Business people negotiate constantly within their organizations, with superiors, subordinates, colleagues, customers and clients, suppliers and vendors. Most conflicts and disputes are resolved through negotiation as well. People gain reputations for their bargaining styles and effectiveness. They are said to be “hard bargainers” or “fair and reasonable,” or “easy to work with.” Is one bargaining style more effective than another? Is a tough, competitive stance likely to produce better results than a more accommodating, cooperative stance? The answer surprises most people: tough bargainers usually finish last.
Negotiating styles can be characterized as either competitive or cooperative. Competitive negotiators seek to maximize their interests at the expense of the other party. Competitive negotiators tend to be adversarial, insincere, and manipulative. They use threats and psychological pressure against the other party. They fear being exploited, but exploit their counterparts. They seek maximum information from the other side, and minimize disclosure of their information. Negotiation is viewed as a competition to be won or lost.
Cooperative negotiators, on the other hand, seek reasonable results for both sides. They desire that their interests and the interests of the other side be satisfied to the greatest extent possible. They tend to be courteous and sincere. They rarely threaten, and they use reason and logic to persuade the other side. Cooperative negotiators look for ways to expand the resources between the parties. They view negotiation as a joint problem to be solved, rather than a game to be won or lost.
Many people believe that a competitive negotiation style is more effective than a cooperative style. This belief is not supported by research studies. In the early 1980s, a study of lawyers in Phoenix and Denver established that 59% of cooperative negotiators and 25% of competitive negotiators were effective. Interesting, 3% of the cooperative negotiators and 33% of the competitive negotiators were considered ineffective. A similar study ten years later looked at negotiation effectiveness in Milwaukee and Chicago. This study found that only 9% of competitive negotiators were effective, while 54% of cooperative negotiators were effective. Like the early study, only 3% of the cooperative negotiators were ineffective, while 53% of the competitive negotiators were ineffective. Being cooperative in negotiation seems to be more effective than being mean-spirited and competitive. Why might this be?
Imagine that you are faced with a counter part with a reputation for leaving nothing on the table. Your counterpart starts the negotiation with a completely unrealistic set of requests, gives you little justification for the requests, and demeans you personally. Aside from becoming angry at the rudeness and disrespect, your reaction would be to protect yourself against exploitation and give tit for tat. The likelihood of an efficient negotiation leading to a solid agreement will be greatly reduced.
Now change the circumstance. You are visited by your counterpart. After pleasantries, she expresses what she believes your interests to be, then states her company’s interests. She indicates a desire to find a good agreement for both companies and makes an opening proposal that is reasonable and fair. More often than not, you will react in kind, exploring the needs of both companies and looking for ways to satisfy those needs with creative problem-solving. This negotiation will more likely lead to an efficient, lasting agreement.
Finally, consider a third situation. You visit your counterpart. Following my thesis, you express what you believe to be the respective interests of the companies. You follow this with a proposal that is objectively reasonable and fair. To your complete surprise, your counterpart responds to the proposal with disdain and makes an unreasonable, unworkable, entirely one-sided counter offer. What do you do? You can revert to a competitive style of negotiation, knowing that the process will be less efficient and more stressful. Alternatively, you can be firm on your proposal, remain unruffled, and engage your counterpart in discussion. By seeking to understand and by focusing on interests, you can move a competitive negotiator to a cooperative stance.
The challenge in each of these situations is recognizing what you are facing and bringing the appropriate negotiation skills to bear on the problem. Cooperative negotiation is a subtler skill that must be learned and practiced. The ability to turn a competitive, adversarial counterpart into a team player requires sensitivity, judgment, patience, and a firm commitment to cooperative bargaining. If managed successfully, the payoff will be a balanced, fair agreement. Without these skills, your only choice is to protect yourself against predation by becoming a predator yourself. The research indicates that reaching a fair agreement will be greatly reduced and the probability of an impasse heightened. Thus, if you don’t have interest-based negotiation skills, you may wish to consider getting some practical training to develop them.
By Doug Noll