Theme 6. Closing negotiations

1.Dealing with price

2. Reaching agreement

3.Conflicts and how to arrange them

4.The closing stages

5.Concluding a contract

1.Dealing with price

Overcoming the price objection

Price is an issue in most negotiations. We need to deal with the price issue confidently, but with an understanding of the needs of the other side. Here are some notes to help you deal with price:

• Be specific. Say the exact price rather than ....well, it will be about £3,000 ....

• Keep eye contact. It makes you look confident

• Make your tone of voice confident and your body language confident and relaxed

• Use silence. Once you have stated your price, stop talking and wait for the other side to speak. Give them time to think

• Deal with price objections and defend your price, but don’t over argue your case

• Close down your body language

• Focus on price and benefit differences

• Begin the bargaining phase

2. Reaching agreement

Negotiations may be repetitive or one of the kind. Negotiations in which the parties are convinced that they will not negotiate again, for example, haggling over price by a tourist in a foreign market, differ from those in which there is a probability that the parties or the organizations they represent will negotiate in future.

Requirements for successful negotiators

Successful negotiators see deal making as a collaborative effort and problem-solving process and not as one that requires confrontation and competition.

Skilled negotiators are:

• good observers

• make sound judgment

• are patient, and appreciate humor

• ready to listen

• have an open, genial, civil, and agreeable manner of speaking

• provide quick replies to unforeseen surprises or comments

• can discover how their counterparts are feeling and thinking

• and are able to resist the temptation to speak before thinking

Good negotiators try to be realistic in the sense of accepting an outcome as being determined by the balance of forces and interests without tying to reinterpret this "balance" in their favour. Instead of taking a situation for granted, they recognize that their counterparts' evaluations as well as their own may change during the negotiation, that issues are not given or imposed but they are defined by themselves and by their counterparts.

Good negotiators are flexible, not because they do not have a firm position but because they recognize of bounds and constraints that limit the set of possible compromises as well as the possibility of relaxing them. They are also flexible in the tactics because they realize that there is a need to discriminate between occasions when it pays to adhere to rules of accommodation and when it does not. They can distinguish between situations where it would be disastrous to make a threat and from those where it is essential to threaten or even to bluff. They know when to humor the personal quirks of their counterparts and when to ignore them. They are willing to disregard propaganda losses at one time and to negotiate merely for propaganda at another time.

Good negotiators need be patient. They should be patient in working for seemingly lost causes, because by doing so they may slowly change the opponent's views and objectives. They should be patient to live with conflict and uncertainty and know that theymay have succeeded even if (or precisely because) their negotiations failed. Above all, they must maintain the will to win. Wise negotiators know that the best deal is one that is good for both sides. If the agreement is mutually beneficial, both sides have an incentive to maintain it. It is better to recognize the possibility of renegotiation at the outset and set down a clear framework with which to conduct the process. In short, a successful negotiator must recognize the possibility of redoing the deal, but controlling the process.

Negotiators must be able to decide how open to be about personal preferences and needs, and how much to trust the other party. The dilemma of honesty and openness suggests that, if a negotiator is completely open and honest about what he wants, or will settle for, he many not do as well as, if he bluffs or fights harder for a better settlement. On the other hand, if he is deceptive and dishonest about what he really wants or will settle for, the parties could never come to an agreement that would be workable. Most negotiators resolve this dilemma by being very careful and guarded at the beginning of negotiation, and revealing more of their true needs as they can come to trust the other side.

Similarly, the dilemma of trust suggests that negotiators need to assess the degree of trust the counterpart's ability to lie or bluff, and the degree of unveiling own interests and objectives. Negotiators need to know also that they cannot believe anything their counterpart says because an agreement will never be reached. Most negotiators resolve this dilemma by probing their counterparts' statements for truthfulness, and for evidence that they will be true to their word.

Good negotiators do not make promises that they know they cannot keep or negotiate in bad faith. Any concession gained dishonestly will have an uncertain result because the deceived party will have a longstanding desire for vengeance. Negotiators should emphasize mutual benefits and mutual advantages.The secret of success is to point out the common advantages to both parties and to link these advantages so that they appear to be equally balanced.

Negotiators try to learn and understand their counterparts values, motives, and objectives, not to determine the counterparts' weaknesses, gain a competitive advantage, and in this way achieve a better compromise. They try to establish an effective process, discover alternatives that are acceptable for their counterparts and the criteria that can jointly be used to assess alternatives.

The more and better the communication, the greater the amount of information shared or extracted, and the greater the build-up of trust, the more likely is the possibility of creating the satisfaction that negotiators require. In order to be effective the negotiator must be constantly alert to the distinctive qualities of the people with whom he is negotiating. He has to appreciate the meaning of their actions so as not to mislead or be misled by them, and to make his own points in a way that promotes advantageous outcomes. Effective negotiators operate as detectives searching for clues to the values and interests of their counterparts. They avoid assumptions about their partner's concerns; they look for what does matter to the partner rather than what should matter.

Characteristics of the successful negotiator

The list below is quite long and many successful negotiators do not possess all of the qualities. So you need not feel discouraged, if you are short in some of these points.

• having good communication skills;

• being persistent,

• being flexible,

• being tactful and respectful,

• being open minded,

• being able to use the subject knowledge;

• being willing to take risks;

• having physical stamina,

• self-confidence,

• decisiveness,

• being creative,

• possessing willingness to listen,

• being able to exert self-control,

• having long-run outlook, and

• being sensitive to the interests and needs of others.

It is very important however, that:

1. You know your strengths as well as you know your weaknesses.

2. Your strengths are indeed strengths (and weaknesses-weaknesses); they are not your expectations.

Establishing Rapport In Negotiations

The role and impact of rapport during negotiations

Rapport is a word often used, but unfortunately scantly understood by many that so glibly utter it. In most dictionaries it is defined as a “harmonious relationship”. “Harmonious” being said to mean” forming a pleasant whole: free from disagreement”.

The best definition probably derives from Neuro Linguistic Programming: “Seek to reduce the differences between ourselves and another person, at a non-verbal as well as a verbal level, at a level below the conscious awareness of the other person.” It involves minimising the differences and maximising the ‘sameness’ between yourself and another person.

How do we build rapport?

Rapport requires of us as negotiators to develop the ability to place ourselves in the shoes of the other party and then view the world from their perspective. It furthermore depends on our willingness to accept that although the other party may view the world in a way very different from ours, and behave accordingly, such a perspective and the resultant behaviour is neither right nor wrong.

How do we do this?

The best way is by pacing the other person; in a graceful and respectful way adjusting our behaviour, verbal and non-verbal, to a physical and psychological level where we move with the behaviour of the other party. Although the other party may not be consciously aware of this they will subconsciously, despite initial assumptions, experience us as being more like they are.

Table 6.1

The main ways of the other part pacing

Subject of attending	Way of attending
Body language	Matching all or part of body positioning by adopting the same posture, movements, etc. Adopting the same head and shoulder angle; Mirroring facial expressions; Matching gestures such as pointing and waving of hands.
Voice	Using the same tone, tempo, volume and intensity.
Phraseology	Using the same repetitive phrases we are confronted with, such as: “You see what I mean”.
Representational system	1.Determining which of the five representational systems: visual (“Looks good to me.”), auditory “I hear what you are saying”), kinesthetic (“It feels good to me.”), gustatory (“It has the right flavour to it.”), olfactory (“I like the smell of what you are trying to say.”) 2.Matching the preferred representational system and thereby getting onto the same inner wavelength
Breathing	Emulating the depth and breathing speed
General behaviour	For example carefully observing dress preference and then matching this preference

Should we break rapport?

In any negotiation there may come a time when you wish to make the other person feel uncomfortable with you at a subconscious level. Such a need could arise if the other party were to suddenly resort to being loud, aggressive and obstructionist. You could then very subtly respond by, at a subconscious level, beginning to reward acceptable behaviour by maintaining rapport and punishing unacceptable behaviour by breaking rapport.

Leading

Once rapport is firmly established it becomes possible to lead the other party towards a desired outcome. You could for example, in the case of the other party being stressed and very tense, decrease the rate of your speech, lower the tone of your voice, breathe more deeply and more slowly, and generally convey a relaxed image. The other party, without becoming aware of it, is likely to adopt a more relaxed approach. [Adapted from: Negotiating in the age of Integrity by Wayne Berry, Positive Paperbacks, London, 1996.]