Planning for a negotiation involves making a lot of decisions. Some of these decisions may seem very important and challenging to make. Others may seem arbitrary and “probably” inconsequential. Today, it is accepted that the random appearing choices can be crucial and significantly impact the outcome of a negotiation. Deciding on the place for negotiations is one such decision.
While it is acknowledged that location can impact the outcome of negotiations, some experts, especially in Africa, continue to underplay how it can affect deliberations and which place may provide some advantages.
In his landmark research titled “Location in Negotiation: Is There a Home Field Advantage,” Washington State University Professor Markus Braer was able to empirically prove that a negotiation team could have an advantage if deliberations were held on their home turf and possibly gain between 60 percent and 160 percent more value than the visiting party. According to him, “what makes the home field advantage is the confidence bred by being in familiar surroundings.
As the Harvard Programme on negotiation experts rightly pointed out, choosing the right negotiation environment can be just as important. The location selected can dramatically affect the ensuing process and, ultimately, the result. In deal-making, your place or mine?’ is never automatic”. They reaffirm
While deciding where to hold a negotiation may seem minor, a purposive study revealed that most British, American, Chinese, French, and Indian negotiation experts still hold the view that initial negotiation location can have a long-term impact on the parties involved in the deal-making deliberations; hence they invest in resources, time and effort in inviting the counterparty into their territories to creatively showcase what could be gained from a potential relationship. Some describe it as the “softening game.”
Different locations have different advantages and disadvantages. Negotiators must consider their locational choice’s implications when deciding on a negotiation location. Anticipating and planning for these implications can be the difference between whether negotiation is successful or not.
In most instances, negotiators either decide to negotiate on home turf, at the other party’s location, or in a neutral setting. Before this decision is made, the big question is: “What is the reason for negotiating in a specific place, and what are the possible risks and benefits of that location?”
Negotiating on home turf
It’s not unusual that many negotiators prefer to conduct negotiations in their own space or place of business. This is mainly for the following two reasons. First, negotiators tend to feel more comfortable on their home turf. Second, being in your own space means you have accessible access to documents, information, and paperwork that may be needed to support your negotiation, etc.
Some negotiators (increasingly South African lead negotiators) feel that negotiations will be more meaningful and outcomes more favourable if the negotiation takes place in their environment.
Negotiators may also choose to hold a negotiation at their location to either intimidate or impress the negotiation counterpart. Having a negotiation at your location provides an opportunity to demonstrate your success. This is usually done non-verbally through an ‘ego wall.’ An ego wall is intended to impress and can include visual demonstrations of success, such as awards, certificates, citations, artwork, photos, etc.
Although many negotiators prefer to negotiate on home turf, there are advantages to negotiating in the other party’s location.
Negotiating on the other party’s turf
A negotiator’s willingness to hold a negotiation in their negotiation counterpart’s premises, offices, or location of choice points toward several factors that can be used to their advantage in the negotiation process.
To begin with, having a willingness to conduct negotiations in your counterpart’s space demonstrates your confidence in your offer or position and can encourage the negotiation counterpart to perceive your situation as favourable to them too.
Next, being willing to meet at a counterpart’s site or location conveys that you are eager and open to negotiating in their space and respect their decision. This demonstration of respect can help strengthen the relationship between negotiators and create an opportunity for more long-term and mutually beneficial engagements.
In addition to being in your negotiation counterparts’ comfort zone,’ negotiating from their location also allows you to learn more about who they are, what they value, their drives, and possible desires. All of this can influence the way you negotiate with them. By using the cues found in the negotiation location, negotiators can build rapport, which can ultimately affect the outcome of the negotiation process.
While there are advantages and disadvantages of negotiating at your own or your counterpart’s location, negotiating at a neutral place is often viewed as the fairest negotiation location.
Neutral location negotiations
Neutral location sites allow parties in a negotiation to meet in the middle – where neither party is seen as having a ‘home’ advantage. This allows both parties to enter the talks on equal footing and encourages equality in the negotiation process.
A neutral location is frequently thought of as a just approach for the two parties to agree. No one will profit or lose from a meeting held in a neutral location. However, the playing field might not be completely level, even in a neutral area. Neither party has the upper hand during negotiations, so the key to success is establishing a fair playing field for one’s self.
Perceptivities on negotiations – “the softening game”
A six-year research* into director-level perceptions of various aspects of supply chain management by PanAvest International investigated director-level perceptions of negotiations in the supply and value chain management environment.
The purposive study*, entitled “director level perceptivities on aspects of negotiations,” drew on a sample of approximately 64 international organisations, including Fortune 1000, FSTE 250, and JSE 100 companies, as well as state-owned enterprises and government departments. The study involved various CEOs, CFOs, COOs, directors, and officers from engineering, marketing, logistics, supply chain management, project management, procurement, and related industries.
Examining an array of issues relating to negotiations, bargaining, agreements, and contracts, the study revealed that in Africa*, eighty-two percent (82 %) of African public sector lead negotiators generally preferred to travel to the other party’s location initially to negotiate.
Some food for thought for emerging economies lead negotiators and policymakers.
- Why are emerging economy leaders, policymakers and executives regularly invited to, amongst others United States of America, the United Kingdom, France, Germany, China, and Russia for initial negotiations?
- Why do emerging economy leaders, policymakers and executives prefer to travel to meet outside their home territory as opposed to the other party coming to their home turf?
- Do emerging economy lead negotiators know and understand the implications of travelling to the counterparty’s home turf for the initial negotiations?
- Is there a lose-win outcome even before the negotiation commences?
- Is the BATNA or ZOPA compromised from the outset with the travelling of emerging economy leaders, policymakers and executives to the counter party’s home turf?
African leaders, policymakers and executives must respectfully reflect on their negotiation planning and tactics and judge for themselves!
Summary and conclusion
To summarise, while most experts concur that negotiations can be impacted by location, there is disagreement about how location affects events and what kind of site is ideal. It appears that many places provide a variety of benefits and disadvantages.
The lead negotiator’s unique skill set may influence the location to be selected. Markus Braer findings suggest that location was an essential factor to consider when examining the forces shaping outcomes of distributive negotiations. Therefore, it should be incorporated into existing approaches to negotiation.
To conclude, sometimes, even a slight advantage can make a big difference. As negotiations become increasingly complex, negotiators are always looking for that small aspect that makes them more competitive as negotiators. Without question, each location has drawbacks and advantages. To some leading experts like Tony Rossiter, Brain Tracey, Michael Benoliel and Wei Hua, selecting the right place can give a team that edge. Thus, the importance of considering “the location for a negotiation process is ignored at the team’s own risk.”
>>>Professor Douglas Boateng (MSc, EngD, FCILT, FSOE, FIPlantE, FCMI, FIC, FInst. D, FIOM, FCIPS, FIoD, CDir) Rtd* is an international chartered director and Africa’s first-ever appointed Professor Extraordinaire for Industrialisation and Supply Chain Governance. He is the CEO of PanAvest International and the founding non-executive chair of MY-future YOUR-Future and OUR-Future (“MYO”) and the top-rated daily Nyansakasa series. Professor Boateng is a recipient of over five (5) lifetime achiever awards, including one in 2018 from HP* (Hewlett Packard), for outstanding contributions to industry and academia. He is currently the non-executive chair of the Minerals Income and Investment Fund (MIIF). Professor Boateng was previously the non-executive chair of the Public Procurement Authority (PPA).
