Whether you’re negotiating solo or with a team, it is crucial to have a smart approach to get the best deal in every situation. In this article, the authors focus on the significance of team negotiation toward value creation as well as the imperatives to making collaborative effort yield desired outcomes.
A participant in a negotiation course once confessed that he hated to negotiate in front of his wife. When asked why, he said he found it difficult to close the negotiation. For example, once he was negotiating to buy a used car. Both he and his wife had agreed that €15,000 was a fair price for the car. However, the seller did not want to go below €16,500. “If I were negotiating alone, I would have agreed on 16,500. But I generally find it difficult to concede in the presence of a family member. I couldn’t concede in that negotiation and we ended up abandoning it. Whenever I am with my father, my brother or my wife I become a bit adamant. Maybe I don’t want to look weak in front of them,” the participant said. Negotiating in a team involves more complexities due to the special interpersonal nature of teamwork. Some of us are more comfortable negotiating as part of a team while some of us are more comfortable negotiating solo.
Impact of Team Negotiations on Outcomes
Let us try to understand a team as a negotiating unit by answering two questions: 1)What happens when an individual negotiates as part of a team? 2) What happens when an individual negotiates opposite a team? In a study led by Leigh Thompson from Northwestern University in Illinois, it was found that teams negotiate better in almost all situations. Not only that but teams were also a better counterpart than a solo negotiator. When teams negotiate with individuals in competitive or distributive scenarios, teams generally create greater value. However, individuals are still better off negotiating opposite a team than negotiating opposite another individual. In other words, in a competitive scenario, teams help not only to get a better result than their counterpart but they also help their counterpart get a better result. On the other hand, in a collaborative negotiation situation, teams actually help increase the joint gain. In a nutshell, teams should achieve better results overall in negotiations.
There are two main reasons why teams could create greater joint profits: better information and better control. When teams negotiate, they have the advantage of a better network, better information and better analysis. With more members on the team, teams can come up with better ideas because they have a greater perspective. Another reason why teams create greater joint profits is their control over the negotiation process. Teams can theoretically have better control over the process because teams have more tactics available to them. Teams can use tactics such as good cop / bad cop, which is generally difficult in a solo negotiation.
About the Authors
Guido Stein is Academic Director of the Executive MBA of Madrid, Professor at IESE Business School in the Department of Managing People in Organisations and Director of Negotiation Unit. He is partner of Inicia Corporate (M&A and Corporate Finance).
Kandarp Mehta is a PhD from IESE Business School, Barcelona. He has been with the Entrepre-neurship Department at IESE since October 2009. His research has focussed on creativity in organisations and negotiations. He frequently works as consultant with startups on issues related to Innovation and Creativity.