8 INTERNAL AND EXTERNAL FACTORS OF NEGOTIATION - CULTURE VOCABULARY - 2025

Some internal and external factors of the negotiation may be, on the one hand, the personality characteristics, the information and the setting, and on the other hand, the financial, political, technological and socio-cultural environment.

Negotiation is a process by which two or more parties, having goals and objectives in common or in conflict, establish a space to discuss their proposals and propose terms to reach some type of agreement.

It is an interactive communication to make decisions and actions every time someone needs something from another person and / or vice versa, trying to achieve the most satisfactory outcome for all those involved.

Negotiations are part of the daily life of all human beings; Parents and children negotiate terms at home, among friends, teachers and students, employees and employers, customers and vendors, politicians, partners, among others.

A good negotiation ends with the parties recognizing the interests and needs of the other and establishes a good relationship in the future.

The business world is distinguished by having this area very studied and developed, ensuring that to achieve financial success, negotiations are taken as seriously as if it were an art in itself.

Internal factors that influence a negotiation

For stakeholders, these elements or variables are usually given some level of control before or during the negotiation.

Time and experience in the area of ​​negotiation improve mastery of these points until they become a skill.

Information and prior preparation

This factor is one of the most important since it is the basis of the previous preparation. Before going to the negotiating table, each party should move on researching data, facts, trends, studies, calculations, projections, etc. Information is power.

This includes knowing the strengths and weaknesses, both your own and the other party's; as well as devising contingency plans, predicting as many scenarios and having possible counter-offers up your sleeve.

Whichever stakeholder is better informed will have the upper hand in the negotiation.

Persuasive and logical arguments can never be appropriately expounded in the absence of relevant information.

Scenario and time

The space where the business meeting takes place may or may not help the trust of the interested parties. Anyone who chooses a friendly or favorable site for himself will have an advantage.

If it is a space of its own like the office, the host may extend social courtesies such as gestures of goodwill that would end up moving the negotiation in a fruitful and pleasant way.

Thanks to the digital advancement of telecommunications, today many negotiations are carried out through some audio or audiovisual medium, such as the telephone or video calls, especially due to distances.

Although it is a modern trend, striving to negotiate in person offers a very important weight in relation to trust and commitment.

Also the time and extent of the meeting presents an element of care. Establishing a schedule without pressure by mutual agreement and taking into account external and competitive factors, can be the difference between effectiveness and failure.

Personality

Both the qualities and skills of both parties are important when sitting down to negotiate.

Excellent strategies may have been studied and designed, but knowing how to present and use them persuasively is just as or more important.

Adaptability, patience, kindness, humor, control of emotions, even knowing when to apply a quota of silence can be decisive to close a deal. Managing a balance between personality dichotomies is very important.

Firmness or flexibility both have their moment, likewise being introverted or spontaneous, empathetic or distanced, daring or reserved, aggressive or passive.

Knowing how to read and interpret the intentions and expressions of the opponent is crucial when deciding how to proceed.

Having the authority to pace the negotiation is the best way to get you through the deal. For all this, well-developed communication skills are necessary and that convey trust, respect and credibility.

It should be noted that factors such as personal appearance, motivation, security, interests and goals, level of commitment, value scales, attitude in general, among others, are also brought to the negotiation table of each interested party.

External factors that influence a negotiation

These elements are those over which the interested parties have little to no control at the time of a negotiation; they do not depend on preparation, study or skills.

Depending on the case, be it positive or negative, establish new scenarios with different conditions. If they are favorable, they are taken as an advantageous opportunity.

If not, and taking into account that no one wants to lose money, investment or costs, these points are usually the reason for the cancellation, freezing or restructuring of the terms of a business transaction.

The financial environment

The behavior of the local or global economy has an important effect on the environment of a negotiation.

Relying on the collateral of a contract or relying on projections will always be a challenge in fluctuating economies.

Inflation and devaluation will always make you reconsider previously established terms. The economic instability of a country is a great risk when establishing a business partner.

Political changes

A change in government, in local or international policies, can massively influence decisions about who to buy or sell to and who to invest in and who is not.

Generally, changes of government are followed by economic reforms or new regulations. Legal and institutional support is necessarily reassessed to seek representation as similar to the previous one.

All this has an impact on how companies structure the chain of production, supply, import, how they must comply with employees, with taxes, social security, health, the environment, among others.

A politically unstable country is a risk for business. On the other hand, a new commercial opening of a country presents new market opportunities and interesting challenges for companies and businesses.

Technological advances

Technology platforms are constantly evolving and at an unmatched speed. This makes producers, sellers, and investors run their businesses faster and seek to stay connected and up-to-date with developments.

The impact of technology spans all levels of an industry. Organizations need to keep up to date, implement and adjust their business functional structures so that their negotiations are not adversely affected.

Sociocultural elements

The world is entering an era of acceptance, progressivism and recognition in many socio-cultural dimensions.

Paradigms about gender and race are breaking every day and create new trends and ethical standards in populations.

This has drastically changed the expectations and behavior of audiences and consumers in certain markets.

Environment

Especially the energy industries and companies dependent on supply chains and distribution of goods, merchandise and products; they are at the total mercy of the environment.

Whether by sea, land or water, accidents or natural disasters are inevitable. High-risk areas are often subject to many difficulties in closing negotiations on terms acceptable to both parties.

References

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