Effective Negotiation: Key to Business Success

Published on 12th October 2010

A farmer protests during the WTO negotiations             Photo courtesy
Negotiation, from the Latin expression "Negotiatus," past participle of “negotiare,” means "to carry on business." Negotiation entails the deliberate interaction of two or more complex social units attempting to define or redefine the terms of their interdependence. Communication is  a fundamental element of negotiation.

Negotiation, a daily business reality, is very important to the success of enterprises. Entrepreneurs negotiate daily with clients, suppliers, shareholders, creditors, potential partners and employees, among others. The majority of tasks in a business environment involve the exchange of information and/or resources between people and enterprises, or between proprietors and representatives of other organizations. These “exchanges” require that entrepreneurs negotiate agreements that fulfill the interests and needs of both parties. The capability to reach those agreements – to negotiate effectively – is therefore, critical in modern management/entrepreneurship.

Entrepreneurs must possess and constantly improve their negotiating and communication skills. In a business environment, relationships are very important. Through relationships, an enterprise gains access to important resources such as finance, human resource, and supplies. The role of building the relations is vested upon the entrepreneur or the manager. In most situations, the entrepreneur does not have direct influence over the other parties and thus it is only through negotiation based on mutual benefit that these platforms can be created.

Devoid of negotiation skills, most entrepreneurs miss vital opportunities. Governments ought to deliberately tailor their education curriculums to include life skills. More opportunities for youth such as apprenticeships, internships and business mentoring are needed to expose budding  entrepreneurs to real business environment.

Key negotiation skills

Negotiators must be able to: express themselves in a clear and precise manner; encourage dialogue; use and detect non-verbal language; listen, preferably in a pro-active manner, clarifying and rephrasing in their own words the content of the message; and persuade the other party of their ideas, arguments and viewpoints.
 
Non verbal expression can create trust or distrust. Signs of nervousness, impatience; fidgeting, excessive smiling; sheepish smiles; serious tone of voice; lack of eye-to-eye contact (averting eyes) and excessively quiet attitude create distrust. On the other hand, direct speech, open behavior and close proximity create trust.

Elements such as physique, height, weight, hair, skin color, gender, odors, and clothing send nonverbal messages during interaction. People use and perceive the physical space around them in a highly varied manner. The space between the sender and the receiver of a message influences the way the message is interpreted. However; the perception and use of space varies significantly across cultures and different settings within cultures.
 
When we interact with others, we continuously give and receive countless wordless signals. The gestures we make, they way we sit, how fast or how loud we talk, how close we stand, how much eye contact we make–all of these nonverbal behaviors send a strong message. The way you talk, listen, look, move, and react tell the other person whether or not you care and how well you’re listening. The non verbal signals you send can either produce a sense of interest, trust, and desire for connection–or  generate disinterest, distrust, and confusion.

Negotiation has to be done in the best way possible to achieve maximum benefit. The most important part is planning: preparing well will give you an advantage when negotiating. Have confidence and be sure that you can keep control at all times. Aim highly, but don't underestimate the opposition. They too may have just read the same advice. If you're selling something, be persuasive and offer some incentive to keep the customer interested. Don't close an agreement until you are happy. This could be difficult if you have been put in a 'corner' but this would perhaps be an effect of poor preparation.

By Simon Munjama.
(MBA) Strategic Management student, Kenya Methodist University.


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