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Chapter 1. Negotiating in Any Language: ... > The Stages of Negotiation

The Stages of Negotiation

In both domestic and international negotiations, there are six stages through which negotiations proceed: (1) orientation and fact-finding; (2) resistance; (3) reformulation of strategies; (4) hard bargaining and decision making; (5) agreement; and (6) follow-up. Knowledge of these stages helps you understand the overall shape of the negotiating process and gives you a bearing as you proceed through each negotiation. Here is a summary of the six stages:

  1. Orientation and Fact-Finding. This first stage is critical for what is to come in the negotiations. The saying, “Information is power,” is never more true than in the early stages of the negotiation process. The more information you can obtain here, the bigger the dividends will be in the negotiation’s later stages. Unfortunately, many U.S. negotiators pay little attention to this critical stage of the negotiation. Orientation and fact-finding should begin even before you sit down with TOS. Orientation may mean learning about the organization of TOS, the history of similar negotiations with TOS, or the individual styles of your counterparts. Does the organization have a good reputation? Are there any recent management shake-ups? How much power do you think your negotiating counterpart has within his or her organization? How are negotiating issues to be addressed: individually, or as a group? How important will a written contract be? Are these people generally easy to do business with?

  2. Resistance. This can be a painful, if predictable, part of any negotiation. Indeed, TOS is usually not devoted to showing you a good time. Try not to be upset by the resistance you encounter in your negotiations. In fact, if you encounter no resistance, this could be a signal that there is little genuine interest in meaningful negotiations. As long as there is resistance, there is interest, and knowing the source of the resistance allows you to work on overcoming TOS’s objections. To break through this resistance, we must again tune in to the frequency that TOS can understand: WIIFT—what’s in it for them. This means finding ways to meet the needs of TOS. Here are typical reasons why you may encounter resistance from TOS:

    • Logic: “Your price is too high.” “We need it sooner.”

    • Emotion: “I really don’t like doing business with these people.”

    • Change: People are usually more comfortable with predictable, familiar situations than the changes you want them to adopt, such as a different product line or price.

    • Testing Your Limits: “How far is this person willing to go?” “Is this really her bottom line?”

    • Organizational Constraint: A budget, policy, or boss overrules TOS’s decision.

    • Personal Rule: “No concessions will be made at the first meeting.”

  3. Reformulation of Strategies. You develop negotiating strategies when you plan the negotiation. As you gain new data, it is important to reassess earlier strategies. What is the motivation of the parties to do this deal? What strategies worked? What didn’t work? This is the time to put your creativity and ingenuity to work.

  4. Hard Bargaining and Decision Making. Concentrate on the real needs of both sides, not just on the formal positions being taken at the negotiating table. Here you concentrate on the determination of real objectives. What are TOS’s main objections? How can they be overcome? What are the key issues involved? Determining WIIFT becomes critical. Here is the time to invent options for mutual gain that will result in a win-win outcome.[2]

  5. Agreement. Here you work out the details of the negotiation and ensure understanding. The negotiators ratify the agreement with their respective sides. In your case, ratification may be by your boss, attorneys, or financial management.

  6. Follow-Up. This stage is often forgotten by negotiators. You work hard to sign the contract, then it’s adios, au revoir, syanora, arrivederci—I’m outta here. But by effective follow-up, you set the stage for the next negotiation. Use this follow-up as an opportunity for relationship building. Be sure to remind TOS that they made a good decision in negotiating the agreed-upon deal.


  

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