Negotiation analysis: an introduction

Before negotiating with anybody, you absolutely need to define your strategy. In order to do it, you have to analyze different issues and settle a plan. There are 7 fundamental questions you need to ask yourself every time you are negotiating.

These questions will help you to define many important things such as your BATNA but also the BATNA of your opponent, the parties in the negotiation, your interests and the one of your opponent, the value created, the barriers that can arise in a negotiation, the power of each party and the last but not least, the ethics, it means how you define your limits in negotiation.

1. The first question is « what will the respective parties do if they don't come to an agreement? »

This question directly refers to our BATNA: I have already defined what is a BATNA in my previous post, but just to remind you in what consists a BATNA, it’s the best alternative you can reach when both parties don’t come to an agreement, it means when they are not able to reach a solution that makes them better off than they would be by walking away. In other words, it’s a plan B. It seems to be easy to define your BATNA but in reality, it’s more complicated. Indeed, you haven’t to take only the monetary value into consideration to define your BATNA. You need to consider various elements, the overall offer, it means tangible but also intangible interests. Also, you have to consider the relationship you have with your partner, the time the negotiation will last because all these issues can change your BATNA. You need to have a broader view. You also have to consider luck as a factor: sometimes our BATNA is just really bad, sometimes really good because of the circumstances. 

2. « Who are the real parties in the negotiation? »

When you negotiate you have to identify the actors which can have an impact in the negotiation. There are principal actors and secondary ones. You need to define if there are influential players who are not directly around the bargaining table. Indeed, interlocutors that we met are not always the ones we need to talk with. It’s the case when you try to negotiate the price of a car with the seller: in reality, the one you need to negotiate with is the manager. By looking for potential interlocutors, you are less passive in the negotiation because you create new opportunities and you bring new solutions if the negotiation isn’t going anywhere. 

3. « What are their fundamental needs and priorities? »

The needs of both parties aren’t always what we think first, it means reaching a certain amount of money (in the case of Frank Park, making profit). Indeed, we need to take other factors into consideration, like the time of payment. There are various interests and you can optimize your negotiation taking into account these factors.

4. « How can value be created and who is likely to get it? » 

It’s important to compare your own interest with the ones of your interlocutor because the value is different and depends on your situation. Both parties have to bargain in order to be both satisfied and that way to create value. But there is another way to do. Value is created through an exchange of information and brainstorming. That way, you can exploit this information to establish other solutions or to take advantages from the other side. This discussion can end when we reach what we called a “Pareto optimal” point, with is a point where one party’s well-being cannot be further improved without hurting the other’s.  

5. «  What obstacles might prevent agreement (or the maximization of joint value) and how can they be overcome? »

Sometimes there are barriers which can interfere in your negotiation. For instance, strategic behavior can be a disadvantage because you can miss a good deal by being too exigent. There are also psychological and interpersonal barriers, such as lack of trust, or emotions, which can drive you to act with hostility. These barriers can disturb your judgment and make you forget about your goals. You need to overcome them to be able to negotiate correctly. 

6. « How can the various parties influence the negotiation process and its outcome? » 

Power doesn’t necessarily mean having a good BATNA. Indeed, the one who has the power can quickly change. For instance, you can reverse the power by allowing a limited time to your interlocutor to take a decision. You can also make your interlocutor think your offer is essential and that he will lose a lot if he doesn’t take it. This way, you force him to reevaluate his propositions. Power is also about perception. You can gain more power by making sure your opponent know you will stay at the bargaining table as long as it would be necessary to obtain what you want. Power isn’t about the one who has the most but the one who knows the best how to use different strategies to reach what he wants.

7. And finally, the last question is « what is the right thing to do?»

Ethics refers to what you can do and what you shouldn’t do. Business ethics is one of the most important aspects in negotiation, especially in long-term relation: you can’t only see your own interest. It also refers to lie: should we lie to get what we want? should we be honest? Should we use force? ». You can’t lie all the time, and it’s also complicated to determine if your interlocutor is lying too…