What’s Your Best Offer?

Since its introduction in 1988, Wharton’s course on negotiation has been one of the most popular electives in both the MBA and undergraduate curricula. Each semester more than 350 students learn about negotiation in multiple small sections, taught by faculty from four different departments including legal studies, management, operations and information management, and marketing. In addition, the week-long Wharton Executive Negotiation Workshop, sponsored by the Aresty Institute of Executive Education, teaches negotiation to senior managers from all over the world.

Legal Studies Professor G. Richard Shell was instrumental in helping establish both the MBA and undergraduate courses and was a key player in creating the executive negotiation program. Now Shell has published Wharton’s first book on the subject: Bargaining for Advantage: Negotiation Strategies for Reasonable People.

"I wanted to write a book that would be reliable and research-based but would also be fun to read," Shell says. "In our teaching, we found there was no book that filled this need. So I decided to write one myself."

Shell notes that most popular negotiation books are based solely on the personal "war stories" of the author — typically a sports or entertainment agent. At the other end of the spectrum are academic treatments of bargaining from scholars in psychology, economics or anthropology. "Neither of these approaches works well for an audience of intelligent business and professional readers," notes Shell. "Our students and executives demand more than war stories, but they don’t have any patience with academic jargon. As someone doing my own research, I already knew the negotiation literature. So I concentrated on reading business and social history to find examples from the lives of extraordinary people that would illustrate the bargaining principles I wanted to discuss." Among the illustrations Shell uses are stories from the lives of some Wharton alumni like First Union Corp. CEO Ed Crutchfield, WG’65, and business mogul Donald Trump, W’68, both of whom are well known for their negotiation skills. One of the most important lessons Shell has learned from years of research and teaching is that virtually everyone has the tools it takes to be an effective negotiator. The key, he says, is to build on the skills you already possess rather than trying to become a hyper-aggressive, take-no-prisoners type like the character Gordon Gekko in the movie Wall Street. "Aggressive people can be excellent negotiators," says Shell, "but only if that is their natural style."

Shell uses the term "information-based bargaining" to describe his approach to negotiation. It focuses on acquiring information in three ways: solid preparation before bargaining begins, careful listening to discern what the other party wants, and attention to the "signals" that the other party sends out through his or her conduct during the process. It’s also important to note that information-based bargaining stresses the use of strategies tailored to the actual situation one is facing, rather than a one-size-fits-all approach.

Shell emphasizes four key personal effectiveness factors that can improve your results, regardless of whether you are a basically cooperative or competitive person. These factors are: a willingness to prepare (something most people know they should do, but don’t); high expectations (because people who expect more usually get it); the patience to listen (because this allows you to learn what the other side wants, which can be used as leverage); and a commitment to personal integrity (which gains you credibility as well as self respect).

So, what kind of person is the best negotiator? There is no simple answer, as Shell has learned over the years. "Competitive people always have the upper hand, at least initially, against other, less aggressive personality types," notes Shell. "Because competitive people don’t mind interpersonal friction, they have an advantage over someone with no appetite for it.

"But competitive people often lack skills in managing relationships. This gives cooperative people an advantage in any situation where interpersonal trust over the long term is important.

"In general, you’re always better off negotiating against someone who is like yourself," he adds. "People who have the same personality type trust each other. It’s when different personality types mix that things get dicey."

And what does Shell recommend to improve your results? Practice. "That is what makes taking a negotiation course such a powerful experience,’ he says. "You get a chance to practice something most people feel anxious about, and do it in a learning environment."

 

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"What’s Your Best Offer?." Knowledge@Wharton. The Wharton School, University of Pennsylvania, [24 May, 1999]. Web. [31 October, 2014] <http://knowledge.wharton.upenn.edu/article/whats-your-best-offer/>

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"What’s Your Best Offer?" Knowledge@Wharton, [May 24, 1999].
Accessed [October 31, 2014]. [http://knowledge.wharton.upenn.edu/article/whats-your-best-offer/]


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