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FiveStagesofNegotiating-2.docxFive Stages of Negotiating
All negotiations are different. Simple negotiations, such as choosing which movie to rent, need not require an extensive negotiation process. However, when negotiations involve significant or complex issues, you should consider using the five-stage process model
Negotiating consists of five stages: (1) preparation and planning, (2) defining ground rules, (3) clarifying and justifying your case, (4) bargaining and problem solving, and (5) closure and implementation.
These stages are described below. 1. Preparation and planning. Without question, preparation and planning are the keys to successful deal making. While some may think they can negotiate effectively “on the fly,” all negotiators benefit from thorough advance thought and preparation. Be clear about what you want and why. Gather data to support your position. Consider ways to present your arguments persuasively. Consider what the other party wants and why.
2. Definition of ground rules. Determining your own guidelines or rules for the negotiation helps you plan a strategy that can be successful. Establish who will or should be present and at what part of the negotiation. Decide where the meeting will be held and offer a possible agenda for how the time will be allocated and for which issues. The location has implications in terms of who’s in charge. While there may be a benefit to having the negotiation at your office—the home court advantage—agreeing to have the negotiation at the other party’s office might show flexibility and willingness to negotiate on your part. When the topic covered is potentially divisive or difficult, a neutral location might help level the playing field for both parties—an important consideration when an integrative solution is desired.
3. Clarification and justification. As the negotiation begins, state what you want and why. A key issue here is the difference between positions and interests. A position is a stance—typically a firm one—taken by a negotiator. “I’ll give you $4,500 and that’s my final offer.” An interest is the explanation behind the position, need, or desire that expresses why a negotiator wants what he or she wants. “I’m asking for $5,000 because the car has low miles, an upgraded stereo system, and brand-new, all-weather tires.” It’s important for both parties to learn the interests behind the stated position. When you share your interests and expectations, you set the stage for the other party to be similarly open about their desires and reasons behind them.
4. Bargaining and problem solving. In the fourth stage, both parties are actively and constructively engaged in working toward solutions. Once the interests and criteria are clearly communicated, it is time for a creative, idea-generating process. This requires skill in finding solutions that might address one or more of the parties’ collective needs, as well as “expanding the pie” and generating even more creative solutions that may not be readily apparent. At this stage, it is best to remain open-minded, considering options without making value judgments or critiquing them. Judgment curtails creativity. By exploring all possibilities for solutions, rather than trying to focus too quickly on one fixed solution, interesting ideas and combinations of ideas may emerge.
5. Closure and implementation. In this final stage, the terms of the agreement that has been reached are formalized. Unfortunately, many overlook or ignore this step, thinking that once an agreement is reached it will be implemented automatically. Leaving out this step can lead to future misunderstandings. No two people will leave a communication with the same perceptions. The only way to ensure that both parties know what they’re agreeing to is to take specific steps:
