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Reasons For Not Reaching An Agreement

28 July 2023

Sometimes it is not possible to reach an agreement, or it simply is not interesting, but it is important to understand that there are good and bad reasons for not reaching an agreement.

Whenever you identify one of these three good reasons, it is very important that you stop negotiating immediately. If you continue to negotiate, relationship problems could arise and you may reveal secrets that should be kept confidential.

The only three good reasons not to get a deal:

1)   There is no Zone of Possible Agreement.

2)   You do not find any common interest or value.

3)   Your BATNA is better or you have a better Plan B.

Bad reasons for not getting an agreement and how to solve them

If the reasons for not reaching an agreement are good, we will not think about it and we will not close the agreement. But if our reasons for not reaching an agreement are bad, we will be missing out on an opportunity and perhaps business that we may need later. So it is important that we are clear about the bad reasons for not closing an agreement and how we can solve them.

A bad relationship is not a reason not to negotiate. We often have to negotiate with people we don’t like, but you cannot always choose with whom you can negotiate. Imagine two diplomats from different countries or two politicians with opposite ideologies. The first thing we have to do is try to create a good relationship: be interested in the other party, be kind, use appropriate non-verbal language, introduce ourselves, create a little bond, find common ground with the other party and make small talk on peripheral issues of the negotiation. All this will help to improve the relationship. If this is not possible because the differences are so immense that there is no way to correct them, we can “change the players”, as they say in the business world.

Do not try to impress anyone, not even those above you on the hierarchy, if doing so could jeopardise the deal. Sometimes the negotiator wants to impress everyone, but especially the people who have sent him to negotiate. Imagine that your manager sends you to negotiate to buy a product. He gives you up to $10,000 to buy it and you want to buy it for $5,000 to impress him. The other party offers to sell it to you for $8,000 but you are so insistent that the seller withdraws from the deal and leaves. In this case you have not fulfilled what was asked of you. You are a victim of your desire to be the best in the world for wanting to reach $5,000 at all costs, when closing it at $8,000 would have been a good agreement.

This is a typical situation: we are negotiating a contract between a company manger and a seller who proposes computer services that we need at the company. Maybe the missing person in this negotiation is a computer expert/technician, so what we would have to do is invite him to participate in the meeting, or the person who is going to use the computer and can give us important information about his needs.

Focus your effort on getting the other person to understand your motivations and of course try to understand his as well. Sometimes we do not quite understand what the other party wants because they are demanding many things from us, but we do not understand their motivation or interests. We must ask more questions and benchmark more to understand better.

Sometimes we reach an agreement, but it still seems to us that it is very good. For example, a French multinational company is negotiating the process of terminating a manager’s employment. An agreement is proposed that is beneficial to him and the company due to early retirement, but he is not satisfied. The only reason for the deadlock is that the manger is not being given enough recognition within the company. This can be solved by holding a small farewell ceremony, leaving him fully satisfied. Therefore, creativity is essential. In this example, a simple tribute dinner closes a complex negotiation

Imagine that a company wants to buy offices in the financial district of Paris and has a budget of $2,500,000. It suddenly realises that for the area it needs, there are no properties for less than $3,000,000. It will have to rethink the situation and either lower the requirements for the size of the offices, change the location or raise the budget.

This is basically when many people talk at the same time in a negotiation. In this case, you have to agree and establish an order: who speaks, in what order, what is talked about, when to establish points, when decisions are made, how and where.

Or maybe you can buy time. Sometimes you cannot reach an agreement due to a lack of time, such as because the other party has to leave due to an emergency or unforeseen event. Rather than failing to reach an agreement, you should propose another date to follow up or give them the time they need right now if they only need a little more time.

Sometimes voluntarily or involuntarily, the other party can provide an environment that is not very appropriate for carrying out the negotiation. This could be a very small room or one that is too cold or hot, too dark, not adapted or noisy. If this is the case, we must voice our objections and find a more suitable place.