Negotiation takes place almost every day in our daily life whether is it negotiating for a higher salary or for a better deal when shopping. These negotiations do not play a significant impact even if they are unsuccessful. However, it is not the same in the business context.
A good negotiation is absolutely vital to the success of a business especially in the increasingly competitive market. Whereas, a poor negotiation can potentially cause harm to the company as quickly as losing key customers or suppliers. Therefore, it is said that effective business negotiation is a core leadership and management skills.
Procurement or Purchasing Negotiation
Procurement and purchasing are often used interchangeably but they do have different meanings. This terminology can be explained using the PP Organogram in the diagram below for a better understanding. Although both purchasing and procurement focuses on systems and processes, but procurement also concentrates on the interaction with both external suppliers and internal customers. Thus, this article will mainly be concentrating on procurement negotiation.