Bargaining for Advantage Summary

"Negotiation isn't about victory or defeat; it's about understanding, communication, and creating value for everyone involved." This book answers how anyone, regardless of personality, can develop successful negotiation strategies.

1. Be True to Your Own Nature in Negotiations

Negotiation is not a "one-size-fits-all" process; staying true to your authentic personality can define your success. Whether you're naturally competitive or more gentle and cooperative, your style must align with who you are. Pretending to be something you're not can make your strategies disjointed and ineffective.

Steve Ross, a fierce competitor and former CEO of Time Warner, exemplified this authenticity by standing his ground in both personal games and business dealings. In contrast, talk show host Larry King, a naturally affable individual, avoided aggressive tactics and secured agreements that suited his kind demeanor. Both men succeeded in negotiations because they adapted their approaches to their unique personalities.

Authenticity also fosters respect. People respond well when they feel you're genuine. An honest approach can expose your strengths—whether that means crafting creative solutions or identifying common ground. By embracing your true character, you gain confidence and clarity at the bargaining table.

Examples

• Steve Ross extending a card game to win demonstrated his innate competitive streak, which also defined his business dealings.
• Larry King's refusal to manipulate Ted Turner with false offers showed that kindness and modesty could produce favorable outcomes.
• Negotiators who stick to their character often find that authenticity builds trust with the other party, paving the way for stronger deals.

2. Set Optimistic Yet Defensible Expectations

Every strong negotiation starts with a well-researched and positive belief in what you can achieve. Setting an expectation—not just a vague goal—offers a tangible point to work toward. This mindset provides confidence and guides your discussion.

Akio Morita, Sony’s visionary leader, entered the US market with his miniature transistor radio despite skepticism about its appeal. When Bulova offered to buy his product only if their branding replaced Sony's, Morita declined. He firmly believed Sony’s name could achieve global recognition—an expectation that later came true. His decision to prioritize reputation over short-term gains established Sony as a global leader.

Expectations are powerful when they’re backed by preparation. The more you understand your position and the marketplace you’re navigating, the more justifiable your asks become. Research and self-assurance turn optimism into persuasion.

Examples

• Akio Morita refused Bulova’s rebranding condition, holding onto his belief in Sony’s potential despite short-term losses.
• A salesperson pitching a new product can confidently ask for higher prices when they’ve analyzed customer demand and competitor trends.
• Lawyers in settlements often set ambitious but evidence-backed terms to steer the final agreement closer to their favor.

3. Use Common Norms to Strengthen Your Position

Tapping into universally accepted norms such as fairness, company policies, or community values can make your arguments persuasive. When you align your reasoning with standards others already respect, you speak their language.

Mahatma Gandhi used this tactic during his civil rights work in South Africa. By dressing formally and behaving in line with social norms governing respectability, he successfully defied racist rules that excluded him from first-class train travel. Once others viewed Gandhi through this lens, their prejudice faced logical contradictions.

This approach works in corporate settings too. For instance, aligning requests with a company's public commitments can exert moral pressure. When norms are part of your negotiation strategy, they act as an unseen ally.

Examples

• Gandhi appealed to norms of decency and respectability to defy inequality on the South African train.
• A nurse advocating for hospital staff funding uses the hospital’s mission for quality patient care to secure her request.
• Employees asking for better benefits can reference fair market practices or policies set by competing companies.

4. Relationships Built on Reciprocity Lead to Better Deals

A successful negotiator values relationships as much as the deal itself. Acting generously—without taking undue advantage—encourages trust and cooperation. Reciprocity reinforces this virtuous cycle.

J.P. Morgan showcased this by giving Andrew Carnegie $70,000 instead of the $60,000 Carnegie had asked for when selling his share in a venture. This gesture formed a lasting business friendship that ultimately multiplied both their wealth. Generosity ensured mutual gain far beyond a single negotiation.

However, reciprocity is a two-way process. While generosity can build goodwill, be cautious of manipulators who try to exploit it. Balance generosity and self-protection, ensuring long-term relationships are supported by fairness.

Examples

• J.P. Morgan’s unexpected generosity to Andrew Carnegie blossomed into a highly profitable partnership.
• Sales contracts that include small extra perks for loyal customers often ensure business retention.
• Friendlier lease negotiations with landlords ensure smoother renewals in future years.

5. Understand the Motivations Behind the Other Party

Every negotiation involves people who bring personal motives, emotions, and goals. Understanding these drivers lets you craft better offers that resonate with their needs.

Kelly Sarber leveraged this by winning a waste-management contract that included replenishing sand on eroding California beaches. By addressing a concern deeply tied to the local community’s identity, Sarber outshined competitors.

When you address someone’s priorities, they’re more inclined to see value in your proposal. Preparation and good communication help discover overlapping interests, making agreements more achievable.

Examples

• Kelly Sarber secured a contract by offering a creative solution that replenished community beaches while removing waste.
• Discovering that an employer is managing tight budgets could lead to negotiating job perks instead of higher salaries.
• Freelancers who identify a client's desire for faster turnaround can use this knowledge to adjust their rates favorably.

6. Leverage Creates Deal-Making Power

Leverage refers to any tools or advantages you can use to tip the negotiation in your favor. This power might come from external alternatives, relationships, or even creative strategies.

Janie Mitcham, a logistics leader, broke through her company’s dependence on a single overpriced railway by building an alternative rail route. This move saved Houston Lighting & Power over $10 million annually, proving how leverage transforms your position.

Sometimes, leverage is less about grand moves and more about subtle perceptions. A negotiator who appears poised, prepared, and confident can project power they don’t yet have.

Examples

• Janie Mitcham’s self-built rail line put pressure on railway companies to offer competitive rates.
• Using a third-party mediator can create pressure for the opposing party to appear fair.
• A competitor willing to undercut prices builds natural leverage for customers in pricing discussions.

7. Stay Objective to Break Stalemates

Disagreements can hit impasses, but taking small and thoughtful actions can ease tensions. Objectivity helps handle emotional responses, keeping discussions productive.

Egyptian President Anwar el-Sadat’s visit to Israel demonstrated how small steps inspire larger peace actions. By simply exiting his plane, Sadat symbolized Egypt’s recognition of Israel—a move significant enough to rekindle peace talks.

In everyday settings, small concessions or admissions of past errors can show good faith, helping to move negotiations forward faster.

Examples

• Sadat’s small act of stepping onto Israeli soil opened channels for peace diplomacy.
• Acknowledge prior delivery delays during vendor negotiations to foster honest conversations.
• Offering a slight discount during stalled sales discussions often reinvigorates purchasing decisions.

8. Ethics in Negotiation Shape Your Reputation

Negotiators operate in three moral frameworks: Poker players treat it as a game, Pragmatists balance truth with flexibility, and Idealists commit to honesty. These ethics influence how others perceive you—and whether you’ll earn trust.

Warren Buffet’s Idealist methods emphasize his trustworthiness, helping him build a reputation where honesty drives success. Yet, other schools—like Pragmatists—prefer resourceful but ethical deception to preserve reputation and relationships.

Your ethical choices influence long-term partnerships. Reflect on which path aligns with your goals before entering discussions.

Examples

• Warren Buffet’s steadfast honesty earns him consistent shareholder trust.
• Pragmatists avoid blatant lies but occasionally spin information for stronger deals.
• Poker players bluff skillfully but risk damaged goodwill when discovered.

9. High Emotional Control Encourages Positive Outcomes

Negotiations often test patience, but remaining calm protects relationships and ensures rational choices. Checking emotional responses relieves combative tension.

When tensions rise, step back, understand the situation, and align actions with your goals. Adjusting tone or offering sincere apologies can also mend strained conversations.

Examples

• Leaders who acknowledge misunderstanding during meetings reset team dynamics effectively.
• Cooling off during family arguments opens room for compromise.
• Diplomats use calm expressions to de-escalate international disputes actively.

Takeaways

1. Prepare thoroughly before negotiating to solidify reasonable yet optimistic expectations supported by research.
2. Build trust by emphasizing fairness, respectful reciprocity, and understanding others’ goals.
3. Develop leverage creatively—consider alternatives, show confidence, and use subtle shifts in dynamics to create options.