A negotiation target is defined as the aim for a negotiation at its conclusion, sometimes referred to as an ‘aspiration’. Negotiation ranges are the best and worst case scenario that the negotiator is prepared to agree. The worst case scenario is often referred to as the bottom line, or a ‘resistance point’.
Targets in negotiation strategy
The spread between the best and worst scenarios is the zone of potential agreement. Both parties will identify a zone of agreement and, for a settlement to be reached in the negotiation, there will obviously be an overlap in these zones.
The different variables to be used in the negotiation can be identified through the types of analyses in the negotiation process and preparation. In identifying targets for these variables, however, there are a number of factors to bear in mind:
- Targets need to be related to stated objectives. In negotiation, you need to think about the other party. It is, however, important that the negotiator does not lose sight of their own position.
- Target setting requires ‘packaging’ variables together to create a bargaining mix. Thus preparation needs to evaluate the variables in different mixes.
- Target setting assumes understanding throwaways’ and ‘trade-offs’ – these are the variables identified as relatively unimportant to the purchaser but which can be used to lever more important variables from the supplier. From this review, it is evident that the variables for both parties need to be prioritized. Whilst it may be relatively straightforward for the purchaser to undertake this for the organization, it is true to say it will be more difficult to undertake the task for the supplier. Similarly, identifying a bargaining mix using high and low priority” variables should be undertaken for both parties. It is also important to attempt to identify the resistance points of the variables for the other party, that is, the point beyond which they will walk away from the negotiating table.
Bargaining position in negotiation strategy
Once the issues to be discussed are assembled, It is important to consider the mutual interests of both parties. The fact that parties may have more than one type of interest in the negotiation often results in there being differences between them. Interests stem from human values, can change over time, and are difficult to define. Positions, on the other hand, are best separated from the problem . By separating the negotiators’ underlying positions from the problem, it is possible to build more integrative solutions for the parties by focusing more on their interests. For example, the position of a negotiator may be that they want to achieve a given price, but the underlying motivation, that is, their interest, is that they will receive a bonus for achieving a target at the end of the month for the which the deal is key. In contrast to interests and positions, an alternative focus may be on the role of power. The balance of power between buyers and sellers has a major influence on negotiation process and outcomes.
Negotiators may influence outcomes by manipulating dependencies to create a relational balance or imbalance between the parties . Typically, an imbalance of power is characteristic of distributive negotiations while a more equal balance is characteristic of integrative negotiations . Power imbalance creates competitive advantage, enabling the superior party to exert some leverage over the subordinate party, such as that typically seen in retailing . The existence of an imbalance does not, however, automatically mean the superior party will exert leverage; indeed, flexibility and fairness in negotiations have an important role to play.