• Choosing The Right Approach In Business Negotiations

    As with any art or science, negotiation is an activity with centuries of studies and approaches. From Aristotle to the modern-day, business negotiations are a skill and an art. Several key schools of thought provide the building blocks of many successful negotiating styles.

    The "I'm Only Asking For What's Fair" Approach

    The fairness school of negotiation rests on the principle that parties must settle through fairness. Agreements become a process of evaluating offers and counteroffers to ensure that the resulting deal is fair for both parties, usually expressed in terms of an equal split or some other quantifiable measure.

    The perceived fairness of the outcome is more important than other factors. For this approach to be effective, both sides must feel that they perceive the deal as fair. If one side perceives itself as disadvantaged, it can entirely use its leverage or walk away from the table. This approach often brings another negotiator's sense of justice or fairness into play.

    The "Getting To Yes" Approach

    In "Getting to Yes," William Ury and Roger Fisher argue a negotiator should set aside standard rules to reach an effective agreement. They suggest three guiding principles:

    • Separate the people from the problem.

    • Focus on interests and not positions (what you really want vs. what you're asking for).

    • Invent alternatives to settlement (no deal is better than a poor deal).

    This approach is all about generating options before getting down to the nitty-gritty. Negotiators from this school often use mediation or brainstorming meetings to develop creative options before sitting down to negotiate.

    In the book, "Yes" does not mean giving up on your position or getting dragged along by another party's demands. Instead, saying "yes" means agreeing upon a solution.

    The "Offer-Concession" Strategy

    The "offer-concession" strategy is a straightforward and widely used approach. Negotiators make an initial proposal, or the offer, which is typically high on the asking price and low on the request. They then make concessions, such as giving up something they want, to arrive at a final deal.

    This approach is simple to understand and flexible, allowing concessions to be made at different stages of the negotiation. It's also subjective because the last deal depends on the compromises made. 

    Barriers to an Agreement

    Choose your negotiation approach carefully. Each school of thinking has its strengths and weaknesses. Remember that a single school may not work in every situation.

    Make sure the approach you choose fits your style and learn the other party's method. Ask questions about what they believe is best, or read between the lines by observing their behavior. Don't compromise on your key issues.

    This situation is tricky because giving on a key issue can make your whole deal seem off-balance and unfair. Decide ahead of time your bottom line. The other party may ask you to cross it at some point, but stay firm.

    Spend Time on Presentation

    If you're going to present your case in a meeting, spend time on how it will look. Poor presentations can compromise deals. Along with reviewing the language to ensure everything is included and easy to read. Be sure to combine PDFs so you can easily send over one file with all the important information.

    Consider joining your local chamber of commerce for future business opportunities in your area.