Factors that influence business negotiation

Negotiation is a skill that many believe is hard to acquire. It has been under appreciated for quite some time, until recently where it has been brought to the attention of several businesses.

We undergo negotiations in all aspects of life: the services we use, things we purchase, even what restaurant you are willing to go to. With that being said, it is extremely important to be familiar with negotiation skills and the key factors that play a role in the process.

The key factors that are going to be portrayed in this article influence the art of business negotiation. Steve Gates, the author of The Negotiation Book, lays out three key factors that play a crucial role in the negotiation process.


Power since the beginning of time has been the decider of how countries, businesses, etc. operate and today is still a prevalent determination of rank. While holding great power is effective, in a negotiation situation, it can be quite detrimental if not used properly. For instance, power can be used to manipulate another person. In this state, it is more beneficial to not partake in using your power to get what you want.

Overuse of power can result in the counterpart feeling threatened or manipulated resulting in a hostile environment and potentially even a deadlock. A deadlock consists of no agreement and both parties walking away empty-handed. This is the worst-case scenario and in order to prevent this from happening, one should not engage in using their power to control the other individual’s decision.

There is a time and place for excessive use of power, unfortunately, it is not the best to use as a negotiation technic. Power influences the negotiation process as a whole and can be responsible for either making or breaking the agreement.


Trust goes a long way in all aspects of life. When It comes to business, trust is one of the most important traits one can have. Everyone wants to be trusted, however, it isn’t that easy. Trust is something that has to be acquired over time and must be achieved through repetition and accuracy. One doesn’t simply gain trust from their counterpart; it must be earned. In a negotiation, trust goes hand and hand with respect.

If someone can trust you they can learn to respect you. Steve Gates states that “if you are able to maintain a good balance between trust and respect, and create the right environment in your meetings, you will have created an environment where it’s possible to secure better and more sustainable agreements.”

The goal in any negotiation is to end in a mutual agreement that benefits both parties. If you can achieve maximum trust and respect from your counterpart, you should begin to see a higher success rate in the number of negotiations that end in an agreement. Building trust takes time and is a process, however, as mentioned above, one must not get too comfortable with the amount of trust they have. This can be seen as a use of power, which to your counterpart, could be taken the wrong way.

Understanding total value and mutual opportunities

In any negotiation, there are several opportunities worth considering. The more opportunities available, the more possibilities there are for total value from both parties. Would you want to walk away from an agreement with less value than you could have potentially gained? I’ll answer that for you. No. You want to consider all possibilities and opportunities in order to achieve full value. Take a new car for instance.

If you had two cars, same colour, price, mileage, etc. to choose from but one had a higher safety rating wouldn’t you choose the car with the higher safety rating?  It makes sense to choose that car because you are getting full value from the price you are paying for it.

Its all about getting the best bang for your buck; and in this instance the best value is the car with the higher safety rating. To improve your negotiation skills you can turn to businesses such as The Negotiation Society who have over 20,000 global members and a huge knowledge bank of negotiation videos, tips and news.

Negotiations are very similar in that you may have two similar possibilities but one will end with a better result and higher value. That is why it’s very important to weigh out all of your options and pick the one that is going to benefit you the most. If you can master finding the total value in a negotiation, you will see that the majority of the time both you and your counterpart are walking away satisfied.

If you are able to understand and consider these factors when participating in a business negotiation you can give it the best possible outcome with both parties benefiting.