What is a Negotiated Agreement?
When two or more parties need to reach a joint decision but have different preferences, they attempt to work out a negotiated agreement.
A negotiated agreement happens through back-and-forth communication in the hopes of reaching a deal when you and the other side have both shared and opposing interests. Of course, finding your counterparts’ interests and reconciling them with your own is a process.
Furthermore, some negotiation experts would have you believe that a mutually beneficial negotiated agreement is one in which each side grabs as much as it can from a finite pot of resources and calls it a day.
Unfortunately, most people are not natural-born negotiators. The good news is that research consistently shows that most people can significantly improve their negotiation skills through education, preparation, and practice. How can you create value at the bargaining table and get on the path to a mutually beneficial agreement?
- Share information. Negotiators often fear they will give away too much if they express their true preferences on various issues. But expressing preferences isn’t the same as giving away your bottom line.
- Ask questions. Listening actively and asking lots of questions will help you collect the information you need to develop a mutually beneficial agreement.
- Make multiple equivalent simultaneous offers (MESO). Craft three offers that are different across issues but equally appealing to you. The other party may reject all three of the offers, but is likely to communicate which one she likes best—and put you back on a track toward a mutually beneficial agreement.
In addition, remember that it rarely hurts to ask your negotiating counterpart for what you want from a negotiated agreement. You will be amazed by what you can get simply by asking.
Armed with a better understanding of these building blocks of negotiation, you are positioned to learn more about how to create and claim value in negotiations, manage fairness concerns, and reach the best deal possible—both for you and for your counterpart.
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.
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