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The Art and Science of Negotiation
November 8, 2021

Business woman shakes hand with business man.
Courtesy of Wharton Interactive.

Negotiation is an essential skill that requires practice. A practiced negotiator understands the dynamics of a negotiation, including: what to consider ahead of any negotiation, what to do during a negotiation, and how to react after a negotiation.

It’s helpful to consider the following ahead of any negotiation:

Decide how much something is worth to you and consider your bottom line. Ahead of any negotiation, it’s helpful to decide how much something is worth to you, and consider how much something is worth to your counterpart. If a deal doesn’t close, what alternative do you have? It’s also worthwhile considering  your counterparts’ alternatives– if the deal doesn’t close what might their alternative be? Thinking about your perspective and your counterparts’ perspective is key ahead of any negotiation.

Consider the relationship. Your negotiating strategy depends on your previous and future relationship. For instance, if you’re negotiating for a higher salary, it’s worthwhile to take into account the long-term health of your relationship with your manager during the negotiation. You want to negotiate so that you get a raise and maintain a good relationship. This is a balancing act. If however, you’re planning for a one-shot negotiation, your strategy may differ depending on your goals for the relationship.

During a negotiation, consider the following:

Use the first-mover advantage. Making the first offer is often a wise move if you’ve taken some time to understand your counterpart’s position.  By making an ambitious (but not outrageous) first offer, you anchor all subsequent offers and counteroffers.

Ask Questions. Using perspective-taking, or looking at a situation from your counterparts’ point of view, is a powerful strategy; it helps you see what they might want. Perspective-taking is not easy, but thinking about what others want can help you overcome barriers in a negotiation. How do you engage in perspective-taking? By asking lots of questions. Any answers to questions can help you better understand your counterparts’ viewpoint: How important is closing the deal for your counterpart? How much do they value the particular good or service? What do they want? Asking questions ahead of making the first offer can help you make a smart first offer and can help reveal common interests: what do you and your counterpart have in common?

After the negotiation, consider the following:

Your reaction matters. Everyone wants to think that they are excellent negotiators. Your actions after a negotiation can affect both how your counterpart feels in the moment and the health of the long-term relationship. What happens after a deal is closed and you show your counterpart that they could have walked away with more? The illusion is broken. Your counterpart is no longer thrilled with closing the deal; instead, they feel bad because they are comparing their outcome to yours, and in this comparison, they lose. Because we are always comparing ourselves to others, it’s important to consider how your counterpart will feel even after a deal has been reached. Closing on a good note can affect your future relationship and your ability to negotiate in the future.

The Shadow of the Future.

If a long-term relationship with your counterpart matters to you, then often the relationship may be more important than monetary concerns – make sure you end the negotiation on a good note.  In one-shot negotiations, this may not be a factor, but in a longer-term relationship, you should focus on ending the negotiation on a good note, highlighting common ground, and promoting shared problem-solving.

For more on negotiation see:
Fisher, R., Ury, W. L., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in. Penguin.
Galinsky, A., & Schweitzer, M. (2015). Friend & foe: When to cooperate, when to compete, and how to succeed at both. Currency.
Hart, E., & Schweitzer, M. E. (2020). Getting to less: When negotiating harms post-agreement performance. Organizational Behavior and Human Decision Processes, 156, 155-175.

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