Parties preparing for negotiation may need the term “positional bargaining” explained. Positional bargaining is a negotiation strategy used to drive the bargain and attempt to secure a possible value from a bargaining session. Many people view bargaining as a harsh and poor form of negotiation. While this style of negotiation often results in win-lose situations and encourages harsh bargaining, some situations may present themselves where positional bargaining may be an appropriate or necessary negotiation strategy.
Defining and understanding the term and its counterparts will help negotiators know when and how to use this style and ensure that they use it correctly. This article will walk through the concept, compare it to principled negotiation, highlight issues, and end with some tips.
Defining Positional Bargaining
It is an adversarial approach to negotiation that seeks to claim value rather than create it. Positional bargaining holds onto a position of what a party wants and refuses to consider underlying interests while arguing for that position. Typically, the parties will start far apart and work their way together. The strategy ignores surrounding contexts to accomplish the goal. To better define the term, several characteristics further demonstrate its essential aspects of it:
Adversarial
Other common forms of negotiation strategies seek to encourage the parties to collaborate for a result. However, positional bargaining is inherently adversarial. The parties see each other as a competitor trying to take away from their value. There is no collaboration in this type of bargaining.
Extreme Opening Offers
The parties in the environment will often begin the conversation with extreme opening offers. These will often be very high or very low to ensure that the point where the parties meet is at the target.
Outcome Focused
The parties in a positional negotiation will be more focused on their desired outcome over the overall effects and consequences of the way they are approaching the goal. There is little room to discuss any options outside trading offers until an agreement is reached.
Interest Ignorance
In other forms of negotiation, the parties will often take about their interests or the underlying wants and needs that are driving their goals. This helps the parties identify other issues that may need to be addressed. This type of bargaining is different in that the underlying interests are not discussed and are, therefore, ignored.
Distrust
A common characteristic is that the parties have a distrust of each other, either with their honesty or with the person as a whole. This can often lead to further issues and a breakdown in the relationship between the parties. If only one party is attempting to use positional bargaining, the other party may be targeted with harsh or demeaning remarks, which may cause further distrust.
When participating in or observing a negotiation, if the characteristics above are present, one or both parties will likely use a positional bargaining method to approach the negotiation. It is not hard to identify this type of negotiation, and many people will have an aversion to negotiation because of these characteristics.
Types of Positional Bargaining
Blended:
Positional bargaining may be combined with other forms of bargaining in a complex or multi-issue negotiation. This will often happen when one party is fixed on the goal for one aspect or issue of the negotiation. These types will not usually have as severe of consequences because there is more room to bargain with the person on other issues, so the party without a strong goal on that issue may feel as though they can find value elsewhere.
Soft:
Soft positional bargaining is a type of positional bargaining that seeks to accommodate the other person’s position by attempting to maintain a friendly environment and relationship. Soft positional bargaining seems less insidious than hard positional bargaining because the person will be ready and willing to surrender parts of their position to keep the other happy. While this may not seem like positional bargaining on the surface, the goal that the person is seeking to achieve is to preserve the relationship at all costs, even if it is unhealthy.
Hard:
Straight positional bargaining is the true positional bargaining that many people imagine when they think of negotiation. It will be two parties starting far apart and working their way toward each other, losing value in the process.
This can happen in single-issue disputes, with the parties’ focus on that one issue, and in multi-issue disputes, where the parties treat each issue as a silo and do not negotiate for them concurrently. Identifying the type will help a party either work with or overcome the adversarial aspect of positional bargaining to achieve the desired result.
Comparing Positional Bargaining and Principled Negotiation:
Another way to better understand positional bargaining is to compare it to a fairly different style, known as principled negotiation. The principled negotiation theory was coined by Roger Fisher and William Ury, and the approach focuses on creating a holistic solution to the problem rather than focusing solely on the outcome of the dispute.
This approach defines the process through four simple rules, as illustrated by Fisher and Ury. To compare positional bargaining and principled negotiation, we will outline the differences in each of these rules. The differences include:
Separating People from Problems:
Principled negotiation separates the people presenting their opinions or interests from the problems that are presented with their position or from the overall problem. This allows the parties to build trust and a good collaborative environment. Positional negotiation tends to conflate the problem with the person, which often leads to disagreements or further adversarial behavior.
The Focus of Negotiation:
Principled negotiation will focus on the interests that are underlying the goals and help create value for all the parties. This leads to a deeper understanding of the issues and encourages the parties to find creative solutions to the problems that are presented. Positional bargaining, on the other hand, ignores these interests, focuses only on the position of the parties, and pays little to no attention to any other factors in the negotiation, often creating narrow agreements.
Options:
Principled negotiation exists to generate options for an agreement. The goal of this type of negotiation tactic is to listen to interests and people to determine what the best option is to make an agreement beneficial for all parties. Positional bargaining will only be focused on achieving the position that is at the front of their strategy. This means that there are no options other than what a party may get further out of the negotiation process.
Criteria:
Principled negotiation relies on objective criteria to determine the best option among the alternatives. This is to avoid too much reliance on the subjective wants of one party. Positional bargaining has no such protection and will often encourage the parties to pursue what is best for them and their position.
Goal:
Aside from the rules, the goal of principled negotiations is to identify options and select an option that is mutually beneficial for the parties. Conversely, positional bargaining approach seeks to attain the most value for oneself, regardless of what happens for others.
Comparing these two types of negotiation strategies makes it fairly easy to see the differences from the very beginning and the motivation entering the negotiation to the final result. Positional bargaining does take a more aggressive and harsh tone, and while principled negotiation is most often preferred, there are situations where positional negotiation will be best. Understanding the risks further helps this decision.
The Issues with Positional Bargaining:
As stated above, positional bargaining is often a harsher, less personal form of negotiation. Because of this and the reluctance to consider anything outside their position, there are a few issues that may arise when a party is intent on using positional bargaining. These issues can lead to difficulty negotiating, a breakdown in communication, and no agreement reached by the parties. Identifying these issues will help the parties spot them when they arise and attempt to avoid further damage.
Additionally, many of these issues are caused or exacerbated by poor negotiation skills or preparation. Some common issues include:
Lose-Lose Agreements:
Occasionally, when the parties practice positional bargaining in a negotiation, they may end up with a lose-lose agreement. Because both parties are focused only on the position they want, they may not take the time to realize that they have lost more value than they intended in the bargaining process while taking more value than the other side wanted, leaving both parties unsatisfied with the outcome.
Ineffective Agreements:
Another issue that may result from positional bargaining is that the parties may reach an ineffective agreement given their situation. They may sometimes be so focused on achieving or obtaining their goal that they do not realize the full consequences of what they are fighting for.
Unnecessarily Long:
Because of the focus on refusing to concede and starting with extreme positions, it often takes parties a long time to work their way to an agreement. Without any collaboration and giving the smallest concessions each time, the parties are stuck trading tiny increments until the offers align or are in a place where they can split the difference.
Relational Harm:
When the parties are so focused on achieving their goal that they do not consider other factors, they may harm their ongoing relationship with the other party, either by what they say or by offending them with an offer. This is especially true in contract negotiations, where the parties adopt positional bargaining. The parties often fail to see that they are harming the relationship they seek to create.
Other issues may arise in positional bargaining, but these are the major issues that may arise when the parties to negotiation choose to use positional bargaining instead of working together to create a satisfactory result.
When to Use Positional Bargaining
While positional bargaining has some serious risks, there are situations where the parties may want to implement it to avoid some of the pitfalls that could arise in more principled negotiation. Understanding the reasons behind the necessity is the most important aspect of the choice because it will help steer the negotiation and inform parties of when it may be going awry. These situations include:
Conflicting Interests
Principled negotiation is focused heavily on the parties sharing interests and finding solutions that address these interests to add value to the agreement. However, in some situations, the parties will have opposing interests that will cause an interest-based approach to go off track. Positional bargaining may avoid these situations and can help the parties to focus solely on the outcome to ensure that the negotiation stack is on track.
Power Imbalances
While it may seem counterintuitive, occasionally positional bargaining may be beneficial in a situation with a power imbalance, especially if the party initiates it with less power. Doing so can give them a better position and can help them avoid being swayed or bullied into a position that they do not want to be in. This can be difficult, but it does help avoid the issues that may arise from a discussion of the underlying interests when they may be used to try and sway a party.
While these situations can allow the parties to reach an agreement that works without issues around interests, they need to be approached with care and consideration of the situation given the risks of positional bargaining.
Conclusion
Many people picture positional bargaining when they think of negotiations. It involves two parties who are miles apart in their offers and nitpick and move in tiny increments until they reach an agreement somewhere in the middle. However, the parties likely do not set out to be extreme or nitpicky; they end up with that result when they enter a negotiation with only the goal of securing their position.
It can be further carried out when the parties refuse to consider the interests affecting the situation and power forward on their position. While there are situations where positional bargaining may be a good option to help protect interests, hard positional bargaining will carry some risks that need to be addressed. Positional bargaining is an avenue to resolve a dispute. Still, it is an avenue that will need to be considered with all the potential pitfalls to determine if the benefits are worth the risks.
To learn more about positional bargaining, negotiations, and more, contact ADR Times today!
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