What are business negotiations?

Negotiation is a two-way communication process aimed at reaching a common agreement. Negotiations are also accompanied by a complex decision-making process aimed at pursuing one’s own interests. In business negotiations we have to deal not only with conflicting interests of different parties, but also with common interests – “without common interests there is nothing to negotiate for, and without conflicting interests there is nothing to negotiate about.”

We deal with business negotiations at different levels of social life. They can take place at the interpersonal, organizational and inter-organizational levels.

• Interpersonal level – is characterized by negotiations between friends, acquaintances, neighbors on controversial issues.
• Organizational level – occurs on the territory of institutions, organizations, corporations. An example of negotiation at this level is the conflict of supervisor – subordinate, management – employee representative.
• Inter-organizational level – involves commercial, financial, international negotiations. An example of negotiation at this level is conflict between companies that have subsidiaries in different parts of the world, a company and its supplier.

When is it a good idea to conduct business negotiations?

It is worth entering into business negotiations, when:

• There is a mutual willingness to compromise.
• There is not only an area of conflicting interests and disagreements, but also an area of common interests.
• We have a sufficient level of decision-making authority. That is, we can make informed, responsible and independent decisions during the negotiation process.
• We are properly prepared for the negotiation process with a partner. We have a negotiation plan laid out in our heads and have defined our own interests, goals and a certain “minimum” that will be satisfactory to us.
• We objectively have both something to offer the opposing party and something to gain.
• We have a positive attitude. A preconceived negative attitude hinders a constructive exchange of ideas and makes it difficult to establish an agreement, which is the goal of negotiations.

Styles in business negotiations

• Competing style

The competing style is based on the assumption that only our interests are important. We do not care about the expectations and conditions of the opposing party. And we treat the other party involved in the negotiation itself as an obstacle to achieving our business goals.

This style of negotiation can be effective when the opposing party is weaker than us. However, in most cases, negotiations conducted in this style do not lead to a compromise, but only escalate the conflict.

• Accommodating style

This style is the opposite of the competing style of negotiation discussed above. The style of accommodation involves the conscious abandonment of one’s own interests in order to maintain good business relations with the other party. During the talks there is a pleasant atmosphere, and the negotiators trust each other.

This style is most often used in negotiations on an interpersonal level – when negotiating with close family or friends. In business, on the other hand, this style occurs when we want to alleviate a conflict with a business partner who is important to us and further cooperation can bring us many benefits.

• Avoiding style

This style is often referred to as “disengagement.” It consists of consciously giving up one’s own interests and abandoning participation in the negotiation process. The style of avoidance is used when we have a much weaker position than the other side or when we consciously do not want to get involved in the conflict. Sometimes consciously “giving in” on “minor” issues to the other side is a strategic action that can bring much greater benefits in the future.

Not noticing a conflict is also part of an avoidance strategy. Avoidance is the failure to take any active action. It involves the spontaneous extinction of the conflict.

• Compromising style

This style is based on a simple principle – “To reach an agreement, everyone has to give up something.” In a compromise, there is no losing or winning side. If both parties seek a compromise, the agreement reached at least in some part means the realization of their interests. The disadvantage of this style is that the parties focus on the problem. What does this mean? Negotiators think “how to divide the cake?”, instead of “can something be done to make the cake bigger?”.

• Collaborating style

In this style, the parties focus on a specific goal and outcome of the negotiation. Negotiators using this style are distinguished by emotional maturity and composure.

It is worth remembering that business negotiations do not always end in an agreement. Therefore, it is extremely important to prepare not only for the negotiation process itself and develop a strategy to achieve the set goals, but also to develop a plan “B” – in case an agreement is not reached with a partner.

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