PON – Program on Negotiation at Harvard Law School - https://www.pon.harvard.edu
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.
The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Rockwell Quarry is a five-party, multi-issue negotiation among elected officials, property owners, and a gravel company over a permit for a gravel quarry in a recreationally valuable canyon.
The Rockwell Quarry Complex Environmental Negotiation is a five-party, multi-issue simulation that … Read Gravel quarry or hiking grounds? 
The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises.The following role simulation is a two-party, four-issue negotiation between representatives of two companies with different national and corporate cultures regarding a possible joint venture.
Scenario: MedDevice, a U.S.-based Fortune 500 company that manufactures high technology medical equipment, and Lee Medical … Read Reconciling differences for a joint venture
The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. The following role simulation is a three-party, multi-issue contract negotiation among representatives for an HMO and two pharmaceutical companies over the purchase of a new antidepressant drug.
SCENARIO: Hopkins HMO is the largest independent managed health care organization in the … Read Pharma talks
The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Teflex Products is a five-party, multi-issue negotiation among representatives of a pharmaceutical company, a medical drug manufacturer, and three consumer organizations over the delayed release of a new drug.
SCENARIO:
Midland Pharmaceutical Company has developed Renaid, a breakthrough drug that … Read Dealing with pharmaceutical delays
The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Telecom Services is a two-party, two-issue, integrative, scorable negotiation over the terms of a telecommunications services contract.
Scenario: Data Voice markets telecommunications (“telecom”) services to residential and business customers. This year, a small firm … Read Negotiations in the telecommunication industry
Adapted from “Managers: Think Twice before Setting Negotiation Goals,” first published in the Negotiation newsletter.
The next time you’re tempted to dangle performance incentives in front of your employees, think about whether it could backfire.
As an illustration, let’s look at Major League Baseball manager Joe Torre’s renegotiation with the New York Yankees in October 2007. Torre … Read When incentives strike out
Adapted from “Matching Rights: A Boon to Both Sides,” by Guhan Subramanian (professor, Harvard Business School and Harvard Law School), first published in the Negotiation newsletter.
As dealmakers look for more sophisticated ways to reduce risks and increase returns, a matching right—a contractual guarantee that one side can match any offer that the other side … Read Know your rights!
Adapted from “Negotiating with Sole Suppliers,” by David Lax (managing principal, Lax Sebenius LLC), first published in the Negotiation newsletter.
Negotiators often wonder how to do business with sole suppliers who know they don’t have any real outside alternative and who take advantage of this. Without the power of a realistic best alternative to a negotiated … Read Gain greater leverage with sole suppliers
Adapted from “Handle with Care: Negotiating Strategic Alliances,” by Lawrence Susskind (professor, Massachusetts Institute of Technology), first published in the Negotiation newsletter.
Some business partnerships are more important than others. This is especially true in supply chains, where producers of key components can be irreplaceable.
Consider the relationship between two hypothetical companies, Brattlebury Corporation, which manufactures … Read Staying in touch with strategic partners
Adapted from “Anchors or Trial Balloons?”, first published in the Negotiation newsletter.
The power of anchors in negotiation has been demonstrated time and again. Sellers who demand more tend to get more. Indeed, the initial asking price is usually the best predictor of the final agreement.
A trio of researchers may have found an important exception … Read Dropping anchors
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