Business Negotiation September 15, 2014

The Organizational Mode

This mode rests on the premise that in every negotiation, large or small, there are unseen others at the table with a stake in the outcome, people who are affected by the issues under consideration. How issues are resolved in the privacy of bargaining has a profound effect on those outside whose workload, productivity or job satisfaction may change in ways not clearly understood by the bargainers themselves...

This mode rests on the premise that in every negotiation, large or small, there are unseen others at the table with a stake in the outcome, people who are affected by the issues under consideration.

How issues are resolved in the privacy of bargaining has a profound effect on those outside whose workload, productivity or job satisfaction may change in ways not clearly understood by the bargainers themselves. What goes on at the bargaining table always affects others behind the negotiators.  And, what goes on deep in the organization affects the negotiators at the table.  Negotiators who fail to factor the organization and it motivations into their planning are less likely to reach agreements that stand the test of time.

There is good reason for this. Agreements reached by negotiators in the privacy of their office are, in my opinion, fragile even if carefully wrought and signed. They will not work if others in the organization do not favor them.  Both sides need a “Yes” from their respective constituents or the deal will fall apart.

Here is a typical organizational situation. Each organization in the negotiation consists of a CEO, President, Vice-Presidents, and Directors.  There are also, those you report to, your peers, and your subordinates.  Each organization also consists of other departments, customers for your outputs, suppliers for your inputs, suppliers of services, and suppliers of staff inputs. Finally, there is human relations, team and project associates, and matrix organization associates.

Two groups, Group A and Group B, are negotiating in a small conference room. Surrounding them but not at the table are others who have in interest in the deal.  The network surrounding negotiators A and B includes their superiors, subordinates and peers.  Rarely can a change in procedure, program, process or relationship be made without affecting someone working close by.  In summary, there are four organizational factors that we should consider in preparing for any negotiation, be it internal or external.  They are:

  1. Recognize that others in the organization have a seat at the table whether present at the negotiation or not.

  2. Understand that an important part of preparation consists of knowing who the other stakeholders are and there their interests lie.

  3. Build positive relationships with all the other stakeholders long before the need for negotiation arises. You will need their goodwill and trust later.

  4. Communicate with other stakeholders regarding their position on each issue before talks begin. Listen to their needs and be sure to present their views. Keep in mind that you and they will benefit if their views are heard at the table. Recognize also that they need an explanation of what you need and why if you want them to endorse and execute the final agreement.

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