A negotiation strategy that ranks as the most popular and accepted way of conducting business negotiations is the win-win strategy. The examples of win-win negotiations illustrate the concept as one where both sides not only win, but also feel that they have won.
Negotiation involves a dialogue between two or more parties aimed at striking an agreement that resolves differences.
Traditional negotiations take the positional bargaining approach, where each side in the negotiation process tries to gain favorable terms with scant regards for the other side, and which naturally meet resistance from the other side. Negotiations end when all parties identify a common ground and reach an agreement on this basis.
The win-win negotiation approach is a newer approach to negotiation, and it is the preferred option among the other negotiation styles of win-lose, lose-win, and lose-lose. In this approach, one party looks at the other as a partner instead of trying to corner the maximum advantage.
Assume a software vendor pricing a top end software program for $20,000. The next alternative costs $15,000, so the vendor is prepared to go down to $15,000 as the least acceptable settlement. Any settlement between $20,000 and $15,000 therefore becomes acceptable to the software vendor. Now, a company who needs the software for project implementation has a budget of only $17,000, and anything beyond $17,000 would make the product not worth the price for the project.
$15,000 to $17,000 is the common ground among the parties involved in the negotiation, and a win-win negotiation would reach a settlement anywhere within this bracket. A win-lose negotiation on the other hand would result in one side trying to exploit the weakness or vulnerability of the other party. For instance, if the software vendor finds that the company desperately needs the software to implement the project and is not aware of the alternative provided by the competitor, he may not budge below $19,000. Similarly, the project manager may try to give the vendor a the impression of developing the software in-house and try to net the software for say $14,000.
The Power of Emotion
Win-win strategies also involve the feelings of either party. In the example quoted above, the project manager readily agreeing to an offer of $17,000 might make the software vendor feel he has quoted too low, and the vendor readily agreeing for $15,000 might make the project manager regret not having quoted $14,000. They walk away feeling as if they have not won.
Even though a deal is good to you, you should take some time before submitting your answer. For example, consider a worker negotiating wage and working conditions. A project manager readily conceding trade union demands for wage increase or for reduced working hours to mitigate stress creates an impression of the workers getting a raw deal.
The project manager allowing for the same after much deliberation, analysis, and study creates the impression of a fair deal. Similarly, the project manager agreeing to a perfect proposal of project deliverables without any comments might lead to project owners developing an impression that the timelines are too light, causing them to push for additional work or bring forward the deliverables.
A third dimension of win-win negotiation is that of valuing relationships based on trust and credibility. This entails honoring commitments and having an open approach.
In the example of the software vendor above, the vendor quoting $16,000 as the absolute last price when offering $15,000 to a similar company next door,or the vendor striking an agreement for $15,000 and then charging $1,000 extra during billing for an unavoidable add-on not mentioned at the time of negotiations are both instances of unethical and untrustworthy behavior. Similarly, a project manager engaged in win-win negotiation with workers on project deliverables understands the workers personal commitments and quality of life requirements and does not try to squeeze in more work to close the project ahead of schedule.
Effective win-win negotiations are the cornerstone of successful deals and help establish long-lasting mutually beneficial relationships.
- Michael Schatzki. “The Win-Win Negotiation.” http://www.sideroad.com/Negotiation/win-win-negotiation.html. Retrieved April 21, 2011.
- University of North Carolina. “Win-Win Basics.” http://www.ils.unc.edu/daniel/131/131notes/1024-winwin.html. Retrieved April 21, 2011.
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