Creating Value: How Mediation Improves Deal-Making
Anyone who has participated in negotiations is familiar with the usual scenario where parties play their cards with the aim of outwitting other parties and securing the best terms for themselves. Where parties are firmly entrenched in their positions, energy and resources are often wasted on corporate games and posturing, which may end with the parties being deadlocked and the deal itself scuttled.
The first difference the presence of a mediator brings to the table is that the mediator takes control of the negotiation process and sets the tone. The mediator neutralises the competitive atmosphere by helping parties realise their common goal, and determine if their interests are mutually exclusive or otherwise.
Upon gaining the trust of parties, private sessions allow the mediator to gather information in a confidential setting and compare parties’ interests openly. The mediator is able to use his/her neutral third-party perspective to identify and manage parties’ perceptions and emotions. Once the smokescreens are dispersed and psychological and strategic barriers torn down, negotiations progress quickly and deals can be sealed.
Thus, there is great potential for mediation to facilitate deal-making and transactional negotiations such as mergers, acquisitions and joint ventures. By involving mediation at the early stages, “preventive or strategic mediation” rather than last-minute “crisis mediation”, the mediator enters negotiations at the beginning, and improves the overall quality and efficiency of negotiations by cultivating open dialogue and avoiding competitive or adversarial negotiations.
In examining parties interests, mediation enables parties to be the architects of creative, future-oriented solutions that satisfy common and different interests. Engage SMC’s specialist mediators today to help you achieve better deals!
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March 2015 Issue. For past issues, read more here.