This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: At its best, negotiation is the art of mutual value creation. But once created, that value must be capitalized upon in the post-negotiation environment.
That means the formal end of negotiations is often only the end of the beginning. Time will tell whether the gains and losses sustained during a negotiation are as solid as they seem when the counterparties get up from the table. But Einav Hart, assistant professor of management at Costello College of Business at George Mason University, says most negotiators overlook what happens after the deal is signed: "While many people will focus upon the art of the deal itself, the outcome of many deals depends upon maximizing longer-term performance." Hart's recent solo-authored review paper in Current Opinion in Psychology explains how and why a shortsighted fixation on the negotiation itself can end up turning "winners" into "losers," or vice versa.
Hart's paper offers a framework to illustrate how the "main event" of negotiation is inseparable from what comes before and after. For example, how counterparties behave during a negotiation can affect not only the immediate outcome but also their relationships with one another going forward. And those post-negotiation relationships, in turn, influence how on-paper agreements will play out in reality.
"When hiring an employee, driving a hard bargain—and even just negotiating in an aggressive, competitive manner—might lead to the employee being less willing to go the extra mile and more likely to leave at the next opportunity," Hart says. Longer-term relationships also have lingering implications for future negotiations between the same counterparties. Take, for example, annual vendor-client conversations around contract renewal.
A particularly contentious negotiation one year might complicate the next year's discussion. It could even lead to the two parties deciding not to negotiate again, instead terminating the relationship at considerable cost to both sides. But isn't crafting a negotiation style complicated enough without having to think about everything that might happen afterward?
Actually, Hart says, using a longer time horizon often simplifies things. "Understanding the potential benefits of the longer relationship, and negotiating accordingly, means that you are often paying a little (if at all) but gaining more." In a previous research paper, Hart presented a clarifying construct known as "ERRO" (economic relevance of relational outcomes). In a high-ERRO negotiation, value is largely realized after the fact, through the post-negotiation relationships of the counterparties.
Extract — continue reading at the source.
