Negotiation as a Part of Business
Negotiation is an essential part of every business. An engineer can be involved in the discussion regarding technical specifications, plans and other related topics. Each party of the negotiations can lose a lot or, on the contrary, win a lot. That is why, it is crucial to be well-prepared for the negotiations in order for them to be successful. Every negotiation process is reinforced by documentation that should contain accurate and up-to date information. It is necessary to know which information should not be included in the documentation prior to discussion (prices, payment arrangements, liability for mistakes, ownership of design rights etc).
All successful negotiations need to be thoroughly prepared for. It is important to set an appropriate date so that each party has enough time to gather all necessary information and consult other people if needed. A pre-meeting is crucial for successful outcomes of negotiations. During the pre-meeting, participants state the questions they want to discuss further and establish a plan. Moreover, they have to identify the opposite party`s objectives and to decide how the objectives might be compromised so an agreement can be reached. It is also crucial to know the areas on which the opponent cannot compromise, the issues that he/she unable to give in. In other way, it can greatly complicate negotiations. Thus, the above mentioned rules are important for every negotiation process.
Every process should have a negotiation plan. Even though there will be unexpected events and questions, a plan with its goals and objectives will serve as a framework. It is helpful to make an objective matrix with such categories as “must have”, “nice to have”, and “bonuses”. The task of an engineer is to ensure that technical objectives are viable and realistic. The plan should contain the structure of negotiations, as well as timing, lunch breaks and time-outs, if possible.
The experience shows that majority of negotiations occur between only two people, not teams. However, if a team is present during negotiations, the team`s leader should be responsible for negotiations, while the others just have to support him. The engineer must develop good listening skills and be sensitive to the idea pursued by the leader.
It is necessary to follow the plan in order not to miss important information and any point of the plan that is valuable for negotiations. If it happens, one party or member of negotiations should recognize that the leader is deviating from the plan, thus making him/her follow it again. The team is representing the company and should have the same point of view. Even though they have some disagreements, it should not be made public.
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Sometimes, negotiators may ask questions, which you don’t know how to answer. In this case, it is better to avoid direct answers and to promise that you will provide such information later. The negotiator should not answer the questions related to the areas he/she is not familiar with in order not to provide false information. However, it is recommended to give minimum information while answering the questions.
One of the golden rules of negotiation is to follow the objectives because it is easy to deviate from it due to big volumes of information, debates, and other things. The parties of negotiations should not forget that it is tough. Whilst, aggression and rigidness rarely lead to success, it should not be found off-putting.
The final rule of negotiations is the concept of a good deal (a deal, which both sides find satisfactory). It is the task of the leader to decide when to offer an acceptable compromise. The engineer should not argue with the other side’s case as it will have good points, as well.
Negotiations consist of a chain of events, meetings and correspondence, and while having any contact with another party, it is necessary to keep in mind all benefits and disadvantages. The most important rule for all the participants of negotiations is to “Think before you speak”. It is better to think a little before answering a question as this answer can be decisive during the negotiation process.
The biggest and the main mistake was made when the project engineer interrupted another speaker to say previously the problems had been solved in a way which differed from the one presented in the examples provided by the speaker. First of all, the leader is responsible for negotiations, and it is up to him to decide what and when to say, while the purpose of the team is to support him. The engineer should be ready to help the leader only if asked to do so. This is an important rule and when it is broken, the result is usually negative, as it happened in the case.
The rule ‘Listen well and be sensitive’ was broken as well. At the pre-meeting the commercial manager and the project engineer agreed that the latter will answer only the questions asked by the leader. However, the engineer did not follow the plan and expressed his own opinion regarding the question. Moreover, it is extremely important for the members of the team (the project engineer in the current case) to stick to the plan. Unfortunately, the project manager imagined that he is a leader and allowed himself to share his personal opinion, which is one of the worst things that can happen to the leader.
Of course, the project manager may have his own opinion that differs from the leader’s one. However, the rule ‘Do not drop the team in it’ says that the disagreement with the leader’s statements is a mistake, which may be beneficial for the opposite party, but will definitely destroy the opinion about the company. In the current case, the project manager could explain his thoughts to the leader personally during a break, but he did not have a right to make it public.
Just as in the previous case, the current one show that the supplier’s project manager did not stick to the plan, which was to fight inch by inch for the acceptable price. Any additional information or statement, which is not included in the plan, should be expressed very carefully, but not like the project manager did. Moreover, it is the task of the leader to talk about new extemporaneous points. Until the project manager blurted out his question, the negotiation process was going well and the compromise was likely to be achieved shortly.
It is obvious that is it not easy to negotiate when both parties are assured of their rightness. However, every member of the team should not forget that it is tough to negotiate. Prudent and calm behavior is a must for everybody in the team, as any unpredictable breakdowns will only worsen the situation, as it happened in the current case. Perhaps, this was due to the lack of professional equanimity or simply the absence of pauses.
Finally, it is obvious that the rule ‘Do not forget to have fun’ was not kept by both parties. Both sides, in general, and the project manager, in particular, did not get any satisfaction from the negotiation process. However, positive attitude is an important issue that significantly facilitates the process of discussion and increases the chances of a successful outcome. If the project manager had enjoyed his participation in the meeting, he would not have disrupted the negotiation.
The first mistake is the absence of the project manager at the meeting. This incident falls under the rule ‘The preparatory meeting is crucial’. The pre-meeting is important to analyze the following negotiation and design a plan for it. It is crucial for all members of the team to participate in it. The further incident during the actual process of negotiation happened partly due to the absence of the project manager at the preparatory meeting.
Secondly, the rule ‘Be realistic’ was broken. The project manager did not discuss the changes in the company, which resulted in making the leader look as a fool as he did not know about some paper. All the issues should have been discussed before among all members of the team to avoid problems and misunderstandings.
Moreover, it is improper to present new information during negotiations. In the current case, the project manager should have told this information to the leader before the meeting. It would be better to take a break in order to discuss new important information.
Another broken rule in the case is ‘Be economical in answering questions’. The project manager provided information which was unfavorable for the supplier. Thus, it is important to analyze the consequences of any information provided, as it may make it harder or even impossible for the objectives to be achieved. One of the rules, applied to all the participants in negotiations, is ‘Think before you speak’. This is what the project manager did not do. Perhaps, the project manager simply forgot about the objective. This is another rule, which is important to follow during long negotiations. The project manager might have forgotten about the main objective and agreed to less favorable terms.