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.

Contract Negotiations and Business Communication: How to Write an Iron-Clad Contract

PON Staff   •  06/22/2021   •  Filed in Business Negotiations

contract negotiations

In contract negotiations, writing a contract that both encapsulates the negotiated agreement but also incorporates future elements such as the business relationship and the sustainability of the agreement can be a daunting task for even the most experienced negotiators. Executives often leave the legal issues surrounding their deals to their attorneys. While this division of … Read More 

Business Negotiation Skills to Curb Your Overconfidence

PON Staff   •  06/17/2021   •  Filed in Business Negotiations

To avoid the pitfalls of overconfidence, you need a clear understanding of how overconfidence is likely to affect your judgments and decisions (and those of your counterparts) at the bargaining table. Fortunately, new research suggests exactly when to expect overconfidence and offers insight into how you can prevent it from getting you into trouble in … Read More 

Negotiation Skills: Four Steps for Changing Negotiation Practices in Your Organization

PON Staff   •  06/15/2021   •  Filed in Business Negotiations

Individual negotiators are sometimes overwhelmed by the idea of leading organization-wide changes to negotiation practices. In fact, it doesn’t take much time or effort to set the wheels of reform in motion, write Hallam Movius and Lawrence Susskind in Built to Win. Here are four simple steps to implement in your workplace. … Read More 

M&A Negotiation Tactics: In Discovery-WarnerMedia Deal, AT&T Tries, Tries Again

Katie Shonk   •  06/14/2021   •  Filed in Business Negotiations

It was a dramatic about-face. In mid-2018, AT&T finalized its $85 billion purchase of Time Warner after successfully fighting off U.S. government antitrust lawsuits. Just less than three years later, in May 2021, AT&T announced it was spinning off Time Warner, now known as WarnerMedia, after merger-and-acquisition (M&A) negotiations with media company Discovery. If approved … Read More 

Business Negotiations: How to Improve Your Reputation at the Bargaining Table

PON Staff   •  06/14/2021   •  Filed in Business Negotiations

In multi-issue business negotiations, research suggests that the advantage goes to negotiators with a reputation for collaboration rather than competition. In a series of studies by Catherine H. Tinsley and Kathleen O’Connor, participants were told they would be negotiating with someone who had either a tough reputation, a cooperative reputation, or an unknown reputation. Although … Read More 

4 Sales Negotiation Traps—and How to Overcome Them

Katie Shonk   •  06/08/2021   •  Filed in Business Negotiations

Whether you’re planning to put your home up for sale, trying to unload excess merchandise, or searching for new clients, there’s a good chance you’ll make your next sales negotiation more challenging than it needs to be by falling into common cognitive traps. You can improve your sales negotiation skills by learning about four traps … Read More 

Win-Win Bargaining: Private Negotiation, Public Auction, or Both?

PON Staff   •  06/07/2021   •  Filed in Business Negotiations

When Amazon and Apple each began scouting locations for a new campus in 2017, we might have expected them to follow similar negotiating strategies aimed at win-win bargaining. In fact, their searches were very different:

Amazon set off a frenzy in September 2017 when it announced it was soliciting bids from cities interested in hosting its second … Read More