Got this forward from a Karthik. Very nice analysis of the strategies involved in Mahabharatha...
Negotiation is an important skill in business. How to negotiate? There aren't any standard rulebooks for it. But even much before the modern books started wring on it, Mahabharatha gives us some guide lines to negotiate.
Time: The timing of your negotiation should be perfect. Krishna makes kunthi approach karna at dawn to negotiate. The visit was unexpected and thus karna is surprised. In negotiation surprising your opponent is important. He will be caught unguarded. Further at dawn karna worships his father Surya and during that time his mother walks in.
Isolation: It is important to isolate the opponent in a negotiation. If he is with people who can influence him or make him think, then negotiation will be difficult. Had karna been with Duriyodana he would have felt embarrassed to give the boon which kunthi asked. He might even have refused to give the boon which kunthi asked, since it was against his friend Duriyodana. But he was isolated when kunthi approached him.
Starting high: In negotiation if you want to sell a product for Rs.100 you should not give the first quote at Rs.100. You should ask Rs.120 or Rs.150 bargain and finally settle down at Rs.100. If you start at Rs.100, your opponent will ask for Rs.60 and you will settle down at Rs.80 finally.
Similarly kunthi starts high. She asks karna to join pandavas and karna refuses it as expected. But then he is weakened by this refusal. His mother's first request and he refused it. So he says 'ask me anything except joining pandavas. Kunthi then asks him not to kill any pandavas except Arjuna. Krishna and she know that karna cannot kill Arjuna because Arjuna will be protected by Krishna. Further among the pandavas the only person who can kill karna is Arjuna. Thus karna signs his own death warrant.
Selecting the negotiator: Selecting the negotiator too is important. Krishna selected kunthi, the mother of karna. Not all businessmen can have such negotiators at his service. Krishna had them and used them properly.
Don't start negotiating initially: Nobody should negotiate the moment you enter a shop. Be friendly with the shop keeper, talk friendly things and finally negotiate. In other words create an environment suitable for negotiation. Weaken your opponent and finally negotiate when the situation is apt. Kunthi does this perfectly. First she emotionally weakens karna. Then while leaving she asks what she wanted. Karna refuses; kunthi persists and finally gets what she wanted.
Don't empower your negotiator to weaken yourself: In negotiation if you give too much power to the negotiator on your side you have a danger. Your opponent might defeat you and will get something dangerous from you. Krishna found this out from sending Indra as the negotiator. Indra asked for karna's armour and got it. But Indra was so moved by karna's act, that he gave him 'Shakthi'. Karna managed to get something from the negotiation.
So Krishna sends kunthi this time. Kunthi could never have given anything solid to karna. Kunthi had nothing with her. She could never have revealed karna's identity to her sons, thus karna could never have asked anything that could weaken pandavas from kunthi.
When negotiation fails weaken your opponent as far as possible: Krishna too negotiated with Duriyodana. That negotiation failed. So Krishna weakens Duriyodana as far as possible. He creates a rift between Duriyodana and Vithura by staying in Vithura's house. Duriyodana abuses Vithura for this and Vithura leaves Duriyodana. Then Krishna makes Duriyodana appear mean. When Duriyodana gets infuriated he wont listen to any small request from anybody. So when Duriyodana is totally infuriated Krishna climbs down from his stand point of asking half the kingdom. He perfectly knew that Duriyodana will refuse even a single penny with that mindset. So he asks 5 villages, and then asks 5 houses....the lowest which anybody can go.
Had Duriyodana been intelligent he could have given 5 houses and he would have won. But he even refuses it. Krishna knew this perfectly. He did not come to Hasthinapura to get 5 houses for pandavas. He wanted to weaken Duriyodana as far as possible. Duriyodana by refusing to give even 5 houses earns the wrath of public. "All they asked was 5 houses and he even refuses it. He is adamant and only because of him the war started" will be the common impression among public and soldiers.
Thus Krishna managed to gain even while the negotiation failed.
Interestingly even hanuman does that in Ramayana. When Ravana refuses to handover Seetha to Rama, he weakens Ravana by burning his capital, killing asuras. This was the first time when Ravana's capital city was ransacked by anybody. All asuras were weakened by thinking "one monkey did this; millions of monkeys will attack us in future. What will happen?"