Negotiation Case Studies, Negotiation Strategies, Negotiation Research, Business Negotiation August 24, 2010

Does the economy impact negotiations?

According to the latest Pew Research numbers, more than half (54%) of Americans believe that the United States is still in recession. (You can read more about the survey here: http://pewresearch.org/databank/dailynumber/?NumberID=1054 ).

The latest move by the Federal Reserve and the high unemployment numbers seem to back up this viewpoint.

Does the sluggish economy affect business negotiations? Some argue that it does. In a 2008 Harvard Business Review article “Negotiation Strategies for a Downturn,” Danny Ertel and Mark Gordon say that the downturn can affect both the quality and the quantity of deals. They write:

“During a downturn, things change. As the frenzied pace of a frothy market slows, there are fewer opportunities, and every deal matters. This tends to make sales and business development negotiators more desperate and anxious to close deals and hit their numbers. Those on the other side know this and take advantage of their new leverage. Negotiations become more difficult, and pressure on the deal makers to deliver increases. In a downturn, there will be fewer deals, so each must be done more carefully to ensure it actually delivers value.”

The authors caution that in a bad economy, negotiators can fall into bad deals, because parties cannot honor their commitments or over promise in desperation to get the deal done.

(Read the article here: http://www.businessweek.com/managing/content/apr2008/ca20080422_046639.htm )

Certainly the tough economy means negotiators are working harder to reach good deals. The era of excess is over for now. New deals probably don’t have a lot of added bonuses, but concentrate on the bottom line, and on value.

Dr. Chester L. Karrass advises that worth analysis is more important than cost analysis. In determining the value of something, you can assess the risk you are willing to take to get there. Value becomes more important when dollars are tight.

Have you found that the current economy has changed the way you negotiate? Please share your thoughts in the comments.

THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.

Deanna D.
CASE MANAGER at THE JACKSON LABORATORY

IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.

Jeff G.
BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.

John S.
CHIEF ENGINEERING MANAGER at EXXONMOBIL

THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.

Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.

Kim C.
PROCUREMENT at AMERICAN EXPRESS

THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.

LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK

THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.

Mary S.
INTERNATIONAL SOURCING at FMC TECHNOLOGIES

WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.

Phillip H.
VICE PRESIDENT at GE

PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.

Steve Q.
PLANNER at HONEYWELL

MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..

Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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