Articles > Positional and Mutual Gains Negotiating (Part 2)
Positional and Mutual Gains Negotiating (Part 2)
by David Bryson
Norton Media
Bargaining
For many, bargaining is the essence of negotiation. Certainly, it's critical to get it right. Here are the main guiding principles.
- Somebody has to open but try to make sure it's not you! The first proposal gives huge clues about where the proposer
will settle. It tends to make the negotiators focus on that person's MSP and the negotiation heads toward it. We
want the MSP that we are heading towards to be the other side's, not our own. If you do have to open, open as boldly
as you can whilst maintaining credibility.
- Once opening positions have been established, there then follows a period of demands and concessions. Never give
anything away for free - always demand something in return. Giving things for free does not create goodwill, it simply
makes the other side hungry for more free things. Always state the condition first: "If you give me X, then I will give
you Y".
- Try to get the other side to make concessions before you have even made your initial proposal, or at least, moved
from it. Then, move in small amounts, infrequently. It's not rocket science to understand the effect of this if the other
side is moving in larger amounts, more frequently!
Concessions
In the bargaining phase, it's a common failing to ignore the other party's perceptions - to offer concessions without considering
what their value is to the other party. This might well lead to us giving concessions too cheaply or paying too
much for the things we want. Ask yourself three questions before trading a concession:
- What is the concession worth to the other party?
- What does it cost me?
- What do I want in exchange?
Closing
When to close is one of the big problems facing a serious negotiator. After you've closed, you will never know if you
could have got more. Deciding when to close comes down to judgment. Ensure that your closing has credibility, both in
terms of when you do it, and in terms of how you do it. Don't try it on when you know there's no chance that other party
will close at this point. It dents your credibility and causes resentment.
After closing, make sure someone summarises what's been agreed. Often each side has a different understanding about
what's been "agreed"! It's better to address the issue at this point, rather than have to come back to the negotiating table
at a later date.
Power
What on earth do you do when your assessment of the division of (real) power for a negotiation tells you that the other
side has more power than you do? Do you just do the best you can, but accept your fate? As successful negotiators, of
course we don't! We turn to the application of psychological power.
"Real" power comes from advantages that actually exist. There are many sources of real power and we assess it by
conducting a strengths-and-weaknesses exercise for ourselves and the other party, as referred to above. Real power
boils down to the questions:
- How much do I want/need this deal?
- How much does the other party want/need this deal?
The party that wants/needs it more has less power.
Let's now consider two examples of how psychological power might be applied.
1. Alternatives
The best way to go into a negotiation is with several alternative suppliers/customers up your sleeve. This gives you real
power.
But what if there are no alternatives? Well, the next best thing is to make the other party think that you have alternatives.
Obviously, this will have an impact on where the other person is prepared to settle.
2. Intransigence
Imagine that you have moved to a point that is your MSP on a particular issue - in other words, you cannot move further.At some stage, the other negotiator will understand this and, as long as it is within his/her range of acceptable outcomes, should settle at this point.
Alternatively, imagine a situation where you have reached a point at which, in reality, you have still got plenty of room to
move on a particular issue. You have the option of making the other negotiator think that you cannot/will not move further.
The effect is the same as in the former "real" situation.
Psychological Power
In both cases above, what we have done is to apply psychological power. By our behaviour, we have influenced what the
other side thinks our real position to be - to our own benefit.