International Negotiation: Win–Win Game

Negotiating might be a difficult task for most of us. At least for a relatively inexperienced negotiator, it might feel awkward to not accept what other party proposes and rather reciprocate with your own offer. It can also be emotionally stressful, especially for those of us who are more relationship-based people. So why do we do it, why do we negotiate?

Because we believe that we can get a better outcome for ourselves rather than if we didn’t do so and simply accepted what is on offer. A study examining the salaries of several hundred MBA graduates in the USA discovered that male candidates started in their job with on average 24 percent higher salaries than their female counterparts. We already know that males command higher salaries so this shouldn’t come as a surprise. But why, the researches in the study asked? Because the ladies on average didn’t negotiate, whereas the gentlemen did (by about 20 percent). 

It is as simple as that. When we want to get what we want, we need to learn to negotiate. At work, on the street or at home. We need to do it politely so that we don’t harm the net of relationships we operate within with our demands, but we need to do it firmly so that we can get what we rightfully deserve. Negotiation is becoming one of the most indispensable skills that a successful 21st centuries workers – and people in general - need to have.

And how should we negotiate? The art of negotiation is becoming a well-researched field with dozens of books pounding the issue.  

Having a strong BATNA is probably what most of the authors and writers on the topic consider a key prerequisite for success in negotiating your demands. BATNA stands for Best Alternative to a Negotiated Agreement and basically means that your position, or your power in a negotiation, is given by the fact whether you have to (need to) agree or not in this particular negotiation. If you need to agree because you don’t have an alternative, you are weak as the other party knows they can push you hard and you still cannot walk away. If you have a strong BATNA, you have a strong position. 

Another interesting phenomenon that has been well researched is an effect of anchoring. Most negotiators think hard about whether it should be them or counterparty who opens the negotiation with an initial offer. Psychologists in this regard described the effects of anchoring. If there is no established range of a price within which the negotiation should occur (think rare vintage car that can cost up to hundreds of thousands of dollars but no one really knows what is the market price) the negotiator that opens with initial offer anchors the future negotiation around this initial offer and even counterparty sub-consciously tends to remain within this range. 

Last bud not least interesting issue that impacts negotiation are the relationships that exist between negotiators. In one study subjects were told that the concert tickets they had or wanted might sell for between $10 and $26. Opening prices to sell tickets to friends were toward the lower end of the “fair value” range ($15.50) and near the midpoint when subjects were offering to buy things from friends ($17.50 to buy the tickets). The prices for strangers were either very high ($24to sell the tickets) or low ($14 to buy the tickets). That means that having a strong relationship with a counterparty allows us to bargain much easier. 

Negotiation is an art that we are born is but also a skill that we can learn. Knowing the latest research might be one of the easiest ways to reach this goal.

This article was publish on the basis of the LIGS University open webinar led by Jan Hebnar on the same topic.

The main objective of the webinar is to improve your understanding of the fundamental concepts of international negotiation and conflict management. In particular, improve their negotiation skills and tactics.

• Identifying and negotiating solutions that are satisfactory to all involved.
• Learn the difference between win-win and win-lose negotiation style.
• Understand the dynamics of international negotiations and mediations, as well as factors that impinge on bargaining outcomes.
• Develop skills to prepare for negotiations in a range of settings, while gaining insights into how to develop one’s own personal capacity to negotiate optimal outcomes.
• Learn how to protect against dishonest negotiation strategies and tactics.