The idea of negotiation scares me. It seems like this foreign concept that only really sought after people in the business world get to do. It makes me a little uncomfortable and awkward. However, negotiation is a daily activity whether I am conscious of it or not, especially as a parent. My children and I negotiate every. Single. Day. Negotiation is the method of resolving conflict between two or more parties. It is the method that people use to settle their differences. The idea is to achieve the best possible solution for the problem which is agreeable and beneficial for both parties that are involved. ((c) Copyright skillsyouneed.com 2011–2021, n.d.; Gulati et al., 2017)
When you are put in a negotiation situation, there are advantages to being the first one to outline your position. Some would say that you should wait and hear what the other person wants first so you have a starting ground, however, there is much more to gain by making the first move. When you give the initial offer you set the tone and direction of the negotiation. The first offer is a better predictor of the final price than any other offer. It helps to influence your counterpart’s offer even if he/she tries to discount it. Secondly, when you are the one making the first offer you are setting the tone of the negotiation. You are showing that you are confident and well-prepared for this meeting which puts you in a favorable position. Lastly, when you make the first offer you give yourself room to be flexible but still retain your advantage. (Grant, 2018; Gulati et al., 2017)
However, as with anything, for every ying, there is a yang. Being the first to outline your position in a negotiation can have its disadvantages. One such disadvantage is if the other party has more market information. This can lead to getting a less profitable deal or even not getting the deal at all. If you go in first with a much higher offer or price, the negotiation can fail and your counterpart can back out. It also could be a disadvantage to make the first offer when your counterparts have more knowledge about the issue being negotiated. You don’t want to go into an offer not being able to estimate what their bottom line is to make the deal. (Grant, 2018; Gulati et al., 2017)
With all of that being said, research does show that on average, you are better off making the first offer in a negotiation. However, you need to do your research properly and thoroughly and gather all information so you can have the upper hand throughout the negotiation.
(c) Copyright skillsyouneed.com 2011–2021. (n.d.). What is Negotiation? – Introduction to Negotiation | SkillsYouNeed. Skills You Need. Retrieved September 29, 2021, from https://www.skillsyouneed.com/ips/negotiation.html
Grant, A. (2018, March). NEGOTIATION ADVANTAGE: MAKE THE FIRST MOVE. Wharton at Work. https://executiveeducation.wharton.upenn.edu/wp-content/uploads/2018/03/1209-Negotiating-Advantage.pdf
Gulati, R., Mayo, A., & Nohria, N. (2017). MindTap – Cengage Learning. Cengage.Com. https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=557615113112872025758405199&eISBN=9781305643673&nbId=2485825&snapshotId=2485825&dockAppUid=16&