Business Negotiations

Business Negotiations related articles

Business Negotiations

27.05.2008 ob 12:50

Negotiation is an important element of business operations and, in particular, of the work of managers in organisations. It is a multi-directional process of communication for the alignment of interests in which several parties influence each other in arriving at common decisions. Negotiations are to coordinate interests and overcome opposition among organisation stakeholders. These can be internal or external, allies or rivals. Opposition is the engine of progress and aligned interests are a condition for the success of an organisation; when unaligned, they degenerate into damaging disputes.

Negotiation is the most complex form of human relationships and of changing these relationships. Negotiation comprises interdisciplinary knowledge and numerous skills. The science of negotiation developed from military sciences and diplomacy; it served to arrange relationships between countries. Today negotiation is involved in all human activities.

Efficient and successful planning and conduct of negotiations is one of the most important capabilities of every organisation. People devise organisations and work within them because little can be achieved alone and much when working in harmony. Harmonious action is based on leadership, and leadership on aligning and directing the interests of individuals, groups, organisations and various types of the public. These interests vary in nature, being based on the different needs and values of people. This creates opposition that we attempt to overcome through negotiations.

Knowledge of the concepts and skills of conducting negotiations therefore represents one of the fundamental capabilities of managers and businesspeople. Negotiation means trying to reach a consensus, an agreement regarding a certain issue. Negotiation is also bringing closer the standpoints of individuals, groups, organisations, and various types of the public and the strategies required to achieve these goals. If cooperation is at one end of the continuum and opposition at the other, negotiation is in the middle.

The precondition for negotiation is knowing how to encourage, influence and lead people, how to communicate and discuss. Logic and cool reasoning alone are not sufficient for negotiations. They also involve human values and customs, interests and needs. Good negotiators are not born but taught and trained.

Negotiations should have a measurable, sensible and attainable goal. The goals of every negotiation are subject to the higher goals and aims of an organisation. Good negotiation goals should add to the successfulness of a company and act as an incentive for the co-workers taking part in the negotiations.

Negotiating styles include compromising, uncompromising, result- or information-oriented, intuitive, normative or analytical styles. The fundamental concepts of negotiation are compulsion, compromise, competition, collaboration and disguised negotiation. The first three concepts are distributive, with gain on one side and loss on the other. The last two are integrative because both sides win.

Preparation of negotiations consists of, first, selecting a strategy and the manner of negotiation. The strategy has to develop according to the willingness and abilities of the parties involved and take into account the timeframes and deadlines for reaching an agreement. Problems in negotiation arise due to mistakes in implementation of the process, because they reach a dead end, or because other parties do not accept the concept of negotiation and try to employ immoral means. Negotiations should be concluded with a consensus, an agreement, which should by all means benefit all the sides involved.


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