Negotiation Strategy Planning Template for Business Success

To achieve their objectives, people can use various methods of leverage—for example, knowledge and information, as well as skills and expertise. Acquiring information can provide people with a critical leverage. According to Chan et al. (2020), knowledge and information incorporate understanding the topic, industry trends, economic situations, and applicable information. People can effectively strategize and make informed decisions when they are well informed. Chan et al. (2020) added that developing specific abilities and skills in a specific region could give an upper hand. Dominating explicit abilities applicable to their objectives permits people to offer unique value, differentiate themselves, and increase their chances of success. Therefore, knowledge and information, as well as skills and expertise, enable people to gain a competitive advantage and make informed decisions, and their chances of succeeding in achieving their goals are increased.

In the context of the negotiation process, the outcomes and dynamics between parties depend on power and influence. Power is a person or group’s capacity to direct or influence other people’s decisions, actions, or behavior. Schaerer et al. (2020) explained that, in negotiations, power could come from various places, such as coercive power and reward power, among others. Coercive power is based on being able to punish others or impose negative consequences on them if they do not follow certain requests or demands. In addition, reward power comes from giving others benefits, incentives, or rewards for their compliance or cooperation. On the other hand, Schaerer et al. (2020) stated that the ability to affect the opinions, beliefs, decisions, or actions of others is referred to as influence. In contrast to power, which usually involves some level of authority, influence is about coaxing and the ability to convince other people to adopt a certain course of action. Influence can be exercised through different strategies, including logical reasoning, presenting compelling arguments, and bargaining, among others. Therefore, a party with power can influence the negotiation process and its outcomes through leverage.

The two common sources of power and influence in negotiations are expertise and referent power. Having specialized knowledge, or expertise in a particular domain relevant to the negotiation gives an individual expertise power. Sinha et al. (2021) asserted that one party could use their expertise to influence the negotiation process when they have a deep understanding of a particular subject. For instance, the other parties involved are more likely to listen to and respect a party whose expertise is well known, which increases their credibility, and their viewpoints and suggestions convey weight and are taken seriously. In addition, Sinha et al. (2021) outlined that referent power as a source of power and influence in the negotiation process depends on personal characteristics or appeal, which makes others need to be related with them.  For instance, others may support a particular proposal if a negotiator with referent power believes it is the best course of action. Thus, a balanced and collaborative approach is frequently more conducive to achieving outcomes that are in both parties’ best interests.

Best alternative to negotiated agreement (BATNA)

(Discuss options and alternatives to agreements)

To reach an agreeable settlement for both parties, exploring and considering different options and alternatives is significant before engaging in negotiations. When generating options and alternatives, individuals can consider aspects such as arbitration, identifying interests and priorities, and contingency plans, among others. According to Johannessen (2019), identifying interests and priorities involves generating viable options by understanding each party’s fundamental interests, necessities, and priorities. Identification of interests contributes to finding alternate solutions that can better address the fundamental concerns of all parties involved. In addition, Johannessen, in 2019, alluded that if the primary agreement cannot be reached, it is essential to consider contingency plans. If the negotiation process does not result in a satisfactory outcome, this entails considering alternative actions. During negotiations, having clearly defined fallback positions can provide leverage and strengthen one’s position. Furthermore, Johannessen (2019) insisted that a neutral third party, such as an arbitrator, could offer a fresh perspective and help facilitate a resolution when direct negotiation fails to achieve a satisfactory agreement. These neutral facilitators can assist in generating alternative options, the direction of the negotiation process, and the discovery of common ground among the parties. Therefore, negotiators can foster creativity and develop creative solutions that lead to mutually beneficial by generating options and alternatives to agreements.

Hardball negotiation tactics are aggressive methodologies one party utilizes to acquire a benefit or apply strain on the other party, including anchoring and bluffing. While these strategies can be effective in specific circumstances, they can likewise strain connections and prevent the chance of arriving at a mutually satisfying agreement.   Craw and Catanese (2020) said that as a means of anchoring the negotiation toward a more favorable outcome for the party employing the tactic of anchoring, this strategy begins the negotiation with an extreme unrealistic demand. The goal is to establish a high initial reference point that can affect how people perceive what is reasonable. The party employing this strategy anticipates that the opposing party will concede and move closer to their initial demand. However, if the extreme demand is excessively unreasonable, it may elicit opposition and cause the negotiation process to be stalled. It requires cautious judgment to utilize this strategy successfully without causing a breakdown in the exchange. In addition, Craw and Catanese (2020) established that bluffing is a strategy used to gain leverage in negotiations by making false claims or misrepresenting one’s position. Threatening, creating a sense of urgency, or lying about one’s interests or constraints are all examples of bluffing. The objective is threatening or maneuvering the other party toward making concessions. While bluffing can be successful in separating concessions, it can impact trust and validity negatively. If the bluff is uncovered, it could lead to the breakdown of negotiations or the parties’ future relationships could be damaged. Hence, negative effects on relationships and long-term outcomes should be carefully considered when employing tough negotiation strategies.