Originally published on November 10, 2017.
Negotiation is a crucial function in business, whether you’re negotiating your salary and benefits, the price of a product, or even a new business partnership.
Negotiation is not easy and often comes with its challenges. Associate Dean Gaylen Paulson, from Texas Executive Education at McCombs, has provided a variety of strategies to differentiate an expert negotiator from an average negotiator:
Below is a summary of his main points that can be applied globally:
Walk in with a clear objective
It’s important to come into a negotiation with a defined goal to avoid being sold short, or end up negotiating too much and leaving with a deal that is less than what you planned.
Focus more on their limits
Set your goal based on their limits. Don’t walk in hoping to only get the minimum value, because there’s a chance you’ll take a deal without considering the additional value the counterpart can offer.
As a general rule of thumb Gaylen Paulson says, “Think about their needs more, and your needs will actually get met.”
Don’t mention the word “negotiation”
Try and avoid saying “let’s start negotiating,” because this might cause the other party to become defensive, and could potentially harm the negotiation process.
Moreover, in some countries, the negotiating goal isn’t establishing a written contract, but creating a trusting relationship between the parties involved. For example, Chinese and Indian negotiators place greater emphasis on the creation of a long-term relationship versus American and German negotiators, who like accelerated negotiations. Additionally, Chinese and Indian negotiators prefer spending more time on negotiation preliminaries.
Know what to say and what not to say
To avoid negotiation challenges, it’s important to understand how each foreign party operates during the negotiation process.
For example, Germans have a more formal negotiation style compared to Latin Americans. Germans address their counterparts by their titles and avoid casual topics that involve one’s personal or family life. In Latin America, they place significant importance on relationships and typically start discussions on a first name basis, as an act to develop a friendly relationship with their counterparts.
Similarly, the Japanese negotiators abide by longer negotiation preliminaries to involve as many people from their company. In Japanese business culture, it’s important to have proper representation of one’s company. That’s why they have several meetings with different teams, each which have a different specialty. This ensures a positive image for the company, too.
Also, the Japanese are less direct when it comes to declining an offer that they are uninterested in. They will often say that their facing a difficult decision with the deal, however this usually means the company is disinterested with the offer.
In conclusion, remember to spend an adequate time preparing yourself for the negotiation. Whether it’s determining your objective, or learning the business culture of other countries, it never hurts to prepare and practice.
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