Effective business negotiation is a core leadership and management skill. This is the ability to negotiate effectively in a wide range of business contexts, including dealmaking, employment discussions, corporate team building, labor/management talks, contracts, handling disputes, employee compensation, business acquisitions, vendor pricing and sales, real estate leases, and the fulfillment of contract obligations. Business negotiation is critical to be creative in any negotiation in a business setting. Business negotiation strategies include breaking the problem into smaller parts, considering unusual deal terms, and having your side brainstorm new ideas.
Leveraging the contrast effect is also a powerful tool in negotiations. You might ask for more than you realistically expect, accept rejection, and then shade your offer downward. Your counterpart is likely to find a reasonable offer even more appealing after rejecting an offer that’s out of the question. Additionally, offering several equivalent offers that aim higher than your counterpart is likely to accept will elicit reactions that can help you frame a subsequent set that, thanks in part to the contrast effect, are more likely to hit the mark.
Building a team is critical to negotiations in business. To prevent conflicts among diverse, strong-minded team members from overshadowing group goals, negotiation teams should spend at least twice as much time preparing for upcoming talks as they expect to spend at the table. Because the other side will be ready and willing to exploit any chinks in your team’s armor, it’s important to hash out your differences in advance.
Other business negotiation tips include curbing overconfidence, creating value in the negotiation, establishing a powerful BATNA, effective use of emotions at the bargaining table, caucusing, delineating your zone of possible agreement, and other skills geared toward an integrative bargaining outcome rather than a distributive, or haggling, bargaining outcome.
In addition, considering the ethical and legal repercussions of a deal to insure that it is a true win-win is the hallmark of every experienced business negotiator.
Articles include many business negotiation examples, and explore concepts such as creative dealmaking, renegotiating unfavorable deals, seeking advice from a negotiation opponent, identifying a solid BATNA and crafting draft agreements.
Best negotiation examples from real life: Imagine that you’ve been negotiating the sale of a property that is owned by your company. The buyer has made an attractive offer that you’ve tentatively accepted. Your boss is pleased with the terms as they stand, but suggests that you go back to the buyer and tell her … Read More
How often have you heard that, when entering a negotiation, you should get your allies onboard first? Conventional wisdom, but not always the best advice. When the United States sought to build a global anti-Iraq coalition following Iraq’s 1990 invasion of Kuwait, for instance, Israel appeared to be its strongest regional ally. … Read More
It had seemed like the beginning of a fruitful relationship. In April 2012, six wealthy businessmen teamed up to buy the Philadelphia Inquirer and several affiliated businesses for $61.1 million, promising to work together to reverse the newspaper’s flagging fortunes. Their infusions of cash and appointment of a Pulitzer Prize–winning reporter, William K. Marimow, as … Read More
If you negotiate regularly on the job, you probably have engaged in multiple business negotiations with counterparts from other cultures. Negotiating across cultures can significantly expand your organization’s reach and bring great rewards. Yet negotiating cross-culturally also can pose challenges, such as these. … Read More
Men tend to achieve better economic results in negotiation than women, negotiation research studies have found overall. Such gender differences are generally small, but evidence from the business world suggests that they can add up over time. … Read More
What are the essential ingredients to getting ahead in the workplace? Hard work, communication skills, and a generous dose of luck all play a role, of course. Another key ingredient—one that is often overlooked—is the ability to recognize and capitalize on opportunities to negotiate for your career success.
Why is negotiation important in business? Because our … Read More
Negotiation researchers have refuted the widespread belief that honesty varies widely among individual negotiators. Rather, because people respond strongly to their environment, personal standards for negotiation ethics often vary depending on the context. … Read More
Here are four pieces of advice that current negotiation research offers to reduce your overconfidence:
1. Collect information.
When the stakes are high, you must overcome the common tendency to spend too much time looking in the mirror, admiring virtues and fretting over flaws. Negotiators get into trouble when they lack information about the other players in … Read More
To encourage the negotiators they supervise to do their best, managers routinely rely on performance benchmarks, the promise of bonuses, and other types of goals. But before you engage in further goal setting, consider the following real-life disasters: Under the leadership of turnaround expert Q.T. Wiles, quarterly earnings goals became a company wide obsession at … Read More
Understanding how to arrange the meeting space is a key aspect of preparing for negotiation. In this video, Professor Guhan Subramanian discusses a real world example of how seating arrangements can influence a negotiator’s success. This discussion was held at the 3 day executive education workshop for senior executives at the Program on Negotiation at Harvard Law School.
Guhan Subramanian is the Professor of Law and Business at the Harvard Law School and Professor of Business Law at the Harvard Business School.