Pre-Negotiation Strategy Plan Checklist

After reading this INFORMATION SHEET, YOU MUST be able to:

1. Understand how to plan a negotiation?

Summary

This checklist will help you prepare a successful negotiation strategy for any potential conflict
and attain the best possible agreement.
To perform well, and perform well consistently, we must first learn to prepare. Ask any athlete
who spends countless tedious hours preparing for a competition, or a lawyer about to step into a
courtroom. At the end of our negotiation training courses, we implore our soon-to-be graduates
to book time into their busy calendars to prepare for their negotiations.
While many colleagues, clients, and suppliers will demand your time on a daily basis, very
seldom will they remind you to invest more time preparing for your negotiations with them. Yet
this is precisely what we need to create our successful negotiation strategy.
Let’s look at a negotiator’s checklist to see how we might better prepare for our negotiations.

Negotiators Preparation Checklist

1. Assess the situation

Each negotiation is going to be different, no matter how often we’ve addressed similar situations.
We will naturally be negotiating with people who have different styles, goals, and objectives.
These people will be coming from different circumstances and have different standards. So,
always take stock and gauge which negotiation skills each negotiation will demand from you and
your team.

2. What Kind of Negotiation?

There are three kinds of negotiations to prepare for:
 One-time negotiations, where we will unlikely interact with the person or company again.
 The start of a repeated negation, where we will be meeting the other person or company
again.
 A negotiation where we are going to form some kind of long-term relationship.
Most of our business negotiations are likely going to fall in the last two categories. We will be
handling a lot of repeat negotiations. We will be negotiating with regular suppliers or engaging
in labor negotiations with the same union reps, for example.
Perhaps we will be seeking a long-term negotiated agreement such as a joint venture, where we
will be mutually entwined over a long period of time. More time is required to prepare your
negotiation strategy for the third type.

3. What Type of Conflict Might We Face?

There are basically two types of conflict situations we may encounter in a negotiation. Conflicts
can present themselves singularly or can be a mixture of the two. It is vital that the negotiator
carefully analyzes the conflict issues, both individually and collectively, to fully appreciate the
unique challenges of each.
The first form of conflict might simply be called agreement conflict. This is where one person’s
views or position is in conflict with another’s, or other members of a group. This is a situation
that takes into account conflicting views relating to opinions, beliefs, values, and ideologies.
For example, two executives may have different views about whether a strategic initiative should
be prioritized. Another example may consist of a trade dispute between two countries, and entail
ideological or religious-based differences. Alternatively, the conservative viewpoints of
management might conflict with the more left-wing approach of union leaders.
The second form of conflict entails the allocation of resources like money, quantity, production,
or, simply put— “things.” Any physical commodity will fall into this category of conflict. Other
issues might entail the allocation of resources, as a separate segment of the trade dispute.
Resource issues, though, are more tangible as they comprise knowable items or particular
products.
One glaring example occurs when subsidized farmers of one country “dump” cheaper products
onto the market of another country, at the expense of the indigenous farmers of that country.
By analyzing the types of conflict into categories, negotiators can have a better understanding of
the real measure of the disputes, and frame or focus their strategies more effectively.

4. What Does This Negotiation Mean to Us?

There are only two reasons why we enter into a negotiation.
The first reason occurs when, out of necessity, we have to. This could be due to some immediate
need, such as urgency to find a particular supplier. It could also be that we face severe cutbacks
in personnel if we can’t increase our business.
The second reason occurs when we are seeking out an opportunity. This situation may arise
simply because an opportunity has sprung up, where we can increase our overall business at an
opportune time.
The reason for entering into a negotiation will affect both our approach, negotiation strategy, and
also our relative negotiating power in comparison to the other side.

5. The Ripple Effect

We also need to ask ourselves whether the results of the negotiation we are conducting will
affect other negotiations or agreements later. Many companies today have international interests.
An agreement with a company in one country may affect how talks will be impacted or
influenced later with other companies in other countries. It’s vital that we, as negotiators,
consider the impact or consequences of an agreement in developing our strategy.
6. Do We Need to Make an Agreement?
We either enter into negotiations because we have to or because we want to. Part of our strategy
will involve a careful analysis of our BATNA (best alternative to a negotiated agreement). If an
agreement is absolutely essential and we have few alternative options, in the event of talks
collapsing, our BATNA will affect our strategy.
Alternatively, the negotiated agreement may not be essential because we have a strong option
and can walk away with confidence. This also would influence the approach to our strategy.

7. Do Other Negotiators Need to Formally Approve the Agreement?

Many agreements made during the negotiated process require formal approval or ratification
before an agreement is official. Once negotiating management and union members have reached
an agreement, union members may need to vote before the agreement is accepted.
A board of directors, CEO, stakeholders, or other outside constituents may also need to review
and ratify an agreement before the agreement can come into effect.

8. Is the Clock Ticking?

Time has an impact on the course of negotiations from two perspectives. First, there are
deadlines that might be imposed, to either make or break an agreement. Offers with expiry dates
may be tendered. Time can be both a tactical weapon (who does it hurt more to delay?) and
strategic imperative (who risks missing the boat to competitors?).
Second, we all know that “time is money.” Negotiations consume our time, and a factory or
production line that shuts down while the negotiation clock is ticking costs money. The point to
remember is that the longer the negotiations drag out; time will negatively affect the bottom line.

Corporate Negotiation Strategy Check-List

Summary
In this article provides additional advice on how to develop a successful negotiation strategy and
create a better proposal while negotiating a solid business agreement.
by Steven Roberts

This article is a continuation from Pre-Negotiation Strategy Check List Part 1. These are the
remainder of factors that corporate negotiators need to take into account preparing their
negotiating strategy.

9. Your Place or Mine?

In much the same way as sports teams enjoy a ‘home advantage‘, negotiators playing away from
home need to adjust their game plan and corporate negotiation strategies. There are 3
possibilities to consider when deciding where the talks will occur. We can either hold the talks in
their offices, our offices, or at a neutral domain. We might choose the latter so no one has the
psychological and resource advantage, of holding the negotiations on their premises. Sometimes,
deciding upon where the negotiations take place can open up a whole new can of worms,
especially in the case of international disputes for example.

10. Will we be under the Public Microscope?

Negotiations are often private affairs with little fanfare, until an agreement is signed. There are
also agreements that are advertised afterwards, to maximize the mutual benefit both sides obtain.
On other occasions, negotiations may be held in strict secrecy.
Then, there are the highly publicized occasions when the press becomes actively involved. It
could be that one of the negotiating parties uses the powers of the press, to lever an advantage to
sway and manipulate the outcome. We need only scan the daily newspapers, to understand the
importance of how public involvement can influence and add intense pressure to some
negotiations. The press can be utilized as a public forum to embarrass our opponents into action,
or to deflect their corporate strategy. Press releases and information leaked to the press are often
to use as an effective strategy in the negotiation process.

11. Will We Need a Third Party?

Third parties have many different functions and roles to play in developing a corporate
negotiation strategy. They may act as agents, intermediaries, translators, consultants, or other
specialists who have an expertise, that one or both parties require. There are occasions when a
neutral third party will act as a facilitator or chairperson, to manage the negotiations such as in
multi-party negotiations, inter organizational negotiations, or even international negotiations.
Then, there are the other occasions when we hit a roadblock or impasse in our negotiation.
During these times we may use a neutral third party to act as a mediator or an arbitrator, to either
facilitate an agreement or to impose an agreement, such as in a labor dispute for example.

12. Who is Going to Blink First?

There are situations when we have to decide how a proposal or offer is to be presented, or in
deciding who is going to go first. Will we make an informal proposal before we start the
negotiations, or wait until we meet face to face? Will we be prepared to make an offer after
listening to their proposal, or do we need more information? Will we respond right away, or refer
the matter to our constituencies? Will it be to our advantage to be first in making an offer or
proposal, to set an anchor around which the talks revolve? Or will it be better to hold our cards
tight to our chest and let the other side go first? Of course, this will all relate to the issues,
positions, goals and objectives that will determine our approach. These are very serious
questions that we need to intelligently address, before we begin our talks.

13. Who Are the Decision Makers?

Before we enter into the negotiations, we must establish who is going to make the decisions.
What is our authority and who do we report to in our organization? Similarly, what are the
authority levels of our counterparts? Finally, can we make an agreement in principle, or an
unofficial agreement that will likely stand the test of scrutiny?
14. How Far Will We Push It?
Negotiations can be a one shot occurrence where one party comes right out and says ‘This is a
one-time offer – take it or leave it.’ There are some instances where haggling is not considered
acceptable, and will not be tolerated by the other party. Other situations will drag out into the
equivalent of a marathon ping-pong match, as each party bounces offers and counter-offers back
and forth. We need to know who we are dealing with, before we get too cute and find ourselves
cut out of the opportunity altogether. It also depends on the offer and proposal, in relation to the
circumstances such as time considerations, need, and many other factors.

15. Are We Strong or Weak?

Negotiation skills aside, two or more parties who are about to engage in a negotiation seldom
operate from an equal power base. If one party has something that we desperately need, for our
company’s survival and we have no alternatives, then we may find ourselves negotiating at a
disadvantage – no matter how dominant our market position. This all relates to our BATNA and
how we stack up against our potential counterpart. Size is not necessarily relevant, as we’ve all
heard the old biblical account of ‘David versus Goliath‘, and how that conflict turned out.
Weakness can be countered by strengthening our BATNA, or even by finding allies to support
our position and add to our strength. We should consider seeking routes to diminish the power
base of our counterparty where possible, before and during our negotiations.

Conclusion
Corporate negotiation strategies need to be developed by considering a whole host of factors that
might have a powerful impact on our success. It is also wise to remember that our strategy has to
be flexible and will need to be adjusted as the game plays itself out. We cannot know everything
before we go into our first meeting, so we need to prepare to adjust our strategy and tactics, as
the situations warps and changes shape. Flexibility is vital, but good preparation is essential.