Negotiation Strategies

Negotiation Strategies

1. Advantages

   • Win-Win
     • If a negotiation is fair and well-balanced, then in a way all parties involved in the deal benefit in the long term. A negotiation is not about one party winning and the other party losing, making it a total zero-sum. Instead, two or more parties come to the table for a conversation. They discuss their interests and create an exchange to create mutual benefits for each other.
   • Win-Lose
     • Can bring more competitive advantage as the negotiator is targeted with obtaining their objectives to the detriment of the other party’s. Very focused, appropriate for certain types of purchases i.e. transactional. often perceived as a powerful perspective/position.
   • Lose-Lose
     • Aim for finding the best lose-lose scenario, and you'll greatly increase your chances for striking a successful deal. try to find a lose-lose compromise that everyone can accept.

2. Disadvantage

   • Win-Win
     • When both parties settle for an agreement, leaving both of them at a disadvantage. This occurs when both parties are so concentrated on cutting the best deal on their end that they fail to recognize alternative options or “win-win” situations.
   • Win-Lose
     • Could damage the buyer-supplier relationship, (not taking account of the other persons perspective). May leave the ‘losing’ party feeling resentful. Seen as a dominant/aggressive position. Too much focus on achieving own objectives, could mean missing an opportunity. Less flexible.
   • Lose-Lose
     • When neither side achieves a desirable result. Both parties lose in the deal, or are off for worse. This would be considered as a failed negotiation in some cases.

3. Example of situations

   • Win-Win
     • Prisoner's dilemma in which two prisoners must decide whether to confess to a crime. Neither prisoner knows what the other will do. If neither confesses, they both serve a reduced sentence (a win-win outcome, although the win is not as big as the one they would have received in the win-lose scenario).
   • Win-Lose
     • Prisoner's dilemma in which two prisoners must decide whether to confess to a crime. Neither prisoner knows what the other will do. The best outcome for prisoner A occurs if he/she confesses, while prisoner B keeps quiet. In this case, the prisoner who confesses and implicates the other is rewarded by being set free, and the other (who stayed quiet) receives the maximum sentence, as s/he didn't cooperate with the police, yet they have enough evidence to convict. The same goes for prisoner B.
   • Lose-Lose
     • Prisoner's dilemma in which two prisoners must decide whether to confess to a crime. Neither prisoner knows what the other will do. But if both prisoners confess (trying to take advantage of their partner), they each serve the maximum sentence (a lose-lose outcome)