Philosophy of Negotiation
Self Improvement: Mind Development
It is fair to say
that we have been negotiating since
birth. We started as children,
negotiating with our parents, family
When we were given
options such as 'if then else', we
tried to improve the conditions by
negotiating a better deal.
Occasionally, we even negotiated
negotiated with God at the creation
and later with everybody else. We
have improved and expanded our
negotiating skills and today they
are widely applied, not only known
and practised by attorneys.
Negotiations are conducted in
diverse arenas, each requiring
different negotiation skills, but we
can find commonalities among them.
We need to negotiate
with terrorists, kidnappers and bank
robbers, where the outcome can be
deadly, and we may save lives if we
We negotiate in shops
and markets, where no sale is the
worst case scenario.
There are mild and
aggressive negotiations. We
negotiate contracts for buying and
selling and 'if then else' is one of
the basic elements in negotiation.
negotiation is common as well, such
as: 'These are my terms', 'Take it
or leave it' and 'It's not
The philosophy of
negotiation takes into account that
the parties are interested in
executing a common deal.
Each party, however,
sets certain standards, conditions
and limits which they will accept or
For example, A has
certain goods for sale and B is
interested in purchasing. Here are
1. The goods have a
fixed price set by A, like drugs in
a pharmacy or goods in
certain stores. B has no negotiating options; either he agrees to
the price and
buys the goods, or refuses to pay the asking price and goes
2. The goods have a
fixed price set by A, but there
might be a special discount.
discount may be subject to
submitting previously published
based on certain
conditions, such as store membership
or seasonal sale. In this
buyer is given a conditional or
unconditional price discount, but
without negotiating options.
3. The goods have a
fixed price set by A. The price
caters for a certain discount,
on the buyer's negotiating skills.
Buyer B has the option to offer a
price and A in return may
either accept or make a counter
offer, until they
otherwise there is no deal.
We will analyse a
general negotiation case between
seller A and buyer B.
The obvious goal of A
is to sell for the highest possible
price, and the opposite goal of the
buyer is to pay the minimum price.
The assumption is that both are
willing to enter into the
negotiation phase to conclude the
We will try to
understand the philosophy behind
their thoughts and strategies for
optimally achieving their goals.
The seller knows that
he is entering into a negotiation
arena and accordingly has embedded
in the asking price a certain
acceptable discount margin.
In his mind, the
seller may have set a minimum price
that he would accept, and below that
minimum there will be no sale.
A has set his asking
price at $100, but he realizes that
the chance to sell at the asking
price is quite slim. He has set a
minimum selling price a priori at
Buyer B may have
similar thoughts. She knows that the
asking price has a certain amount of
discount, which is subject to
negotiation. Therefore, she decides
not to agree to the asking price of
$100. In her mind, she decides to
pay a maximum of $80.
Seller A encourages
buyer B to make an offer. B tries a
'fishing trip' and provocatively
offers only $50.
ridiculous offer, A overcomes his
inclination; he wants to sell, but
will not accept $50 and he responds
with a counter offer of $80.
B is hooked now, as
she realizes that the new offer is
the price she is willing to pay.
Although she may have the option to
end the negotiation by accepting the
new offer, B as an experienced
negotiator makes another attempt and
offers to pay $60.
Seller A realizes
that they have reached the sum he is
willing to accept; he has the option
to terminate the negotiation as
well, but A is also an experienced
negotiator so he uses the 'meet them
halfway' system. This is a classical
negotiation method, where both
parties want the deal and each
thinks that the middle of both
offers is a fair way to close the
deal. The parties agree the deal and
the negotiation closes for $70.
In this case both
parties are happy, the buyer who
thought she would have to pay $80
got the goods for only $70, less
than she expected, and at the same
time the seller, who thought he
would be willing to sell for $60
actually received more than he
A good and a fair
deal is when both parties end up
happy with their decisions. Both
parties made their optimal choices
and both will leave the negotiation
with a winning feeling.
Obviously, this is
the ideal scenario and it has many
different endings in terms of the
closing price or in walking away
from the deal.
In an auction sale,
the final price is set by the
auctioneer's hammer and no direct
negotiation is possible. The process
of bidding from the starting price
until the hammer comes down involves
a lot of psychology, however.
Potential buyers are
bidding, or more precisely fighting,
among themselves, in order the get
the item they desire.
Often they are
carried away by their emotions and
pay more than they decided a priori
to pay, or even more than they can
afford. The auction hall is the
ground for the hunt.
Ego, usually male
ego, is one of the parameters which
will decide a final price many times
above market value or the buyer's
'There is a cheaper
item over there', said the potential
buyer to the seller. The seller
asked for $100 and the buyer said:
'But over there, they asked only
$70'. The seller replied: 'OK, so
buy it there'. The buyer said: 'But
they have sold it already'. The
seller said: 'Thanks for the info,
so now my price is $120'.
Another version might
be: 'So why don't you buy it over
there?'. The buyer: 'Unfortunately
they have sold their entire
inventory'. Seller: 'OK, when my
inventory runs out, I'll sell it for
Pricing is a science
with a lot of psychology. When the
price is too high, people will not
buy; too low a price is not only
loss of extra profit for the seller
but it is not appreciated by the
Pricing is affected
among others by context and
location. The same item sold in a
market, in a small shop or in a
boutique in an affluent
neighbourhood can make a significant
difference in price. Price is
obviously affected by the uniqueness
and the rarity of the item.
nineteenth-century silver and enamel
object made by Fabergé may fetch a
significantly higher price than a
similar item made elsewhere in
another period by an unknown maker.
In an open trading
market environment, price is often
not displayed or fixed by the
seller. Experienced sellers do not
label products with a price if they
are willing to negotiate. They will
however make an ad hoc decision,
based on buyer's image, origin, sex
and other factors and set the
initial asking price accordingly.
It is interesting to
observe the diverse negotiation
skills and methods deployed
culture-oriented negotiation such as
in the Middle East, where there is a
significant gap between the asking
and the final selling price.
Price may be affected
by the gender of both the seller and
the buyer, whether he or she is
local or a tourist and even by
appearance, smell, voice and other
Don't ever bid
If you as the seller
have set an asking price, do not
start to change it when you see and
feel that the buyer is not
interested. If the buyer is truly
interested, s/he will enter into the
negotiating arena. In this case, if
you lower your initial asking price,
you will lose the starting
negotiation point. Ask the buyer to
make the first counter offer to your
first asking price. This case is
clearly demonstrated in the example
The more you seem to
be eager to sell the less you'll
Do not run after
buyers, play it cool. In most cases,
you cannot persuade a potential
buyer to buy if s/he is not
interested. The buying and selling
possibilities available on online
trading websites such as eBay are:
fix,auction,make an offer orbuy it
The 'fix' price is
the situation of 'take it or leave
it' with regard to the indicated
The 'auction' option
requires one buyer to bid for the
starting auction price and it may
increase if other bidders are
interested to buy; eventually the
highest bidder wins.
In the 'make an
offer' option, the seller enables
the buyer to make an offer. In this
case, the seller may accept the
offer or make a counter offer, until
they reach an agreement.
The 'buy it now'
option may be combined with the
'auction' option, whereby the buyer
may bid and compete with other
potential bidders, or accept the
'buy it now' price and win
are required in conflict management,
arbitration, conflict resolution and
mediation. If A has a conflict with
B and A is our client, the best
advice to A is to bring a third
party C into the equation.
This may yield a
stronger and a better result. By
bringing C into the conflict, we
consider future situations and
relations that might evolve after
the negotiation is terminated. It
holds true especially in cases where
A has to continue personal or
business relations with B.
Negotiation is quite
often seen as confrontation.
Effective negotiations need not be
confrontational, however. Setting
the mood as aggressive and seeking
to win means that there must be a
The correct attitude
of the opposing parties should not
be to win the confrontation but to
find a mutually agreeable solution.
It is necessary to
control our emotions during the
negotiation process. The more we
lose control and become emotional,
the less we will be able to achieve
an efficient, desirable and mutually
We must make an
effort to focus on the issues in
hand and not on the specific and
sometimes annoying personality of
our counterpart. Blaming the other
side is a definite distraction and
an unproductive one.
One of the most
important factors in efficient
negotiation is to research and
understand the needs of the other
To find a mutually
agreeable solution to the problem,
we need to assess the gap between
our needs and any disagreements. We
will be able to do so only after
understanding the needs and worries
of our opponent.
A typical example of
how such understanding can be
effective is the following scenario.
Let us assume that two people have
found a coconut and each is claiming
it should be theirs.
You happen to be
there and you are chosen to be the
arbitrator. What would be your
ultimate solution to this conflict?
Most of arbitrators
would simply suggest splitting the
coconut in half. In this case each
claimant will have only 50% of what
they want. Is it the best ultimate
solution? Well, not really.
If you had talked
first to each party to learn their
needs before making your ruling, you
might have found out that one of
them is an artist interested only in
the coconut shell for carving,
whereas the other just wanted the
milk and the coconut meat.
With this information
you would be able to satisfy 100% of
each party's needs and reach a
classical win-win situation.
Timing is everything.
Negotiations, like many other things
in life, are time-dependent. There
are better and worse times and
places to conduct negotiations. When
entering into the negotiation
process, we should be prepared,
learn about our opponent, prepare
alternative solutions, not waste
time on futile arguments, never get
emotional and present persuasive
arguments to support our claims.
Essentially, the aim of negotiation
is to cause a change in our
opponent's perspective that may lead
him/her to agree and come closer to
our needs and desires.
A good and efficient
negotiator is one who has the
ability to persuade. Sometimes a
negotiator needs to use his/her
persuasive skills for the sole
purpose of encouraging the parties
to open up, to talk, to listen and
to start a dialogue.
There are many
persuasion techniques that are used
by negotiators. Some are positive
and some are negative. Among the
positive techniques are basic
physical touch and gestures like
handshake, smile, compliments,
respect and other small-talk to
generate a certain atmosphere of
The negative attitude
used in the persuasion process may
contain obvious or hidden threats
such as 'if then else'. Monetary
threats are usually very effective
tactical methods, especially in
financial arguments. Failing is
another negative technique, and can
be considered as a major
psychological punishment. Therefore,
when entering into the negotiation
process, we should set aside our
fear of failing or losing.
One of the basic and
most primitive human motivators is
fear. The fear of losing property,
wealth, a game or anything else puts
us in a weak position in the
We should try to
control and monitor our non-verbal
signals. Our body language sends out
revealing messages, especially when
we are angry, frustrated or eager to
accept and agree to a proposal or to
In our daily life we
face conflicts that require
negotiation in order to resolve
them. A typical example is conflict
between employees and employers,
Employees want more money and better
working conditions and employers
want to make more profit and
minimize their labour costs.
In certain countries
and in specific cases, employees are
united under a local labour union
responsible for the actual
negotiation with the employer. Such
negotiation will normally take
several rounds of meetings, in which
different scenarios emerge.
There are cases where
the union may demand certain
changes, such as salary increases.
There are several negotiation styles
and methods that can be used either
by the union or the employees acting
They may enter the
negotiation arena with an ultimatum
such as: 'If then else... ' or
alternate demands and response may
take place between employees and
negotiators will add to the basic
minimum demands an extra demand or
several demands that will be given
up later, as an act of goodwill, so
that not all demands will be met.
Consequently, at the
end of the process, both sides may
declare themselves the winner. This
mutually agreed compromise is
essential for the ongoing
relationship between the parties as
they have to continue to work
negotiation is a dialogue between
two or a group of people.
The main intention is
to reach an agreement and
understanding or to resolve
conflicts between the parties.
It is essential that
the parties enter into the
negotiation phase willingly and that
they commit to accept and execute
the resulting outcome. Normally, a
good negotiation process is
terminated by a compromise
acceptable to both sides.
The definition of a
good negotiating process, however,
is not when one side wins but when
all negotiating parties come out as
winners. This can happen only when a
win-win situation is achieved.
What does it take to
persuade people? How does a lawyer
cause an arbitrator, judge,
businessperson or other lawyer to
reach the desired conclusion of
their own volition?
If you wish to
persuade me, think my thoughts,
my feelings and speak my words
This article is part
of the book "Hunting for Antiques
and Collectables", the adventures of
an antique collector.
For more information please visit: http://aoc.imexco.com