Negotiation

Negotiation: Definition, Objectives, Benefits, and Examples of Negotiation

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Negotiation is a form of communication that cannot be separated from human life, both in business activities and daily life. So what exactly is negotiation and what is the purpose of negotiation?

In this article, we will discuss several things related to negotiations, including:

  • A brief explanation of what is meant by negotiation.
  • General purpose of negotiations.
  • Benefits of negotiation in general.
  • Some basic skills in negotiating.
  • Examples of negotiation activities in everyday life.

Come on, read this article to the end so that you better understand what negotiation is.

The Meaning of Negotiation

Etymologically, the word negotiation comes from the English language, namely “to negotiate” and “to be negotiating” which means to discuss, negotiate, or offer. The word then has another derivative, namely “negotiation” which means the activity of discussing or negotiating something with other parties to reach an agreement.

According to the origin of the word, negotiation is a strategic discussion process carried out to resolve a problem in a way that is acceptable to the negotiating parties.

In negotiations, each party tries to persuade the other party to agree on his point of view. By negotiating, all parties involved try to avoid contention but agree to reach some form of compromise.

So in general, the notion of negotiation is a form of social interaction between several parties that aims to reach a mutual agreement that is considered beneficial to the negotiating parties. People who carry out negotiation activities are called negotiators.

Negotiation activities are used in various areas of life, and usually involve many people’s problems. For example, in the world of business and organization, activities in these two fields are never separated from the negotiation process.

The parties involved in negotiations can vary and can cover many things. Here are some examples of negotiation activities in everyday life:

  • Conversations between buyers and sellers in the process of bargaining for goods.
  • The interview process between employers and prospective employees.
  • The process of a business agreement between a company and another company.
  • The process of communication between the government of a country and other countries in bilateral cooperation.

Negotiation Purpose

According to the Oxford dictionary, negotiation is a way to reach an agreement through formal discussion. Negotiations are carried out by two or more parties where each party has different goals and a bargaining process occurs to reach an agreement.

From this explanation, we can understand that in negotiating activities there are goals to be achieved by the negotiating parties. The objectives of the negotiations are as follows:

  1. To reach an agreement that is considered beneficial to all parties.
  2. To solve a problem and find a solution to the problem being faced by the negotiating parties.
  3. To achieve a mutually beneficial condition for the negotiating parties where all benefit (win-win solution) .
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For example, business negotiation activities between a company and another company are very useful in developing a market where the goal is to increase sales figures.

Another example, the negotiation process also occurs when producers and consumers negotiate the price of a product to set an agreed price. With negotiation activities, sellers and buyers can determine a price that is considered equivalent to the value of a product.

Negotiation Benefits

Many people assume that an offer or price is something that is final. In fact, many things that are considered final are in fact flexible or subject to change.

After understanding the meaning of negotiation and its purpose, we need to know what are the benefits of negotiation. Some of the benefits of negotiation are as follows:

  1. The creation of a network of cooperation between one party with another party to achieve their respective goals.
  2. There is mutual understanding between each negotiating party regarding the agreement to be taken and its impact on all parties.
  3. Negotiation is beneficial for the creation of a mutual agreement that is mutually beneficial for all negotiating parties.
  4. The creation of a positive interaction between the negotiating parties so that the cooperation will produce a wider impact for many people.

Basic Negotiation Skills

Before negotiating, all negotiators must understand the philosophy of negotiating. Referring to the notion of negotiation, the basis for negotiating is that the agreement reached benefits all parties, or everyone wins.

This can be achieved by considering all aspects of the negotiation from various points of view. The basic skills for negotiating are as follows:

  1. Sharp in thinking.
  2. Be patient in action.
  3. Can adapt well.
  4. Have endurance.
  5. Good socialization skills .
  6. Good concentration ability.
  7. Have articulation skills.
  8. Have a good sense of humour.

In addition, there are several crucial things that negotiators must pay attention to when conducting the negotiation process, including:

  • In expressing an opinion, it must be accompanied by clear reasons, facts, or examples so that it is easily understood by other parties.
  • Opinions must be conveyed with the appropriate volume, intonation and choice of words.
  • Expression of opinion must be done clearly, smoothly, and politely.
  • It is not easy to accept or reject the opinion of other parties but must go through various considerations.
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Key Factors in Negotiations

There are several main elements or factors that must be considered in the negotiation process. Quoted from Investopedia.com, the following are some of the main factors in negotiations:

1. The Parties Involved

We must know who will be participating in the negotiations, and what are their interests? It is also important to know the background of the parties involved and how this affects their position in the negotiation process.

2. Relationship

Next, we also need to know what the relationship between the parties and their intermediaries is in the negotiation process. How are the parties connected and what role do they play in the negotiation process?

3. Communication

This relates to the interests of the negotiators can be well communicated to secure their agreement through negotiations? What is the most effective way to deliver the desired result? How can negotiators be sure they are being heard?

4. Alternative

Is there any alternative to what one of the parties originally wanted? If direct agreement is not possible, do the parties need to look for other alternatives?

5. Realistic Options

What options are possible to achieve a result? Have the negotiators suggested that there might be some flexibility in their demands?

6. Legitimate Claims

Are the requests and promises of each party valid? What evidence do the negotiators offer to support their claims and demonstrate that their claims are valid? How will they guarantee that they will follow through on the outcome of the negotiations?

Conclusion

From the explanation above, we can conclude that the definition of negotiation is a strategic discussion activity involving two or more parties to reach a final agreement that is agreed by all parties involved.

In practice, one of the parties will put forward his point of view, while the other will accept the conditions offered or refuse by conveying his own point of view. This process continues until both parties agree on a resolution.

Thus a brief explanation of negotiation, starting from its meaning, objectives, benefits, and basic skills needed in negotiating. Hopefully this article is useful and adds to your insight.


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Engineering Student of Airlangga University in Indonesia. Love to share knowledge