Negotiation Importance, Elements affecting Negotiation

15/03/2021 1 By indiafreenotes

The process of negotiation starts the moment an employee gets a selection call from an organization. It is essential that the individual responsible for hiring employees negotiates well with the candidate and offers him the best salary. Every organization runs for earning profits and thus the HR Professional must try to make the person join at the lowest possible salary but make sure you do not offer him anything less than his previous salary. He will never be interested to join. Even if he joins, he will not take his work seriously and the results would be zero. Discussions are important. Make him realize that money is not the only criteria for selecting a job. Other things like one’s job responsibilities, job security as well as the brand name should also be considered.

The negotiation style plays an important role in corporate. Do not offer anything exceptionally high as it would again create a problem among the existing employees. Ensure that you are little tactful and do flash your trillion dollar smile. It helps. No way can you annoy the individual.

Negotiation is also important when you are dealing with vendors. An organization needs money to survive and take care of the employees as well. It can’t afford to spend money as it is. A single penny saved will help you and the organization later. The person dealing with the external parties must be a good negotiator else he will end up paying more amount than required. Always sit with the vendor and quote a price little lower than you intend to pay. He will definitely ask you to increase it and probably then you will reach to a figure well within your organization’s budget. Don’t be rude with your vendor but be very confident and convincing. Remember you are not dealing with him just once; you need to maintain a healthy relationship with him for future business as well. Try to convince the vendor at such a rate which would benefit your organization and save money. Quote realistic figures and do take care of the vendor’s profits as well. Try your level best to close the deal.

One should never accept terms and conditions verbally, it’s always better to have something in black and white probably a contract as it is more reliable. The terms and conditions must be discussed on an open forum and should be signed in presence of both the parties so that no body backs out later.

One should also learn to negotiate with one’s superiors. Remember negotiation does not mean you have to shout on others, you need to be polite. Don’t accept responsibilities just because your boss wants it. If you are not comfortable with any role, its better to decline it, rather than accepting something you are not familiar with and losing interest later. After all there are other employees as well, they can accept the same and you can do something else which suits your profile. If you know you will not be able to submit the project within the stipulated time frame, tell your boss. Never hide things from him. Be straightforward. If you want to go for a leave, try to negotiate with him that probably you will attend office the coming weekend or sit for some more time in the coming days to compensate for the loss. Be a little patient.

Conflict must be avoided at the work place as it only leads to negativity all around. Negotiations help to reduce conflicts at the work place. Conflicts arise when individuals are too rigid and are just not willing to compromise with each other. Negotiations help in finding an alternative which benefits all.

Let us understand the importance of negotiation in corporates with the help of a simple example:

Ted was working with a leading organization. He was a smart negotiator. He always negotiated well with his superiors as well as his fellow workers and thus a enjoyed his work. He only accepted those responsibilities he knew he was capable of doing. No doubts his work was error free, and he was his boss’s favourite. He was always well informed before going for any negotiation with vendors, never lost his temper and always closed the deal in favour of the organization. Good negotiation skills helped Ted be the most appreciated employee among all.

Elements affecting Negotiation

The actual negotiation process depends on the following factors:

(i) The goals and interests of the parties

(ii) The extent to which the negotiating parties are interdependent

(iii) The past relations which exist between the two negotiating parties

(iv) The nature, temperament, and personalities of the parties

(v) The persuasive ability of each party


Subjective Factors

Often the outcome of the discussion does not depend wholly on the objective factors of logic and the facts of matter under consideration. The final outcome of the negotiation is also determined by the subjective factors of influence and persuasion.

Mutual Obligation: The memories of well done in the past by the other party also act as an influence on us.

Personal relationship: The conduct of negotiation is influenced not only by the real situation of the matter but also by the relationship between the two persons or parties involved in the process of discussion.

Future Considerations: When personal relationships are at stake we may not wish to win the argument, especially when good relations between the two parties are likely to be affected.

Practical Wisdom: Fear of losing good opportunities in the future is a strong factor in our bargaining and negotiation positions and power.

Fear: Often our bargaining power is conditioned by our fear of the other party’s authority, power, higher connections and the capacity to harm.


  • The choice of time for holding discussions should be fixed according to mutual convenience.
  • The time should be adequate for the smooth exchange of ideas through different stages of negotiation
  • Exchanging initial views
  • Exploring possible compromise
  • Searching for common ground
  • Securing agreement
  • The time to prepare for negotiation and the time for implementing the agreement should also be carefully fixed for action before and after the meeting.
  • To be effective, negotiations should be timely. This means that the negotiation should be done before it is too late so as to secure an agreement.


The place of meeting for negotiation influences one’s level of confidence. Choosing a place like your own office has many advantages:

  • You are in your area of strength.
  • You can extend social courtesies as a token of goodwill; this would move the negotiation towards an agreement.
  • You can get whatever information or material that is needed during the course of the discussion.