K.Rohner's Blog -www.krohner.ch-

Posts Tagged ‘not to negotiate; losing out on negotiations

 

Negotiations do not happen by chance. To negotiate or not to negotiate is a rational decision. There are some conditions in which you should not enter into bargaining or negotiations.

You have no interest

If you have no interest to negotiate, then do not negotiate. Since there are no incentives to negotiate a better condition as you are currently experiencing. Typical situations in businesses are, your goods are on high demand or you operate on the full capacity for your services. In such situation there is no reason to discuss price reduction and you might think of increasing your prices.

You have no interest but are pushed to negotiation by force

Hostile takeovers in the corporate world are a typical example for such a situation. In hostile bid a hostile party tries to buy the shares of a company to become the new owner and to influence the destiny of the company. Often member of the boards are taken by surprise. Before you start with a hostile party you should build up an alternative. The solution in the corporate world is called  a white knight. Only if you have found a per-arrangement with an alternative buyer, you should start negotiating with the hostile party. Time is of essence in such situations.

If you are not prepared

Do not jump in to negotiation without good preparation. The most common mistake I observe in the business world is insufficient preparation before entering the negotiations process. If you have not prepared yourself then delay the meeting to prepare sufficiently in advance.

If you have no alternative

Negotiating without an alternative is putting you in a weak situation. This is a general rule. To negotiate strategically is to create and pursue alternatives. Beside a good preparation for the negotiation creating alternatives is most important task to satisfy your interest. I have this observed very often: The limitation is not the other party or the circumstances, but our own horizon. Many times I have asked whet alternatives are at hand and always got the same reply: “There is no alternative!” I almost all the cases it proofed to be wrong. The simplest most powerful move in any negotiation is to have equally attractive alternatives to satisfy an interest.

If the clock is running against you

Not having sufficient time to prepare is one reason not to jump into negotiations. Having time pressure from the other party is never a reason to bow to the command of time.

If time is running for you

Negotiate to sell with falling prices in to the future; you should delay negotiations just before the point of reversal is reached. You will try to close the deal before the prices start to go up again. These cycles are known in almost all markets. An example is the market for properties.

If you lose out big

If the only possible outcome may be you losing everything, it is not very wise to negotiate. Seek an other alternative to solve the problem or circumstances you are in.

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