Business Negotiation July 03, 2013

Acts Two and Three of the Five Act Negotiation Drama

Act Two-The Bargaining Talks Begin Act Two in our five-act drama begins when the buyer and seller meet for the first time at the bargaining table.   The act opens with pleasant introductions but is soon followed by turbulence and verbal fireworks...

Act Two-The Bargaining Talks Begin

Act Two in our five-act drama begins when the buyer and seller meet for the first time at the bargaining table.  The act opens with pleasant introductions but is soon followed by turbulence and verbal fireworks.

One side or both open with positions that appear harsh or extreme.  The large gap between them leads them to think that settlement will be difficult.  Lots of smoke and fire are generated as they scramble to justify opening positions.  They spend most of their time arguing about the validity of backup claims and numbers, posturing about what they must have, getting involved in peripheral matters and attacking each other’s demands as unreasonable or unwarranted.

Act Two is not a pleasant stage in the drama.  The clouds are dark and choppy as the participants rise through them.  The settlement both parties want appears out of reach.  The gap is large and the issues in conflict appear unbreachable.  Neither side quite trusts the other.  Act Two ends on a grim note.

Act Three-Moving Toward Agreement

     In this act the parties reconnoiter and narrow the settlement range, discover what each really wants, and jointly search for win-win ideas to make the deal better for them both.

During Act Three the parties move away from fighting in the direction of agreement.  Having gone above the turbulent clouds of the previous act, they now take real actions to close the gap.  It is not easy sailing but far more peaceful than the verbal fireworks of Act Two.

Act Three is when the give and take of productive bargaining takes place.  The adversaries become serious.  They reconnoiter the settlement range in search of concession and compromise.  Negotiation goals and targets are adjusted as the parties introduce strategies and tactics to alter each other’s expectations.  Each party tests the resolve of the other on issue after issue.  They push and pull, slowly closing the gap that divides them.

     All through this act the parties seek to discover what the other really wants and needs, in contrast to what they say or do. They do so by observing and by listening to what is said and what is left unsaid.  They test their assumptions and strive to alter the erroneous assumptions of the other side.  They assess their power in relation to the other party.

What helps most in building mutual trust during Act Three is when the parties search for and find better, more creative ways to do business together.  This is the win-win stage where they discover how to lower costs and improve the range and shape of products or services rendered.  Values are added that neither party knew were possible before talks begin.  The buyer/seller negotiating pie grows bigger and better.

Act Three ends on a high note.  It now appears to both that an acceptable settlement is likely.

 
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