MAKING A DEAL OR BUILDING A RELATIONSHIP

“Making a Deal” has entered popular discourse of late—so much so, that the full depth of its meaning should be made clear.

“Making a Deal” is usually associated with Transactional Negotiation. Professional negotiators understand this typically involves adversarial tactics, such as excessive demands and threats eventually exchanging something of value to reach a mutually agreeable outcome. Parties understand the agreement is typically not intended to be permanent or even long term. As conditions change, the two parties understand there are no guarantees of anything. Transactional Negotiation is by definition short term, temporary, and expedient. Most professional negotiators would agree Transactional Negotiation is only appropriate for parties who never expect to have any relationship, positive or negative, beyond this one negotiation.

Most pros today stress the value of negotiation that builds a relationship between the parties. Professional negotiators recognize making one deal often sacrifices many positive deals in the future, so relationship negotiation not only has the objective of reaching a mutually agreeable solution, but also attempts to maximize the gain for both parties.

Relationship negotiators recognize that winning today is less important than winning many times in the future. Winning in the future means establishing a relationship that can facilitate mutual gain as conditions change.

Deal makers face a future of finding new partners and uncertainty. Relationship negotiators know that partners are available as conditions change and are willing to help if conditions require it.

Transactional Negotiation involves parties exchanging something of value, like a tangible item or an idea, in order to reach a mutually agreeable deal. It often involves adversarial bargaining tactics like making demands or threats, but can also incorporate collaborative approaches, like Integrative Negotiation where parties try to maximize joint gains.

For more information on negotiation styles, refer to my book, “Negotiation and Mediation.”