Why is Financial Modelling so Complex?
Finance itself is a complicated field. It is difficult to understand the nature of relationships between various financial variables which finally culminate in the financial statements. However, financial modeling is considered to be one of the most complex tasks, even in the financial field. There are several reasons behind this assumed complexity. Some of the […]
Risks Faced by International Businesses in Developing Countries
Political Instability The recent case involving GMR Group in Maldives wherein the new government cancelled the license of the company for the Male Airport illustrates the biggest risk that international businesses face when they operate in developing countries. It is often the case that the change in government leads to a reevaluation of the contracts […]
Wage Increases and Tax Cuts
Recently the Dow Jones index faced a drastic fall. This fall was partly because of the fears of inflation that were sparked by increasing employee wages. This is because employee wages have been stagnant in America for close to a decade now. The drastic short-term rise was attributed by many to be the result of […]
Fundamental Principles of Accounting
Following are the basic fundamental principles of Accounting: Monetary Unit Accounting needs all values to be recorded in terms of a single monetary unit. It cannot account for goods like the barter system. Assigning values to goods and items therefore becomes a problem since it is subjective. However, accounting has prescribed rules to deal with […]
The Role of Technology in Social Entrepreneurship
Social entrepreneurs are those who use innovative approaches to social problems such as poverty, lack of access to healthcare in the rural areas, difficulties in bridging the gap between employability and unemployed youth, and problems such as lack of access to credit for women. In these and other cases, technology plays a prominent role as […]
Let us first go through a real life situation to understand negotiation better.
Your friends want you to come for a late night movie with them. However you very well know that your parents will never appreciate your staying away from house at late nights and you don’t even want to miss the movie as well as the company of your friends.
What would you do? Will you fight with every one?
Another situation
Tom went to a nearby mall and after a day of extensive shopping came across a CD player which he instantly liked. The cost of the CD player was around $30, but unfortunately he was not left with much cash. There was no way he could leave the CD player as it was an exclusive model and Tom was eyeing the product for quite some time.
What would Tom do in such a situation?
The answer to all the above questions lies in a simple word “Negotiation”. You negotiate so that you achieve whatever you want without the fear of conflicts or misunderstandings. It is a peaceful way of accomplishing things without making anyone angry.
We all will agree that nobody has ever gained anything out of conflicts and disagreements. Disputes in turn increase our stress and we feel restless always. One loses focus and eventually his interest in the organization goes down. It is always wise to discuss among yourselves and reach to an alternative best suited to all through negotiations.
Negotiation is a technique of discussing issues among one selves and reaching to a conclusion benefiting all involved in the discussion. It is one of the most effective ways to avoid conflicts and tensions. When individuals do not agree with each other, they sit together, discuss issues on an open forum, negotiate with each other and come to an alternative which satisfies all. In a layman’s language it is also termed as bargaining.
Please go through the above two real life situations once again.
You want to go for a movie but you know that your parents will never agree to your decision. Will you fight with your parents? Obviously NO, instead you will sit with them and try your level best to convince them and negotiate with them without fighting and spoiling everyone’s mood. Probably you will spend the coming weekend with your parents if they allow you today for the movie else you will negotiate with your friends so that they agree for a noon show.
Negotiation helps you to achieve your goal without hurting anyone. Your goal in this case is to go for a movie and you negotiate either with your parents or friends to achieve the same.
In the second situation, Tom could not afford to lose the CD player as it was an exclusive one, thus he tries to negotiate with the store owner to lower the price so that it suits his pocket and even the store owner earns his profit as well.
Negotiation is essential in corporates as well as personal lives to ensure peace and happiness.
Your boss asks you to submit a report within two working days and you know that the report is a little critical one and needs more time. Will you say a yes to your boss just to please him? Your yes might make the boss happy then but later you will land yourself in big trouble if you fail to submit it within the desired time frame. It’s always better to negotiate with your boss rather than accepting something which you know is difficult. Ask for some more time from your boss or probably don’t make an exhaustive report. Negotiation is better as it would prevent spoiling your relation with your superiors later.
An individual representing an organization or a position who listens to all the parties carefully and comes to a conclusion which is willingly acceptable to all is called the negotiator.
A negotiator ideally should be impartial and neutral and should not favour any one.
He needs to understand the situation and the parties well and decide something which will benefit all.
It is not always that people will easily accept the negotiator’s decision; they may counter it if they feel their personal interests are not satisfied. In such a situation, where the negotiator is left with no choice, he must use his power to impose his ideas on all, after all one can’t please everyone.
A negotiator has to be a little tactful and smart enough to handle all situations and reach to a conclusion.
Negotiation
↓
Process + Behaviour + Substance (Agenda)
To conclude, negotiation is simply a technique, a discussion among individuals to reach to a mutual agreement where everyone gains something or the other and conflicts are avoided.
Your email address will not be published. Required fields are marked *
