“In Business as In Life, You Don’t Often Get What You Deserve, You Get What You Negotiate” Chester Karrass

How do you describe this negotiation outcome?

  • Wife: Darling, I have a question for you. If you don’t know the answer, you pay 50,000; if my answer is incorrect, I pay you 5,000.
  • Husband: Okay, deal
  • Wife: If vegetarians eat vegetables, what do humanitarians eat?
  • Husband: Hmm, I don’t know. Gives the wife 50,000
  • Husband: So, what is the answer?
  • Wife: Please take your 5000 because I don’t know the answer

Any quick word for the husband and wife?

Negotiation is the art of reaching agreements through communication and is a multifaceted skill set that extends far beyond mere bargaining. It encompasses understanding, empathy, and strategic thinking to navigate towards mutually beneficial outcomes. Negotiation is fundamental to human interaction, whether a business deal or a household decision.

Negotiation is finding common ground among parties with differing needs, goals, or viewpoints.

Negotiation Opportunities
    Negotiation permeates various aspects of life, from personal relationships to international diplomacy. Negotiation skills are indispensable when deciding where to go for dinner or brokering a multimillion-dollar business deal. Without the ability to negotiate effectively, opportunities are missed, agreements are compromised, and relationships suffer.
    Negotiation prowess can be the difference between success and failure in business. As competition intensifies and global markets expand, organisations must navigate diverse personalities, cultures, and backgrounds. Negotiation skills empower professionals to navigate these complexities, ensuring favourable outcomes and fostering organisational success.

    In his days, President Obasanjo was too strong for Tinubu in bargaining situations. Hence, there was an impasse on creating a new Local Government, which Obasanjo disapproved of. Tinubu had to settle for the alternative, now known as the Local Council Development Area (not recognised by the country's constitution.) The current context, however, has strengthened President Tinubu's bargaining hands.

Iconic Mo' Hits Records Partners of decades standing, D'banj and Don Jazzy, hit a negotiation deadlock over their international strategies. In the end, they had to part ways.

The Lagos-Calabar Coastal Road project and the ongoing tough negotiations over the existing high-value properties on its path, e.g., Over $200 million Landmark Resort.

How may the negotiations end?

Negotiating with Dangote (yes, that man again!) is a big deal:

  • extremely focused
  • unrelenting
  • but he recognises it and concedes with dignity whenever bargaining won't go his way.

Case Example:
Dangote's moves in the late 2000s got the giant Flour Mills of Nigeria out of the lucrative cement business (the Burham Cement). But subsequently, Flour Mills got around to out-bargain him in the flour milling business this time.

Benefits of Negotiation

  1. Good negotiations help you gain better control in business and personal situations.
  2. They help you identify and understand your interests, the interests of the other parties, and their differences.
  3. It helps to reach a ‘Win-Win’ Solution, which is mutually beneficial to all the parties involved in a negotiation.
  4. Good negotiations also help to improve our understanding of others and interpersonal relationships.
  5. They help to develop and maintain an overall harmonious and thriving interpersonal environment.
  6. It is one of the easiest and quickest ways to solve conflicts and disagreements.
  7. Negotiations help to reduce stress and frustration among two conflicting individuals.

Distributive vs Integrative Negotiation

There are two main types of Negotiation:

  • Distributive Negotiation, often labelled as ‘Positional’, ‘Competitive’, ‘Fixed Pie’, or ‘Win-Lose’ Negotiation, revolves around parties competing to distribute a fixed amount of value. In this scenario, immediate goals take precedence, with minimal regard for building future relationships. Each party tends to adopt a self-focused approach, striving to maximise their gains while potentially disregarding the other party's interests.
  • Integrative Negotiation, also referred to as ‘Interest-based’, ‘Cooperative’, ‘Win-Win’, or ‘Non-zero Sum’ Negotiation, aims to reach an agreement that considers the interests, needs, desires, concerns, and fears of all involved parties. Here, the focus is on fostering mutually beneficial agreements that align with the interests of both disputants. Unlike distributive negotiation, integrative negotiation emphasises collaboration and problem-solving to create value for all parties.

Three Elements of Negotiation (Tip)

In negotiation, three key elements play crucial roles in shaping the dynamics and outcomes of the process.
Firstly, information is paramount. It encompasses understanding not only your characteristics, needs, and motivations but also those of the other party. A clear grasp of these aspects allows negotiators to tailor their approach and proposals effectively.
Secondly, time is a critical factor. Negotiators must consider their own and the other party's time constraints. Whether there are looming deadlines or time-sensitive factors, the negotiation timeline can significantly influence decision-making and strategy.
Lastly, power dynamics come into play. Negotiators must assess where power lies within the negotiation context. This includes factors such as authority and legitimacy. Understanding power dynamics allows negotiators to leverage their strengths and navigate the negotiation process effectively. To illustrate, akin to pieces on a chessboard, the power of a negotiator can often hinge on their positioning and strategic moves.

Temitope Jegede,
MAY 4, 2024