Business Negotiations

Table of Contents

Introduction2

Type of Negotiations2

The Negotiations Committee3

Negotiation Process5

Build Trust and Emotion In Negotiation5

Understand the Dynamics of the Particular Negotiations6

Understand the Role That Fairness Plays in the Process7

Merger Negotiations8

Conclusion9

References11

Business Negotiations

Introduction

Successful negotiating depends upon listening effectively to understand what each side is offering, wants, and will accept. Empathic listening can both persuade opposing negotiators and enable you to understand what they really want and are willing to settle for. During the negotiation, especially a contentious one, tune into your body periodically and do temperature checks. If you are experiencing strong negative emotions, take a break—either mentally or physically. (Kolb: 3) During the break, you may want to use the techniques that change hot feelings into cooler ones. Once you are calmer and more detached, you can decide how to get the negotiation back on track. You may want to ask yourself how the other side is feeling. If you still want to foster a positive environment, use the tools and techniques that help with that. You may want to use communication techniques to respond in a constructive way to the aggressive moves of the other side. You may also want to take the time to assess whether the strong negative emotion was triggered by identity issues or shadow characteristics. During the negotiation session, be perceptive and watch for signs of emotion in the other person. Doing so can provide invaluable information.

Type of Negotiations

There are two types of negotiation: "integrative" and "distributive." Integrative negotiations are those typically referred to as "win/win" negotiations: all sides are looking for a solution that maximizes joint gain and allows everyone to walk away feeling like they won something. They involve looking at the issues being negotiated from multiple angles, considering multiple issues at once (thus allowing for trade-offs), and honestly trying to "expand the pie" rather than divide it. Anyone who imagines that they might see or do business with their fellow negotiator in the future should be attempting to negotiate in this way. Integrative negotiations foster trust and good working relationships, and leave all parties feeling good, not just one.

Distributive negotiations, on the other hand, are typically described as "win/lose" negotiations - one party gets what they want, and the other party gives something up. Think of negotiating for your car - you either get that extra $1000, or the dealership does. If you feel you got a good deal (and squeezed that salesman), you "won." If you walk away feeling like you paid too much money, you "lost." This type of negotiating does not lead to good long-term relationships. The parties' interests are often opposed (or seem to be opposed - this may not prove to be the case once you start getting creative), and usually good feelings are not plentiful when the negotiation is over. (Anderson: 125-127)

The Negotiations Committee

Negotiating the terms of a strategic restructuring -- merger, asset transfer, parent/subsidiary structure, the creation of an MSO or joint venture corporation, etc. - is a complex process, and can raise many anxieties. The ultimate responsibility ...