The global economy is going through turmoil and uncertainty in the business environment is on the rise. At a time when deals and agreements need to be carefully negotiated, Deepak Malhotra of the Harvard Business School, who specialises in negotiations, tells Kirtika Suneja on the sidelines of the Nasscom India Leadership Forum in Mumbai that negotiations matter more in uncertain times because risk is high and trust is low. Excerpts:
How significant are negotiations in uncertain times like these?
Negotiations are the standard way of monetising the value proposition and uncertainties. They are important. However, during uncertain times they are significant for adding value and monetising that value proposition. They matter more when there is a downturn in the economy because no one thinks when money is flowing freely. Companies become price sensitive when money supply is tight and then design strategies to deal with the problems.
How do companies change their strategies when there is uncertainty in the business environment?
There are six ideas which are related to trust when firms make strategies and negotiate. Don?t confuse mistrust with greed as both are different, avoid partial trust, sometimes giving some things away for free is a bigger motivation to get people to act in your favour, it is normal to get into lows during negotiations and mediations, respect other parties? opinions and beware of the curse of knowledge. Uncertain situations mean greater risk and lesser guarantee of returns and hence, trust becomes more relevant while making strategies.
How do business schools react to increased uncertainties and what does industry expect from B-schools in such times?
The expectation of the industry is two-fold. They ask us two questions ? why didn?t you see it coming and how to get out of it? B-schools can?t predict uncertainty but they only do the job of equipping people for uncertain times and constantly change their curriculum either through case studies or greater interaction with the industry.
How popular is the subject of negotiations among students and how has its demand changed over years?
There is a steady increase in demand for negotiations by students in the US and it is the most popular elective at Harvard. It is an inherently interesting subject and is becoming increasingly popular across management schools globally. This is so because changing business environment calls for constant negotiations, conflict management, contracts, auctions and most important, trust.
