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Importance of Negotiation in Daily Life
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Negotiation is defined as a discussion among individuals to reach to a conclusion acceptable to one and all. It is a process where people rather than fighting among themselves sit together, evaluate the pros and cons and then come out with an alternative which would be a win win situation for all.
Sam wanted to purchase a mobile handset, he tried his level best to buy it at the lowest possible rate and the shopkeeper also ensured that he could earn his profits as well. Thus the negotiation benefited Sam who didn’t have to shell out loads of money and the shopkeeper was also satisfied because even he earned his profits.
Negotiation helps in reducing conflicts and disputes among each other. Negotiation is essential in every walk of life for a peaceful and stress free living.
Let us go through various models of negotiation:
Let us understand it with the help of an example:
Daniel wanted to buy a laptop but it was an expensive model. He went to the outlet and negotiated with the shopkeeper to lower the price. Initially the shopkeeper was reluctant but after several rounds of discussions and persuasion, he quoted a price best suited to him as well as Daniel. Daniel was extremely satisfied as he could now purchase the laptop without burning a hole in his pocket. The negotiation also benefited the store owner as he could earn his profits and also gained a loyal customer who would come again in future.
Please refer to the above example once again where Daniel wanted to buy a laptop. In this example, both Daniel and the store owner were benefited out of the deal. Let us suppose Daniel could not even afford the price quoted by the storeowner and requests him to further lower the price. If the store owner further lowers the price, he would not be able to earn his profits but Daniel would be very happy. Thus after the negotiation, Daniel would be satisfied but the shopkeeper wouldn’t. In a win lose model, both the two parties are not satisfied, only one of the two walks away with the benefit.
Had Daniel not purchased the laptop after several rounds of negotiation, neither he nor the store owner would have got anything out of the deal. Daniel would return empty handed and the store owner would obviously not earn anything.
In this model, generally the two parties are not willing to accept each other’s views and are reluctant to compromise. No discussions help.
Let us understand the above three models with an example from the corporate world.
Mike got selected with a multinational firm of repute. He was called to negotiate his salary with Sara- the HR Head of the organization.
Case 1 - Sara quoted a salary to Mike, but Mike was not too pleased with the figure. He insisted Sara to raise his salary to the best extent possible. After discussions Sara came out with a figure acceptable to Mike and she immediately released his offer letter. Mike got his dream job and Sara could manage to offer Mike a salary well within the company’s budgets - A Win win Situation (Both the parties gained)
Case 2 - Sara with her excellent negotiation skills managed to convince Mike at a little lower salary than he quoted. Mike also wanted to grab the opportunity as it was his dream job and he was eyeing it for quite some time now. He had to accept the offer at a little lower salary than expected. Thus in this negotiation, Mike was not completely satisfied but Sara was - A win lose negotiation
Case 3 - Mike declined the offer as the salary quoted by Sara did not meet his expectations. Sara tried her level best to negotiate with Mike, but of no use.-A lose lose model of negotiation. No body neither Mike nor Sara gained anything out of this negotiation.
RADPAC Model of Negotiation is a widely used model of negotiation in corporates.
Let us understand it in detail
Every alphabet in this model signifies something:
R - Rapport: As the name suggests, it signifies the relation between parties involved in negotiation. The parties involved in negotiation ideally should be comfortable with each other and share a good rapport with each other.
A - Analysis: One party must understand the second party well. It is important that the individual understand each other’s needs and interest. The shopkeeper must understand the customer’s needs and pocket, in the same way the customer mustn’t ignore the shopkeeper’s profits as well. People must listen to each other attentively.
D - Debate: Nothing can be achieved without discussions. This round includes discussing issues among the parties involved in negotiation. The pros and cons of an idea are evaluated in this round. People debate with each other and each one tries to convince the other. One must not lose his temper in this round but remain calm and composed.
P - Propose: Each individual proposes his best idea in this round. Each one tries his level best to come up with the best possible idea and reach to a conclusion acceptable by all.
A - Agreement: Individuals come to a conclusion at this stage and agree to the best possible alternative.
C - Close: The negotiation is complete and individuals return back satisfied.
Let us again consider Mike and Sara’s example to understand RADPAC Model
R - Rapport between Mike and Sara. They must be comfortable with each other and should not start the negotiation right away. They must first break the ice. The discussions must start with a warm smile and greetings.
A - Both Mike and Sara would try their level best to understand each other’s needs. Mike’s need is to grab the opportunity while Sara wants to hire an employee for the organization.
D - The various rounds of discussions between Mike and Sara. Mike and Sara would debate with each other trying to get what they want.
P - Mike would propose the best possible salary he can work on while Sara would also discuss the maximum salary her company can offer.
A - Both Mike and Sara would agree to each other, where both of them would compromise to their best possible extent.
C - The negotiation is complete and probably the next course of action is decided, like in this case the next step would be generation of the offer letter and its acceptance.
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