The Effect of Negotiation Planning on Negotiation Outcomes

Abstract: Many “self-help” books and textbooks on negotiations state that the first step necessary for success is always to plan. Even though this advice is intuitively appealing, there is inadequate empirical evidence that indicates planning produces superior negotiation outcomes. In this study, we examine the effects of planning on negotiation outcomes. Specifically, we hypothesize that planning will contribute to negotiation self-efficacy. We further predict that negotiation self-efficacy will have both direct effects on negotiation outcomes, as well as indirect effects through increased negotiator’s mental models. Results suggest that planning is directly related to negotiation outcomes but that this relationship is mediated by neither negotiation self-efficacy nor by negotiator’s mental models. A post hoc analysis revealed that prior negotiation experience is related to negotiation self-efficacy, which in turn predicts negotiation outcomes. Theoretical and practical implications are discussed along with limitations and directions for future research.

Keywords: Negotiation, planning, negotiation self-efficacy, negotiation mental models