Success Factors of Negotiations E-Book

Andreas Haug

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2016

Seitenzahl: 77

Beschreibung

Few things are “more important to running a successful company than being able to reach wise, stable, and advantageous agreements” (Movius and Susskind 2009). Professionally prepared and executed negotiations can create a value of millions of Euros, a few imprudent sentences in negotiations can ruin a promising power position. The processes and outcomes of negotiations can look quite different. The key question before, during and after particular negotiations therefore is: “What are the factors which make a negotiation successful?” This book offers an answer to this question by presenting ten important success factors. They are based on a profound literature review and on broad practical experience. The valuable findings of this book shall contribute to the success of interested negotiators around the world not only in professional but also in private context.

Leseprobe

TABLE OF CONTENTS

FIGURES

FOREWORD

INTRODUCTION

1.1 ISSUE

1.2 OBJECTIVES

1.3 METHOD

CONTEXT

2.1 DEFINITIONS

2.1.1 Negotiation

2.1.2 Success factors

2.2 ASPECTS OF NEGOTIATIONS

2.2.1 Subject

2.2.2 Needs

2.2.3 Power

2.2.4 Targets

2.2.5 Strategy

2.2.6 Tactics

DERIVATION OF SUCCESS FACTORS OF NEGOTIATIONS

3.1 LITERATURE REVIEW ABOUT NEGOTIATIONS

3.1.1 Overview

3.1.2 Game Theory

3.1.3 Behavioural decision theory

3.1.4 Negotiation analysis

3.1.5 Management approaches

3.1.5.1 Voeth and Herbst (2009): Negotiation Management

3.1.5.2 Fisher et al. (1999; 2004): The Harvard Concept

3.1.5.3 Lewicki et al. (2006): Negotiation

3.1.5.4 Lax and Sebenius (2003; 2006): 3-D Negotiation

3.1.5.5 Wachs (2012): Faktor V

3.1.5.6 Thompson (2012): The Mind and Heart of the Negotiator

3.1.5.7 Hasler-Dierauer (2007): Negotiation Success

3.1.5.8 Movius and Susskind (2009): Built to Win

3.1.5.9 Kreggenfeld (2010): Negotiate

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3.1.5.10 Saner (2008): Negotiation Technique

3.1.5.11 Schranner (2007a; 2007b; 2009)

3.1.5.12 Braun (2008): Negotiation in Purchasing and Sales

3.1.5.13 Macioszek (1995): Chruschtschow’s Third Shoe

3.1.5.14 Forghani (2010): Dance Around Power

3.1.5.15 Ruede-Wissmann (2010): Satanic Art of Negotiation

3.1.5.16 Von Senger (2005): 36 Stratagems

3.1.5.17 Restrepo Sáenz (2013): The Negotiation Process

3.2 DISCUSSION REGARDING POSSIBLE SUCCESS FACTORS

3.3 HYPOTHESES OF SUCCESS FACTORS FOR NEGOTIATIONS

3.3.1 Comprehensive negotiation management

3.3.2 Mastery of information

3.3.3 Appropriate analysis of the situation

3.3.4 Feasible set of targets

3.3.5 Formation of an purposeful strategy

3.3.6 Creation of value

3.3.7 Developing negotiation power

3.3.8 Reasonable tactics

3.3.9 Profound negotiation skills

3.3.10 Thorough organization

TRANSFER INTO PRACTICE

SUMMARY

ABSTRACT

APPENDIX

BIBLIOGRAPHY

ABOUT THE AUTOR

CONTACT

FIGURES

Figure 1: Result-oriented negotiation strategies

Figure 2: Negotiation management

Figure 3: Success factors of negotiations

Figure 4: Overview of negotiation tactics

Figure 5: Checklist for successful negotiations

FOREWORD

Negotiations are paramount in safeguarding good business. I have observed in my career how professionally prepared and executed negotiations can create a value of millions of Euros, and have also seen how a few imprudent sentences in negotiations can ruin a promising power position.

I am very thankful that in the course of my recent studies at McGill University of Montreal I had the opportunity to reflect on my rich experience in negotiations and that I could explore my key question: “What are the factors which make a negotiation successful?” from a scientific perspective.

Thanks to Prof. Henry Mintzberg for his inspiring lectures and to my academic advisor, Prof. Pablo Restrepo Sáenz, for fruitful discussions. I also thank my various business partners and colleagues for sharing their best practice and insights into negotiations with me during the last 25 years.

I hope that this little work may give some helpful suggestions to interested negotiators around the world and will contribute to their success.

1 INTRODUCTION

1.1 ISSUE

Negotiations play an important role in management (Mintzberg 2009). Few things are “more important to running a successful company than being able to reach wise, stable, and advantageous agreements. (…) This holds true whether you are negotiating with customers, partners, suppliers, regulators, or investors.” (Movius and Susskind 2009, p. 1). By negotiating, millions of Euros of value are redistributed between parties. Since 1987 I have been working in the airline industry, characterized by tight margins and a partly monopolistic supplier landscape. In my career, e.g. as vice president procurement, a significant part of my activities was related to negotiations, either by my personal participation in negotiations or by managing and observing the negotiations of my teams or peers. I have gathered broad experience in international negotiations with customers, agents, suppliers, landlords, employees, works councils, unions, authorities and at court during the last 25 years. I have constantly spoken to experts and read literature about the topic in order to improve my personal knowledge and skills in negotiation and those of my organizations.

According to my observations, the processes and outcomes of negotiations look quite different. Often, my party reached its targets, but sometimes it did not. I often analyzed the case-related reasons behind the outcome and tried to learn for future negotiations. My key question before, during and after particular negotiations therefore is: “What are the factors which make a negotiation successful?”

1. 2 OBJECTIVES

The main objective of this work is to find answers to the question: “What are the factors which make a negotiation successful?”

This paper will give an overview of success factors with the help of literature, verified from the background of practice, discuss new insights and possibly trigger new research. The results of this work can serve as a practical guideline for negotiators and offer suggestions for improvements in companies, in order to create more value by professional negotiation.

1.3 METHOD

In order to reach these objectives, I will identify possible success factors by reviewing the relevant literature and discuss them from a practical background and with commercial experience.

In chapter 2 I focus on the relevant context, mainly discussing definitions and important aspects of negotiations in a commercial environment. Chapter 3 will serve to review the relevant literature in a systematic way and subsequently to formulate success factors in the light of practical experience. As a source of answers, plentiful international literature about negotiations exists: the wide range varies from scientific works founded on game theory (for example, Raiffa et al. 2002 and Berz 2007), business administration (for example, Voeth and Herbst 2009) and psychology (e.g. Barisch 2005) to simple guidelines by practitioners (for example, Schranner 2007b and Braun 2008). The challenge will be that the works are written for a certain context, they focus on different aspects, and might contain contradictory advice.

In chapter 4, I shall draw relevant conclusions to transfer into negotiation practice in companies. Chapter 5 will sum up the content of this work.

2 CONTEXT

In this chapter, I firstly establish some useful definitions around the topic and then discuss relevant aspects of negotiations to lay a basis for the following chapters.

2.1 DEFINITIONS

2.1.1. Negotiation

Everybody has certain beliefs about the term “negotiation”. For example, we negotiate the price of a new car, we negotiate with children about when they have to return home in the evening, or there is a negotiation at parliament about a new taxation law. In this work, I focus on negotiations in the commercial context. Typically, organization units like sales, procurement, labour relations, mergers & acquisitions and partnership management would be involved in negotiations. Legal, private-emotional, political-diplomatic and intrapersonal negotiations are not discussed here. However, some findings may be transferred to these spheres if applicable.

Reviewing the literature shows many different definitions of negotiation, but most elements are congruent. So we can state that a negotiation is a process in which at least two parties with different needs try to agree on the exchange of goods and services as a subject where each party tries to influence – often by power – the outcome and process according to its targets by strategies and tactics (Saner 2008; Voeth and Herbst 2009).

The negotiation process typically consists of preparation and negotiation, followed by implementation. Depending on importance and complexity, these phases can be quite different in their duration and content. In interpersonal negotiations, at least two negotiation parties, represented by a person or team, participate voluntarily. Additionally, third parties like observers or mediators can also be involved. The aim is to find an agreement. It can also happen that no deal is reached. The motivation for exchange is based on different needs and preferences of the parties in relation to the subject.

Negotiations can take place in writing, by phone, face to face, or through internet applications. Combinations with auctions, called “negotiauctions” by Subramanian and Zeckhauser (2005, p. 3) are possible.

The terms “bargaining” and “negotiation” are mostly used synonymously. However, Lewicki et al. (2006) suggest that the first term should be used in the sense of haggling over price in win-lose situations, whereas the latter should stand for the search for a mutually acceptable solution in the win-win context of the so-called “Harvard Concept” (Fisher et al. 1999).

2.1.2 Success factors

Success should be understood as the degree of target achievement. Success factors are components that have an influence on the process and its outcome in this context of negotiations. In management, critical success factors can determine the success or failure of actions, strategies or even companies (Horváth 2009).

2. 2 ASPECTS OF NEGOTIATIONS

According to the definition, some of the main aspects of negotiations in a commercial context, such as the subject, needs of the persons involved, allocation of power, the targets, strategy and tactics of the parties, will be described further.

2.2.1 Subject

The subject of negotiations can be goods, services, rights, omissions or money, or a combination of these.