This thesis sought to identify mergers and acquisitions advisors’ perceptions of their own negotiation
strategies in a typical negotiation. Additionally, the thesis examined the potential association between the
first offer and a negotiator’s perception of his or her own negotiation strategy. This was researched
empirically by presenting the negotiators two different first offer negotiation scenarios. In the first scenario,
a buyer presented a first offer that was higher than a negotiator’s reservation value. In the second scenario,
a buyer presented a first offer that was lower than a negotiator’s reservation value.
The theoretical framework of the thesis was based on the negotiation analytic approach that was
theoretically extended to the context of first offers and distributive and integrative negotiation strategies.
Additionally, a quantitative and an expert based approach of negotiation research was used. The survey
questionnaire, which measured the negotiators’ percepti
ons of integrative and distributive negotiation
strategies and first offers, was created with a theory driven approach. Therefore, the survey questionnaires
of previous research, such as the Dutch test, BPA II and five‐factor model was used as an example when this
thesis’ questionnaire was created. The research data was gathered from a population of 300 professional
advisors of mergers and acquisitions. The cross‐cultural sample of respondents comprised of 30 advisors.
The responses were received from Europe, Americas and Asia‐Pacific. The data was analyzed by means of
descriptive statistics, principal component analysis, reliability analysis, normality test and a paired samples
t‐test.
In line with the theoretic framework of the thesis and previous research results, this research suggests that
a negotiator’s perception of his or her own negotiation strategy, in a typical negotiation, is more integrative
than distributive. However, in terms of counteroffer strategies the thesis resulted in a contradictory
descriptive finding. In both high and low offer scenarios, the majority of respondents’ perceived distributive
strategy as their preferred strategy. A key finding of the thesis was that a first monetary offer in a
negotiation was associated with a negotiator’s perception of his or her own negotiation strategy.
This thesis concluded that a negotiator should use more integrative than distributive negotiation strategy.
This strategy consist of behavior, which directs a negotiation towards a problem‐solving practice, where
information sharing and trust is emphasized. In order to achieve this type of negotiation process, the
negotiator should always make the first offer, for example, before the letter of intent phase. However, the
negotiator should carefully analyze the potential reference values of the negotiating parties, create
alternatives and evaluate consequences, in order to make trade‐offs. The alternatives could comprise of
creative earn‐out models, vendors’ notes and third party negotiation models. However, the negotiator
should acknowledge the high probability that an integrative first offer is countered with a distributive offer
and communication strategy. Concerning negotiation goals, the negotiator should have a high level of
aspiration, which in this context is the goal of high merger premium.
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