The negotiator will need to select a general negotiation approach. There are many techniques but the two most common approaches to negotiation are positional bargaining and interest-based bargaining. The positional bargaining will be discussed here and we will expatriate them in such a way you will understand the process.
Positional bargaining is a negotiation strategy in which a series of positions, alternative solutions that meet particular interests or needs are selected by a negotiator, ordered sequentially according to preferred outcomes and presented to another party in an effort to reach agreement.
The first or opening position represents that maximum gain hoped for or expected in the person advocating it. Agreement is reached when the negotiator’s positions coverage and they reach an acceptable settlement range.
When Is Positional Often Used
Positional bargaining is often used:
- when the resource being negotiated is limited (time, money, psychological benefits, etc.), when a party wants to maximize his/her share in a fixed sum pay off,
- when the interests of the parties are not interdependent, contradictory or mutually exclusive
- when current or future relationships have a lower priority than immediate sustentative gains.
Attitudes of Positional Bargainers
Most positional bargainers tend to:
- See resource as limited
- See the other negotiator as an opponent and tend to be hard on him or her
- Think a win for one party means a loss for the other
- Think the goal is to win as much as possible
- Believe that giving concessions are a sign of weakness
- Believe that there is a right solution, mine.
- Be on the offensive at all times.
How to do positional bargaining
(a) Set your target point: This is a solution that would meet all your interests and result in complete success for you. To do this, you need to consider:
- Your highest estimate of what is needed. (What are your interests?)
- Your most optimistic assumption of what is possible.
- Your most favourable assessment of your bargaining skill.
(b) Make your target point into opening position.
(c) Set your bottom line or resistance point: This is the solution that is the least you are willing to accept and still reach agreement. To identify your bottom line, consider:
- Your lowest estimate of what is needed and would still be acceptable to you.
- Your least optimistic assumption of what is possible.
- Your least favourable assessment of yourbargaining skill relative to other negotiators.
- Your Best Alternative to a Negotiated Agreement (BATNA)
(d) Consider possible targets and bottom lines of other negotiators.
Why do they set their targets and bottom lines at these points? What interests or needs do these positions satisfy?
Are your needs or interests and those of the other party mutually exclusive?
Will gains and losses have to be shared to reach agreement or can you settle with both parties receiving significant gains?
(e) Consider a range of positions between your target point and bottom line.
- Each subsequent position after the target point offers more concessions to the other negotiator(s) but is still satisfactory to you.
- The following positions are for issues in dispute: opening position, secondary position, subsequent position and fallback position (a yellow light that indicates you are close to bottom line. Parties who want to mediate should stop here so that the intermediary has something to work with)
- Bottom line.
(f) Decide if any of your positions meets the interests or needs of the other negotiators. Also, decide how your position should be modified to do so. (If not, decide how to modify your position to do so)
(g) Decide when you will move from one position to another.
(h) Order the issues to be negotiated into a logical (and beneficial) sequence.
(I) Open with an easy issue.
(j) Open with a position close to your target point.
- Educate the other negotiator(s) why you need your solution and why your expectations are high.
- Educate them as to why they must raise or lower their expectations.
(k) Allow other side to explain their opening position.
(I) If appropriate, move to other positions that offer the other negotiator(s) more benefits.
(m) Look for a settlement or bargaining range, a spectrum of possible settlement alternatives, any one of which is preferable to impasse or no settlement.
(n) Compromise on benefits and losses where appropriate.
A: Party A’s resistance point
B: Party A’s target
C: Acceptable Option for Party A
X: Party B’s target
Y: Party B’s resistant point
Z: Acceptable Option for Party B
(o) Look for how positions can be modified to meet all negotiators’ interests.
(p) Formalize agreements in writing
Characteristic behaviours of positional bargainers
- Having an initial large demand: This is a high or large opening position used to educate other parties about what is desired or used to identify how far they will have to move to reach an acceptable settlement range.
- Working with a low level of disclosure: This is a secretive and non-trusting behavior used to hide what the settlement range and bottom line are. The goal is to increase benefits at expense of other.
- Bluffing: This is a strategy used to make the negotiator grant concessions based on misinformation about the desires, strengths or costs of another.
- Making threats: This is a strategy used to increase costs to another if agreement is not reached.
- Using incremental concessions: These are small benefits awarded to gradually cause convergence between negotiators’ positions.
- Being hard on people and problems: Often the other negotiator is degraded in the process of hard bargaining over substance. This is a common behavior that is not necessarily a quality of or desirable behaviour in positional bargaining.
Costs and benefits of positional bargaining
- Often damage relationships: inherently polarizing (my way, your way)
- Cut off option exploration. Often prevents tailor-made solutions.
- Promote rigid adherence to positions. Obscure a focus on interests by premature commitment to specific solutions.
- Produce compromise when better solutions may be available.
- May prevent premature concessions
- Are useful in dividing or compromising on the distribution of fixed-sum resources
- Do not require trust to work.
- Do not require full disclosure of privileged information.