Procurement Negotiation
There are various definitions for negotiation. We will consider some of those definitions here and consider what is ideal for a procurement professional.
“Negotiation is a process of defining and reducing alternative positions until a unique combination is reached that is acceptable to all parties.” Zartman, I. William (2008) Negotiation and Conflict Management: Essays on Theory and Practice. p.17
“Negotiation is taking place any time two people are communicating, where one or both parties have a goal in mind.” McRae, Brad (1998) Negotiating and Influencing Skills- The art of creating and claiming value. p.2
Negotiation is an “interpersonal process”. Rubin, J.Z & Brown. B.R(1975) The Social Psychology of Bargaining and Negotiation. p.260
“Negotiation takes place when neither party in a conflict is strong enough to impose its will or to resolve the conflict unilaterally. In such negotiations, the parties are formally equal, since each has a veto over an acceptable outcome.”
“Negotiation is the process of combining divergent viewpoints to produce a common agreement”
Zartman, I. William (2008) Negotiation and Conflict Management: Essays on Theory and Practice. p.14
Each party in a negotiation must acquire information about the other’s true preferences. The true intention of negotiation as per these definitions does not suggest winning at the expense of the other. Therefore, the aim is to create a mutually acceptable result.
The classic definition of procurement reveals the five rights of procurement, which are really the true preferences or true interests of a procurement professional during a procurement negotiation. At least, they are the minimum.
“Securing supplies, materials, and services of the right quality in the right quantity at the right time from the right place (source) at the right cost”.
The aim of procurement negotiation in its barest form is to achieve these five rights.
