Critically discuss the meaning and major characteristics of position bargaining
INTRODUCTION
Positional bargaining is a negotiation strategy that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. The classic example of positional bargaining is the haggling that takes place between proprietor and customer over the price of an item.
The customer has a maximum amount she/he will pay and the proprietor will only sell something over a certain minimum amount. Each side starts with an extreme position, which in this case is a monetary value, and proceeds from there to negotiate and make concessions. Eventually a compromise may be reached. For example, a man offers a vendor at the Shoprite 100,000= for an item he has for sale. The vendor asks for 300,000= so the customer offers 150,000=. The merchant then says he will accept 250,000= but the customer says the highest he will go is 200,000=. The vendor agrees that 200,000= is acceptable and the sale is made at 200,000=. So the customer pays100, 000= more than he originally wanted and the vendor receives 100,000= less.
Positional bargaining tends to be the first strategy people adopt when entering a negotiation. This is often problematic, because as the negotiation advances, the negotiators become more and more committed to their positions, continually restating and defending them. A strong commitment to defending a position usually leads to a lack of attention to both parties' underlying interests. Therefore, any agreement that is reached will probably reflect a mechanical splitting of the difference between final positions rather than a solution carefully crafted to meet the legitimate interests of the parties.
Therefore, positional bargaining is often considered a less constructive and less efficient strategy for negotiation than negotiation. Positional bargaining is less likely to result in a win-win outcome and may also result in bad feelings between the parties, possibly arising out of the adversarial, "you vs. me" approach or simply a result of one side not being truly satisfied with their end of the outcome. Positional bargaining is inefficient in terms of the number of decisions that must be made. The example above demonstrates the back-and-forth nature of positional bargaining. The more extreme the opening positions are, the longer it will take to reach a compromise.
Despite criticism of positional bargaining, supporters of this negotiation strategy do exist as it has been argued that consideration of all underlying interests in a negotiation process is unnecessary. In fact it may sometimes be counterproductive. This is because of the distinction and relationship between issues and interests.
Issues are universal, they are shared between each party in a conflict. Interests, on the other hand, are specific to each party: what the buyer of the item in the market wants is a bargain, what the seller wants is profit. This relationship is quite simple.
The problem arises when the issue at hand stirs up dramatically opposing interests between the parties, a situation in which it would be very difficult to bring them into agreement. If this is the case, it may sometimes be better to negotiate in terms of positions and go for a compromise. For example, two nations are in a dispute over water rights.
However, they also differ on many other issues, including trade, immigration, religion, and politics. Broadening the debate to include these underlying interests will only polarize the sides further. In this case it may be much easier to reach agreement if the two sides focus on the smaller issue of water, and set aside their other concerns. This involves negotiating in terms of positions. This may help the sides reach a compromise without creating any larger, interest-based conflicts. So, for issues that involve extremely conflicting underlying interests, it may be best to just focus on positions and aim for compromise.
There are various characteristics of positional bargaining hereunder are some major ones;
First of all the initial large demand is high or large opening position used to educate other parties about what is desired or to identify how far they will have to move to reach an acceptable settlement range.
Secondly is the characteristic of low level of disclosure where secretive and non-trusting behavior to hide what the settlement range and bottom line are. The main goal here is to increase benefits at expense of other.
Further more is the characteristic of bluffing as the strategy used to make negotiator grant concessions based on misinformation about the desires, strengths or costs of another.
Another related characteristic is that of threats as a strategy used to increase costs to another if agreement is not reached.
Also the characteristic of incremental concessions surfaces where small benefits are awarded so as to gradually cause convergence between negotiators' positions.
Finally is the characteristic of hard on people and problem where often the other negotiator is degraded in the process of hard bargaining over substance. This is a common behavior that is not necessarily a quality of or desirable behavior in positional bargaining.
Criticism of positional bargaining
The positional approach to negotiation, in which the process is viewed as a zero-sum game, does greater damage to the positional bargainer than other parties. A positional bargainer has locked himself/herself into position, moving out of that position will most likely yield a loss of face. Even worse, moving away from a position may well diminish the credibility of the positional bargainer so substantially that her/his reputation suffers.
Positional bargainers, by taking that approach, are making it clear that they do not intend to 'play fair' in their negotiations with others. People who feel they have been dealt with unfairly are going to be reluctant to enter into agreements or, if they must do so, they will be on the lookout for opportunities to breach unfairly-reached agreements they have felt forced to make. Since successful negotiation is a process by which people reach agreements each party is ready, willing, and able to fulfill, when there is an unfair process yielding an agreement a party is neither ready, nor willing and perhaps not able to fulfill, that is a failed negotiation.
The long term consequences of using a positional approach include greater difficulty in finding people willing to negotiate with you, a reputation for narrowness and closed-mindedness, and thus great difficulty establishing and maintaining the reciprocity which is fundamental to rewarding human relationships.
Finally, positional bargaining only works in the short term and during times of crisis. Hard positional bargaining beyond the system´s perceived crisis timeframe damages relationships and infrastructure internally and externally. Organizations and systems seek democratic collaborative ideals where participants expect participation regardless of policy or rules that are in place. In time, the executive loses credibility and strains relationships through unilateral negotiation. No matter how reasonable the solution may be, time wears away systemic and organizational buy in when partners are denied participation.
Within these economic and politically uncertain times, this may offer an important lesson to be remembered by the "fix it" manager. You can put your nose to the grindstone for a while and yes, positional bargaining can work but only within a set time frame. If you hold your nose to the grindstone for too long, it is going to rub off. Remember in an increasingly collaborative society, what you do is important, but over the long term it is how you have done it that matters.
CONCLUSION
The positional approach to negotiation, in which the process is viewed as a zero-sum game, does greater damage to the positional bargainer than other parties. A positional bargainer has locked himself/herself into position, moving out of that position will most likely yield a loss of face. Even worse, moving away from a position may well diminish the credibility of the positional bargainer so substantially that her/his reputation suffers.
Positional bargainers, by taking that approach, are making it clear that they do not intend to 'play fair' in their negotiations with others. People who feel they have been dealt with unfairly are going to be reluctant to enter into agreements or, if they must do so, they will be on the lookout for opportunities to breach unfairly-reached agreements they've felt forced to make. Since successful negotiation is a process by which people reach agreements each party is ready, willing, and able to fulfill, when there is an unfair process yielding an agreement a party is neither ready, nor willing and perhaps not able to fulfill, that is a failed negotiation.
The long term consequences of using a positional approach include greater difficulty in finding people willing to negotiate with you, a reputation for narrowness and closed-mindedness, and thus great difficulty establishing and maintaining the reciprocity which is fundamental to rewarding human relationships.
REFERENCES
Creighton, J, Jerome Delli, P, (1998): Public Involvement and Dispute Resolution – Volume 1: IWR Research Report.
Langton, S. (1996): An Organizational Assessment of the U.S. Army Corps of Engineers in regard to Public Involvement Practices and Challenges, US Army Engineers Institute for Water Resources, IWR Working Paper 96-ADR-WP-9, 1996.
Moore, C, W.(1986): The Mediation Process: Practical Strategies for Resolving Conflict, Jossey-Bass Publishers.
Susskind, L, McKearnan, S.(1999): The Consensus Building Handbook: A Comprehensive Guide to Reaching Agreement, Sage Publications.
www.orionconsult.co.in/positional-bargaining.html(22/07/2011)
Positional bargaining is a negotiation strategy that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. The classic example of positional bargaining is the haggling that takes place between proprietor and customer over the price of an item.
The customer has a maximum amount she/he will pay and the proprietor will only sell something over a certain minimum amount. Each side starts with an extreme position, which in this case is a monetary value, and proceeds from there to negotiate and make concessions. Eventually a compromise may be reached. For example, a man offers a vendor at the Shoprite 100,000= for an item he has for sale. The vendor asks for 300,000= so the customer offers 150,000=. The merchant then says he will accept 250,000= but the customer says the highest he will go is 200,000=. The vendor agrees that 200,000= is acceptable and the sale is made at 200,000=. So the customer pays100, 000= more than he originally wanted and the vendor receives 100,000= less.
Positional bargaining tends to be the first strategy people adopt when entering a negotiation. This is often problematic, because as the negotiation advances, the negotiators become more and more committed to their positions, continually restating and defending them. A strong commitment to defending a position usually leads to a lack of attention to both parties' underlying interests. Therefore, any agreement that is reached will probably reflect a mechanical splitting of the difference between final positions rather than a solution carefully crafted to meet the legitimate interests of the parties.
Therefore, positional bargaining is often considered a less constructive and less efficient strategy for negotiation than negotiation. Positional bargaining is less likely to result in a win-win outcome and may also result in bad feelings between the parties, possibly arising out of the adversarial, "you vs. me" approach or simply a result of one side not being truly satisfied with their end of the outcome. Positional bargaining is inefficient in terms of the number of decisions that must be made. The example above demonstrates the back-and-forth nature of positional bargaining. The more extreme the opening positions are, the longer it will take to reach a compromise.
Despite criticism of positional bargaining, supporters of this negotiation strategy do exist as it has been argued that consideration of all underlying interests in a negotiation process is unnecessary. In fact it may sometimes be counterproductive. This is because of the distinction and relationship between issues and interests.
Issues are universal, they are shared between each party in a conflict. Interests, on the other hand, are specific to each party: what the buyer of the item in the market wants is a bargain, what the seller wants is profit. This relationship is quite simple.
The problem arises when the issue at hand stirs up dramatically opposing interests between the parties, a situation in which it would be very difficult to bring them into agreement. If this is the case, it may sometimes be better to negotiate in terms of positions and go for a compromise. For example, two nations are in a dispute over water rights.
However, they also differ on many other issues, including trade, immigration, religion, and politics. Broadening the debate to include these underlying interests will only polarize the sides further. In this case it may be much easier to reach agreement if the two sides focus on the smaller issue of water, and set aside their other concerns. This involves negotiating in terms of positions. This may help the sides reach a compromise without creating any larger, interest-based conflicts. So, for issues that involve extremely conflicting underlying interests, it may be best to just focus on positions and aim for compromise.
There are various characteristics of positional bargaining hereunder are some major ones;
First of all the initial large demand is high or large opening position used to educate other parties about what is desired or to identify how far they will have to move to reach an acceptable settlement range.
Secondly is the characteristic of low level of disclosure where secretive and non-trusting behavior to hide what the settlement range and bottom line are. The main goal here is to increase benefits at expense of other.
Further more is the characteristic of bluffing as the strategy used to make negotiator grant concessions based on misinformation about the desires, strengths or costs of another.
Another related characteristic is that of threats as a strategy used to increase costs to another if agreement is not reached.
Also the characteristic of incremental concessions surfaces where small benefits are awarded so as to gradually cause convergence between negotiators' positions.
Finally is the characteristic of hard on people and problem where often the other negotiator is degraded in the process of hard bargaining over substance. This is a common behavior that is not necessarily a quality of or desirable behavior in positional bargaining.
Criticism of positional bargaining
The positional approach to negotiation, in which the process is viewed as a zero-sum game, does greater damage to the positional bargainer than other parties. A positional bargainer has locked himself/herself into position, moving out of that position will most likely yield a loss of face. Even worse, moving away from a position may well diminish the credibility of the positional bargainer so substantially that her/his reputation suffers.
Positional bargainers, by taking that approach, are making it clear that they do not intend to 'play fair' in their negotiations with others. People who feel they have been dealt with unfairly are going to be reluctant to enter into agreements or, if they must do so, they will be on the lookout for opportunities to breach unfairly-reached agreements they have felt forced to make. Since successful negotiation is a process by which people reach agreements each party is ready, willing, and able to fulfill, when there is an unfair process yielding an agreement a party is neither ready, nor willing and perhaps not able to fulfill, that is a failed negotiation.
The long term consequences of using a positional approach include greater difficulty in finding people willing to negotiate with you, a reputation for narrowness and closed-mindedness, and thus great difficulty establishing and maintaining the reciprocity which is fundamental to rewarding human relationships.
Finally, positional bargaining only works in the short term and during times of crisis. Hard positional bargaining beyond the system´s perceived crisis timeframe damages relationships and infrastructure internally and externally. Organizations and systems seek democratic collaborative ideals where participants expect participation regardless of policy or rules that are in place. In time, the executive loses credibility and strains relationships through unilateral negotiation. No matter how reasonable the solution may be, time wears away systemic and organizational buy in when partners are denied participation.
Within these economic and politically uncertain times, this may offer an important lesson to be remembered by the "fix it" manager. You can put your nose to the grindstone for a while and yes, positional bargaining can work but only within a set time frame. If you hold your nose to the grindstone for too long, it is going to rub off. Remember in an increasingly collaborative society, what you do is important, but over the long term it is how you have done it that matters.
CONCLUSION
The positional approach to negotiation, in which the process is viewed as a zero-sum game, does greater damage to the positional bargainer than other parties. A positional bargainer has locked himself/herself into position, moving out of that position will most likely yield a loss of face. Even worse, moving away from a position may well diminish the credibility of the positional bargainer so substantially that her/his reputation suffers.
Positional bargainers, by taking that approach, are making it clear that they do not intend to 'play fair' in their negotiations with others. People who feel they have been dealt with unfairly are going to be reluctant to enter into agreements or, if they must do so, they will be on the lookout for opportunities to breach unfairly-reached agreements they've felt forced to make. Since successful negotiation is a process by which people reach agreements each party is ready, willing, and able to fulfill, when there is an unfair process yielding an agreement a party is neither ready, nor willing and perhaps not able to fulfill, that is a failed negotiation.
The long term consequences of using a positional approach include greater difficulty in finding people willing to negotiate with you, a reputation for narrowness and closed-mindedness, and thus great difficulty establishing and maintaining the reciprocity which is fundamental to rewarding human relationships.
REFERENCES
Creighton, J, Jerome Delli, P, (1998): Public Involvement and Dispute Resolution – Volume 1: IWR Research Report.
Langton, S. (1996): An Organizational Assessment of the U.S. Army Corps of Engineers in regard to Public Involvement Practices and Challenges, US Army Engineers Institute for Water Resources, IWR Working Paper 96-ADR-WP-9, 1996.
Moore, C, W.(1986): The Mediation Process: Practical Strategies for Resolving Conflict, Jossey-Bass Publishers.
Susskind, L, McKearnan, S.(1999): The Consensus Building Handbook: A Comprehensive Guide to Reaching Agreement, Sage Publications.
www.orionconsult.co.in/positional-bargaining.html(22/07/2011)
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