Business Management

How is negotiation changing in an era of geopolitical instability?

For businesses, negotiating is no longer about ‘securing the best price’ but about safeguarding business continuity and protecting profit margins that have been severely strained by price rises

by Luca Brambilla* and Andrea Monti**

18 June 2026

3' min read

Translated by AI

Versione italiana

3' min read

Translated by AI

Versione italiana

The era of relative abundance is over. For decades, businesses operated in a context of apparent stability, where supplies of energy, gas and raw materials were regarded as constant variables, and the negotiating table was essentially the place where companies sought to secure the most favourable price. That scenario has been swept away by a complex reality in which geopolitical tensions are no longer mere background noise, but a disruptive force that is having a profound impact on costs, contracts and supply chains.

From the energy crisis to tensions surrounding the US Inflation Reduction Act (IRA), from the closure of maritime straits to the strengthening of the dollar, right through to the return of inflationary pressures and supply chains under strain. We are no longer witnessing isolated crises: uncertainty seems to have become a constant, rewriting the rules of global trade. The Chartered Institute of Procurement & Supply (CIPS) has recorded record levels of anxiety in recent years, demonstrating that the perception of risk is now systemic.

Managing uncertainty: the metamorphosis of the negotiating table

In this volatile environment, for businesses, negotiating no longer means ‘securing the best price’ but safeguarding business continuity and defending profit margins that are under severe pressure from rising costs in logistics, basic chemicals and energy. This requires a paradigm shift: from a mindset focused on fighting for a percentage point to building flexible systems. Businesses must adopt risk-sharing approaches and incorporate price review clauses into contracts, along with automatic transparency mechanisms for energy and transport costs, and define negotiation ranges for exchange rates. The aim is to build resilience now, thereby avoiding having to manage an even more serious emergency whilst under even greater pressure.

In-house teams as orchestras

This new complexity requires companies – particularly SMEs – to take a significant step forward in their development by making negotiation a team effort.

The first obstacle to overcome is the siloed division between business functions. In far too many organisations, the commercial division (sales and marketing) and procurement (purchasing) do not communicate. These two divisions must instead function as a well-coordinated orchestra, guided by senior management. The role of the legal department must also evolve: the company does not need ready-made advice, but professionals capable of finding practical, compromise-based solutions in a global environment governed by differing regulations.

In this control room, the manager becomes a key figure who must combine negotiating skills with a keen understanding of socio-political dynamics: when geopolitics drives up energy costs, prolongs timelines and increases uncertainty, negotiating effectively no longer means merely securing better terms; it means safeguarding operational continuity, profit margins and relationships. And today, for many businesses, this can constitute a form of competitive advantage.

Negotiation as co-design and problem-solving

In such an unstable environment, a distributive negotiating approach is often counterproductive: we need to establish a process in which suppliers are not counterparties to be squeezed, but partners with whom to co-design solutions and adapt together as the context changes. Flexibility is a sign of strategic intelligence, not weakness. As recent international developments demonstrate, those who act solely through force without analysing the political and economic consequences often end up isolated.

Beyond Germany, SMEs need agility

Despite global difficulties and tensions, the final message must be one of optimism, because the current uncertainty conceals opportunities for growth for those who can act swiftly. Whilst it is true that just over 50 per cent of Italian SMEs export and that a large proportion of these exports are concentrated in Germany, it is equally true that alternative avenues are opening up.

Agreements with India, for example, as well as those with Mercosur and Australia, represent markets that have yet to be fully explored by our companies, which are often held back by a perception of excessive distance. However, the small-to-medium-sized nature of Italia’s industrial fabric, whilst it may struggle in times of stability, ensures greater agility in periods of major change: to use a metaphor, it is easier to manoeuvre a small boat quickly than an ocean liner. Thus, in this phase of chaos, coordination between politics and business becomes vital: success will depend on the ability to network, both internally and externally, and to take the initiative to gain new ground, whilst remaining ready to operate on multiple fronts in a world that will continue to be in a state of flux.

Those who rise to the challenge of complexity will not merely survive, but will find in the crisis the driving force for new growth.

As Winston Churchill said: “The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity.”

*Director of the Academy of Strategic Communication

**Lecturer in International Marketing, Business Economics and International Markets, IULM

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