Experienced negotiators know
the importance of building a personal relationship before entering a
negotiation. Negotiations involve two parties, usually an organisation and its
Suppliers, trying to reach a deal in which both parties may want a different
outcome.
Reaching a Compromise
In most, if not all,
negotiating scenarios, the best deals and compromises are reached between an
organisation and its Suppliers, where the parties involved in the negotiating
process are removed from the day-to-day operational and administrative tasks of
trading.
Operational and
administrative staff within organisations rarely, if ever, formulate or write
the technical specifications upon which an organisation describes the needs of
its Suppliers. Negotiations with Suppliers should be undertaken and led by
those who have an intimate knowledge of the technical specification upon which
the negotiation will be based.
Those negotiating with
Suppliers must have an objective view of what is being negotiated and a clear
understanding of an organisation's strategic needs without political or
operational bias. A successful negotiating process must balance an
organisation's strategic and tactical needs.
Operational and
administrative staff are deeply involved with an organisation's tactical needs
and often lack the strategic clarity and visionary intent required in the
negotiating process. As such, they should be involved in, but not lead,
negotiating processes to balance an organisation's strategic and tactical
needs.
Negotiating With Suppliers
An organisation and its
Suppliers must be able to negotiate with each other in a scenario where neither
side is viewed as more potent than the other. Each party is equally reliant on
the other to create a mutually profitable trading opportunity. Organisations
must lead the negotiating process to ensure that Suppliers understand their
requirements so that Suppliers can meet them profitably.
A personal relationship with
an organisation’s Suppliers against whom the organisation will be negotiating
prevents an adversarial relationship from souring the deal before it starts. If
an organisation’s negotiation Stakeholders see themselves as adversaries in a
confrontation with an organisation’s Suppliers, both sides tend to become
defensive and reactive.
An overly heated atmosphere
and anger can unravel the most carefully planned negotiation process. However,
much can be done to avoid the problems and issues when an organisation tries to
establish a “personal relationship” with its Suppliers, who will be on the
other side of the negotiating table.
If an organisation and its
Suppliers did not have divergent needs, negotiations would not be needed. However,
when both parties are asked to give up something, this can create a problematic
atmosphere.
Reaching a Mutually
Beneficial State
If an organisation’s
Suppliers believe that the organisation is genuinely looking for a mutually
beneficial deal, the organisation is far more likely to make a concession. It
is always good to remember that business is business and that an organisation must
establish itself as the leader in the negotiation process. It has a requirement
to fulfil, and it knows the intricacies of this best.
Negotiation stakeholders
should never make personal attacks or attribute any combative exchange between
an organisation and its Suppliers to malice on the part of their opponent. In
this situation, asking for even a tiny concession can be seen as an encroachment
or an attempt to take advantage of the other party.
When things become tense in
a negotiation, it is always best to suggest a break. Taking some time away from
the negotiating table can help the parties steer the conversation back to a
more convivial personal relationship. It always pays not to take things
personally.
Getting the Best Advantages
While Compromising
Understanding what a
Supplier wants from the negotiation can help an organisation achieve its goals.
It is wise to remember to get to know the negotiators' positions on the other
side and the people with whom an organisation is negotiating. Focusing on
seeking their cooperation can be the element that closes a deal.
A good negotiator will build
a personal rapport with the person against whom they will be negotiating before
they even get to the table, emphasising the importance of maintaining a
professional but personable approach to managing an organisation’s supply base.
The key is for the
negotiator to frame themselves as a friend first and a negotiator second
to the Supplier, transforming the relationship between the parties in
negotiation from competitors to co-operators to provide a positive perspective
on the Supplier that an organisation is negotiating with.
The Positivity of
Negotiations
Positive negotiation
relationships are meaningful with suppliers because they engender trust, which
is vital to securing an organisation’s best negotiating position with suppliers.
Consideration of a proposed action entails a risk. People view negotiations and
the associated risks as more acceptable when a proposal is made by someone they
trust.
Research in the social
sciences has found that people tend to respond to negotiations with similar
reactions. Suppliers tend to respond kindly if an organisation cooperates and
treats its suppliers with trust and respect. Effective leadership within the
negotiating process is crucial to securing a successful outcome.
The nature of reciprocal
trust reinforces the value of taking time to get to know and understand the
other party and build rapport before an organisation begins to negotiate. It is
important not to assume that an organisation can form a bond simply by
exchanging a few friendly emails before meeting in person. Instead, they should
forge a personal connection before the negotiation process begins.
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