There are a lot of ways to negotiate a deal in business. So where do you begin?
As the starting point from which all commercial transactions occur, (as well as many personal ones), from purchasing equipment to setting salaries, learning how to successfully negotiate a deal is an essential skill no matter what field a negotiator finds herself.
To engender a creative and collaborative environment conducive to integrative negotiations, you should ask many questions and listen intently to the answers given, with an eye toward using this information to reconcile your respective differences during the course of the negotiation.
It’s also important to build trust when you negotiate a deal. However, in negotiation, you would be wise to think carefully about the decisions and motives of the other party so that you can understand what the situation looks like from her perspective. This may help you identify when reasons to trust exist and when you have cause to be cynical.
You can work to prevent this obstacle, though. People tend to respond to others’ actions with similar actions, research in the social sciences has found. The reciprocal nature of trust reinforces the value of taking time to get to know the other party and build rapport before you begin to negotiate. Even just a few minutes of small talk can go a long way.
Effective negotiation strategies in business are critical. If you don’t know how to negotiate a business deal, get the information you need to succeed today by downloading our free special report, written by some of the nation’s foremost experts in negotiation, Business Negotiation Strategies: How to Negotiate a Better Business Deal. It will teach you how to negotiate a business deal and gives you the tools you need to navigate even the stickiest business deals.
At the time, it seemed to be an example of coolheaded dealmaking in the midst of disaster. In 2009, hit hard by the 2008 financial crisis and changes in consumer preferences, U.S. automaker Chrysler was on the brink of collapse, and the Treasury Department stepped in to do a deal. In exchange for about $12 … Read More
When we think of failed business negotiations, most of us picture negotiators walking away from the table in disappointment. But that’s only one type of disappointing negotiation. Failed business negotiations also include those that parties come to regret over time and those that fall apart during implementation. The following three types of negotiation failures are … Read More
On May 19, 2013, internet company Yahoo announced it was purchasing the blogging service Tumblr for about $1.1 billion in cash. The acquisition was intended to put a fresh face on the aging Internet company and provide it with a profitable revenue source. But those plans didn’t play out: In August 2019, Tumblr was bought … Read More
On September 5, 2017, President Donald Trump announced that in six months he would phase out Deferred Action for Childhood Arrivals (DACA), the Obama-era policy that has shielded from deportation about 800,000 people brought to the United States illegally as children. Members of Congress seeking permanent protections for the so-called Dreamers covered under DACA then … Read More
Business negotiators tend to focus on getting to the finish line, which is typically defined as a signed contract. The contract negotiation skills we need to get there—such as building trust, brainstorming issues, and negotiating a great price—are pivotal, yet we often overlook the importance of setting up our agreement for success during the implementation … Read More
In recent years, the U.S. film industry has avoided dealing with a mounting inefficiency. Historically, theater companies have negotiated with film studios for the right to screen movies for three months before they can be released in other formats, including streaming, on demand, and DVD. Staggering the release of films in different formats has benefited studios … Read More
A key component of moral leadership is motivating others to live up to their personal ethical standards and those of your organization, even in the face of temptations to behave unethically.
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The 1998 merger of German automaker Daimler-Benz and the American Chrysler Corporation at first seemed like a match made in heaven, but the honeymoon wore off as the two cultures that made up DaimlerChrysler began to clash. The Americans’ informal behavior, such as using first names rather than titles, made the Germans uncomfortable, while the … Read More
When trying to negotiate a deal with a potential business partner, you need to come up with a plan for ensuring the two sides will mesh rather than clash. Facebook’s leaders and WhatsApp’s founders appeared to skip that vital step when negotiating the social media giant’s purchase of the text-messaging app in 2014—an oversight that … Read More
Adapted from “Strike the Right Balance Between Trust and Cynicism,” by Harvard Business School professor Max H. Bazerman, first published in the Negotiation Briefings newsletter.
Negotiators often must choose between trusting their counterparts and being cynical of their motives. The consequences of such decisions can be serious in dealmaking: trust too much, and you’ll lose big; … Read More
Negotiators often wonder how they can get the biggest slice of the pie when claiming value in negotiation. Certain deal-making techniques can be useful, such as the well-known “foot in the door” technique, which is designed to get people to comply with a large request by securing their agreement to a smaller one first, and … Read More
Joint ventures, strategic alliances, purchasing agreements, and other types of partnerships between organizations often begin with a great deal of promise—and a hefty amount of risk. Serious misunderstandings and opportunistic behavior are relatively common in such relationships. Formal contracts offer a method for reducing such risk, but negotiators and their attorneys are often unsure about … Read More
As experienced negotiators well know, the more parties involved in a negotiation, the more difficult it often is to come to agreement, due in part to the logistical challenge of making sure each voice is heard. Yet multiparty negotiation offers considerable benefits. Most notably more opportunities for making tradeoffs and creating value in negotiation than … Read More
Imagine you’re competing with multiple parties to secure a coveted resource, such as your dream house, a cool invention, or a talented new hire. How might you stand out from the pack and win the prize? While negotiating its $13.4 billion acquisition of upscale grocer Whole Foods in 2017, online retailer Amazon did so in … Read More
Without realizing it, we leave many of our most important decisions in negotiation up to chance. When talking to a potential negotiating partner, we may assume that we have met the best person possible to do this particular deal. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the … Read More
Men and women approach negotiation differently, on average, research suggests. Women initiate negotiations on their own behalf less frequently than men, for example, though they are just as likely as men to advocate for others. In addition, women—and not men—tend to face a backlash for bargaining on their own behalf, an outcome that may explain … Read More
At last, the deal is done. After 18 months of negotiation, eight trips across the country, and countless meetings, you’ve finally signed a contract creating a joint venture with a Silicon Valley firm to manufacture imaging devices using your technology and their engineering.
The contract is clear and precise. It covers all the contingencies and has … Read More
Q: I work for an international nonprofit that tries to eliminate “bad acts” around the world—not illegal activities, but ones that we consider unethical. We are currently negotiating with a U.S. business owner who is engaged in these bad acts. His business is generating losses, so we are trying to buy him out and put … Read More
Adapted from “Great Deal—But How Will It Play at the Office?” by Jeswald W. Salacuse (professor, Tufts University), first published in the Negotiation newsletter, October 2006.
To close any deal, you not only have to reach agreement with the other side but also convince your own organization of the deal’s value. In fact, you may … Read More
Adapted from “Option Overload? Manage the Choices on the Table,” by Chris Guthrie (professor, Vanderbilt University Law School), first published in the Negotiation newsletter.
Consider what happened when Randy, who was opening his first restaurant, met with Albert, the general manager of Best Appliances, to negotiate a deal. Albert pulled out a stack of brochures and … Read More
Adapted from “The Deal Is Done—Now What?” by Jeswald W. Salacuse (professor, Tufts University). First published in the Negotiation newsletter.
At last, the deal is done. After 18 months of negotiation, eight trips across the country, and countless meetings, you’ve finally signed a contract. It’s clear and precise. It covers all the contingencies and has … Read More
Understanding how to arrange the meeting space is a key aspect of preparing for negotiation. In this video, Professor Guhan Subramanian discusses a real world example of how seating arrangements can influence a negotiator’s success. This discussion was held at the 3 day executive education workshop for senior executives at the Program on Negotiation at Harvard Law School.
Guhan Subramanian is the Professor of Law and Business at the Harvard Law School and Professor of Business Law at the Harvard Business School.