DISTRIBUTIVE NEGOTIATION
Distributive Negotiation occurs in the form of somebody winning and somebody losing. It’s a zero sum game. The key objective in distributive negotiation is to maximize our party’s share of value from a particular deal – regardless of the impact on future relationship with the other party.
It is thus a ‘transactional’ (rather than ‘relation’) approach.
This type of negotiation does not seek to secure any kind of benefit or share of value for the other party, who is seen as an opponent, a competitor for value share, or an obstacle to what we want
If you use Distributive negotiation strategies then you are basically attempting:
- To discover the other party’s ‘resistance’ point…And
- To override or influence the other party’s resistance point, so that they are willing to accept an even more unfavorable deal.
There are three basic strategies to achieve a ‘win-lose’ outcome.
- Pushing for a settlement as close as possible to the other party’s resistance point
- Making the other party lower its resistance point, by influencing its perceptions of what is possible (for instance, by persuading a supplier that its bid price unrealistic, or that the buyer has a better offer available elsewhere; and/or by emphasizing the costs and risks to the supplier of delaying settlement or walking away from a deal)
- Making the other party think that this settlement is the best it can hope achieve.
What are the Tactics for distributive negotiation?
The kinds of tactics used in a distributive or transactional approach reflect a ‘push’ influencing style:
- Presenting exaggerated initial positions, demands or opening bids, in order to allow for expected movement and compromise.
- Exaggerating the initial distance between the two parties’ positions, and polarizing conflicting viewpoints ,in order to persuade opponents that their position is unrealistic
- Withholding information that might highlight areas of common ground or weakness in your bargaining position.
- Using all available levers to coerce, pressure or manipulate the other party to make concessions
- Offering no concession in return (unless forced to do so), even where they might be offered at low cost
Remember the objective of this kind of distributive negotiation is to maximize your position and ignore the relationship and so it is suitable for one off purchases