To Negotiate or not to negotiate: is that the question? | MISB Bocconi
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To Negotiate or not to negotiate: is that the question?

We can give an apparently easy answer to this question: basically, it depends on the difference in terms of (perceived) value assigned to the resource to be negotiated. Consequently, we are facing negotiation situations much more often than we believe.
In other words, a negotiation process exists when one party is interested in something that is possessed by another party.
Therefore, we can define negotiation as a communication process between two or more parties aiming at achieving a common decision. The decision can be “ok, we got an agreement” or “ok, we can’t move forward with this negotiation as there is no room for finding a common agreement”.
One of the most important success factors of any negotiation is the ability of negotiators to be “prepared enough”. Being prepared refers mainly to: the level of information negotiators have about the context, the specific situation, the counterpart(s), the value assigned to the resource to be negotiated by each negotiator.
Many negotiators typically take into consideration only the information that is immediately accessible for them. Is this enough? Sometimes, the negotiation process can be more successful when the negotiator – during the preparation phase – searches for new info that is not in her/his knowledge domain yet.
Not exploring enough for useful information is one of the typical behaviors that negatively affect the negotiation effectiveness. The higher the ability of negotiators to search for and select information, the higher is her/his preparation, and consequently the more successful the negotiation process will be.
Being well prepared doesn’t mean that negotiators have to necessarily follow the predefined path for managing the negotiation process. On the contrary, the well-prepared negotiator is also able to manage the uncertainty, e.g. in case the negotiator discovers a new info during the meeting with the counterpart s/he’s able to deviate from the process s/he was prepared on.
So, successful negotiators must be able to manage information according to two dimensions: the ability to understand properly the set of information they already have access to; the ability to search for eventually new info useful for the negotiation process. In other words, negotiators’ ability to manage information can be represented by the expression ExE, which stands for “Exploring x Exploiting”: negotiators have to balance effectively the need for going in deep with the info they have, and at the same time to gather new info that can be used for the negotiation process.
This ExE ability is particularly relevant in the case the negotiation is characterized by high level of uncertainty and risk, rules are not clearly defined, and the relationship between the negotiators is not consolidated yet.
Following this, there are three practical recommendations for improving your negotiation skills in the short-term.
The first recommendation is about the type of relationship between negotiators and the part they are representing. Typically, there is a principal-agent relationship where the agent is the negotiator and the principal is who gives the mandate. This is really important as negotiators must continuously remember who they are negotiating for (that is principals), and then pursuing the principals’ interests and preferences, not the negotiators’ ones.
The second recommendation is about the kind of negotiations. Even if some negotiations are similar, actually they are different each other. Several factors make negotiations diverse. The two most significant factors are the context and the parties. Having a good understanding of these two factors helps negotiators to define the negotiation strategy, and their style for managing the negotiation process. Moreover, taking these factors in mind helps negotiators to remember that negotiations evolve during the meeting so also their either strategy or style can change consequently.
The third recommendation is about the effects of the agreement. Once an agreement has been signed, it must be executed accordingly. This helps to build trust between the parties, and to reinforce your credibility as professional negotiators. To make this happen, negotiators want to be sure on what they are negotiating about. In other words, resources that are not included in the mandate are not negotiable. In case it becomes necessary to add a new resource, negotiators have to first check it out with their principals.

Leonardo Caporarello
July 13, 2015

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