Positional bargaining

Definition

Positional bargaining is a negotiation strategy where each party starts with a fixed position and negotiates by making concessions to reach an agreement. This approach often involves claiming value rather than creating it, leading to a competitive atmosphere where parties defend their positions rather than explore mutual interests. While it can result in agreements, it often misses opportunities for collaborative problem-solving.

5 Must Know Facts For Your Next Test

1. Positional bargaining often leads to a win-lose outcome, as parties focus on winning their respective positions instead of finding common ground.
2. This type of bargaining can create a confrontational environment, making it harder to maintain positive relationships between parties after the negotiation.
3. Concessions in positional bargaining may be perceived as weakness, leading parties to hold out longer or make less favorable offers.
4. When using positional bargaining, the initial offers tend to be extreme, which can set the tone for the entire negotiation process.
5. This method is commonly used in negotiations that involve distributive issues, where resources are limited and parties compete over fixed amounts.

Review Questions

• How does positional bargaining differ from interest-based negotiation, and what implications does this have for the negotiation process?
  • Positional bargaining differs from interest-based negotiation in that it focuses on fixed positions rather than the underlying interests of the parties. In positional bargaining, parties typically make concessions based on their starting points, often leading to competitive standoffs. This can result in suboptimal outcomes and strained relationships, while interest-based negotiation promotes collaboration by encouraging parties to explore shared goals and creative solutions, which can lead to more satisfactory agreements for everyone involved.
• What are some potential drawbacks of using positional bargaining in negotiations, especially in terms of relationship dynamics?
  • The drawbacks of positional bargaining include fostering a competitive atmosphere that can damage relationships between negotiating parties. When each party is focused solely on defending their position, it can lead to misunderstandings and resentment. This approach often results in win-lose scenarios where one side feels victorious at the expense of the other, which can hinder future collaboration or trust. Additionally, positional bargaining may overlook valuable opportunities for cooperation that could benefit both sides.
• Evaluate the effectiveness of positional bargaining in different negotiation scenarios and propose alternative strategies when it might not be suitable.
  • Positional bargaining may be effective in scenarios where resources are limited or time is pressing, such as in distributive negotiations over price. However, in situations where maintaining long-term relationships is crucial or where mutual interests exist, this approach may not be suitable. In such cases, alternative strategies like interest-based negotiation or win-win approaches are more effective because they prioritize understanding underlying needs and fostering collaboration. By shifting focus from fixed positions to shared goals, parties are more likely to find creative solutions that satisfy both sides.

Related terms

Interest-based negotiation: A negotiation approach that focuses on the underlying interests of the parties rather than their stated positions, encouraging collaboration and creative solutions.

BATNA: Best Alternative to a Negotiated Agreement, which refers to the best course of action a party can take if no agreement is reached during negotiations.

Win-win negotiation: A negotiation strategy where both parties seek to achieve mutually beneficial outcomes, focusing on collaboration and problem-solving.