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Negotiation is a common occurrence in our daily lives. Even if we don't immediately think of it when engaging in conversations with others, it's undeniable that we negotiate in various situations.
Of course, negotiating is not a one-size-fits-all activity. It is more than possible to break it down into a range of different subcategories, each with its own nuances. When trying to understand negotiation, it is one thing to look at hypothetical scenarios and another to look at how they play out in real life. We can find great examples of negotiation all around us and in the media, and by studying them, we can learn how to apply them ourselves.
Salary negotiation
Even if an employee has no idea how to approach an acquisition deal or trade agreement, they should know how to negotiate their contracts and salaries. Knowing how to do so can net a new employee a much more agreeable deal at a company and can aid them in progressing their career on a timeline that suits them. Research shows that men are 20% more likely to negotiate their salary in an interview, while 20% of women have never negotiated their salary at all!
Believe it or not, one of the best places to look for examples of successful negotiations of higher salaries is not in the boardroom, but in the offices of Hollywood. Both those in front of the cameras and behind them have a keen idea of their worth, and many successful negotiation examples have been forged here.
1. Modern Family
When considering Hollywood's salary negotiation, many people might think of the Friends cast. However, they are not the only sitcom cast to band together and approach the studio executives with a request for more pay. Before production began on the fourth season of ABC's Modern Family, five of the adult stars of the cast – Sofia Vergara, Julie Bowen, Ty Burrell, Jesse Tyler Ferguson, and Eric Stonestreet – had their contracts voided.
Though senior cast member Ed O'Neill initially stayed back as he had a better deal than his co-stars, he eventually joined the dispute to give their position more weight. When the negotiations came to an end, all stars received more pay and better benefits and continued to receive high pay rises across the remaining seasons of the show.
2. Alec Guinness & Star Wars
Modern audiences might know Sir Alec Guinness best as Obi-Wan Kenobi in the original Star Wars trilogy, but he almost did not take the role. Though he admired the characters and the story at the heart of the tale, he described the script as "fairytale rubbish" to his friends.
He requested that the film studio double their initial offer of his salary and that he would be excused from any promotion for the film. He also asked for 2% of the royalties paid to the film's director, George Lucas. Lucas agreed and even raised the amount to 2.25% following the success of the film. This led to Guinness taking in roughly 0.45% of the total box office revenue. This might not seem much, but given the cultural monolith that Star Wars has become, it is not difficult to see how this extra clause ended up netting Guinness several extra million.
Customer negotiation
Customer negotiation examples are great at putting the consumers' issue at the heart of the matter. So often, delivering new value to customers can help boost the profile of a company overall and position it as a business that puts its customers first. When we see customer negotiation taking place, it is usually between two vendors with a pre-existing relationship seeking to provide a better service or fix an issue with their shared customers.
3. Netflix & Comcast
In 2014, the streaming service Netflix started negotiations with internet service provider Comcast. The two companies aimed to negotiate a Content Delivery Network, a network designed to deliver content efficiently to the end users, the customers of both. Ideally, a faster and more reliable streaming service would be delivered to Comcast customers who also wanted to access Netflix content.
Though an agreement was reached, the negotiations also introduced some third-party debate into net neutrality. Concerned parties argued that this could create a precedence for a tiered internet, where internet service providers would give better access to those willing to pay for the best connections. Though these negotiations showed that benefits can be delivered to customers, they are also a great example of some of the more wide-ranging issues that can develop out of what seems to be a good deal.
4. TikTok & Universal Music Group
An ongoing negotiation collapse occurring at the time of writing is the standoff between the social media platform TikTok and Universal Music Group (UMG), a major music corporation. The licensing agreement allowing music from UMG's artists to be used on the app was due to expire, and negotiations to renew the deal fell apart.
Music from major artists like Taylor Swift and Ariana Grande was pulled from the app, muting existing videos and preventing users from using UMG tracks when they create new ones. This also majorly affects up-and-coming artists who have found new ways to promote themselves in the rise of short-form content.
To get negotiations back on track, TikTok will either have to face the concerns over the misuse of AI currently swirling their conduct, or UMG may have to back down from their current hard stance.
Business negotiation
Every business owner knows that the negotiation process is a key part of running a company. Owners need to know how to negotiate the best price with their suppliers and make the right deals and acquisitions to propel their business to success. Even amongst the titans of industry, as we shall see from these negotiation examples, business negotiation can take time and a lot of effort, especially if it is a deal worth millions.
5. Disney & Lucasfilm
To appear twice on this list must make George Lucas one of the most low-profile expert negotiators out there!
In October 2013, Disney announced that it was acquiring Lucasfilm for an impressive $4.05 billion. This would give them access to all the intellectual properties in the Star Wars franchise and they set about drafting new films and TV shows to further grow the brand.
This was a long negotiation process that required many discussions. Bob Iger, Disney's then-chairman, stated that he personally negotiated with George Lucas for the terms of the deal across a period of two years.
6. Amazon & Hachette
In 2014, the major publisher Hachette ended up in a dispute with online retailer Amazon. The exact details of the disagreement and subsequent negotiations are still private, as many talks at this level tend to be. What we do know is that Amazon wanted to drop the prices of e-books. At this time, Amazon sales accounted for 41% of all new books sold, so a drop in price from the vendor would result in a significant impact on profits across the year.
Though Hachette was just one of thousands of publishing houses supplying Amazon with titles, they ended up being the ones fighting them. When putting pressure on the company, Amazon chose to halt the sales of Hachette books. Some became unavailable to purchase, others had delayed shipping, and Amazon even recommended that buyers go elsewhere if they wanted to buy titles from Hachette.
Though not every negotiator would engage in such harsh practices, the chips eventually fell in favour of Hachette. Amazon agreed to let them set prices for their e-books, thus potentially slowing down the gradual monopoly of the online seller.
Trade negotiation
Trade agreements often provide some of the most important negotiations we see impacting our lives. Often conducted between two or more countries, these deals can have an impact on everything from how the country is viewed on the world stage down to the everyday life of an average citizen. A government might choose to add a clause to a treaty currently being negotiated with another, only for that clause to cause a wave of unpopularity when the announcement hits the general public.
Looking at these negotiation examples can teach us about some of the wide-ranging effects even the simplest agreement can have.
7. Brexit
The UK's decision to leave the European Union, colloquially known as Brexit, is often counted as one of the poorer negotiation examples in trade. This saga is a great example of a lack of synergy between the two parties. They had wildly different outcomes in mind when they came to the table, and both were refusing to back down.
With multiple deals on the table, it was down to negotiators from the UK and the EU to reach an adequate solution. Negotiations took years, and any deal proposed by then-Prime Minister Theresa May and her team was shot down either by the parties from the EU or the UK parliament. Eventually, she resigned, and it was left to the next prime minister, Boris Johnson, to finish negotiations and carry the country forward into its post-Brexit era.
8. USMCA
In 2017, the US government and President Donald Trump expressed dissatisfaction with the existing North American Free Trade Agreement (NAFTA) and asked to renegotiate terms with Canada and Mexico. NAFTA came into effect in 1994, and the Trump administration was concerned that it no longer suited the modern goals of each country.
After several years of negotiation – covering a diverse range of topics such as labour standards, environmental protections, and intellectual property, to name a few – each country ratified the new agreement. The US Congress, Canadian Parliament, and Mexican Senate all had roles to play in the ratification of the new deal before the United States-Mexico-Canada Agreement (UMSCA) officially became policy across all three countries.
This is why everyone needs negotiation skills
Everyone should learn how to negotiate, regardless of their role, as they will have to pull on these skills at some point in their lives. You may not even have to negotiate in the office often, but may instead find yourself turning to negotiate in your relationships or when dealing with tradesmen.
The above real-life examples show how important negotiating can be. No one wants to get stuck with a bad deal after all!
In business, employees who know how to negotiate can add real value to not just their organisation as a whole, but their role within it. Anyone who wishes to progress as far as they can within their career will need to have a few negotiation strategies by their side whenever they find a new contract coming their way. Negotiation skills can also help resolve issues and provide creative solutions. An employee might not know the first thing about engaging with sales strategies, but they could pull on negotiation skills when dealing with a client face-to-face.
Let Scotwork UK's experts deliver this crucial training to your team, providing valuable strategies and insights into the world of negotiation. Our negotiation training can help all employees gain these essential skills so critical for success in the modern world of business.
