BRINKMANSHIP IN NEGOTIATIONS

A lot of rationalization conceals what typically goes down in most business relations. This, if you think about it, makes more sense especially if you consider how people at times tend to take the adversarial nature of business to the extreme edge, that is, brinkmanship.

An executive in an organization will hire a research team or in extreme cases a “corporate fixer” to look into the affairs of their competitors, things like their motivation, value, perspective, future prospects etc, all in the pursuit of a win. In this case the issue is not just information for the sake of knowing, it is how the person intends to use the information. Simply put it will be used in a way that that serves as a threat to their opponent in that they (the opponent) are better of just compromising and avoid conflict. The opponent may then cooperate even though in reality cooperating is never an official goal in competition

The underlying reason why people can go to the extreme ends in pursuit of their intended goals in business is how they are emotionally invested, even though we often hear people say, “It’s just business and nothing personal”

What you need to remember when negotiating with someone is that “winning” means more in that individuals mind than it does in the economical set up you exist in.

Brinkmanship in negotiations

Negotiation is one of the areas in business that things can be taken to the brink and yet it is an area where parties can benefit from if they apply arbitrary reasoning.

Look at this example:

Doctors and nurses threaten to go on a strike. If they follow through with the threat the losses incurred in the form of wages will outweigh the gains from the strike but you can bet this is not what their union has in mind.

Assuming their employer, be it the government or some other person, let things get to the level of a strike they will incur loss inform of revenue and others, that would have been avoid had they met the workers’ demands. So both parties lose if the strike occurs

Clearly both parties can gain if there is no strike and yet that does not happen because the bigger question is who will gain the most?

The core reason why the parties go on with the strike is fear. Each party fears that unless they go to the extreme (brinkmanship in negotiations) to show how serious they are the other party may ask for even more from the “losing” party. Basically it’s all about attitude.

The point is persuasion depends on emotional and intuitive factors rather than on analysis or deductions.

Tactics to use to avoid brinkmanship in negotiations

With negotiations the objective is often mainly to decide who will benefit more and that explains the adversarial nature of some people.

As we have seen in the strike example, it is wise to minimize damages in negotiation or rather than using pure logic, use arbitrary skills to obtain compromise without destroying the basis for voluntary mutual cooperation or self-restraint

The question then becomes how do you guide the behavior of the parties involved to arrive at such end? Which tactics do you use?

Here are some common sense rules to help avoid pushing things to the edge or at least ensure that you gain if things go to that direction

1. Ensure that the person with whom you are negotiating knows what they can gain if they cooperate and what it will cost them if they choose not to. Example, showing the other party how low you can go with your prices should they start a price war and what that will mean to them.
2. Avoid actions that will arouse their emotions since you want them to believe in a reasonable manner even if you are not doing it yourself
3. Convince the opponent that you are emotionally dedicated to your position and are completely convinced that it is reasonable

Remember your competitors become handicap if they act in a rational manner which is what you want.  That way they get to keep what they perceive as the benefit of cooperating while you keep the rest.