Ch. 16: Negotiation Positioning

Negotiation is an art form. There are those that are gifted in this and there are others that require fine tuning it on a regular basis. Negotiation itself is all about relationships and cultivating and maintaining good rapport with all individuals involved (Mamas, 2015). Preparation is a very important aspect of negotiation, as well as an understanding of the importance of positioning. When it comes to outlining ones position there are definite drawbacks to being the first to open with an offering. This blog will discuss these drawbacks as well as any advantages that may occur from being the first to outline their position in the negotiation. 

Picture found at Unsplash @charlesduvlio

Preparation requires identifying our ZOPA (Zone of Possible Agreement), BATNA (Best Alternative to Negotiated Agreement), and an analysis of the other parties positioning (Gulati, Mayo, & Nohria, 2016). Going in blindly is not recommended as it is highly likely that your lack of preparation will leave you in an unfavorable position. Making an offer prematurely can have costly results. The text indicates that the only time a party should  make the first offer is when they believe they have sufficient information about the other party's reservation value (Gulati, Mayo, & Nohria, 2016). In other words, you are "showing your cards" and unknowingly giving away some of ones bargaining zone (Staff, 2020). This is known as anchoring, which can give too much weight on the initial number put on the table. 

Staff (2020) goes on to discuss how if one values only the economic outcome of the deal, then there is an advantage to anchoring; however, if one values satisfaction with the process more than the outcome itself then one would want to avoid the stress and anxiety of making the first offer. Some advantages to allowing the other party to counter include ones ability to counter with a high offer to help bridge the gap of your ZOPA, reject the offer all together, or to accept the offer if it meets your reservation limits (Gulati, Mayo, & Nohria, 2016). If the other party is hesitant to make an anchor offering, as they too may understand why it's not typically advisable, it may be best to anchor with a very high or very low offering depending which side of the spectrum one is trying to move the other party towards. Sometimes this can set the mood that you mean business. 

Office Negotiation Image found @pixabay

In the most ideal situation, one achieves the capability of not having to be the initial offering or anchoring party. There are far more advantages to being the party to counter, however, if one cultivates their negotiation skills all together, they will be able to start negotiations with a firm anchor offering. 

References

• Deluvio, C. (2017, November 22). person sitting in a chair in front of a man. Unsplash. https://unsplash.com/photos/rRWiVQzLm7k
• Gulati, R., Mayo, A. J., & Nohria, N. (2016). Management: An integrated approach. Australia: Cengage Learning
• Mamas, M. (2015, December 11). 5 Steps to Master the Art of Negotiation. Entrepreneur. https://www.entrepreneur.com/article/253074
• Office Negotiation Image. (2020). Pixabay. https://pixabay.com/illustrations/office-business-businessmen-227170/
• Staff, P. (2020, July 6). Negotiation Techniques: The First Offer Dilemma in Negotiations. PON - Program on Negotiation at Harvard Law School. https://www.pon.harvard.edu/daily/dealmaking-daily/resolving-the-first-offer-dilemma-in-business-negotiations/