Business Negotiations

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.

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Should You Negotiate Sooner or Later?

PON Staff   •  06/14/2011   •  Filed in Business Negotiations, Daily

Adapted from “Is Time on Your Side?” first published in the Negotiation newsletter, May 2007.

A difficult negotiation looms on the horizon—say, next year’s allocation of resources across divisions or your family’s summer vacation destination. Should you negotiate now or wait? Professors Marlone Henderson, Yaacov Trope and Peter Carnevale of New York University provide experimental … Read Should You Negotiate Sooner or Later?

Negotiating for the Long Haul

PON Staff   •  05/17/2011   •  Filed in Business Negotiations

Adapted from “Take the Long View,” by Kimberly A. Wade-Benzoni (professor, Duke University), first published in the Negotiation newsletter, April 2006.

Negotiators often overlook the long-term consequences of various issues on the table. Amid the pressures to meet short-term financial targets, it’s difficult to remember that the effects of managerial decisions may be felt years, even … Read Negotiating for the Long Haul

Will Your Deal Thrive in the Real World?

PON Staff   •  05/02/2011   •  Filed in Business Negotiations, Daily

Adapted from “The Deal Is Done—Now What?” by Jeswald W. Salacuse (professor, Tufts University), first published in the Negotiation newsletter, November 2005.

Whether you’re manufacturing audio components in China, providing data-processing services in Chicago, or constructing a cement plant in Cheyenne, Wyoming, the quality of your relationship with a contractual partner is often the difference … Read Will Your Deal Thrive in the Real World?

Getting Agreement on Energy Policies and Plans

PON Staff   •  04/29/2011   •  Filed in Business Negotiations, Daily

Lawrence Susskind (Ford Professor of Urban and Environmental Planning, The Massachusetts Institute of Technology; author of Built to Win; co-author of Breaking Robert’s Rules and Breaking the Impasse)

Making public policy about energy has been a scattered, uncoordinated disaster. In this posting, the author argues for a negotiated, consensus building approach to energy planning.

Read More … Read Getting Agreement on Energy Policies and Plans

A Closer Look at Collective Bargaining

PON Staff   •  04/18/2011   •  Filed in Business Negotiations, Daily

Adapted from “Innovation in Labor Relations,” first published in the Negotiation newsletter.

In 2004, a team of MIT and Harvard researchers published a study of a bold initiative by health-care giant Kaiser Permanente and its many unions to restructure their relationship. Given the recent spotlight focused on collective bargaining, beginning with a very public battle in … Read A Closer Look at Collective Bargaining

Dealing with Option Overload

PON Staff   •  04/18/2011   •  Filed in Business Negotiations, Daily

Adapted from “Option Overload? Manage the Choices on the Table,” by Chris Guthrie (professor, Vanderbilt University Law School), first published in the Negotiation newsletter.

Consider what happened when Randy, who was opening his first restaurant, met with Albert, the general manager of Best Appliances, to negotiate a deal. Albert pulled out a stack of brochures and … Read Dealing with Option Overload

Negotiation and the Glass Ceiling

PON Staff   •  04/11/2011   •  Filed in Business Negotiations, Daily

Adapted from “A Fresh Look Through the Glass Ceiling,” first published in the Negotiation newsletter.

Women are less likely to seize opportunities to negotiate than men, Linda Babcock and Sara Laschever documented in their widely-read book Women Don’t Ask. Subsequent research has indicated that, when they do negotiate on their own behalf, women ask for and … Read Negotiation and the Glass Ceiling

Put More on the Table

PON Staff   •  04/04/2011   •  Filed in Business Negotiations

Adapted from “Putting More on the Table: How Making Multiple Offers Can Increase the Final Value of the Deal,” by Victoria Husted Medvec and Adam D. Galinsky (professors, Northwestern University), first published in the Negotiation newsletter.

Suppose you open talks with an important customer by making an aggressive first offer. He becomes offended. You back off … Read Put More on the Table

The Negotiator’s Secret: More Than Merely Effective

PON Staff   •  04/01/2011   •  Filed in Business Negotiations, Daily

James K. Sebenius (Program on Negotiation Executive Committee Vice-Chair; Gordon Donaldson Professor of Business Administration, Harvard Business School; Co-author of 3-D Negotiation)

Negotiators are often too confident of their own position and too quick to demonize the other side. In this article, the author describes steps to conquer these damaging biases.

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