Alexander Bolinger, The Daily Record Newswire
Are good negotiators born or made? When I discuss this question with students, their answers are generally split. Many of the students I talk to believe that good negotiating is an inherent trait or ability, tied to a person’s personality. Other students, however, believe that negotiating is a skill that can be learned.
It turns out that the way you answer the question of whether negotiation is a fixed trait or a set of learnable skills affects your actual performance in negotiating. A 2007 study by researchers Laura Kray and Michael Haselhuhn from the University of California at Berkeley compared the performance of MBA students in a semester-long course on negotiation. At the beginning of the class, the researchers asked the students to indicate to what extent they believed that negotiation is a fixed trait or a learnable skill, and then they followed each student’s performance over the four months of the class.
Kray and Haselhuhn found that students who believed that negotiation is a skill that can be learned gave more effort, were more persistent, captured more value in simulated negotiations, and earned significantly better grades in the course than students who believed that negotiation is a fixed trait. In contrast, the students who viewed negotiation ability as something that people are born with were less persistent, believing that their initial failure to reach an agreement was a sign that they were not natural negotiators.
It's very important that individuals learn negotiation skills, and educators know this. Many business schools have added negotiation classes to their MBA programs in the past decade, and these courses are consistently in demand. One reason is that avoiding negotiation can be costly over time. Kray gives an example of a 30-year-old MBA graduate who is offered a salary of $100,000 and negotiates for an extra $11,000. Over the next 35 years, assuming an average annual raise of 3 percent and a 5 percent rate of return on investments, that initial difference of $11,000 could grow to as much as $1.6 million by the age of 65.
In the College of Business at Idaho State University, we offer an MBA class in negotiation skills and value-chain management drawn on curriculum developed at Northwestern University’s Kellogg School of Business. The course teaches students how to systematically analyze a negotiation situation, how to understand their alternatives and the interests of the other party, and how to use negotiation as a tool for collective problem-solving. Each class is structured around a case involving a simulated negotiation scenario, where each student role-plays a part in a negotiation (e.g., a job candidate and a prospective employer) and tries to get the best deal for their side.
A willingness to negotiate is often critical to getting good deals. We ask our MBA students to write about an actual, real-world negotiation they participated in during the semester. One of my former students applied this assignment to bargaining for her first house and used the concepts from class to evaluate her alternatives, assess the interests of the other side, and set her target price. After several rounds of give-and-take, she was able to negotiate a purchase price several thousand dollars lower than what she had originally anticipated.
Perhaps most importantly, while negotiation skills are useful for getting good deals and maximizing value in business deals, they are also valuable in managing relationships in all walks of life. Whether it is deciding who will do the dishes, where to go on vacation, or persuading your kids that it is bedtime (“Just five more minutes?”), everyone negotiates every day, whether they recognize it or not.
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Alex Bolinger is an assistant professor of management at Idaho State University. He teaches courses in organizational behavior, negotiation, and strategic management. His research focuses on facilitating performance in interdependent situations (e.g., working in groups, negotiating) and his work has appeared in the Harvard Business Review, Organizational Behavior and Human Decision Processes, Cornell Hospitality Quarterly, Small Group Research, and the Journal of Management Education, among other outlets.
