It is important to know when to walk away from a negotiation.
If you know when to walk away from a negotiation, you will have established Best alternative to negotiated agreement (BATNA).
The advantage to knowing this is:
- It helps you to be more assertive since it can be used a leverage
- Prevents you from accepting terms that are unfavourable due to limited options
- Its helps in making a decision, when the party says “take it or leave it” you leave
So always make sure you have a walk away position
How to know when to walk away from a negotiation
When you are negotiating or are planning to negotiate and you want to know when to walk away from a negotiation, the following signs should guide you;
If you can achieve the objective without negotiating
Negotiation is a way of achieving what we desire and solving conflicts, but it is one of the many other alternative dispute resolution mechanisms in business arrangement. So, if other alternatives can work effectively then you don’t have to negotiate.
If the objective is not worth the time and effort of negotiating
In business you just don’t walk up to a person and start negotiating you will have to prepare and this takes time and resources.
The results of a negotiation be it a win-win or win-lose will depend on how much time and effort you have to prepare for success otherwise you are just risking it.
If you have a compelling alternative to negotiating
As pointed out earlier there are alternative to negotiating. Imagine negotiating a contract in procurement and supply and there are many other suppliers but there are few buyers. In this case the buyer has an upper hand which means they can get a better deal if they pit the suppliers against each other.
The best alternative to negotiations in this case would be to put out request for quotations or request for proposals (RFQ /RFP) as opposed to negotiating.
If you risk losing too much by negotiating
When you negotiate you have to remember that everything just comes down to position and interest.
A party’s position in a negotiating will depend on their power, which is the ability to influence. The more power they have the easier it is for then to get their interest and that can put you in a position to lose too much if you are disadvantaged.
This is why you need to know when to walk away from a negotiation, because you can lose it all.
If the other party acts in bad faith or unethically
Unethical negotiation will result into agreements that wont last. This is how you end up with breach of contract.
If you feel the other party is negotiating in bad faith then just walk away.
If waiting (doing nothing) may improve your position.
Sometimes time gets you the kind of results you desire.
Imagine negotiating for a given price only for other suppliers to drop their prices due to market changes which you would have noticed if you paid attention and waited, now you end up with a deal which you don’t even like.
You may find the following articles helpful;
- 4 common negotiation mistakes
- 4 factors for success full negotiation
- How to a get a win-win negotiation
- How to identify and manage stakeholders
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