INTRODUCTION
Usually when we think of trading, we think in terms of buying and selling. Most of us recognize that diplomats, businessmen, executives, and labor representatives also negotiate daily at their jobs. What we don't recognize is that all of us negotiate every day in all areas of our lives. The ideas about negotiation are developed according to the character of the people, their knowledge, their aspirations and, of course, their weaknesses and aspirations. A person's ability will determine the extent to which she avoids negative factors and achieves satisfactory results for her aspirations.
The new way of trading
Negotiating is what happens when two parties have conflicting interests but also have a zone of mutual convenience where the difference can be resolved. If we do not negotiate we will have to resort to rights, to the legal system. If this does not work, or if we are oriented towards conflict, we will resort to force, to power, in which we act unilaterally and we can end up in the field of violence or war.
Each person has their own way of negotiating, a result of the experiences of their family life, of their relationships with friends and neighbors, since throughout their lives they developed this way of handling conflicts. Thus, each person has their implicit theory of negotiation. In a more general way, two schools can be distinguished: the traditional and the integrative (or the new theory of negotiation). The first is essentially a bargaining process, in which emphasis is placed on the distribution of what is negotiated, under the assumption that what one wins is lost by the other. The new theory of negotiation tries to redefine the problem through an exchange of interests to achieve an extension of results for both parties. This is an international trend in the various fields of negotiation.
The new theory of negotiation implies a different way of acting that can be described in the following decalogue.
- With your colleagues, do not negotiate as if they were adversaries or make friends either: keep your relationship in a cordial and respectful colleague. Your main purpose is to solve a joint problem: it is not to beat the other or reach an agreement at all costs. long-term in the results that this negotiation will have both for the relationship with the other and for future negotiations. Look for the favorable solution that an external judge or arbitrator would give: appeal to the numbers, to the reasons…. Put aside threats and "lies". Think of the other as much as yourself: do not make proposals that are not "fair" enough: make offers that are good for you but at least acceptable for the other. Redefine the problem. as broadly as possible to include the broader real interests of the other and your own:use negotiation as a means of redefining the problem by asking questions and opening up to new ways of conceiving the solution Ask questions and gradually offer exchanges of information Determine with the greatest possible certainty in which elements there is a total incompatibility with the other side, in Which ones are exactly the same interest, and which ones have a different valuation for each one. Expand the "package", seek to enrich the result of the negotiation for all. Proceed to bargain healthily whatever is bargaining: use objective standards or criteria external to the negotiators. At the same time, find and identify the total "block" of points to be negotiated. Do some math before sitting down to negotiate. What is your outside alternative (what would you do if you can't reach an agreement)? What are your priorities:What is the relative value of the different points you are going to trade? Determine the differences in value that may exist between you and the other party, and try to exchange the points of more value for you for those of more value for the other. This will create value: there will be more for both. The above prescriptions are a generalization and a simplification of a very complex process. But it is good to reflect on your own performance when negotiating a conflict. Probably the most important skill that a person can develop is to negotiate differences, since their professional efficiency and personal peace of mind often depend on it.and try to exchange the most valuable points for you for the most valuable for the other. This will create value: there will be more for both. The above prescriptions are a generalization and a simplification of a very complex process. But it is good to reflect on your own performance when negotiating a conflict. Probably the most important skill that a person can develop is to negotiate differences, since their professional efficiency and personal peace of mind often depend on it.and try to exchange the most valuable points for you for the most valuable for the other. This will create value: there will be more for both. The above prescriptions are a generalization and a simplification of a very complex process. But it is good to reflect on your own performance when negotiating a conflict. Probably the most important skill that a person can develop is to negotiate differences, since their professional efficiency and personal peace of mind often depend on it.Probably the most important skill that a person can develop is to negotiate differences, since their professional efficiency and personal peace of mind often depend on it.Probably the most important skill that a person can develop is to negotiate differences, since their professional efficiency and personal peace of mind often depend on it.
(*) Enrique Ogliastri
NEW TRADING TACTICS
POWER
People perceive power in different ways. It is in the mind. Under identical circumstances, a person can say: »I will not give in because it is okay» according to experts, under the same facts and limits, some receive small settlements and others with the same information, obtain huge settlements
ASPIRATION LEVEL
People who aim higher earn more?
There is a general consensus that in life, those with the highest aspirations achieve more. If this holds true in the field of negotiation, the answer is 'yes' …… up to a point.
"Aim higher and you will accomplish more." It is good advice, as long as you accept the risks, take your time to do your homework, be patient.
In this regard, it can be noted: "the relationship between the level of expectations and the results is directly proportional."
However: "great aspirations also represent greater risks and in some cases, truncated negotiations and great frustrations."
FREE TIME
The time limit determines the outcome of the negotiations. People wait as soon as possible to make a decision. Those who have sixty minutes to negotiate reach an agreement in sixty minutes. The time limit puts pressure to close the deal The problem with time limits is that we tend to be more aware of our time limit than that of the other person. This induces us to use our power little and to overestimate that of our opponent.
In this regard, take into account the following reflections:
- If necessary, a longer time should be 'negotiated' Make the most of the time available Quick negotiations, whether necessary or unnecessary, are dangerous The person who is more prepared for a quick negotiation, is more likely to obtain better results
TWO POWERFUL BARGAINING INSTRUMENTS
Most people view negotiations the wrong way. They see them as a competition in which one party wins at the expense of another. But negotiations are not necessarily a competition. They undoubtedly have elements of competition in their process, but it is much more than a war between adversaries.
There are two ways of negotiating that occur within the same negotiation. Understanding these two ways can help you in the following ways:
- Allows you to keep a negotiation going that is leading nowhere Makes you feel more comfortable Allows you to learn more Prevents breaking deadlocks Helps you better understand the tactics you are using, or the ones being used against you Improves long-term relationships Provides you higher level of satisfaction to the other party
COOPERATIVE NEGOTIATION
The basic principle of this type of negotiation is that both parties win, therefore there is always a better deal for both, if they are willing to take the time to look for it.
Both the buyer and the seller can increase their profits and satisfaction without hurting each other.
COMPETITIVE NEGOTIATION
In this type of negotiation one gains a fact that must be considered in the negotiations that there is an element of competition. There is a point that the benefits of one party come out of the pocket of the other
What is the best way to behave from a competitive point of view? Here are some rules that should serve as guidelines:
Keep quiet
The less your opponent knows about you the better. You and your organization are in a better position to keep your motivations, power limits and time pressures secret.
Information that weakens us should not be given and information leakage should be taken care of as much as possible
Don't trust your assumptions, calculations, or perceptions
In negotiations things are not what they seem. Be aseptic and acknowledge that you could be wrong
The problem is that assumptions drive us to act, however as such assumptions can be good or bad for us.
Cost analysis
- Buyers should always get cost analysis Sellers should never provide cost analysis
Concessions
Concessions are an important part of a negotiation, insofar as they allow obtaining collateral benefits and therefore contribute to a successful negotiation. It is good to respect some criteria to give concessions:
- It is good to give yourself a wide margin to negotiate Concessions must be given in a proportionate way Preferably not be the first to give a concession Buyer-seller concessions do not necessarily have to be the same.
For this purpose it is good to consider the following techniques:
- When you are ready to say "YES," say "NO" one more time. Do not give the concession immediately, leave an answer for consideration. Highlight that it is a concession Before giving a concession or when looking for it, show astonishment at what was raised
POWER SOURCES
The power is in the mind. There is ample evidence that people, even when presented with identical facts and positions of power, react differently to circumstances. It is worth understanding the sources of one's power because power plays a key role that determines by results.
There are many sources of power. Some are based on resources, others on laws, regulations or precedents while others are based on psychological factors
POWER OF COMPETITION
It is a smart move (very common) for a buyer to say: "give me your best price because I can go with any of your competitors." From a sales point of view, the key question is: what limits the buyer's ability to use existing competition?
POWER OF LEGITIMACY
No source of power can be more hypnotizing than the power of legitimacy. We have to learn to accept the authority of things to the point of not questioning their applicability in changing situations.
Power is vested in factors such as public opinion, simplicity, a good track record, a well-supported position, and how we treated each other yesterday.
In this regard, it is good to write down two practical suggestions:
- Take good notes of the negotiation discussions and any agreements that have been reached. Close the negotiation with a memo of agreement that you write yourself.
POWER OF COMMITMENT
Commitment, loyalty and friendship are bulwarks of power. People who are committed to their goals have a hidden power. Those who are loyal to your company, management, and products negotiate more effectively on your behalf. If you are confident in yourself and your point of view, you can stand up for yourself more firmly
POWER OF KNOWLEDGE
Knowledge gives power. The better prepared the person is and has more preparation and knowledge, the better able to negotiate
POWER TO ASSUME RISK
Safety is a goal of humans. We share a desire to avoid risk whenever possible. The person who is willing to accept a greater burden of insecurity with regard to a reward or punishment increases her power
TIME OF EFFORT
Time and patience are power. The person who is most restricted by the time limit provides her opponent with a power base.
Buying, selling, negotiating are hard and exhausting jobs, so the desire to work is power. Perhaps the heaviest work is imposed on us by planning requirements and deadlocks.
The part most willing to work hard, gains power, some sincerely lazy, lose this important source of power.
In the same way, the person who knows how to manage time will acquire a better position to negotiate, without being pressured by a close limit.
Time limits put pressure on people to make a choice, yet a person can never be sure that the time in a negotiation is real.
To avoid the time limit trap it is good to ask yourself the following questions:
- What is my opponent's time limit? What is the time limit? Can we negotiate the time limits? Are real?
WHAT YOUR OPPONENT WANTS
Behind the negotiation people want:
- Feel good about yourself Avoid future problems and risks Be recognized by your bosses and others as people of good judgment Keep your job and get promoted Work less hard, not harder Feel that what you do is important. Avoid the insecurity that comes from changes and surprises Be heard Be treated kindly Be pleasant End the negotiation as soon as possible and do other things Be considered honest, fair, kind and responsible Power
According to William Shakespeare's thinking: "whoever is well satisfied is well paid", that is to say, the agreed price is not so important but rather the degree of satisfaction obtained by the parties.
HOW TO RESOLVE A STAGNATION
Here are some ideas to help a negotiator come back after a deadlock
- Shift the emphasis of negotiation from the competitive method of solving problems to the corporate method Focus the negotiation on the important points, putting off some difficult parts of the agreement to be re-negotiated later when more information becomes available. Change the leader or a team member. Share risks Call a mediator Add options related to the deal, either by real or apparent attempts. Offering options can sweeten a dubious deal
LONG-TERM RELATIONSHIPS
Long-term relationships are good and bad. There is a lot to be said for such relationships in terms of trustworthiness, friendships, and peace of mind. Many buyers have been happy that the seller appreciated past business enough to continue supplying merchandise
SETTING BETTER GOALS
People tend to increase their aspirations if they succeed, in the same way they tend to decrease them when there is a failure. The level of aspirations compromises the image of the person.
Great success leads to greatly increased aspirations. A failure leads to a tremendous loss.
THE TACTICS
Tactic 1. Take it or leave it
It's a frontal pressure tactic. Some of the typical attitudes of these tactics are:
- Leave the negotiation. Get out of the store Keep talking like you never heard it at all Attack the negotiation by looking for a person of greater authority
The best way to try a "Take it or leave it" is to change the nature of the deal, downplay the bargain or negotiator, break the concept of "firm price" for "good deal"
Facing a higher authority can yield the following results when taken into account:
- They know less about the details. They are less prepared They have a propensity to want to demonstrate their ability to make decisions They do not want to waste valuable time on small matters
In any case, when using this tactic you must be careful not to cause a breakdown of the negotiation to a stalemate, unless you have new alternatives to redirect the negotiation
Tactic 2. Bogey
This term means a temporary measure used to scrutinize the other party. The "Bogey" involves three fundamental principles of negotiation:
- Whenever the other person's ego rises, you expect something in return. In subtle ways, you ask for help. Usually you will. Sellers know the product better than buyers. The Tactic of Opportunity to Show What You Know There is always a better deal for both parties if they are willing to seek it
Tactic 3. Pressure (krunch)
This tactic basically uses the concept that there are several alternatives, introducing the competition variable in the negotiation. The buyer tells each seller "You have to improve your offer"
Regarding this tactic, it is good to consider that a negotiation should not be unfair for any of the parties. It is important to remember that it is a process of give and take from both sides.
This tactic has a negative effect if it is abused, the salesmen continuously to the "Krunch" can react as follows. Way:
- Inflate tough Degrade product in subtle ways Decrease services
In any case, it is recommended to be very careful in using this tactic as a buyer, and to study very well your own possibilities and how to plan the negotiation if you are a seller and the Kruch is used against you.
Tactic 4. Haggling
Haggling is a widely used business tactic but is often frowned upon. In some cases it is described in terms such as despicable, vulgar, or degrading, yet haggling is necessarily a trifle. Haggling can work if:
- The other party wants to close the deal. By giving a little more, a long-term relationship can be improved. It is not wrong for the other person to feel like they are getting a bargain.
Since even if the tactic is rejected it works, it is good to cite the following preventive measures
- Keep a list of prices in a visible place (use the sense of legitimation) No authority to the seller to give concessions Resist the tendency to give in. If he is patient, the client will give up
In combating haggling you should realize that most of those who practice are uncomfortable, therefore they stop practicing it when they encounter persistent and discreet resistance.
Time tactics
- Acceptance time: the concept of acceptance time is paramount in negotiation. No one has the right to expect their ideas, no matter how brilliant, to be immediately accepted by the other party. People need time to adjust to new ideas. Take into account the acceptance time within the planning and your negotiations will have a better chance of unfolding are stumbles. Change of pace: what happens if we change? People are sensitive to changes of the following kind: A change of interest indifference A change from cooperation to competition A change from warmth to coolness A change from short to long interruptions A change of place A change of people
Each change is capable of sending a notice. You can emphasize a point you want to achieve, you can show your strength or signify the importance at a point.
RECIPES FOR SUCCESS
- Negotiation is not a competition. A better deal can be found for both parties. It has more power than you think. Look for the limits of your opponent's power. Write a plan. Never decide at any point unless you are prepared to. No matter how big the differences are, never be afraid to negotiate. Do not negotiate with a second-rate team. Do not talk. Listen without criticism Don't feel limited by position or authority. Once you do your homework, you need to be ready to face them. Don't feel limited by facts, averages, or statistics. Don't emphasize your own problems if stagnation occurs. The other party has enough problems of their own Don't feel limited by the final offer, a firm price, or a take it or leave it,all are negotiable. Learn how to get out and come back later Difficult negotiation has conflicts. The person who has a need to be liked is prone to giving in too much. If you have pushed the other party too far in a negotiation, have the leniency and willingness to re-negotiate. At the very least make sure you listen to their problems and understand them. Set your goals higher. Prepare to take the risks that go with the highest goals. Also be prepared to work hard and be patient. Test your opponent. You never know what he will be willing to give up. Take the time and be persistenthave the leniency and willingness to re-negotiate. At the very least make sure you listen to their problems and understand them. Set your goals higher. Prepare to take the risks that go with the highest goals. Also be prepared to work hard and be patient. Test your opponent. You never know what he will be willing to give up. Take the time and be persistenthave the leniency and willingness to re-negotiate. At the very least make sure you listen to their problems and understand them. Set your goals higher. Prepare to take the risks that go with the highest goals. Also be prepared to work hard and be patient. Test your opponent. You never know what he will be willing to give up. Take the time and be persistent
…… many successes in your next negotiation!
Source: The negotiation game. Chester L. Karras
In the video lesson that you will see below, Professor Jesús Molina teaches the main negotiation techniques that you could apply to a process of this type, it is a course in which you will learn the objectives of any negotiation, the reason for negotiation and how to negotiate, as well as effective negotiation strategies and tactics. We know that it will be useful as a learning aid.
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