When determining the best alternative to a negotiated agreement or BATNA (the point at which the negotiators ought to walk away from the table), executives should check in with key organizational leaders.
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Learn how to negotiate like a diplomat, think on your feet like an improv performer, and master job offer negotiation like a professional athlete when you download a copy of our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.
beneficial agreement
What is a Beneficial Agreement?
Some negotiation experts would have you believe that a mutually beneficial agreement is one in which each side grabs as much as it can from a finite pot of resources and calls it a day.
At the Program on Negotiation, we urge you to aim higher by combining such competitive value-claiming with collaborative value creation. Not because it’s the “nice” thing to do, but because it’s been proven to be the best path to a truly mutually beneficial agreement.
Negotiators often fail to reach a mutually beneficial agreement because they bring a win-lose mindset to the negotiation table. The assumption of a fixed pie triggers competitive behavior that bypasses opportunities for collaboration and leaves parties entrenched in an impasse.
Rather than working together to increase the size of the overall pie, negotiators end up haggling over a small pie, reducing the chance of creating a beneficial agreement that increases the value for everyone at the table.
To do this, you have to establish a relationship with your counterpart and through this discover the zone of possible agreement with her (ZOPA). When you know the areas of agreement where you and your counterpart are in alignment (and those areas on which you diverge), a skilled negotiator can craft a mutually beneficial agreement that most closely approximates her own and her counterpart’s needs while building a bargaining relationship with her counterpart.
Rather than antagonistic, the negotiation process becomes a value-creating, integrative situation in which each side gets a “fair share” of the pool of resources.
In the end, remember that situations that appear to be zero-sum rarely are.
The key to value creation and a beneficial agreement? Bringing a degree of optimism about the chances of expanding the pie to every negotiation.
Discover how to boost your power at the bargaining table in this free special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.
The following items are tagged beneficial agreement:
Ask Better Negotiation Questions
Asking questions can reveal a wealth of valuable information in negotiation. Yet most negotiators do not ask enough questions or share enough information, instead choosing to devote most of their time at the table to arguing or defending their positions.
… Read Ask Better Negotiation Questions
Appealing to Sympathy When Dealing with Difficult Situations
Imagine that you are about to enter into a negotiation. Unbeknown to your counterpart, the stakes are particularly high because you are dealing with difficult situations behind the scenes. Maybe your organization is struggling financially and needs a break to stay in the black. Or you are planning to ask for a raise to help … Read More
How Mediation Can Help Resolve Pro Sports Disputes
Worldwide, mediation has become a common means of resolving conflict, ranging from divorce to workplace disputes to broken contracts. Yet mediation remains an underused tool for resolving disputes in U.S.
… Read More
For a Mutually Beneficial Agreement, Collaboration is Key
At the Program on Negotiation, we urge you to aim higher by combining such competitive value-claiming with collaborative value creation. Not because it’s the “nice” thing to do, but because it’s been proven to be the best path to a truly mutually beneficial agreement.
… Read More
Managing the “Negotiator’s Dilemma” with Multiple Equivalent Simultaneous Offers
There are two common perspectives on negotiation that can seem at odds, leaving negotiators to decide between these options. But one way around this negotiator’s dilemma is through multiple equivalent simultaneous offers, or MESOs. Consider the following two perspectives on negotiation:
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10 Negotiation Failures
Here’s a list of 10 negotiation failures drawn from recent negotiations in the news—including deals that were over before they started and those that proved disastrous after the ink had dried. These cautionary tales offer ample lessons to business negotiators.
… Read 10 Negotiation Failures
Conflict Management Skills When Dealing with an Angry Public
When negotiators get along well, creative problem solving is easy. When they become upset, however, they seem to forget everything they know about finding joint gain, to the point of giving up tangible wins simply to inflict losses on the other party. This is especially true in high-profile negotiations that turn nasty.
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Are You Ready to Negotiate?
“Winging it” is a fine approach to life’s minor decisions, but when you negotiate, it can be disastrous. Follow these three preparation steps and improve your agreements.
… Read Are You Ready to Negotiate?
Are Introverts at a Disadvantage in Negotiation?
Are extroverts by nature better negotiators than introverts? Or are they at a disadvantage in negotiation? As we’ll see, the answer is far from decided. However, we all have clear opportunities to build on our own strengths and learn from those of others.
Introversion is a personality trait marked by a desire to think through ideas … Read Are Introverts at a Disadvantage in Negotiation?
Body Language in the Negotiation Process and the Impact of Gender at the Bargaining Table
How important is body language in the negotiation process? Negotiators are often advised to engage in small talk before getting down to business.
… Read More
Negotiate Business Contracts that Last
After engaging in the complex process of business negotiation, business negotiators are often happy to pass off the technicalities of deal drafting to their attorneys. Unfortunately, this handoff is prone to errors. Vague, contradictory, and missing deal terms are not uncommon, and they can lead to serious problems during the implementation stage, according to Harvard … Read Negotiate Business Contracts that Last
Video: Setting the Stage for Productive Negotiations
Understanding how to arrange the meeting space is a key aspect of preparing for productive negotiations. In this video, Guhan Subramanian, professor at Harvard Law School and Harvard Business School, discusses a real world example of how seating arrangements can influence a negotiator’s success. The discussion was held in his negotiation training workshop “Setting the … Read More
Top Business Negotiations: Apple’s Price-Fixing Defeat
Back in 2007, unhappy with Amazon’s low, flat price of $9.99 for e-books, five major U.S. publishers negotiated a new business model for e-book pricing with Apple, which was getting ready to launch the iPad.
… Read More
Examples of Negotiation in Business: When “Shrink to Grow” Pays Off
Learn how BP and Russian negotiators came together and created value in a tough business negotiation even though expansion of the negotiated relationship was not on the bargaining table.
… Read More
Trying to Come to Terms with an Adversary?
A string of recent deals between longtime opponents could give you the inspiration you need to reach agreement with your most difficult partners.
Republicans and Democrats. North and South Korea. The United States and China. All of these pairs have a reputation for conflict, rivalry, and impasse. Yet despite their ongoing differences, each pair recently managed … Read Trying to Come to Terms with an Adversary?
Negotiation Skills in Business Communication: Status Anxiety
Negotiation Skills in Business Communication: Campeau Corporation and Federated Department Stores
Sometimes in negotiation we are forced to deal not only with the issues on the table but also with concerns about status.
One famous instance took place in the late 1980s, when Robert Campeau, head of the Campeau Corporation and then one of Fortune magazine’s “50 … Read More
Successes & Messes: Bare-knuckle negotiating
Perhaps it’s no surprise that two boxers, bitter rivals, took many years to negotiate the terms of their hotly anticipated matchup. But the fact that a bout between Floyd Mayweather Jr. and Manny Pacquiao—held May 2 in Las Vegas—came together at all offers hope that even the fiercest competitors can secure a mutually beneficial agreement.
Hitting … Read Successes & Messes: Bare-knuckle negotiating
Build On Your Past Success in Business Negotiations
For fans of AMC’s hit show Mad Men, the news was terrible. In late March 2011, the network publicly confirmed that the fifth season of the show, originally set to air summer of 2011, would not air until early 2012. A contract dispute with the show’s creator, producer, and head writer, Matthew Weiner, had held … Read More
To Close an International Negotiation, Obama Tries a Domestic “Work-Around”
As he entered his second term in office, President Obama set a goal of taking concrete steps to address global climate change. A global agreement on the issue is in sight, but a key obstacle stands in the way: the U.S. Senate. According to the Constitution, a president needs approval from a two-thirds majority of … Read More
Managing Status in Negotiation
Concerns about status will arise in any negotiation. How can you deal with them, both in yourself and in others? The following six guidelines can help in virtually any context
… Read Managing Status in Negotiation
Learning from the deficit-reduction talks
Does anyone down there know how to cut a deal?” Senate Republican Mitch McConnell said to Vice President Joe Biden. It was Sunday, December 30, 2012, the day before the “fiscal cliff ” deadline, and the minority leader had phoned Biden out of a sense of desperation, report Patrick O’Connor and Peter Nicholas in the … Read Learning from the deficit-reduction talks
Dealing With Constituents
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 Dealing With Constituents
Pharma talks
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