(This article originally appeared in Ambition, the thought leadership publication by the Association of MBAs (AMBA) – in print and online – and has been republished on this website with the permission of AMBA.)
In both the workplace and in education, people are constantly involved in negotiations. A negotiation typically involves two or more people or parties striving to reach a joint agreement on a decision – perhaps you are discussing with peers who works on which part of a group project, agreeing on a deadline for a task, or you are convincing a stakeholder to support a new strategy of your business.
The World Economic Forum has ranked negotiation skills as one of the top 10 skills required for jobs in the future, so it is vital to learn how to negotiate effectively. In fact, research shows that leaders spend around 15% to 26% of their working hours negotiating – but many of these negotiations end with an impasse.
An impasse occurs when the parties end a negotiation without coming to an agreement, either because one or both parties prefer no agreement, or because they could not reach an agreement despite benefitting from doing so. Understanding why negotiations end with an impasse and how to prevent them can help leaders and potential leaders become more effective, improve business outcomes, and make employees happier.
A 2020 analysis of 25 million negotiations on eBay found that 55% ended in an impasse, and respondents to a survey we conducted indicated that 29% of their most recent negotiations ended without agreement. However, much of the research on negotiations ignores impasses. Therefore, Professor Stefan Thau from INSEAD and Professor Madan M Pillutla from London Business School, together with Martin Schweinsberg examined the impact of impasses in negotiations research.
They reviewed and systematically coded more than 1,000 research papers on negotiations to understand what they know about why negotiations end without an agreement. Through this, they identified three different types of negotiation impasses; wanted, forced, and unwanted, the factors through which they can occur, and the solutions they require to be resolved.
Wanted impasse
Wanted impasses occur when both individuals or parties involved in a negotiation actually desire an impasse. Structural factors can cause wanted impasses; pre-existing factors that affect the negotiation independent of the individuals or their relationship with each other. Example causes include communication channels used, such as email or phone call, time pressures and deadlines, threats to core and sacred values, whether negotiations involve individuals or a group, or whether an agent is negotiating on an individual’s behalf.
The fact that wanted impasses occur when both parties desire an impasse means they don’t always need resolving. Some, however, can be manipulated to end in an agreement by changing aspects of the negotiation.
In some cases, externally imposed time pressure, such as an approaching deadline, can actually reduce impasses. However, time pressure can cause wanted impasses if it makes the negotiators feel overwhelmed, especially during complex negotiations.
Wanted impasses can also be resolved by changing the form of communication used: Previous research has found that impasses in virtual negotiations through email were reduced from 60% to 40% when negotiators had a simple phone conversation to get to know each other. Therefore, pick up the phone for a quick social call if you negotiate with someone via email and you have never met before.
Wanted impasses can also result from group negotiations as this increases competition between negotiators. Negotiators can overcome this by having group leaders negotiate one-on-one with each other, rather than having groups handle the entire negotiation process.
Forced impasse
Forced impasses occur when one party seeks an impasse while the other does not. This can result from interpersonal factors, such as touch negotiation tactics, quality of relationships and relational needs, anger, and other expressions of emotion.
Tough negotiation tactics, such as extreme first offers, can offend recipients, resulting in forced impasses. Negotiators can minimise this risk by understanding that offers are extreme only in relation to other values. Range offers have been found to reduce the risk of impasses and so saying, ‘I can sell the apartment for $300,000 to $350,000’ can be better than just providing one specific value.
Forced impasses can also be resolved by taking the other party’s perspective. If you are confused as to why a counterpart continues to negotiate and bargain with you, despite everything you have offered, it could be that you are offering what you believe is important to them – and not what is actually important to them. Perspective-taking allows negotiators to understand what the counterpart values most, enabling them to offer what they truly want. It can also motivate selfish negotiators to become prosocial, and prevent them from forcing an impasse on their counterparts in the first place.
Improving relationships can also help to avoid forced impasses. A bad relationship between negotiating parties can be improved by swapping lead negotiators. Also, negotiators that have to deal with counterparts they deeply dislike or hate are advised to build a relationship. Simply, people that like each other tend to care more about the outcome for the other party: Negotiators who care about their counterparts experience fewer impasses than those who solely care about their own needs.
When relational needs are threatened and trigger forced impasses, a third-party intervention, such as through mediation, may help. Negotiating parties who know that an impasse will be ruled upon by an independent party in a legally binding manner may make more concessions and not force an impasse on their counterpart.
Unwanted impasse
Unwanted impasses occur when neither party seeks an impasse, yet the negotiation still ends without an agreement. Unwanted impasses can be caused by intrapersonal factors such as biased framing of the negotiation or varying levels of informational complexity. For example, an unwanted impasse may be caused by too little or too much information about the negotiation. An unwanted impasse is also more likely when negotiators do not know enough about their counterpart’s goals and preferences.
Unwanted impasses can be resolved by framing the negotiation so that both parties recognise the negotiation’s win-win potential or by simplifying complex information. Information can be simplified by making it more accessible or by thorough preparation beforehand to help negotiators distinguish irrelevant from relevant information. Negotiators can also avoid unwanted impasses by processing and recombining information more creatively. Past research found that negotiators who have lived abroad and have multicultural experience avoid unwanted impasses by negotiating more creatively.
These types of impasses can also be resolved by addressing the negotiator’s mindsets. It has been shown that a growth mindset – the belief that negotiations can be learned – reduces impasses. This is also true of a choice mindset – the belief that a negotiator has the freedom to choose – which can also reduce impasses.
In summary, Schweinsberg’s analysis has identified three different types of impasses, how they are caused, and also what can be done to avoid them during negotiations. He conducted this research as, despite the prevalence of impasses in real-life negotiations, the study of them in classroom and laboratory situations is rare. In business schools, students and prospective future leaders should understand how negotiations can become deadlocked and how to overcome and prevent impasses as this will improve their ability to function well in leadership and management positions.
This is an adapted version of an article that was published on AMBA’s website, written by Martin Schweinsberg; an Assistant Professor of Organisational Behaviour at ESMT Berlin and a leading expert in negotiations.
