- slide 1 of 5
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-loose, loose-win, and loose-loose. In this approach, one party looks at the other as a partner instead of trying to corner the maximum advantage.
- slide 2 of 5
Assume a software vendor pricing a top end software program for $20000. The next alternative costs $15000 and as such, the vendor is prepared to go down to $15000 as the least acceptable settlement. Any settlement between $20000 and $15000 therefore becomes acceptable to the software vendor. Now, a company who needs the software for project implementation has a budget of only $17000, and anything beyond $17000 would make the product not worth the price for the project.
$15000 to $17000 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-loose 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 $19000. 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 $14000.
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Win-win strategies do not center on price alone. It also pays due regards to feelings. In the example quoted above, the project manager readily agreeing to an offer of $17000 might make the software vendor feel he has quoted too low, and the vendor readily agreeing for $15000 might make the project manager regret not having quoted $14000.
This negotiation strategy not only ensures both sides win, but it also provides each side with a feeling of having won. For instance, consider examples of win-win negotiations when negotiating wage and working condition. A project manager readily conceding trade union demand 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.
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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 $16000 as the absolute last price when offering $15000 to a similar company next door,or the vendor striking an agreement for $15000 and then charging $1000 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.
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- 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.
Image Credit: flickr.com/royblumenthal