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.

Negotiation Update: Not playing at a theater near you?

PON Staff   •  09/30/2020   •  Filed in Business Negotiations

Long before the Covid-19 pandemic, people increasingly were staying home to watch movies on streaming services such as Netflix rather than heading out to the local multiplex. Film studios and other content providers were eager to capitalize on the trend by shortening the traditional “three-month theatrical window”— the exclusive period of time that theater companies … Read More 

Stronger together: Achieving goals through negotiation and nonviolent action

PON Staff   •  08/03/2020   •  Filed in Business Negotiations

Since 2013, the Black Lives Matter (BLM) movement has been organizing nonviolent action to defund police forces and invest in Black communities. For years, many Americans—particular White Americans—viewed BLM as a radical fringe group. That swiftly changed in May. Horrified by a bystander’s video of the death of George Floyd, millions of people worldwide have … Read More 

Negotiation In The News: Dissolution of a Deal

PON Staff   •  06/30/2020   •  Filed in Business Negotiations

One of the biggest negotiation stories of the Covid-19 era is how many deals are collapsing. As we described in last month’s issue, lots of agreements that made perfect sense just a few months ago have become inadvisable or impossible to carry out. Here’s how one troubled acquisition unfolded recently.
A change in fortune
Corporate buyout firm Sycamore … Read More 

In Times of Crisis, Collaboration Must Come First

PON Staff   •  05/31/2020   •  Filed in Business Negotiations

In the best of times, negotiators thrive by striking a careful balance between cooperation and competition. Collaborating with our counterparts to create new sources of value, and then trying to claim a fair share of that value for our side, is typically a recipe for success.

In the worst of times, working with other parties to create … Read More 

Contract Renegotiation in a Time of Crisis

Katie Shonk   •  04/27/2020   •  Filed in Business Negotiations

The COVID-19 pandemic has left many of us negotiating circumstances we never envisioned just months ago, from health crises to lost jobs to plummeting sales. Businesses of all sizes, in particular, are faced with the difficult task of contract renegotiation as a result of parties’ inability to meet current deal terms.

Unfortunately, contract renegotiation is much … Read More