Growing a Business

Good guidance for great business negotiations

The most difficult aspect of business negotiations is the actual conduct of the face-to-face meeting. Assuming that the best representatives have been chosen, and assuming that those representatives are well prepared, and the situational factors have been manipulated in one’s favour, things can still go sour at the negotiation table. Obviously, if these preliminaries have not been managed properly, things will definitely go wrong during meetings. Even with great care and attention to preliminary details, managing the dynamics of the negotiation process is almost always the greatest challenge facing companies which seek to do business with other organisations or countries.

Going into a business negotiation, most people have expectations about the ‘proper’ or normal process of such a meeting. It is on these expectations that the way forward is planned out and assessed and the most suitable bargaining strategies are chosen. It is quite often that the conduct and mood of the negotiation differs to a considerable extent on how things are done in the latter stages, from the earlier stages of introduction. It is during the conclusion of the negotiations that higher risks are observed and dealt with. But all decisions about strategy are made relative to the perceptions of progress through an expected course of events.
It is a common practice all over the world to proceed though negotiations, following the four important stages:

Non-task sounding

This the first and significantly crucial stage where both parties have to make a positive effort to establish a rapport between each other, and get to know each other to the extent possible. In this stage there is no reference about the actual ‘business’ of the meeting. Usually topics such as the weather, family, sports, politics and business conditions in general are discussed, but not for long. Usually the discussion is moved to the specific business on hand after five to ten minutes. Such preliminary talk helps negotiators to learn how the other side is feeling on that particular day. One can determine whether the client’s attention is focussed on business or distracted by other matters, personal or professional. During these initial stages of conversation, judgements too are made about the kind of person with whom one is dealing- can this person be trusted? Would he be reliable? How much power does he/she have in the organisation? All these judgements are made before the business discussions actually begin.

Task Related Information Exchange

The information exchanged in the second stage of business negotiations concerns the parties’ needs and preferences. It is only after a trusting personal relationship is established should business talks commence. In this stage of task-related information exchange, a two way communication process is put into action, when each of the parties present their opinions, their needs and their preferences. The information flow should be balanced between both parties, using multiple communication channels during presentations – writing, exhibits, speaking, repetition etc, to minimize errors and misunderstandings.


Persuasion, which is the third stage, is indeed an art and it is here that the parties’ endeavour to adjust and adapt one another’s needs and preferences by employing various modes and methods of persuasion. Asking more and more questions is, in fact, the most powerful tactic of persuasion. Questions are a potent, yet, a seemingly passive persuasive device. In case the other party or the potential business partners, come up with good suggestions, then compromising on the issue is the best option. It has been seen that very often, questions elicit answers that when subjected to close scrutiny, do not appear to be all that good. It is here when the weakness of their position is exposed, that the other party will be ready to oblige and concede.

Concessions and Agreement

The final stage of business negotiations involves the consummation of an agreement, which is often the summation of a series of concessions or smaller agreements. It is essential and of great importance that concession-making strategies and agreements are written down. Both the parties should have a healthy respect and concern for the mutual benefits of the relationship and therefore should take into consideration, the interests of each other, when reaching or drawing up an agreement.

Finally, once the agreement or contract is signed, follow up communications are an important part of the business negotiations. Senior level executives who have participated in the negotiations should keep in touch through letters, pictures, and mutual visits as they are important long after the contracts are signed. Warm relationships among the key personnel, often prove to be the best solution for any problems that may arise in the future.

Entrepreneurial Learning

The article talks of the difficult aspects of business negotiations which take place before the actual conduct of the face-to-face meeting. The author tells us that even though the representatives are well prepared, and the situational factors have been manipulated in one’s favour, things can still go sour at the negotiation table. And, if these preliminaries are not managed properly, things will definitely go wrong during meetings.

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