Any business, contract, or personal relationship can substantially benefit from having the skill to negotiate. The ability to negotiate effectively could be what makes the difference between accomplishment and failure, whether you are attempting to clinch a commercial deal, negotiate a wage, or come to an agreement with your partner.
Positional bargaining, commonly referred to as positional negotiation, is one of the most frequently employed negotiation techniques. This approach involves taking an aggressive position on a certain topic or demand and using it as the foundation of the negotiation. However, this strategy has both benefits and drawbacks and depending on the circumstance, it may or may not be beneficial.
We are going to dive deeper into the concept of positional bargaining and examine its benefits and drawbacks in this blog article. We shall contrast it with interest-based bargaining, a different strategy for negotiating that emphasizes determining and resolving the interests of both sides, as well.
We will additionally provide guidance on when to utilize positional negotiating and when to employ alternate tactics. We will also offer some advice on how to employ positional bargaining successfully, which can aid you in getting the result you want from your talks.
We will wrap up by introducing the Shapiro Negotiations Institute, which provides seminars and other resources to assist businesses improve their negotiating abilities and produce better outcomes.
What Is Positional Bargaining?
The Positional bargaining definition is, a negotiating tactic in which both sides adopt a certain position on a particular subject and attempt to bargain from that position. This tactic, where one side strives to maximize their advantages while reducing the other party’s losses, is also known as distributive bargaining. Positional negotiating usually involves two parties competing to get the greatest deal for themselves during the negotiation process. Negotiations carry on until all sides come to a decision that satisfies their objectives. During this time, each party makes demands and compromises based on their perceived strengths
and limitations.
Interest-Based vs. Positional Bargaining
In interest-based negotiating, often referred to as integrative bargaining, both sides attempt to define their interests and collaborate to create a win-win resolution. Maximizing benefits for both parties is the aim of this kind of negotiation. In interest-based bargaining, both sides work together to come up with solutions that satiate their respective requirements. In commercial partnerships, mediation, and interpersonal negotiations, this kind of negotiation tactic is frequently employed.
Advantages of positional bargaining
Positional negotiating can be a speedy and effective negotiation tactic, which is one of its key benefits. Negotiations can move more quickly when both parties are adamant about a certain point, since less time is spent debating potential solutions. When both sides are aware of their goals and the worth of the objects being negotiated, positional bargaining can be helpful as well. It may be simpler to come to a mutually beneficial arrangement if both sides are clear on what they want and how much it is worth.
Disadvantages of positional bargaining
The fact that positional negotiating frequently results in a lose-lose situation is one of its key drawbacks. Finding a middle ground and coming to a mutually beneficial agreement can be challenging when both parties are negotiating aggressively. One partner can feel exploited as a result, which could cause resentment and strain in the relationship. When both sides are unwilling to compromise or make compromises, positional negotiating may also prove to be a fruitless tactic. In these circumstances, discussions may stall out and result in no resolution.
Advantages of Interest-Based bargaining
The fact that interest-based negotiation results in a win-win solution is one of its key benefits. An agreement that benefits both parties can be reached when the parties collaborate to define their interests and come up with original solutions. When there is a long-term cooperation or relationship between the parties, interest-based negotiating can also be helpful. It might help to develop trust and deepen the relationship between the parties if they cooperate to find a solution.
Disadvantages of Interest-Based Bargaining
Interest-based bargaining’s key drawback is that it can be time-consuming and labor-intensive. More time may be needed than with positional negotiation when both sides are attempting to define their interests and come up with a novel solution. When both sides are unwilling to make concessions or when there is a considerable power disparity between the parties, interest-based negotiation may also be fruitless.
When to Use Each Strategy
Positional and interest-based negotiations each have benefits and drawbacks, and the ideal course of action will vary depending on the circumstances.
Positional negotiation may be the ideal tactic to employ when there is a considerable power disparity between the parties. Due to its size and resources, a firm, for instance, may have more negotiation power when dealing with a small supplier. In this case, the business may employ a positional negotiation approach to increase its gains and reduce the supplier’s losses.
Interest-based negotiation may be the most effective tactic to employ when both parties have a long-term commitment or partnership. For instance, two businesses may desire to protect their long-standing connection if they are discussing a joint venture. Interest-based negotiation can help the parties in this situation establish confidence and improve their
relationship.
It’s vital to remember that in some circumstances, combining the two tactics may be suitable. In a labor dispute, the union might, for instance, utilize a positional bargaining strategy to secure better pay and benefits for its members while also utilizing an interest-based bargaining strategy to provide stable working conditions.
The most effective approach to take ultimately depends on the particulars of the discussion. It’s critical to conduct a thorough analysis of the problem and decide on the course of action that would most likely lead to a win-win solution.
Guidelines for Effective Positional Negotiation
- Be aware of your BATNA: If you and the other party are unable to come to an agreement, your BATNA, or Best Alternative To a Negotiated Agreement, is your best option. When practicing positional bargaining, knowing your BATNA is essential since it serves as a guide for what you would accept during the negotiation. It might be time to end the negotiation if the other party is unable to reach or surpass your BATNA.
- Establish a high anchor: In positional negotiating, the initial offer made usually acts as the negotiation’s anchor point. Setting a high anchor point that is both reasonable and justifiable is therefore crucial. This will give you more wiggle room throughout the negotiation and improve your chances of getting a good result.
- Make modest compromises: It’s crucial to make modest concessions when giving in. By doing this, you can keep the situation under control and stop the other party from taking advantage of you. Additionally, it will demonstrate to the opposing party your willingness to reach a compromise.
- Remain assertive and self-assured: Self-assurance is essential in positional negotiation. While remaining respectful and professional, you must be firm and stand by your position. The other person can try to take advantage of you if you come off as weak or unsure.
- Be ready to walk away: Lastly, if the other side does not agree to your demands, it is crucial to be ready to leave the discussion. Understanding your BATNA will be useful in this situation. It could be time to conclude the negotiation and explore other choices if the other side is unable to offer a better option than your BATNA.
We will look at a practical illustration of positional bargaining in this case study. A new collective bargaining agreement is being negotiated between a corporation and a labor organization. Wages, benefits, and working conditions are some of the major themes that are discussed during the negotiating process. We will look at how the parties employed positional bargaining to accomplish their goals through the case study and the results of their negotiation strategies.
Case Study
Samantha was offered a job as a marketing manager for a large company. Even though she was delighted by the job offer, she wasn’t happy with the starting pay. The initial compensation proposal was $90,000 annually, but Samantha believed that her background and credentials called for a wage of at least $100,000.
Samantha decided to use positional bargaining to negotiate her salary. She concentrated on positioning herself as a strong candidate for the position since she knew she had to persuade the employer that she was worth more than their initial offer. She emphasized her background, credentials, and prior accomplishments that were pertinent.
Samantha argued for a larger wage on her first meeting with the employer to discuss the contract. She clarified that given her qualifications and expertise, her market value was at least $100,000 annually. In response, the corporation made a counteroffer of $92,000 a year, claiming that this was the maximum they were able to give.
Samantha declined the offer, saying she couldn’t accept anything less than a yearly salary of $100,000. She then advised that in order to make up for the pay gap, the company think about providing extra advantages like longer vacations or flexible work schedules.
After several rounds of haggling, the business decided to pay Samantha $98,000 annually, in addition to other perks including flexible hours and four weeks of paid vacation. Samantha accepted the deal and expressed her satisfaction with how the negotiations turned out.
In this instance, Samantha used positional bargaining to negotiate her salary. She presented herself as a strong candidate and advocated persuasively for a higher compensation package in light of her credentials and expertise. Samantha persisted despite the company’s resistance, and she eventually got the salary and extra benefits she desired. By using this strategy effectively, Samantha was able to secure a better deal for herself.
Conclusion
Positional bargaining is a powerful negotiation strategy that can be used in various scenarios. If you use it properly, it will support you in successfully and efficiently achieving your goals. When using positional bargaining, it is essential to be prepared, flexible, and willing to compromise to reach a mutually beneficial agreement. At Shapiro Negotiations Institute, we can provide negotiation training to further develop your skills and avoid or take advantage of positional bargaining. To learn more about our training programs and how we can assist you in getting better results from your conversations, get in contact with us now.
