Why is Negotiation Important in Business?

By definition, negotiation is a discussion between two or more parties to reach a mutually beneficial agreement and resolve a conflict. Conjuring up an image of heated shouting matches between bullheaded partners, many don’t realise that negotiation aims to avoid this scenario. Through a combination of body language, intonation, vocabulary and calculated questioning, a master negotiator can move mountains and manoeuvre obstacles to form close, symbiotic relationships. From the boardroom to the bar, it is a critical skill we often use unconsciously, but when utilised to its full potential can pay dividends for any employee or employer in the business world. Whether you’d like a pay rise or to close a high-value business deal, negotiation is essential. Below, we will explore the five reasons you should prioritise training and establish its importance with your team.

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Conflict Resolution

A dispute or quarrel can lead to damaged relationships, a divided team and a toxic workplace for everyone. That’s why being able to re-establish unity through structured, peaceful discussion can be critical to a business’s ability to flourish.

Negotiation is an essential problem-solving tool when resolving a conflict because its goal is to consider both sides and create a win-win scenario. By correctly identifying a problem, anticipating the needs of clients, employees or businesses involved and weighing up solutions, you can produce the best possible outcome, predict future conflicts and stage an early intervention. Whether through compromise, collaboration or accommodation, if a CEO, manager or team leader can negotiate effectively, they can create a thriving environment and successful business by leaving behind authoritative managerial practices to solve the root of the issue. Additionally, for employees, being able to negotiate empowers them to settle a disagreement without needing others to get involved.


Building Relationships

Negotiating effectively can give clients, employees and employers a positive impression rooted in respect. By dealing with problems fairly, forming strong bonds with clients and securing mutually beneficial deals, more people will want to work with you because of your ability and value your insights. No one wants their colleagues or partners to perceive them as a pushover or a bully in the workplace because of poor negotiation skills. You can become a solution-orientated worker who appears confident, personable and honest through relevant training. It is particularly valuable for bosses who feel their teams would benefit from a benevolent approach to leadership.


Boost the Bottom Line

With well-honed negotiation skills, you’ll be able to walk into any deal, conversation or networking opportunity and leave with the best possible outcome for yourself and your company. It allows you to be savvier with your agreements and better persuade others to your way of thinking. For example, by taking the time to negotiate the cost of a job with a contractor or vendor, you could reinvest any money you’ve saved into another project or add it to your profit margins. On a more personal level, you could use it to negotiate a pay rise or annual bonus with your boss. In short, it is a mindset, and knowing how to use it can give you the boost you didn’t know you needed.

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Master negotiators aren’t just good talkers, they are excellent listeners, and that is the secret. It allows you to listen to a pitch and accurately identify the opposition's weaknesses and strengths, hear about a problem, and recognise the root cause to find a solution. Adding meaningfully to a conversation by tailoring your response requires you to pay attention and fully understand all the factors and variables involved. Everyone, from clients to colleagues, appreciates the person who takes the time to listen and think before speaking.

Additionally, negotiation teaches you to get to the point and be direct about what you desire and need without being sidetracked. Beating around the bush won’t get you anywhere in the boardroom, so being able to make an excellent point in just a few words saves everyone time, energy and money.



Negotiation as a problem-solving tool allows you to openly search for innovative ways to overcome obstacles when making a deal. Rather than the conversation shutting down at the first negative response, skilled negotiators can haggle, discuss and come up with creative solutions. It creates open-mindedness and shows people you value their time, energy and service by working hard to find a mutually beneficial agreement.


How to Develop Your Negotiation Skills

To develop your negotiation skills and ultimately become a successful negotiator, you need to:

  • Do your research, and have a plan in place.
  • Take the time to strategise with your team before a meeting.
  • Listen carefully to what the other people are saying, and ask considered questions.
  • Engage with your audience, and think before you speak.
  • Tailor your pitch and concentrate on what they need to be persuasive.
  • Focus on the discussion at hand, and take an active role.
  • Be open-minded, flexible and solution-oriented.
  • Before you close a deal, consider whether your agreement is mutually beneficial.
  • Practice using negotiation strategically at work and home.
  • Book yourself or your team into training, and get expert advice on how to level up your skills.

To explore some of the best negotiation skills courses, visit Scotwork and kickstart your business with advanced negotiation training.

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