Trust in Negotiation

Trust in Negotiation


– Trust, ethics and morality

is the recipe for success in negotiations

Imagine that you are taking part in a very arduous expedition in the Amazonian rainforest.  Every morning you are told how far you have to walk, and what you should carry. When you ask the leader about the destination, he answers, “I am afraid I cannot tell you, it is classified information and anyway, it does not concern you!”

The same applies to business life. If people do not know the goal, whether they are about to win or lose we risk total loss of motivation and enthusiasm.

There are four levels of trust-relationships, which need to function in companies and between individuals:

  • Relationships to clients
  • Relationships to suppliers
  • Vertical relationships between managers and staff
  • Lateral relationships between departments and divisions

In our training courses on SMARTnership negotiation technique we operate with a collaborative concept. Its foundations presuppose confidence in each party with regard to producing an increase in value.  Research carried out with more than 25,000 negotiators in more than 1,000 negotiations shows that in the traditional negotiation (distrust), potential increase in value is blown in more than 40 per cent of cases. Or to re-phrase this: a business with an income of one million dollars loses a potential USD 400,000 due to lack of trust and communication.

Try and imagine that you could count on everyone:  The workman who says that he is coming on Friday, actually comes on Friday. Your colleague who promises to have the report ready for Monday actually has the report ready for Monday. The person who says that you will have the cheque tomorrow actually sends it.  The greatest problem for all negotiators is relying on the other party, i.e. opening up and giving information.  The fact that you prefer to do business with the people you like, those whom you trust and get on with rather than people who are better suited to your technical and financial needs, can appear irrational.  However, it does show that your psychological needs are more important to you than your material needs and that in your eyes to work with those who you trust is extremely rational.

The person who endeavours to create a positive negotiation climate and openness, and who wants to win the opposite number’s trust aims to:

  • Listen
  • Answer questions
  • Be open and show body language
  • Express interest and commitment
  • Respect opinions of his counterpart

Unfortunately, it is normal for negotiators to work with unnecessarily expensive solutions. Resources go up in smoke and neither party benefits.   Not only that, defective relationships, where each party shows lack of trust and openness towards the other one, bring about a bad negotiation climate. Lack of openness entails that the negotiators only see what the consequences will be for themselves when they make decisions on the conditions they need to ask for or accept. They have failed to and have not tried to obtain information on what the conditions will entail for the other party. Their decisions lead to sub-optimisation. People do not make use of the opportunities that exist for rationalisation, for optimal distribution of costs and for payoffs.

Trust in Negotiations

 Recently A. T. Kearney, the consultancy firm, carried out a study which shows that trust is particularly important in negotiation situations and alliances.  It is possible to find a direct link between trust and profit.  This means that provided you continually share information with your negotiation counterpart in an honest and open manner, not only will trust increase considerably, so will the quality of the agreement, the potential for optimising the result and the profit.

It can take several negotiations to attain this level, but it has proved worthwhile.  Compared to previously, winning people round is seen more and more as a competitive advantage.  However, it is important to remember that once trust has been established it is much easier to destroy it than it is to keep it.

Also Check Here: Negotiation Training Course

It is difficult to establish a business framework if there is no trust.  Very few people would like to have a supplier who they could not trust, even if the supplier was the cheapest.  Very few people would like to work with a colleague who they could not rely on, and hardly anyone would get married to someone who continuously lies.

Even if it were possible to establish a business where there is no trust, it would prove difficult to implement.  Trust is absolutely essential in any SMARTnership long-term relationship of any importance no matter whether you are selling, buying or solving conflicts.  Each and every communication and negotiation situation leave behind traces for the future and produces consequences.

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