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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In business negotiations, share the wealth wisely

PON Staff   •  01/14/2015   •  Filed in Business Negotiations

After graduating from the University of Chicago’s business school in 1971, David G. Booth took what he had learned and ran with it. The firm he founded, Dimensional Fund Advisors, bases its investment decisions on the type of academic research Booth absorbed from his professors in Chicago. That scholarly approach has paid off: Dimensional Fund … Read In business negotiations, share the wealth wisely

Women and Negotiation: Why Women Sometimes Ask for Less

PON Staff   •  12/05/2014   •  Filed in Business Negotiations

The average college­-educated woman earns $713,000 less over the course of her working life than her male counterpart, according to the Coalition of Labor Union Women. What explains this persistent gender gap? Women employees’ awareness that they could be penalized for negotiating assertively on their own behalf is one factor, according to new research from … Learn More About This Program

Business Negotiation Advice: When Your Image is Everything

PON Staff   •  11/13/2014   •  Filed in Business Negotiations

Turning to another questionable negotiation from Illinois politics, in 2005, then–U.S. senator Barack Obama and his family bought a house in Chicago. On the same day the Obamas closed on the property, the wife of real estate developer Antoin Rezko bought an adjacent parcel of land. Rezko was a key fundraiser for Obama’s Senate campaign. … Learn More About This Program

Stay “in the deal”

PON Staff   •  10/15/2014   •  Filed in Business Negotiations

As Joe Biden tells it, he never wanted to be vice president.

When Barack Obama asked him to consider being vetted as his running mate, Biden declined. Traditionally, the vice presidency was a largely ceremonial position removed from the center of power. Though recent VPs, most notably Dick Cheney, had changed that, Biden, as a longtime … Read Stay “in the deal”

In Business Negotiations, Restraint Can Be Key—Even in High Fashion

Katie Shonk   •  09/16/2014   •  Filed in Business Negotiations

When employees leave an unsatisfying job, the feeling of relief they feel sometimes motivates them to explain their decision to whomever will listen. But that tendency can backfire and necessitate tense business negotiations, as a recent story from the world of high fashion illustrates. In November 2012, designer Nicolas Ghesquière startled the fashion world with … Learn More About This Program

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