Negotiating Tips, Negotiation Case Studies, Negotiation Research January 15, 2010

How a crisis affects negotiations

How a crisis affects negotiations

Since Monday’s massive earthquake that demolished Port-au-Prince, Haiti, the world’s humanitarian agencies have mobilized to provide aid to the impoverished nation. Normally, obtaining permits, negotiating contracts with providers, and the other bureaucratic issues that affect transportation and relief efforts, take some time. But when a natural disaster strikes creating a crisis, these speed bumps are smoothed and aid agencies are able to move quickly.

As you probably have heard, an immensely popular and successful donation campaign was started in which you text the word Haiti to 90999 to make a $10 donation to the American Red Cross (www.redcross.org). The money is billed to your cell phone. The Yéle Foundation started by singer Wyclef Jean has a similar program in which you text Yele to 501501 (www.yele.org) to make a $5 contribution. From a business stand-point, what is remarkable about these text message donation campaigns is how quickly they were set up and the fact that transaction fees were waived to allow the entire amount to go directly to the charitable organizations.

Again, the crisis made this possible. Crisis creates urgency and urgency creates speed. When there is a crisis, negotiators try to reach an agreement as quickly as possible in order to speed up a transaction. The sense of urgency makes negotiators cut to the chase.

However, negotiating in a crisis situation has its pitfalls and mistakes can happen. According to Dr. Chester L. Karrass here are some mistakes to avoid during crisis:

  • Assuming the impasse in one area will result in deadlock in the overall negotiation
  • Being afraid to admit to errors
  • Panicking before getting to a final agreement
  • A final agreement that is not fair or reasonable
  • Failing to prepare your organization for potential deadlock or threat tactics by the other party
  • Trying to be liked during the final stage of the negotiation results in not reaching the objectives

Have you seen other business negotiations being affected by crisis? Do you have specific examples from the Haitian crisis to share?

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CASE MANAGER at THE JACKSON LABORATORY

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BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

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CHIEF ENGINEERING MANAGER at EXXONMOBIL

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SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

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PROCUREMENT at AMERICAN EXPRESS

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SENIOR STRATEGIC BUYER at HALLMARK

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INTERNATIONAL SOURCING at FMC TECHNOLOGIES

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VICE PRESIDENT at GE

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PLANNER at HONEYWELL

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Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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