Enigin Advice - How to Negotiate II
Negotiating is a part of business life, sometime with employers/employees and often with clients.
For Enigin Distributors enhancing your negotiating skills is vital - so here from the desk of Enigin Training comes a useful articles from the Stanford Graduate School of Business.
Take these points in an apply them when in negotiations - here the concluding points:
Assuming that cross-cultural negotiations are just like “local” negotiations
You need to remember that differences do exist, that they are not necessarily negative, and that these differences can create huge potential benefits — as well as big problems if ignored. Services and negotiations need to be tailored to enhance your position with the other side.
Neale uses a case study that centers on the construction of a large American theme park in Europe. To convince local government officials that an American park would be a great opportunity, the American developers brought the European officials to a theme park in the United States.
Unknown to the American executives, the Europeans were dismayed and shocked with what they observed: highly commercialized American culture blasting from every fast-food bar, bandstand, and gift shop. This was not what they had envisaged for their quaint countryside.
Trying to dream up more enticements during the negotiation, the clueless American executives offered more free trips to the U.S. park for an expanded group of local European officials and their families. It was a disaster.
Had the Americans had a sensitive negotiator on the ground in Europe, they could have capitalized on the differences in the two cultures and offered a detailed presentation of an amusement park tailored to local tastes, skipping the junkets to the U.S. park.
Paying too much attention to anchors
Anchors are part of a bargaining dynamic known as “anchoring and adjustment.” This involves clearly setting the parameters for negotiation. For example, a couple was selling their house for $500,000. The first offer came in at $375,000, which was too low to consider. If the couple had acknowledged the offer with a counter, they would have started bargaining somewhere between $500,000 and $375,000. Instead, they responded that it was not a reasonable offer and told the buyers to come back when they had a decent offer. The buyers came back at $425,000. The seller then countered at $495,000. The buyers then came up to $430,000, but the sellers still didn’t accept the offer.
The buyers argued that they had come up $55,000 from $375,000. But the sellers were careful to remind them that $375,000 was not their starting point; rather, it was $425,000, the first reasonable offer. Using that anchor, the sellers argued that they had come down $5,000 from $500,000 — and the buyer had come up $5,000 from $425,000. Both had moved the same amount in negotiations. One more round of bidding had the house sold — for a price well above the buyer’s initial bid. “The point is: You’ve got to watch the anchors and where they are set,” says Neale.
Caving in too quickly
Accepting a well-priced deal too quickly can cause anger on the other side, too. If you list a used car for $5,000, you might really be thinking of accepting $4,500. But when your first buyer has it checked by a mechanic and then immediately writes you a check for $5,000 without trying to bargain, how do you feel? Disappointed. You’ll think you sold it for too little. The lesson is: No matter what the price, even if it’s fair, always offer less — if only to make your opponent feel good about the deal. You may come up to full price in the end, but at least your opponent will feel as if he made you work for it. “Never give anyone their first offer; it makes them crazy,” says Neale.
Don’t Gloat
Finally, when you’ve cut a sweet deal, never do the dance of joy in public by turning to your opponents and telling them you would have done it for less. Gloating will only drive your opponent to extract the difference from you sometime in the future. Today, flagging corporate allegiances and rampant job hopping make it essential to keep on professional terms with your negotiating opponents. You may find yourself on the same side of the bargaining table one day.
Article by Barbara Buell
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