Whether it’s buying a house or signing a business deal, offer negotiation is common.
That doesn’t mean offer negotiation is always easy, even when parties hope to achieve an agreement. For example, research shows that people fall victim to a host of perceptual biases when assessing others. Therefore, be prepared to find out that your opponent is very different than you expected them to be – and perhaps less competitive than you expected.
One common mistake that leads to these biases for many people in an offer negotiation is failing to adequately prepare. Poor preparation also prevents you from using one of the strongest bargaining tools at your disposal: the first offer.
Making the first offer is often a smart move, especially if you have a strong sense of the value of the item or service being sold. The first offer often anchors the discussion that follows and, as such, can have a powerful effect on the final outcome. However, it’s risky to make the first offer when you have little knowledge about the bargaining range.
If that’s the case, you may be able to assess your counterpart’s priorities by setting up a MESO negotiation – a multiple equivalent simultaneous offer negotiation. This approach entails identifying several proposals that you value equally and presenting them to the other side.
In MESO, negotiation in which multiple offers are presented simultaneously at the negotiation table, effective negotiators seek opportunities to create value. By making tradeoffs across issues, parties can obtain greater value on the issues that are most important to them.
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When you expect people to be competitive, it’s not only your own behavior that changes. You also set up a self-fulfilling prophecy, such that your expectations about the other side’s behavior lead him to behave in ways that confirm your expectations.
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A common topic in our business negotiations articles are negotiation topics in business about enhancing your deal after signing the negotiated agreement. After all, not all contracts are created equal.
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In a hot real estate market, sellers may find themselves determining the best way to engage in an early offer negotiation. We asked Leslie John, the Marvin Bower Professor of Business Administration at the Harvard Business School, to answer a question regarding this topic.
Q: I’m selling my house in a seller’s market. As is the … Read More
When a team is preparing for a critical negotiation, members need to appoint a leader, allocate roles and responsibilities, and discuss their at-the-table strategy. Another key objective that teams sometimes fail to discuss is the importance of staying “on message” – that is, making sure that statements by individual members don’t contradict the group’s agreed-upon … Read More
This famous offer negotiation illustrates how negotiators and other decision makers sometimes have the difficult task of remaining impartial when facing a conflict of interest. The actions of the special committee of Dell’s board as the company’s CEO and founder, Michael Dell, moved forward with a leveraged buyout suggest precautions you can take when navigating … Read More
Amid the Covid-19 pandemic, many jobseekers have concluded that if they are lucky enough to be offered a good job in a tight market, they lack the power needed to negotiate better employment terms. In fact, a silver lining of the crisis is that it has created new opportunities to negotiate. With the coronavirus throwing … Read Job Offer Negotiation Tips During the Pandemic
Ethics in negotiation can involve expectations of fairness, equity, and honesty but, sometimes, despite your best intentions, one or more of these four forces might lead you to behave unethically during job offer negotiations:
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The year 2017 offered plenty of negotiation hits and misses in the realms of government, business, and beyond. To avoid failed negotiations in 2018, politicians, business leaders, and the rest of us would be wise to explore the following recent negotiation books, which can help steer us through our most difficult negotiating dilemmas:
… Read Must-Read Negotiation Books for 2019
Regrouping from the cancellation of the 2004–2005 season due to failed labor negotiations, National Hockey League (NHL) teams and players faced the challenge of radically restructuring their collective bargaining agreement (CBA) in July 2005. The new CBA instituted a uniform cap (as well as a floor) on team payrolls. It also set maximums and minimums … Read Negotiation Topics in Business: Make a Bump Plan
On October 15, 2012, Citigroup CEO Vikram Pandit walked into the office of the bank’s chairman, Michael E. O’Neill, expecting a routine meeting and perhaps some words of praise. The day before, Citigroup had released a favorable earnings report that suggested the bank was beginning to rebound from the financial crisis. Citi had received a … Read More
Whether dealing with difficult or hard bargainers like Putin or forging business partnerships, international negotiations are fraught with a level of complexity rarely encountered in everyday negotiations. Here are the top ten international negotiation articles on the Program on Negotiation’s website.
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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