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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Dispute Prevention: It’s a Good Idea, Right?

PON Staff   •  02/04/2011   •  Filed in Business Negotiations, Daily

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

Putting a dispute handling system in place has been shown to eliminate many disagreements or misunderstandings. So why are some industries reluctant to do so? In this posting, the author … Read More 

Improve Your Online Negotiation Results

PON Staff   •  01/31/2011   •  Filed in Business Negotiations, Daily

Adapted from “Strategies for Overcoming E-Mail’s Weaknesses,” first published in the Negotiation newsletter.

Negotiators communicating via e-mail can easily be blinded to the medium’s pitfalls. In her research, professor Janice Nadler of Northwestern University Law School confirms that the “impoverished” nature of e-mail—its dearth of physical, social, and vocal cues—often leads to misunderstandings, ambiguous messages, and … Read More 

Video of Professor Sebenius

PON Staff   •  01/14/2011   •  Filed in Business Negotiations, Daily, Negotiation Skills, Resources, Videos

PON Professor James Sebenius answers these critical questions during an interview before last month’s Executive Education classes:

Why is it so important for managers and business people to become skilled negotiators?

Why is preparation and set up so important in negotiations?

Why do you enjoy teaching students in Executive Education courses?

To watch more PON Videos, click here.

To watch … Read More 

A Powerful Strike-out

PON Staff   •  01/11/2011   •  Filed in Business Negotiations, Daily

Adapted from “Why Your Next Negotiation Power Trip Could Backfire,” first published in the Negotiation newsletter.

Powerful negotiators generally don’t devote enough time to considering the other side’s point of view, Northwestern University professor Adam D. Galinsky and New York University professor Joe C. Magee have written in Negotiation. As a consequence, the powerful may fail … Read More 

Agreeing to Disagree

PON Staff   •  01/10/2011   •  Filed in Business Negotiations, Daily

Adapted from “What Divides You May Unite You,” by James K. Sebenius (professor, Harvard Business School), first published in the Negotiation newsletter.

Mark Twain once quipped that “it is differences of opinion that make horse races.” Along these lines, differences in beliefs about how future events will unfold—what a key price will be, whether a technology … Read More 

Bridging the Gap Between Groups

PON Staff   •  01/03/2011   •  Filed in Business Negotiations, Daily

Adapted from “What Divides You Can Unite You,” by Susan Hackley (managing director, Program on Negotiation), first published in the Negotiation newsletter.

When we think about negotiating with people from other cultures, we tend to think globally: how might differences in nationality or race affect our bargaining outcomes? But cultural differences can also be local, existing … Read More 

Who’s Looking Over Your Shoulder?

PON Staff   •  12/14/2010   •  Filed in Business Negotiations, Daily

Adapted from “Onlooker Alert!” First published in the Negotiation newsletter.

Unless your official title is “lawyer” or “agent,” you probably don’t think of yourself as an agent. But if you’ve ever represented a family member, your boss, your department, or your organization in a negotiation, you’ve served as that party’s agent.

Representing others at the bargaining table … Read More 

Pitfalls of the Powerful

PON Staff   •  12/13/2010   •  Filed in Business Negotiations, Daily

Adapted from “Are You Too Powerful for Your Own Good?” by Ann E. Tenbrunsel (professor, Notre Dame University), first published in the Negotiation newsletter.

Imagine that you’re a national account sales manager and are preparing to negotiate your annual raise. You have met all your sales objectives and feel that you are not only a valuable … Read More 

Dealing With Constituents

PON Staff   •  12/06/2010   •  Filed in Business Negotiations, Daily

Adapted from “Dealing with Backstage Negotiators,” first published in the Negotiation newsletter.

Negotiated agreements sometimes go off the rails in the final hour because one side caves in to a constituent’s wishes despite having the authority to make a commitment. Because people tend to approach negotiations with an “us versus them” mentality, they may succumb to … Read More 

Letting Them Down Easy

PON Staff   •  12/06/2010   •  Filed in Business Negotiations, Daily, Negotiation Skills, Webcasts

First published in the Negotiation newsletter.

In recent years, a number of new Web-based systems have changed the very structure of negotiation as we know it. One of most famous of these is, which allows consumers to make bids for rental cars, hotel rooms, and air travel-bids that the car-rental firms, hotels, and airlines can … Read More 

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