The process of negotiation involves several psychological aspects and through the last 30 years, scholars have tried to increase the knowledge about the underlying processes. The subjective emotions under play in a negotiation is mainly cognitive skills, sentiments, motivation, confidence, the power to influence and communicate directly. It can be described primarily as a skillful cooperation in an atmosphere of different ideas and interests coming into a different situation. The parties taking part in a negotiation will have different ideas, claims, and talents and they come together in a management scenario. The underlying reason for a talk is a matter of dispute between the parties involved, and they come together to reach a compromise on the issue of concern. The process if based on the notion that both the parties are ready to talk over the matter and come up with offers and return-offers. And eventually, the dispute is solved only when the parties agree over the proposals put forth.
The researches over the scholarly basis of negotiations can be dated back to 1947 when Von Neumann and Morgenstern conducted studies over how games affect the economic characteristics of humans. This was the origination work and from then on several descriptions and viewpoints were presented for the psychology of negotiations.
In spite of these descriptions, a negotiation involves some key elements, and there are at least two or even more than two opposing parties involved, their ideas form the base of the argument, and they present the alternatives towards the negotiation process and thus produces the final outcome.
“Negotiation is a necessity, a process, and an art.” - Gates, 2015
Several aspects make a business a success and the role of a right deal at the right time is inevitable for the same. In a corporate business, there arise issues between sections of the same grounds and with a good negotiator, he/she will be able to handle it tactically and take the business to great success. With a proper negotiation procedure, it is not just the solution that it evaluated, but the push factor to carry on the agreement details are also included. The profit level of the agreement will include several intermediate concerns like payment processing, terms and conditions, the quantity of work and the delivery of completed goods. So, to clearly define a negotiation as a successful one, it is required to plan efficiently. When there is a negotiation taking place over an acquisition procedure, the basic need is to get maximum profit, and this defines the specific values and numbers involved.
There are even cases where the negotiations over the product prices will take place before considering the quotations. This is true especially when there is a hike in prices. What is negotiated in a procurement process? The price is the primary matter of negotiation, and there are also other elements like discounts in bulk purchase, considerations over packaging charges, shipping reduction, and other applicable discounts. The idea that is conveyed through a negotiation process is not just to reduce the prices but to get the best value for the money spent. Only a talented and skillful person will be able to become a reputed acquisition manager and should be knowledgeable about the cost of the products and the profits to be able to stand shoulder to shoulder with the negotiators. So, basically, negotiation is a process that leads to a decision and involves various steps of organization, analysis, and evaluation.
What are the necessary skill requirements of a procurement negotiator? The requirement is to know the negotiation techniques. He should be to able to work out any issue, get feedback from labor associations, know the power of the opposite party, be able to talk mutually on home grounds, have a clear idea about the concessions and should be able to use the apt diversions when it is required to solve an issue. While closing agreement, the condition should be a mutual benefit for both the parties so that there is no compromise made over the quality or attention towards detail. Such an agreement will cause more harm than good. The need is to come to a win-win negotiation. Several purchase staffs take care of the quality of the final product, and it is the responsibility of the procurement officer to create a good rapt with these staff and inform them about the aims of the purchasing system so that they keep a close check on the delivery.
It is a rather difficult task for a business to look for an efficient procurement negotiator as the person should be qualified to take up the intricate responsibility of making all the deals which will be the foundation of the business enterprise. It is only the experience acquired over time that will improve the characteristic skills and traits of the procurement negotiator. A trait which is a common one found in all great negotiators is the ability to respond well and understand. When you look at all the great negotiators of all time, you can see that empathy has been the most prominent and base skills required for proper communication. This understanding helps the officer to understand the key factors and to focus on it to maintain the business identity. It will give the capability to understand the traits, aims, and morals of the opposite party and display patience to the agreement talks. This empathy shown by the negotiator will be considered back with utmost respect.
Honesty and integrity are other characteristics of a good acquisition negotiator so that the others believe in him while making agreements over the matter of concern. To bring in his integrity, the officer will have to follow the rules strictly, be truthful and stick to the agreement clauses without any external reminders. The final agreement reached should be fair, and the officer should take care that all dealings are handled fairly being beneficial for all people involved. When it comes to negotiations, it is a difficult factor to be fair but essential too so that the positive and responsible outlook of the negotiator are expressed and realized. A strong negotiator is the one who displays the level of dependency that people have vested upon him and accepts it proudly and takes the liability of his actions on himself. This trait of responsibility should be improved upon each step by accepting all challenges, big or small. The negotiator should be able to stand up to the goals put before him without backing off or acquiring any help whatsoever.
It is not necessary that all deals are successful or becomes a successful one. The power to hold on and move on gets the negotiator moving forward with challenges. A good negotiator will not shudder with a failure and will see it as an opportunity to improve oneself to come back with a bang with new offers and to put away the setbacks. The way to success is to keep striving without giving up.
Gikey and Green described that an excellent negotiator is one who has a remarkable personality and carries forward a better communication to come to a good agreement.
But any person with these personality traits cannot become a good procurement negotiator. The post of a purchase negotiator is open only to uniquely skilled individuals who stay above the others by developing their traits and present it in a refined manner. The inexperienced and unpolished features of a procurement officer can lead him to get tangled in talks with a better negotiator on the opposite side and thus fail in completing a successful deal. The trick is to be well prepared by acquiring all the information about the negotiator of the opposing party before the negotiation process starts so that they is no risk of getting caught off guard. A small talk can let an experienced person get a good lot of information about the style and traits of the other person. The major mistake is to make wrong presumptions when dealing with an agreement. Therefore it is necessary to improve the logical analysis and evaluate the other related factors so that the idea can be imparted to the client or the supplier.
By getting a proper logical plan, the negotiator will be able to have the presiding power over the meeting taking up all the communications in the path that he desires. Such a supervising position gives him the control over the meeting and lets him decide when the meeting should stop and even make a reschedule optimally if he wants to make a recheck over the notes of the agreement. Sometimes, a procurement negotiator works with a team and spreads out the roles among the team members to produce the best results.
The proper timing is another essential trait, and it is not the ability of the individual to know what to say, but to realize the best time to say it. There are several cases of negotiations gone berserk over the wrong timing of presentation, pushing the business into loss of huge sums of money. The worst timing is to negotiate after the agreement is reached or before the proposal as it creates a bad image about the company as a whole by not succumbing to the settlements. Unless you are keen on details, an experienced negotiator will easily get your weaker sections and utilize it against you. When you seem in doubt, the other negotiator will quickly pick up the discussion in his favor.
The department of procurement performs different functions for different company definitions. Depending on the precise definition, there are traits which will finally decide the success of the business. These features include several factors like moral values, honesty, awareness, management, observation, understanding, etc.
The responsibilities and skill sets do not come to closure without the mention of the risk management skills. The risks managed can be classified as legal, operational and commercial. Mutual agreements carry fewer risks and deals that end in a loss, or unreasonable ones can be riskier. Proper usage of risk management, time management, and the right decision can help avoid any risks. With a wrong decision, it affects all the people down the line who are waiting to finish their tasks.
The next duty of the procurement negotiator comes in after the successful realization of the agreement. The contract had to be managed properly and analyzed clause-by-clause, point-by-point. The negotiator should be well acquainted with the advancements in technology to gain a firm hold. This can be attained by attending conferences and keeping up to date with the advancements.
In the career of a negotiator, he will have to deal with several different kinds of deals, and they can be handled in a variety of ways. There no such specific set of traits that can make a negotiator perfect in all senses. In simple words, a good negotiator is one who puts on his best approach and provides the best solution at the proper timing.
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