Regardless of the type of small business an owner may be involved in, there are always negotiations that take place on a daily basis. These may be as simple as choosing a meeting time and place, or they could be much more important to the overall business structure, such as working out the details of a big contract. Business people need to be skilled in negotiation tactics and understand how to effectively communicate during the negotiation process.

Effective communication is directly proportional to effective negotiation. The better the communication is the better the negotiation would be. The discussion does not mean fighting and shouting, instead, it is simply the exchange of one’s ideas, thoughts, and opinions with each others.

One needs to have excellent communication skills for a healthy and effective discussion. Communication is an art and one should master it to excel in all kinds of negotiation. The other person will never come to know about your thoughts and ideas unless and until you share it with them.

• Why is Effective Communication Important in Negotiation?
• What is Communication During Negotiation?
• What is the Role of Culture in Communication and Negotiation?
• What are the Types of Negotiation Strategies?
• How do you Effectively Communicate With Negotiations?
• What is Important of Communication?
• What Factors Affect Negotiation?
• What are the Five 5 Stages of Negotiation?
• What are the Most Important Elements of Negotiation?
• What are the Most Important Techniques for Effective Negotiations?

Why is Effective Communication Important in Negotiation?

Communicating effectively is crucial for effective business negotiation. Your goal is to make yourself and your position understood, and this relies on your communication ability. In a negotiation, there is no room for communication breakdowns and misunderstandings.

Read Also: Should Business be Market-focused or Product-focused?

Negotiation is essentially an exercise in communication. The underlying objective is to use communication techniques to convince, persuade, or alter the perceptions of another. 

The three most significant elements of communication include: 

Verbal Communication

The effectiveness of verbal communication in a negotiation depends upon the ability of the speaker to encode thoughts properly and on the ability of the listener to understand and decode the intended message(s). 

Language operates at two levels: the logical level (for proposals or offers) and the pragmatic level (semantics, syntax, and style). We often focus upon logical attributes instead of semantic or style attributes. 

In any event, the meaning conveyed by a proposition or statement is a combination of one logical, surface message and several pragmatic messages. 

A negotiator’s word choice, tone, tempo, and inflections may not only signal a position but also shape and predict it. 

Nonverbal Communication 

Non-verbal communication is anything that is not words. Examples of non-verbal communication include vocal cues or paralinguistic cues; facial expressions; eye contact; interpersonal spacing; posture; body movements; gestures; touching, etc. 

Generally, successful communicators are nonverbally sensitive, nonverbally expressive, nonverbally self-controlled, and motivated to perform for their audiences. 

It can be extremely important with regard to persuasion, power, and trust. People assert dominance and power through nonverbal cues. For example, high social power is reliably indicated by patterns of looking while speaking and listening. 

A skilled negotiator will use non-verbal communication in a manner that furthers her strategy and strengthens her position. 

A neutral exhibition of non-verbal communication is known as attending behaviors. Attending behavior lets the other know that you are listening and prepares her to receive your message. 

Examples of attending behavior include making eye contact when speaking and adjusting one’s body position to show engagement. 

Communication Channel 

People negotiate through a variety of communication media: over the telephone, in writing, and increasingly through such electronic channels as e-mail and teleconferencing systems, instant messaging, and even text messaging. 

It is important to recognize the context of the negotiation and select a communication channel that maximizes the potential for value creation and agreement. 

Sometimes, however, there is little option to choose a channel. In such a case, it is important to be aware of the general hurdles that any communication channel entails. 

For example, there is evidence that negotiation through written channels is more likely to end in an impasse than a negotiation that occurs face-to-face or by phone. 

There is also evidence that e-mail negotiators reach agreements that are more equal than face-to-face negotiators. 

Further, negotiators using e-mail need to work harder at building a personal rapport with the other party if they are to overcome the limitations of the channel that would otherwise inhibit optimal agreements or fuel impasse.

What is Communication During Negotiation?

Communication in negotiation is the means by which negotiators can achieve objectives, build relationships, and resolve disputes. Most negotiators know that it is the most important tool you can have for successful negotiations.

Communication becomes even more important when negotiations include counterparts that are from different cultures.

A negotiator communicates her preferences during a negotiation. Selectively relaying preferences can have a powerful influence on the actions of the other party and on outcomes. 

A communicative framework for negotiation assumes that the communication of offers is a dynamic process; the process is interactive; and that various internal and external factors drive the interaction and motivate a bargainer to change his or her offer. 

• Communicating Offers
• Counteroffers, and 
• Motives

What is the Role of Culture in Communication and Negotiation?

International business deals not only cross borders, they also cross cultures. Culture profoundly influences how people think, communicate, and behave. It also affects the kinds of transactions they make and the way they negotiate them.

Differences in culture between business executives—for example, between a Chinese public sector plant manager in Shanghai and a Canadian division head of a family company in Toronto– can create barriers that impede or completely stymie the negotiating process.

The effect of culture on negotiation is very broad. Below are some of the primary methods in a culture that affects communication and negotiations. It can be categorized into intercultural and cross-cultural and can be compared along cultural characteristics. 

• Intracultural negotiation refers to negotiations within one’s own culture. 
• Cross-cultural negotiation concerns negotiation between individuals from different cultures. Examples of cultural characteristics include collectivist versus individualistic cultures. Research has found, however, that negotiators in collectivist cultures are more likely to reach integrative outcomes than negotiators in individualist cultures. 

Research suggests that culture does have an effect on negotiation outcomes, although it may not be direct, and it likely has an influence through differences in the negotiation process in different cultures. 

Elements of Culture Affecting Negotiation

The following aspects of different cultures affect the negotiation process:

• Definition of Negotiation– The fundamental definition of negotiation, what is negotiable, and what occurs when we negotiate can differ greatly across cultures.
• Negotiation opportunity- Cross-cultural negotiations will be influenced by the extent that negotiators’ indifferent cultures have fundamental agreement or disagreement about whether or not the situation is distributive or integrative.
• Selection of negotiators– Different cultures weigh the criteria to select negotiators differently, leading to varying expectations about what is appropriate in different types of negotiations.
• Protocol- Cultures differ in the degree to which protocol, or the formality of the relations between the two negotiating parties, is important.
• Communication- The implications of a method of communication for negotiation regards the ability to transmit information necessary to reach integrative agreements and any dispute resolution preferences, differences in strategies and tactics, and orientation toward long-term and short-term goals.. Cultures influence how people communicate, both verbally and nonverbally, directly and indirectly, and through the body language used.
  • Direct communication is targeted directly at the other party, such as words spoken or written communications. 
  • Indirect communication uses third parties, situational signals, or other indirect means of communication.
• Time Sensitivity – Other cultures have quite different views about time. The opportunity for misunderstandings because of different perceptions of time is great during cross-cultural negotiations.
• Risk propensity – Negotiators in risk-oriented cultures will be more willing to move early on a deal and will generally take more chances. Those in risk-avoiding cultures are more likely to seek further information and take a wait-and-see stance.
• Groups versus individuals – The United States is very much an individual-oriented culture, where being independent and assertive is valued and praised. Group-oriented cultures, in contrast, favor the superiority of the group and see individual needs as second to the groups needs.
• Nature of agreements – Cultural differences in how to close an agreement and what exactly that agreement means can lead to confusion and misunderstandings.
• Emotionalism– Culture appears to influence the extent to which negotiators display emotions (Salacuse, 1998). These emotions may be used as tactics, or they may be a natural response to positive and negative circumstances during the negotiation (see Kumar, 2004).
• Cognition– What are the effects of culture on negotiator cognition? Researchers are working to understand how culture influences the way that negotiators process information during the negotiation and how this in turn influences negotiation processes and outcomes. 
• Ethics and Tactics– Effects of culture on negotiator ethics and tactics. Researchers have recently turned their attention to examining ethics and negotiation tactics in cross-cultural negotiations by exploring the broad question of whether negotiators in different cultures have the same ethical evaluation of negotiation tactics.

How Culture can Constrain Negotiations

Key constraints or challenges in negotiation attributable to culture include:

• Expanding and dividing the pie– The objective of integrative negotiation is to expand the pie by creating greater total value in the negotiation. Cultural influences can interrupt this objective through any number of methods. Dividing the pie concert apportioning value to individual negotiations. Procedural and cognitive aspects of different cultures can thwart this necessary aspect of a successful negotiation.
• Sacred values – Issues that are deemed by the decision maker as ones that cannot be compromised, traded off, or even questioned. Trade-offs – Exchanges that are made between parties; in negotiation, one party gives up something less valuable to him or herself in return for something more valuable, and vice versa.
• Biased punctuation of conflict – The tendency for people to interpret interactions with their adversaries as offensive and their own behavior as defensive.
• Ethnocentrism- The universal strong liking of one’s own group and the simultaneous negative evaluation of out-groups.
• Affiliation bias – Bias that occurs when people evaluate a person’s actions on the basis of their group connections, rather than on the merits of the behavior itself.
• Conciliation/Coercion – Faulty perceptions of conciliation and coercion
• Naverealism– The human tendency to believe that we see the world around us objectively and that people who disagree with us must be uninformed, irrational, or biased. 
• Western Canon debate– Argument that the body of scholarship is biased because the traditional main focus of academic studies of Western Culture and history has only been on works produced by European men. 
• Fundamental attribution error – Error that occurs when people attribute the behavior of others to underlying dispositions or character and discount the role of situational factors.

What are the Types of Negotiation Strategies?

Negotiation is a discussion in which two or more parties attempt to reach an agreement through bargaining. Here are a few examples of negotiation in business:

• Salary negotiation: Candidates for jobs can bargain with an employer about their salary and benefits.
• Vendor negotiation: Many businesses negotiate with vendors on the pricing and services provided in contracts.
• Conflict-resolution: Often, conflict-resolution in the workplace involves a negotiation between two or more parties that can result in an agreement.

Below is a list of negotiation types:

1. Principled negotiation

Principled negotiation is a type of bargaining that uses the parties’ principles and interests to reach an agreement. This type of negotiation often focuses on conflict resolution. This type of bargaining uses an integrative negotiation approach to serve the interests of both parties. There are four elements to a principled negotiation:

• Mutual gain: The integrative approach to a principled negotiation invites parties to focus on finding mutually beneficial outcomes through bargaining.
• Focus on interests: Negotiators can identify and communicate their motivations, interests and needs in principled negotiation.
• Separate emotions from issues: In principled negotiation, parties can reduce emotional responses and personality conflicts by focusing on the issues rather than how the problems make them feel.
• Objectivity: Parties in a principled negotiation can agree to using objective criteria as a baseline for negotiations. Examples of objective criteria in negotiations include market rates, expert opinions, laws and industry standards.

For example, the leaders of two departments for a large company often argue over the resources for each department. The two leaders enter a principled negotiation to discuss solutions. They listen to each other’s positions and decide to base resource allocation on the percentage of revenue each department generates for the company. The department leader who receives more resources agrees to support the other department’s functions, and the two leaders reach a compromise.

2. Team negotiation

In a team negotiation, multiple people bargain toward an agreement on each side of the negotiation. Team negotiations are common with large business deals. There are several personality roles on a negotiation team. In some cases, one person may perform more than one role. Here are some common roles on negotiation teams:

• Leader: Members of each team in a negotiation usually appoint a leader to make the final decisions during negotiations.
• Observer: The observer pays attention to the other party’s team during a negotiation, discussing their observations with the leader.
• Relater: A relater on a negotiation team works on building relationships with the other team members during bargaining.
• Recorder: A recorder on a negotiating team can take notes on the discussions of a negotiation meeting.
• Critic: While this may sound like a negative role, having a critic on the team during negotiations can help you understand an agreement’s concessions and other negative results.
• Builder: A builder on a negotiation team creates the deal or package for a bargaining team. They can perform financial functions during negotiations, calculating the cost of an agreement.

3. Multiparty negotiation

A multiparty negotiation is a type of bargaining where more than two parties negotiate toward an agreement. An example of a multiparty negotiation is bargaining between multiple department leaders in a large company. Here are a few of the challenges of multiparty negotiations:

• Fluctuating BATNAs: BATNA stands for best alternative to a negotiated agreement. With multiple parties in a negotiation, each party’s BATNA is more likely to change, making it harder for parties to agree. Each party can evaluate its BATNA at each negotiation stage to understand the results of a proposed agreement.
• Coalition formation: Another challenge of multiparty negotiations is the possibility for different parties to form coalitions or alliances. These alliances can add to the complexity of bargaining. Coalitions can agree to a specific set of terms to help all parties reach an agreement.
• Process-management issues: Managing the negotiation process between multiple parties can lead to a lack of governance and miscommunications. People in multiparty negotiations can avoid these issues by choosing a leader willing to collaborate with others toward an agreement.

4. Adversarial negotiation

An adversarial negotiation is a distributive approach in which the most aggressive party in a negotiation achieves an agreement that serves their interests. Here are a few examples of adversarial negotiation tactics:

• Hard bargaining: Hard bargaining is a strategy in which one party refuses to compromise in an agreement.
• Future promise: A person using this tactic can promise the other party a future benefit in exchange for current concessions. You can counteract this tactic by asking for the future promise in writing.
• Loss of interest: Another adversarial negotiation tactic is loss of interest, in which one party pretends they’ve lost interest in pursuing an agreement.

How do you Effectively Communicate With Negotiations?

Verbal and non-verbal communication

While verbal communication is an efficient way of conveying a message, non-verbal cues are used to indicate emotions and add meaning.

Skilled negotiators develop techniques in observation and listening so they can analyze the total communication package. Observing and interpreting non-verbals from the Other Party helps you understand their hidden feelings. Observe what is said and how it was said and listen to what was not communicated. All may contain hidden cues about what motivates the Other Party.

Observe and analyze body language

Research suggests that body language accounts for more than 50% of the communication message. During face-to-face negotiations (in person or by video conferencing), skilled negotiators analyze body language and deliberately use their own body language to their advantage. Consider this when negotiating via phone or email, without these cues, it is more difficult to understand the Other Party’s key needs and how they manage their decision-making.

Practice active listening and maintain content awareness

The skilled negotiator appreciates that verbal communication includes listening as well as talking. Good listening is regarded as the most critical of our negotiating skills. Negotiators appreciate that it is more difficult to listen than to speak and real listening requires constant practice.

When negotiating, we make decisions based on what we hear, as well as what we observe. Practice the following to maintain content awareness:

• Ask yourself “What is it the Other Party wants me to do, think or believe?”
• Make contrasts and comparisons, validate the evidence
• Mentally repeat the Other Party’s key words or phrases
• Read between the lines – understand what is not being said

A question has more influencing power than a statement

Carefully framed questions will keep you in control of the negotiation. The right questions can elicit facts, validate assumptions and uncover the Other Party’s needs. Skillful questioning can be used tactically to direct the course of the negotiation to your preferred outcome.

When you prepare for your negotiation, consider the influence your questions may have on the Other Party and what their purpose is in your negotiation strategy.

Agree signals for internal team control

Negotiation teams need to agree on some sort of covert signals to help manage the negotiation process. The team lead needs to be able to pass the discussion to team members and then later regain control of the interaction. The lead negotiator’s role should remain as such unless it is specifically agreed for a change of roles.

When signals have been agreed upon, ensure each team member is clear on the meaning, it helps if this is rehearsed before the event.

Structure of language for cooperation

Style flexibility demands that we intentionally act competitively or cooperatively. The language you use is an important component in implementing your chosen style. Style choice must be carefully managed so you purposefully implement your style rather than react to the Other Party, revealing your true feelings. Aggressive verbal slanging matches between negotiators create a negative emotional climate and are usually detrimental to the outcome you seek.

Do you need to engage a mediator?

With the increased use of alternative dispute resolution procedures, negotiators now find themselves more often in situations where they are being called on to act as mediators. Interventions by mediators influence the behavior of the negotiators, the negotiation climate and the ultimate outcome of the negotiation.

Often the presence of a mediator can be sufficient to facilitate agreement. This may be due to the influence the third party has. The main task of the mediator is to assist the parties to find common ground through initiating active process interventions, both formally and informally.

What is Important of Communication?

Effective communication is vital for efficient management and improving industrial relations. In modern world the growth of telecommunication, information technology and the growing competition and complexity in production have increased the importance of communication in organizations large and small irrespective of their type and kind.

A corporate executive must be in a position to communicate effectively with his superiors, colleagues in other departments and subordinates. This will make him perform well and enable him to give his hundred percent to the organization.

The importance of communication in an organization can be summarized as follows:

1. Communication promotes motivation by informing and clarifying the employees about the task to be done, the manner they are performing the task, and how to improve their performance if it is not up to the mark.
2. Communication is a source of information to the organizational members for the decision-making process as it helps identify and assess the alternative courses of action.
3. Communication also plays a crucial role in altering an individual’s attitude, i.e., a well-informed individual will have a better attitude than a less-informed individual. Organizational magazines, journals, meetings and various other forms of oral and written communication help in moulding employee’s attitudes.
4. Communication also helps in socializing. In today’s life the only presence of another individual fosters communication. It is also said that one cannot survive without communication.
5. As discussed earlier, communication also assists in controlling the process. It helps control organizational member’s behaviour in various ways. There are various levels of hierarchy and certain principles and guidelines that employees must follow in an organization. They must comply with organizational policies, perform their job role efficiently and communicate any work problems and grievances to their superiors. Thus, communication helps in controlling the function of management.

An effective and efficient communication system requires managerial proficiency in delivering and receiving messages. A manager must discover various barriers to communication, analyze the reasons for their occurrence and take preventive steps to avoid those barriers. Thus, the primary responsibility of a manager is to develop and maintain an effective communication system in the organization.

What Factors Affect Negotiation?

Commonly understood factors affecting a negotiation include:

Cognitive Disposition 

Logic is the starting point for negotiation strategy. That is, a party must understand the elements of negotiation and a party’s logical response to those elements. A party’s perception of negotiation and all of its contextual elements may change given any number of influences on the negotiator. 

Most notably, emotions can affect the strategic orientation of a negotiator. Specifically, emotions (or lack thereof) are known to influence an individual’s behavior and alter or take the place of logic. In turn, they can alter the perception of interests. Emotions can also affect a negotiator’s self-belief or self-efficacy. 

Emotional intelligence is the ability of people (and negotiators) to understand emotions in themselves and others and to use this understanding to effect positive outcomes. 

Communication Ability

In summary, negotiations are a communication exercise. This is the method by which negotiators carry out their strategies. 

Trust, Relationships, and Ethics affect Negotiations 

In later articles, we discuss the role of trust, relationships, and ethics in negotiation. These are all personal factors that affect how negotiators interact. Each of these elements involves emotions and can affect one’s objectives.

 In summary, individuals do not always act logically when affected by emotions. These factors can affect ones approach to and objectives in the negotiation. 

Ethics 

In later articles, we discuss the ethical considerations present in a negotiation. We explore how ethics can affect the negotiation process and outcome. 

Multi-party or Team Negotiation 

In later articles, we discuss team and multi-party negotiations. The team dynamics in a negotiation affect the strategy and tactics employed, as well as the interests or objectives in the negotiation. 

Further, the human element of team-based negotiation is the propensity to form coalitions in support or against others. These factors can affect the process and outcome of the negotiation. 

Cross-cultural Negotiation 

In later articles, we discuss cross-cultural negotiation. Individuals from diverse cultures may place differing levels of value upon the outcomes (interests or objectives) and the process of negotiation. As such, culture stands to greatly influence the negotiation context and process. 

Medium of Negotiation 

In later articles, we explore negotiation through information technology. Negotiation is effectively an exercise in communication. Negotiation through a medium other than face-to-face can alter the context of the negotiation, as well as how other factors (such as ethics, trust, etc.) affect the negotiation. As such, a negotiator must adjust her strategy and tactics accordingly.

What are the Five 5 Stages of Negotiation?

Negotiation is a process by which two or more people (or groups) resolve an issue or arrive at a better outcome through compromise. Negotiation is a way to avoid arguing and come to an agreement with which both parties feel satisfied.

Negotiation can be used by a variety of groups in a variety of situations—for instance, between individuals at a market looking to get the best price on an item, between startups looking to merge organizations through business negotiations, or between governments who want to come to a peace agreement.

In your daily life, you may find yourself at work in salary negotiations or sales negotiations. Negotiation strategies are also a great tool for conflict management and conflict resolution—even in your personal life.

While there are many approaches to negotiation tactics, there are five common steps that most effective negotiations follow to achieve a successful outcome:

1. Prepare: Negotiation preparation is easy to ignore, but it’s a vital first stage of the negotiating process. To prepare, research both sides of the discussion, identify any possible trade-offs, and determine your most-desired and least-desired possible outcomes.

Then, make a list of what concessions you’re willing to put on the bargaining table, understand who in your organization has the decision-making power, know the relationship that you want to build or maintain with the other party, and prepare your BATNA (“best alternative to a negotiated agreement”). Preparation can also include the definition of the ground rules: determining where, when, with whom, and under what time constraints the negotiations will take place.

2. Exchange information: This is the part of the negotiation when both parties exchange their initial positions. Each side should be allowed to share their underlying interests and concerns uninterrupted, including what they aim to receive at the end of the negotiation and why they feel the way they do.

3. Clarify: During the clarification step, both sides continue the discussion that they began when exchanging information by justifying and bolstering their claims. If one side disagrees with something the other side is saying, they should discuss that disagreement in calm terms to reach a point of understanding.

4. Bargain and problem-solve: This step is the meat of the process of negotiation, during which both sides begin a give-and-take. After the initial first offer, each negotiating party should propose different counter-offers for the problem, all the while making and managing their concessions.

During the bargaining process, keep your emotions in check; the best negotiators use strong verbal communication skills (active listening and calm feedback; in face-to-face negotiation, this also includes body language). The goal of this step is to emerge with a win-win outcome—a positive course of action.

5. Conclude and implement: Once an acceptable solution has been agreed upon, both sides should thank each other for the discussion, no matter the outcome of the negotiation; successful negotiations are all about creating and maintaining good long-term relationships. Then they should outline the expectations of each party and ensure that the compromise will be implemented effectively. This step often includes a written contract and a follow-up to confirm the implementation is going smoothly.

What are the Most Important Elements of Negotiation?

Whether you are trying to obtain a better price from a supplier or to obtain a wage increase from your employer, you are in a bargaining situation of negotiation. If you are an aspiring entrepreneur, it is important to sharpen your skills in the field of negotiation now in order to learn how best to get ahead and make satisfactory decisions for all parties involved.

The skills you’ll need depend on your environment, your intended outcome and the people or businesses involved. Here are several key elements that apply to many situations:

1. Communication

Essential communication skills include identifying nonverbal cues and verbal skills to express yourself engagingly. Skilled negotiators can change their communication styles to meet the listener’s needs. By establishing clear communication, you can avoid misunderstandings that could prevent you from reaching a compromise.

2. Active listening

Active listening skills are also crucial for understanding another person’s opinion in negotiation. Unlike passive listening, which is the act of hearing a speaker without retaining their message, active listening ensures you engage and later recall specific details without needing information repeated.

3. Emotional intelligence

Emotional intelligence is the ability to control your own emotions and recognize others’ feelings. Being conscious of the emotional dynamics during negotiation can allow you to remain calm and focused on the core issues. If you’re unsatisfied with the current negotiation, ask for a break so you and the other party can return with refreshed perspectives.

4. Expectation management

Just as you should enter a negotiation with a clear goal, the other side also likely has its own defined expectations. If you believe you might not be able to agree to each other’s terms, you could try adjusting your expectations. Skilled expectation management involves maintaining a balance between being a firm negotiator and a collaborative one.

5. Patience

Some negotiations can take a long time to complete, occasionally involving renegotiation and counteroffers. Rather than seeking a quick conclusion, negotiators often practice patience to properly assess a situation and reach the best decision for their clients.

6. Adaptability

Adaptability is a vital skill for a successful negotiation. Each negotiation is unique, and the situation within a singular negotiation may change from one day to the next. For example, an involved party may change their demands abruptly. While it’s difficult to plan for every possible situation, a good negotiator can adapt quickly and determine a new plan if needed.

7. Persuasion

The ability to influence others is an important negotiation skill. It can help you define why your proposed solution benefits all parties and encourage others to support your point of view. In addition to being persuasive, negotiators should be assertive when necessary. Assertiveness allows you to express your opinions while respecting the other side’s perspectives.

8. Planning

Negotiation requires planning to help you determine what you want. You should consider the best possible outcome, your least acceptable offer and what you will do if an agreement isn’t reached. Preparing, planning and thinking ahead is crucial to a successful negotiation. Planning skills are necessary for negotiating and deciding how the terms will be fulfilled.

The best negotiators enter a discussion with at least one backup plan, but often more. Consider all possible outcomes, and be prepared for each of these scenarios. This is known as the “best alternative to a negotiated agreement” (BATNA) for negotiators.

9. Integrity

Integrity , or having strong ethical and moral principles, is an essential skill for negotiations. Being thoughtful, respectful and honest allows the other side to trust what you say. As a negotiator, you should be able to follow through on commitments. To demonstrate trustworthiness, avoid over-promising.

10. Rapport building

The ability to build rapport lets you establish relationships with others where both sides feel supported and understood. Building a rapport requires you to communicate your goals and understand the other side’s wants and needs. Rapport helps ease tensions, promotes collaboration and increases the likelihood of reaching an agreement. To build rapport, showing respect and using active listening skills are critical.

11. Problem-solving

Negotiation requires the ability to see the problem and find a solution. If a price is too high, how can it be lowered? If a resource is in short supply, what can be done to increase it? Being able to find unique solutions to problems may be the determining factor in compromise.

12. Decision making

Good negotiators can act decisively during a negotiation. It may be necessary to agree to a compromise during a bargaining arrangement. You need to be able to react decisively. Keep in mind that your decisions may have lasting effects on yourself or your company. It is important to think through your options carefully without overthinking your decision. Going back and forth between your options without a clear answer might bring unnecessary stress.

What are the Most Important Techniques for Effective Negotiations?

You’ve mastered the basics of good negotiation techniques: you prepare thoroughly, take time to build rapport, make the first offer when you have a strong sense of the bargaining range, and search for wise tradeoffs across issues to create value.

Now, it’s time to absorb five lesser-known but similarly effective negotiation topics and techniques that can benefit all professional negotiators:

1. Reframe anxiety as excitement. The preparation stage of negotiation often comes with unpleasant side effects, such as sweaty palms, a racing heart, and seemingly overwhelming anxiety. It’s common even for professional negotiators to feel nervous, but this state of mind can lead us to make costly decisions, according to Harvard Business School professor Alison Wood Brooks.

We tend to believe the best negotiation techniques to deal with our anxiety is to calm down, but that can be easier said than done. Try reframing the state of high physiological arousal associated with anxiety as excitement, recommends Brooks. This subtle reframing tactic, which treats your arousal as a plus rather than a minus, actually increases authentic feelings of excitement—and improves subsequent performance in negotiation, Brooks has found in her research.

2. Anchor the discussion with a draft agreement. Due to a widespread decision-making heuristic known as the anchoring bias, first documented by psychologists Amos Tversky and Daniel Kahneman, the person who makes the first offer in a negotiation is likely to sway the discussion in her favor. First offers tend to serve as powerful anchors, even for experienced professional negotiators.

Read Also: Role of Currency Exchange in Trade

To make an even bigger impact, you might try opening substantive negotiations with a draft agreement, or standard-form contract, prepared with your legal counsel and any relevant decision-makers from your team. Though such drafts aren’t always appropriate, they can increase your influence over the negotiation, according to Tufts University professor Jeswald Salacuse. A standard-form contract not only uses the anchoring bias to your advantage but could save both sides time and money, making this one of the negotiation techniques that could really be worth trying.

3. Draw on the power of silence. In negotiation, as in any discussion, we tend to rush in to fill any uncomfortable silences that arise with persuasion techniques and counter-arguments. That can be a mistake, according to Harvard Business School and Harvard Law School professor Guhan Subramanian. After your counterpart speaks, allowing a few moments of silence to settle can give you time to fully absorb what he just said.

“Silence give you the ability to dampen your instincts for self-advocacy and amplify your instinct to listen,” according to Subramanian. Silence can also help you defuse your own tendency toward the anchoring bias. If a counterpart drops an outrageous anchor, “your stunned silence will far more effectively defuse the anchor than heaps of protesting would,” says Subramanian.

4. Ask for advice. Professional negotiators often assume that asking the other party for advice will convey weakness, inexperience, or both. But in fact, in one recent study, participants rated partners who asked them for advice to be more competent than partners who didn’t ask for advice, Brooks, Wharton School professor Maurice Schweitzer, and Harvard Business School professor Francesca Gino found.

When we ask for advice, we flatter the adviser and boost her self-confidence, the researchers discovered. So, consider taking opportunities to ask your counterpart for advice when you truly need it. Not only are you likely to benefit from the advice, but you may strengthen the relationship in the process.

5. Put a fair offer to the test with final-offer arbitration. When negotiating to end a dispute under the shadow of a lawsuit, you might find yourself frustrated by a counterpart’s seeming inability to make or entertain reasonable, good-faith offers. How can you come to a settlement that’s fair to both sides in such an adversarial negotiation?

One promising but underused tool is final-offer arbitration (FOA), also known as baseball arbitration, according to Harvard Business School professor Max H. Bazerman. In FOA, each party submits its best and final offer to an arbitrator, who must select either of the two offers and not any other value. Parties may not appeal the arbitrator’s decision.

When parties agree to use FOA, their offers typically become reasonable, as they now have the incentive to impress the arbitrator with their reasonableness. In Major League Baseball, where FOA is available, uncertainty about what an arbitrator might decide usually motivates players and teams to come to an agreement in contract disputes.