiation, positional negotiation sees both parties having fixed stances and sticking to them obstinately. They may not consider the other party’s interest or see where they are coming from. Positional negotiation is not considered very productive.

There are various stages in the negotiation process. Research is the building block of the negotiation process. While preparing, you must weigh both sides, identify the strengths and weaknesses of both sides, and then determine your negotiation strategies. Define the kind of interaction you want to have and the bond you intend to form with the other party.

The information exchange involves discovering and creating value for the negotiation process. It also helps in building rapport.

Both parties should explain their interests and exchange their viewpoints to achieve the desired results. Unless there is a transparent exchange of information, even sophisticated negotiation strategies won’t work.

In all types of negotiation, a bargain is of utmost importance. It is the beginning of give-and-take deals. Each party proposes its demands and seeks to secure benefits. During the bargaining process, it is imperative to keep yourself in check. Don’t lose your cool or become emotional during negotiations. To achieve your desired outcomes, train yourself to be composed and diplomatic.

Once a solution that is acceptable to both has been reached, both parties should thank each other. They should confirm that interests have been secured and the outcome has been successful. A good summing-up and amicable closing always lead to rewarding long-term relationships.

All types of negotiation lead to effective implementation. The steps to implement the negotiated result should be categorically chalked out. Often, in the corporate context, a written contract is entered into to confirm the intent to execute.

Ego is considered the biggest obstacle to good negotiation. Knowing the other side is important before you put your cards on the table. That’s the reason why big corporations send a multi-functional team for an important negotiation.

Other barriers that may hamper a negotiation are:

Taking negotiations as personal battles and focussing too much on winning Maintaining a know-it-all attitude and failing to ask genuine questions Being hostile and thinking negatively during the negotiation process Inability to grasp the problems and positions of the other party in the negotiation process Entering a negotiation unprepared and uninformed f and having no credible answers for the questions asked Being short-tempered, sarcastic, lacking listening skills, and criticizing too much Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of trade union to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. The term "collective bargaining" was first used in 1891 by Beatrice Webb, a founder of the field of industrial relations in Britain. It refers to the sort of collective negotiations and agreements that had existed since the rise of trade unions during the 18th century. Beatrice, a Fellow of British Academy ( 22 January 1858 – 30 April 1943) was an English sociologist, economist, socialist, labour historian and social reformer. In the United States, the National Labour Relations Act  of 1935 made it illegal for any employer to deny union rights to an employee. The issue of unionizing government employees in a public sector trade union was much more controversial until the 1950s. In 1962 President John F. Kennedy issued an executive order granting federal employees the right to unionize. The union wage premium—the percentage-higher wage earned by those covered by a collective bargaining contract, adjusted for workers’ education, age, and other characteristics—is 13.6 percent overall.

Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions, and also enjoy more paid time off with their families.

Collective bargaining raises the wages and benefits more for low-wage workers than for middle-wage workers and least for white-collar workers, thereby lessening wage inequality.

Collective bargaining also raises wages and benefits more for black, Asian, Hispanic, and immigrant workers, thereby lessening race/ethnic wage gaps.

The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-educated men.

The writer is MD and CEO of Community Bank