Negotiation, Economics and Outsourcing

Negotiation is on my mind a lot lately as I finish The Vested Outsourcing Manual with three colleagues and friends. It also apparently is much on the mind of Tim Cummins in his excellent “Commitment Matters” blog, where he writes about the “economics of negotiation” and the “purpose of negotiation.”

It’s on my mind because collaborative negotiation is an important theme in the new book, which will be published in June by Palgrave Macmillan. Collaboration and getting to the win-win  by agreeing on and achieving mutually Desired Outcomes is key to establishing a Vested business relationship.

Tim, in his recent post, talks about how “economic growth is something that can be shared – and indeed, if conflict is to be avoided, it must be shared” He adds that “adversarial, winner-loser thinking permeates” the business world. “Power is used to extract short-term economic gain at the expense of longer-term sustainability,” he writes. “This is nowhere more evident than in many contract negotiations, dominated by extracting the lowest possible price.”

Economics does not have to be a war with winners and losers at every turn; in simple terms markets determine success on their own. As in survival of the fittest. Adversarial approaches complicate and make matters worse. The idea of Vested Outsourcing is to compete, sure; but don’t compete to crush your competitors at all costs. That crushed competitor may one day come back to haunt you. Rather than competing to win, compete to succeed and get to the win-win over the long term.

In the same vein, Tim writes, “In a global context, the tensions created by adversarial economics are obvious. Such an approach limits the ability to cooperate and sets the stage for ultimate ‘revenge.’

“Those who view themselves as professional negotiators should be at the forefront in advocating approaches that create win-win economic outcomes. To achieve this, we must stop selecting trading partners based on the lowest price and instead focus on compatibility of organizational culture and synergy in long-term goals. It is on those foundations that we can achieve continued growth and superior performance.”

It’s more than simply negotiating a one-off or short-term deal or transaction in the easiest, most advantageous way possible; it’s much tougher stuff: negotiating a successful long-term relationship.

Vested Outsourcing and Five Rules lays the foundation, and is the clearest path for that to happen.

Comments

  1. Thanks for the post Kate – I cannot wait to read what I am sure will be another outstandig book and contribution to better business relationships!

  2. Thanks for the post Kate – I cannot wait to read what I am sure will be another outstandig book and contribution to better business relationships!

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