Jan 14

Introduction to Negotiation Theory – Part I: The Role of Competition and Cooperation in Negotiation

Tags:
This article was written by Roger Beaudry on October 10th 2009.

NOTE: To make sure that readers of future posts have a basis upon which to understand more advanced negotiation approaches, issues and techniques, I have decided to start my posts on negotiation with an introduction to negotiation theory. The introduction (which is in large part based on the concepts advanced by Roger Fisher, William Ury and Bruce Patton in their book Getting to Yes: Negotiating Agreement Without Giving In) is divided into four posts: this first post will deal with the role of competition and cooperation in negotiation, the second will cover the role of alternatives and interests, the third will focus on options, legitimacy, relationship, communication and commitment, and the last will cover the concepts of goals, process and strategy. My hope for this introduction is to give readers a good foundation upon which to understand other ideas I will share in later posts.

Understanding negotiation theory begins with the realisation and for some the acceptance, that all negotiation involves competition and cooperation. Negotiation involves competition in the sense that there are very often limited resources or options available to satisfy the needs at play between of the parties, and both sides want the best result for themselves. As such, the parties to a negotiation typically compete for a limited “pie”. That said, negotiation involves cooperation in the sense that it is a consensual process that depends on a measure of cooperation and consensus to work. Meeting with the other side, talking to the other side, making concessions, sharing information, and ultimately agreeing with the other side, involves cooperation.

Being effective in negotiation involves learning how to balance competition and cooperation in a way that makes sense; inserting enough competition in the negotiation, so that you get a good result for yourself and prevent others from taking advantage of you. However, it also involves inserting enough cooperation to ensure that necessary information gets exchanged, that options for settlement get generated, that valuable relationships are not destroyed, and that all sides push forward to a resolution as quickly and as economically as is reasonable.

 

EXTREMES: NEGOTIATION STYLES THAT DO NOT SUFFICIENTLY MIX COMPETITION AND COOPERATION

The need to balance competition and cooperation is easily understood when one considers the impact of being too competitive or too cooperative in negotiation; something readily apparent when one reflects on the following two extreme styles negotiation that do not sufficiently mix competition and cooperation:

COMPETITIVE BARGAINING: At the extreme of almost pure competition, there is the style of negotiation sometimes labelled “competitive bargaining”. Competitive bargainers see the negotiation as a purely competitive process in which they are going to win, and you are going to lose. They tend to make extreme and unreasonable demands and are very slow to move. They typically try to intimidate, mislead and outmanoeuvre the other negotiator in their effort to get the best possible deal. Competitive bargainers often have a table-pounding take-it-or-leave-it negotiation approach. They see negotiation as a game of winners and losers, and they are prepared to do whatever it takes to ensure they win and you lose.

COOPERATIVE BARGAINING:At the other extreme of almost pure cooperation, there is the polar opposite style sometimes referred to as “cooperative bargaining”. Cooperative bargainers are overly focussed on cooperation and seek to drain all competition out of the negotiation process. They tend to overvalue any relationship they have with the other side, their need to avoid conflict, and their need to reach agreement. Because of that, they tend to make concessions in negotiation that objectively are unnecessary and that do not make sense. They typically do this to satisfy their exaggerated perception of the value of getting a deal, safeguarding the relationship, and/or avoiding conflict. Cooperative bargainers are often more focussed on the other side’s needs in the negotiation than on their own. They tend to take naive or pie-in-the-sky approaches to resolving disputes, and have unrealistic expectations of what can be achieved, and of how the negotiation process should unfold.

If one maps out the advantages and disadvantages associated with each of these extreme styles of negotiation, the role of competition and cooperation in negotiation becomes more evident, as does the risk of being overly competitive or overly cooperative in negotiations.

BEING OVERLY COMPETITIVE IN NEGOTIATION:  ADVANTAGES AND DISADVANTAGES

The advantages of competitive bargaining for those who use it (i.e., the advantages that can flow from a focus on competition in negotiation) include the following:

  • Competitive bargainers are typically perceived as tough by their constituency (those they represent), and often by the other side.
  • They tend to strive for the best possible immediate financial result. If they get a deal, it will most often be one that is financially beneficial for them or those they represent, at least in the short term.
  • They are perceived as difficult to manipulate.
  • They have a tendency to not get caught up in the other side’s emotions or in any sympathy towards the other side. This can serve to help them strive for better results.
  • They tend to be well focussed on their goals.
  • They have a tendency to feel like they are in control of the negotiation, and to project confidence. This can be intimidating to the other side and unbalance it.
  • In comparison with other more complex approaches, competitive bargaining can be a very simple negotiation style to implement. It requires little preparation.
  • It can be a very effective negotiation style against a weak negotiator.

That said, competitive bargaining has disadvantages for those who use it. These disadvantages, which flow from its overemphasis on competition, and its minimization of cooperation, include the following:

  • Competitive bargainers have a tendency to jeopardize and destroy important relationships.
  • They can fail to get a deal where a deal would otherwise have been possible. This happens at least in part because their overly aggressive and competitive approach pushes the other side to not want to participate in the negotiation and sets up barriers to reaching agreement.
  • Competitive bargainers often miss out on creative options and opportunities for joint gains. This flows from their focus on financial gain to the exclusion of other benefits that can be achieved in negotiation, their take-it-or-leave-it attitude, and their perception that there is a need for there to be a winner and a loser in the negotiation.
  • Because the other side sometimes resents the result or feels cheated, the deal, if one is reached, may not be as durable as would otherwise be the case.
  • Competitive bargainers create a lack of trust in the negotiation process, which can slow it down or stall it.
  • If two competitive bargainers negotiate one with the other, it can take more time and resources to get to a deal, and make it much more difficult to reach agreement because both sides will be slow to compromise and will fear leaving too much on the table.
  • By holding their cards too close to their vest, competitive bargainers tend to stifle the exchange of information. To achieve durable resolutions quickly and effectively, the parties often have to exchange information. By stifling the flow of information, competitive bargainers can sometimes stall the negotiation or direct it towards settlements that do not reflect the reality of all the facts.

So while there are clear advantages to being competitive in negotiation, bleaching cooperation out of the process and being overly and indiscriminately competitive has clear disadvantages.

BEING OVERLY COOPERATIVE IN NEGOTIATION:  ADVANTAGES AND DISADVANTAGES

Cooperative bargaining illustrates the benefits of cooperation in negotiation all the while making evident the disadvantages of being overly cooperative and of not harnessing the benefits of competition.

The advantages that cooperative bargainers gain from their focus on cooperation include the following:

  • Cooperative bargainers tend to foster better relationships with the other side during the negotiation. They can often use the benefits of this (such as the trust it builds with the other side) to smooth the negotiation process.
  • When cooperative bargainers negotiate one with the other, they will tend to generate creative options, cut deals that better meet the needs of both sides and come to more durable resolutions.
  • There will usually be a deal when a cooperative bargainer is involved.
  • In the short term, they have a tendency to build their relationship with the other side (if there is one) outside of the negotiation.
  • They tend to enhance communication and the flow of information. In many negotiations, a settlement is not possible unless the parties exchange information. Cooperative bargainers often enhance the negotiation process by facilitating the exchange of information.
  • Cooperative bargaining can sometimes lead to a quicker result.

The disadvantages associated with cooperative bargaining for those that use, i.e., the disadvantages of being overly cooperative in negotiation, include the following:

  • Cooperative bargainers are vulnerable to being manipulated, especially by competitive bargainers.
  • They often make concessions that objectively do not make sense and agree to bad deals.
  • They have difficulty walking away from the table when that is what they should do.
  • They develop a reputation for being “soft”. This can make people that they represent lose faith in them.
  • They can get caught up in emotions, as opposed to focusing on the facts and the issues.
  • Their focus on making negotiations fair can lead to overly complex and lengthy negotiation processes.
  • Over the long term cooperative bargainers can have a tendency to destroy relationships. Rather than negotiate for what they need from the other party to make the relationship work, they have a tendency to repeatedly give in and not have their needs met, especially if the other person in the relationship is a competitive bargainer. Over time giving up and giving in results in a relationship where the cooperative bargainer is not having his or her needs satisfied. You can be in a relationship where your needs are not being met for only so long. At some point, the cooperative bargainer typically sours, and explodes out of the relationship.

It is therefore plain that while cooperation plays a necessary role in negotiation, bleaching competition out of the process and being overly cooperative has clear disadvantages.

THE NEED TO BALANCE COMPETITION AND COOPERATION IN NEGOTIATION

Effective negotiation involves avoiding the disadvantages of being overly competitive (competitive bargaining), and those of being overly cooperative (cooperative bargaining) while finding ways of harnessing the advantages of both competition and cooperation. To achieve this effective negotiators mix competition and cooperation in proportions that make sense; putting enough competition in the negotiation to ensure that they achieve a good result for themselves, and making sure that others do not take advantage of them, all the while inserting enough cooperation to ensure that information flows, options are found, a deal is reached quickly and effectively, and important relationships are not damaged.

In my next post on negotiation, I will begin discussing a roadmap for mixing competition and cooperation in negotiation in proportions that make sense: the Ten Elements of Effective Negotiation.

No comments yet.

Leave a Comment

reset all fields