Business Negotiation Skills: 5 Common Business Negotiation Mistakes

In the business world, why is competition so often the norm, while cooperation seems like an impossible goal? Why do we so often settle for “better than nothing” compromises?

One of the most destructive assumptions we bring to negotiations is the assumption that the pie of resources is fixed. The mythical-fixed-pie mindset leads us to interpret most competitive situations as purely win-lose.

Of course, a small percentage of negotiations are distributive—the parties are restricted to making claims on a fixed resource. For instance, if price is the only issue on the table, your gains come at the expense of the other party and vice versa.

Haggling over a piece of jewelry in a bazaar is one type of distributive negotiation. But in organizational negotiations, far more issues than price are typically involved, including delivery, service, financing, bonuses, timing, and relationships.

For those who recognize opportunities to grow the pie of value through mutually beneficial tradeoffs among issues, the complexity of such negotiations is an asset.

Tradeoffs allow you and your negotiating partner to achieve more than you would if you merely compromised on each issue. For instance, buyer and seller negotiating a purchase might both be satisfied by increasing the order size and slightly decreasing the price per unit.

Finding tradeoffs can be easy when negotiators know to look for them, yet our assumptions about the other party’s interests often keep us from this search.

The problem is, we tend to apply the fixed-pie mentality too broadly, assuming that any gain for the other side comes at our expense.