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importance of negotiation in business

What is the Importance of Negotiation in Business?

The importance of negotiation in business can’t be overestimated. 

What is the importance of negotiation in business? As the starting point from which all commercial transactions occur, from purchasing equipment to setting salaries, negotiation in business is an essential skill no matter what field a negotiator finds herself in. Using an objective standard can strengthen your proposal and eliminate emotional bias. 

However, we sometimes overlook the importance of negotiation in business, because we don’t know what might be possible. In addition, the other party (such as a boss who hasn’t given you a raise in two years) may appear to have no incentives to negotiate with you, leaving it up to you to start the conversation.

In fact, the topic of salary is one of the areas where the importance of negotiation in business is especially noticeable. For a new employee, successfully negotiating a salary offer up by $5,000 could make a huge difference over the course of her career. A 25-year-old employee who enters the job market at $55,000 will earn about $634,000 more over the course of a 40-year career (assuming annual 5% raises) than an employee who starts out at $50,000.

Remember, though, in salary negotiations, the best negotiators share information and ask questions. The more information you can provide about what you value (without revealing your bottom line), the better equipped you and the other party will be to identify new issues to discuss. 

Discover how to refine your negotiation skills with this free special report, Salary Negotiations: How to Negotiate Salary: Learn the Best Techniques to Help You Manage the Most Difficult Salary Negotiations and What You Need to Know When Asking for a Raise, from Harvard Law School.

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The following items are tagged importance of negotiation in business:

The Process of Business Negotiation

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Negotiators are more satisfied with the outcome of a negotiation when they think the process has been fair, research shows. To maximize satisfaction and build a strong working relationship, don’t leave the process of business negotiation up to chance. Given the importance of negotiation in business communication, you’d be wise to consider the following seven … Read More 

The Importance of Negotiation in Business and Your Career

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What are the essential ingredients to getting ahead in the workplace? Hard work, communication skills, and a generous dose of luck all play a role, of course. Another key ingredient—one that is often overlooked—is the ability to recognize and capitalize on opportunities to negotiate for your career success. Why is negotiation in business important? Because … Read More 

Contract Negotiations and Business Communication: How to Write an Iron-Clad Contract

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In contract negotiations, writing a contract that both encapsulates the negotiated agreement but also incorporates future elements such as the business relationship and the sustainability of the agreement can be a daunting task for even the most experienced negotiators. Executives often leave the legal issues surrounding their deals to their attorneys. While this division of … Read More 

Setting Standards in Negotiations

Posted by & filed under Salary Negotiations.

As the starting point from which all commercial transactions occur, from purchasing equipment to setting salaries, negotiatiosn in business is an essential skill no matter what field a negotiator finds herself. Using an objective standard can strengthen your proposal and eliminate emotional bias. … Read More 

Top Ten Posts About Conflict Resolution

Posted by & filed under Conflict Resolution.

Conflict resolution is the process of resolving a dispute or a conflict by meeting at least some of each side’s needs and addressing their interests. Conflict resolution sometimes requires both a power-based and an interest-based approach, such as the simultaneous pursuit of litigation (the use of legal power) and negotiation (attempts to reconcile each party’s … Read More