Positional Bargaining

Introduction:

This note will discuss the meaning of positional bargaining, styles of positional bargaining, and the problems that accrue when parties engage in positional bargaining or argue over positions.

Meaning of Positional Bargaining:

During negotiations, it is common for each party to take a position and argue or negotiate for it. This is what is referred to as positional bargaining. According to Fisher and Ury [1], in positional bargaining, “each side takes a position, argues for it, and makes concessions to reach a compromise.”

For example, in discussing the number of children to have in a marriage, a man may adopt the position that four children is ideal, and the woman may adopt the position that two is ideal. In support of his position, the man may argue:

1. That children are blessings from God, and it is good to have as many blessings as possible.
2. That a large family has provides a solid support system.
3. That in his culture, the more children a man has, the more respect he has in society.

The woman may equally argue:

1. That more children will drain their finances.
2. That more children will negatively affect her physically.
3. That in the event of the man’s death, it would be more difficult to deal with more children.

With these arguments, the man may eventually agree and adopt the woman’s position, or she may agree and adopt his. Even better, they may decide to compromise and agree on three. There is also a world in which neither party is willing to compromise, which may result in more disputes.

The Two Styles of Positional Bargaining:

In the bestselling book Getting to Yes, 3 ^rd ed., Fisher and Ury [1] identified two styles of positional bargaining: soft and hard. According to the authors, most people see their choice of negotiating strategies as between these two styles. A person who engages in soft negotiation is a soft positional bargainer. Likewise, a person who engages in hard negotiation is a hard positional bargainer. In the same negotiation process, it is possible for one party to be a soft positional bargainer and the other party to be a hard positional bargainer.

A. Soft Negotiating:

According to Fisher and Ury [1], soft negotiating:

emphasises the importance of building and maintaining a relationship. Within families and among friends much negotiation takes place in this way. The process tends to be efficient, at least to the extent of producing results quickly. As each party competes with the other in being more generous and more forthcoming, an agreement becomes highly likely.

This style of positional bargaining has the following characteristics:

1. Participants are often friends (or maintain a friendly relationship).
2. By virtue of being friends, they often make concessions and may change from their positions.
3. Participants may accept one-sided losses to reach an agreement.
4. Participants yield to pressure.
5. Participants try to avoid a contest of wills. Thus, the parties focus on finding mutually acceptable solutions rather than engaging in a power struggle or imposing their individual positions on each other.
6. The parties trust each other.
7. Insist on reaching an agreement that is acceptable to all parties.
8. They are soft on each other. Thus, they may take each other’s emotions and positions into account.
9. A soft negotiator yields to pressure.

While soft negotiating can ensure that the parties reach an agreement, it makes a party vulnerable and open to exploitation. According to Fisher and Ury [1] ,

In positional bargaining, a hard game dominates a soft one. If the hard bargainer insists on concessions and makes threats while the soft bargainer yields in order to avoid confrontation and insists on agreement, the negotiating game is biased in favor of the hard player. The process will produce an agreement, although it may not be a wise one.

B. Hard Negotiating:

In hard negotiating, the hard negotiator sees the negotiation as a contest of wills. He adopts a position and holds onto that position, unwilling to make concessions.

This style of positional bargaining has the following characteristics:

1. The participants are often adversaries (not friends).
2. A hard bargainer demands that the other party make concessions if he wants to maintain the relationship. For example, one may say, “Buy me the iPhone or we break up,” lol.
3. A hard bargainer distrusts the other party.
4. A hard bargainer may make threats.
5. A hard bargainer insists on his position and seeks a one-sided gain.
6. A hard bargainer insists on reaching an agreement that is acceptable to him.
7. A hard bargainer applies pressure.

Problems Associated with Positional Bargaining:

According to Fisher and Ury [1], the merits or demerits of any method of negotiation can be judged using the following three criteria:

1. Whether or not it is capable of producing a wise agreement, if an agreement is possible.
2. Whether or not it is efficient.
3. Whether or not it improves or at least does not damage the relationship between the parties.

Using the above criteria, Fisher and Ury [1] came to the conclusion that positional bargaining (arguing over positions) has the following problems:

1. Produces unwise agreements.
2. Is not efficient.
3. Endangers ongoing relationships.

They further submitted that these problems are worsened when there are more than two parties involved. For instance, if about 150 countries are negotiating based on positions, there is a higher likelihood of producing an unwise agreement, the negotiating process being inefficient, and relationships getting endangered.

Their analysis on how arguing over positions performs against each criterion is now discussed.

1. Arguing over Positions Produces Unwise Agreements:

First, what is a wise agreement? According to Fisher and Ury [1],

A wise agreement can be defined as one that meets the legitimate interests of each side to the extent possible, resolves conflicting interests fairly, is durable, and takes community interests into account.

In light of this, an unwise agreement is one that does not meet the legitimate interests of each side to the greatest extent possible, does not resolve the conflict fairly, is not durable, and does not take the community interests into account.

On why arguing over positions produces unwise results, Fisher and Ury [1] submitted that:

When negotiators bargain over positions, they tend to lock themselves into those positions. The more you clarify your position and defend it against attack, the more committed you become to it. The more you try to convince the other side of the impossibility of changing your opening position, the more difficult it becomes to do so. Your ego becomes identified with your position. You now have a new interest in “saving face”—in reconciling future action with past positions—making it less and less likely that any agreement will wisely reconcile the parties’ original interests.

Thus, once parties only become interested in saving face, they are not negotiating to meet their legitimate interest, may negotiate unfairly, and fail to consider the community interests.

2. Arguing over Positions is Inefficient:

The second problem with arguing over positions is that it is inefficient because it often takes a lot of time. Fisher and Ury [1] explained how this inefficiency accrues as follows:

Bargaining over positions creates incentives that stall settlement. In positional bargaining you try to improve the chance that any settlement reached is favorable to you by starting with an extreme position, by stubbornly holding to it, by deceiving the other party as to your true views, and by making small concessions only as necessary to keep the negotiation going. The same is true for the other side. Each of those factors tends to interfere with reaching a settlement promptly. The more extreme the opening positions and the smaller the concessions, the more time and effort it will take to discover whether or not agreement is possible.

A good example of how this occurs is buying and selling in Ghana. Often, the seller begins by quoting an extremely high price, and the buyer counters by quoting an extremely low price. After a lot of “please” and complaints about the economy and the dollar rate, with a sprinkle of “someone else was giving it to me for less,” each party may slightly adjust his starting price. Depending on the buyer and the seller, this can take some time.

3. Arguing over Positions Endangers an Ongoing Relationship:

When a party adopts a position and argues for why this position should prevail over the position adopted by the other party, the other party may give in and bend to the rigid will of the other party. This act may give rise to anger and resentment.

If one party decides to compromise for the purpose of maintaining a relationship, the other party may take advantage of him, and this may equally lead to resentment.

Positional bargaining may also endanger the relationship because parties may see each other’s position as a reflective of what the other party care about their relationship. Here, if a party takes a firm position, the other party may conclude that he does not care about the relationship, which explains why he has adopted a firm position.

Conclusion:

This note discussed positional bargaining as a form of negotiation where parties adopt a position and argue over those positions. In doing so, a party may choose to be soft or hard. When a party is soft, he may yield to pressure and change his position for the purpose of reaching an agreement and sustaining a relationship. On the other hand, when a party is hard, he insists on sticking to his position and expects the other party to make compromises. Whether hard or soft, there are three problems associated with positional bargaining. The first is that it produces an unwise agreement, defined as an agreement that does not meet the legitimate interests of each side to the greatest extent possible, does not resolve the conflict fairly, is not durable, and does not take the community interests into account. In addition, it is inefficient as parties tend to waste time going back and forth. Finally, it may endanger relationships. For these reasons, positional bargaining is often dismissed as a less optimum style of negotiation.