The Negotiator Magazine

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Wise leaders also know that executive time, accounting time, resource personnel and legal time are essential components of any complex negotiation and must be factored into the cost analysis. Next, add the direct expenses of travel, meeting facilities, entertainment and other related expenses, for example secretarial and technical support, and a significant cost side emerges for almost any business negotiation.

The benefit side requires a thorough estimate of the likely gains and downside risks in a deal with this particular partner. Here we need to calculate accurately not only monetary impacts, but also relationship values, potential synergies and other potential area of gain.

We also need a reality check. If all goes well, have we found the best negotiating partner? Why this one instead of expending time on alternative partners? What really is our best alternative to this negotiated particular agreement (BATNA). What are the risks inherent in the negotiations themselves and the probability of the agreement to achieve our goals? Are we confident that we are meeting with the key personnel who can make and carry-out the agreement?

The same applies in personal negotiating decisions. If I wish to negotiate the price of a can of soup at the market, is it worth my effort? How much time will it require? How much time will it demand to even reach a decision maker? Even if I win the negotiation what will be the gain.

Humankind, for better or worse, uses other criteria for this decision to negotiate. Sometimes it proves to be to their satisfaction and sometimes to their loss. Let us note some of those other negotiation criteria that may not fit the model, but never-the-less are in play.

Some decisions to negotiate rest on principle and that, of course, may well trump any cost-benefit analysis. Sometimes, the decision to enter negotiations is based on our commitment to helping people we consider abused or exploited and we undertake them as champions of the rights of the weak.

Indeed, some negotiations are decided upon on a mix of altruism and public safety as the crisis negotiator engages with the suicidal individual or the hostage taker. The equation here is the preservation of human life that outweighs all economic criteria.

Sometimes decisions to negotiate are based on institutional policies that may require that "we do not negotiate, we litigate." In some instances, these policies may be written to preclude negotiation and require mediation or arbitration.

Other negotiations are launched on opportunities to prove skills, make a mark as a great negotiator, or simply prove that even the mountain can be brought to its knees by mere mortals. These are the ego-driven criteria.

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November 2004