If your company has assigned you with the job of negotiating contracts, it means they expect you to work hard for getting satisfactory agreements. This does not mean that the contracts you negotiate should favor your company alone. The other party of the contract should also be pleased with it.
Reasons why you should ensure that the other party is also satisfied
1. The foremost reason is that satisfied parties will never fail to uphold the clauses of the contract. Even if you draft a lengthy contract and get it signed by the other party, you can not assume that it will cover all the contingent situations. Satisfied parties will willingly fulfill even if a particular situation is not covered in the contract.
2. If the other party is satisfied, they will automatically come forward for future contracts also. They may even do word-of-mouth publicity for your company.
3. The party will adopt an open and cooperative attitude when you negotiate future contracts with them.
On the other hand, if you aim to negotiate a contract that favors your company alone and that contains clauses that are detrimental to the other party, they will make all-out efforts to score when you call them for negotiations for your future contracts.
When the company assigns you with the job of negotiating a contract, they may have certain expectations. Likewise, you may also have your own expectations. But once you negotiate and finalize the contract, you as well as your company will tend to compare the contract terms with what you had been expecting prior to finalizing the contract. This aspect has been researched by Richard Oliver and Bruce Barry, professors at Vanderbilt University in Nashville. Another member of the research group was Sundar Balakrishnan of the Seattle-based University of Washington. These researchers have corroborated this comparison theory. They also said that the feelings of different negotiators will not be the same though the deals and the outcomes are similar.
How to be a skilled negotiator?
1. You must start managing the situation even much earlier to the beginning of the negotiation process. Let us take a particular situation as an example. Most of the companies negotiate rise in salaries of employees once in 3, 4 or 5 years. If you are a skilled negotiator, you should create a situation through which employees should start perceiving that the company is passing through a tough phase. This will lower their expectations.
2. Show a reaction that may deflate the expectations of the other party. Especially, when the other party makes an initial offer, your reaction should be such that it lowers their expectations. On the contrary, if you talk with a cooperative tone, you may increase their expectations.
3. Never make a steeply favorable counter-offer. This will inspire the other party to ask for more.
4. Never agree very quickly also. Researchers like Adam Galinsky and Victoria Medvec, both of North Western University and Vanessa Seiden of Chicago and Peter Kim of the University of Southern California have categorically established that if you agree very quickly, the satisfaction levels of the other party may be less. They may think that they could have achieved a better deal had they made a higher offer.
If you keep in mind these points and negotiate wisely, your company will certainly think that you are an asset to them.