If you are a business owner or manager, you may engage in negotiations at some point in your career. Negotiating effectively can strengthen your business, while poor negotiation strategies can ultimately hurt it. You can use many different approaches to negotiation, and all of them could be appropriate depending on your situation.
Distributive Negotiation Strategy
One approach to negotiation is the distributive negotiation strategy. With this type of negotiation, you look at the property or goal of the negotiation as if it were a fixed amount of something. This is sometimes referred to as a fixed pie negotiation. Each party in this negotiation wants to get as much as he can for his side.
For example, if you are buying something, you want to pay the lowest price possible while the seller wants to get the highest price possible. This type of approach to negotiation is best used if you will only be working with the counter party to the negotiation one time or only a few times.
Compromise with the Other Party
Another approach to negotiation involves compromising with your negotiation partner. This type of negotiation usually works when you have an ongoing relationship with the counter party. For example, if you are setting up a relationship with a distributor, this would potentially be one of the most beneficial ways to negotiate.
With this type of negotiation, everyone gets something they want. You are not out to only help yourself, but to also help your partner. This kind of negotiation helps build lasting relationships and improve business for everyone.
Separate the People from the Problem
One of the most effective negotiation strategies involves separating the people involved from the problem. Negotiators often get tied up in personal issues with those who they are negotiating with. When this occurs, it can lead to problems completing a deal.
To finish the negotiation, it is often beneficial to separate the people from the problem. This way, both parties in the negotiation can complete the deal regardless of personal issues.
Lack of Information
Another approach that you can take toward negotiation is keeping important information to yourself. Some refer to this as keeping your "cards close to the vest." You go into the negotiation without divulging everything about the project. If the counter party does not need to know a particular piece of information, you do not inform him. This helps you keep your objectives and priorities to yourself so the other party in the negotiations does not find a way to profit from them.