What Type Of Negotiation Should You Use Next Time?

Picking the right type of negotiation is key to getting the deal you want
Picking the right type of negotiation is key to getting the deal you want
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Let’s face it, by now you realize that not every negotiation is the same. Each and every negotiation that we engage in has its own set of characteristics and qualities that set it apart from all of the other negotiations that we’ve been part of. However, the good news here is that all of the negotiations that we participate in fall into one of several different categories of negotiations. In order to make sure that we’re able to get the best deal possible out of a negotiation, we need to make sure that we understand what type of negotiation we are preparing to enter into. Make sure that you understand what type of negotiation your next negotiation is.

A Distributive Negotiation

So what is a distributive negotiation? A distributive negotiation is a negotiation in which both parties are haggling over a single issue. This is most often the price of a given item. Parties engaged in a distributive negotiation bargain over a fixed amount of value – what they are trying to do is to slice up the pie. As a negotiator, you may find yourself engaged in a distributive negotiation when you are negotiating with a merchant over the price of a rug in a foreign bazaar, or you are at a car dealership negotiating over the price of a car.

An Integrative Negotiation

When you are engaged in an integrative negotiation there is more than one issue is at stake — perhaps many issues. When multiple issues are available for discussion – if you were negotiating for a new job there would be salary, benefits, and a start date — negotiators have the potential to make tradeoffs across issues and create value. In cases like this if you care little about a particular issue that the other side values more, you might propose making a concession on that issue in exchange for a concession from your counterpart on an issue that you value more. Quite often negotiators make the mistake of assuming that a negotiation is a distributive negotiation when in fact additional issues can be added to the discussion to make it an integrative negotiation.

Team Negotiations

You know that you are involved in a team negotiation when at least one of the parties is made up of more than one person. Most often in a team negotiation, there are at least two teams involved, perhaps more. Good examples of team negotiations would be contract negotiations between company management and workers, or two organizations negotiating a possible merger. Negotiators will typically team up when they believe their different talents, skills, and knowledge will make them stronger. Indeed, research has shown that when there’s at least one team at the bargaining table, negotiators are likely to create more overall value. When setting up your negotiation team, it is wise to determine what role each person will play, plan your negotiating strategy in advance, and take frequent breaks during the negotiation to discuss how things are going and work out any disagreements that may emerge in private.

Multiparty Negotiations

When there are a lot of people at the negotiating table, you may be involved in a multiparty negotiation. A multiparty negotiation is one in which three or more parties are negotiating among each other. They may be involved as individuals or as part of negotiating teams. A common example of this type of negotiation would be when three business partners are deciding where to go for dinner, they can be said to be engaged in a multiparty negotiation. Multiparty negotiations often also encompass team negotiations, if various teams are at the bargaining table. Business professionals are often overwhelmed by the complexity of multiparty negotiation, but in fact, that complexity can bring benefits. The more issues, parties, and concerns there are on the table, the more opportunities there are in the negotiation to create value by making tradeoffs across issues. Negotiators need to realize that multiparty negotiations sometimes splinter into divisive factions. This means that they need to be managed carefully.

Repeated Negotiations vs. One-Shot Negotiations

Before starting a negotiation a negotiator needs to ask themselves a key question: will I ever be negotiating with this person again? Some negotiations are referred to as being “one shot” — that is, parties are meeting for a single negotiation with no intention of negotiating together in the future. These types of negotiations can take on many different appearances. An example is negotiators who discuss the price of a used car online, meet in person for a test drive, and then conclude the negotiations a week later, but the expectation in this case is that they will go their separate ways when the negotiation is over and never meet again. Negotiators need to understand that one-shot negotiations often carry a risk of unethical behavior and hard bargaining if parties believe they have no need to build a trusting relationship. This is different from negotiators who hope to engage in repeated negotiations and tend to work harder to create a sense of mutual trust, and their negotiations may be more cooperative and collaborative as a result.

What All Of This Means For You

The key to getting the deal that you want out of your next principled negotiation is to understand what kind of negotiation you are getting ready to participate in. It is true that every negotiation that we take part in is both unique and different; however, all negotiations fall into one of several different types of negotiations. If you understand what kind of negotiation you will be engaging in, then you’ll be able to go in ready and will be successful.

The simplest type of negotiation is a distributive negotiation. In these types of negotiations there is only one issue that has to be resolved. Generally it has to do with the price of the product. When there are multiple issues that are being negotiated, then you can consider yourself to be involved in an integrative negotiation. If one or more sides brings multiple negotiators to the table, then you are involved in a team negotiation. Things can get even more complicated if you have more than two teams show up to negotiate. This is called a multiparty negotiation. Prior to starting a negotiation you need to determine if you’ll be negotiating with the other side again in the future or if this will be a one-time thing.

In the world of negotiating knowledge is power. Knowing what type of negotiation you are preparing to participate in can equip you to have a good understanding of what it is going to take to get the outcome that you seek. If we take the time to study who will be at the table negotiating with us, classify the negotiations, and then pick the negotiation styles and negotiating techniques that we want to use, we have a much better chance of reaching the deal that we want.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that it is possible to change the type of negotiation that you are getting ready to participate in?

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What We’ll Be Talking About Next Time

So during a negotiation, when you know the other side is wrong in how they are viewing the world, what do you do? If you are like most of us, you probably have a tendency to try to use your negotiation styles and negotiating techniques to correct the other side’s perceptions. You may lecture them about why you’re right—and they’re wrong. The problem with doing this is that we know that this conflict resolution approach usually fails to resolve the conflict and often will only makes it worse. What we really need are some conflict resolution strategies that can help us to get out of situations like this.