When you enter into a negotiation, do you automatically try to maximise your gain from the transaction?
If so, you are not alone. However, you might want to step back and think about your game plan before you begin negotiating.
There are different types of negotiating situations. You must know what type you face before you choose a strategy.
A distributive negotiation is sometimes called a “fixed pie” negotiation. The parties each strive to get as big a slice of the pie as possible. Because one party’s gain can only come at the expense of the other, a win-win outcome is not an option.
A classic example of a distributive negotiation is the purchase of a used car. The buyer wants to pay as little as possible, while the seller strives to get the highest price possible.
The car itself does not change, but the ultimate purchase price can vary greatly. The name of the game is how to distribute or allocate the pie, or to fight for the larger piece.
Some of the hallmarks of a distributive negotiation are:
A single issue. With only one issue — usually money — being negotiated, there is nothing to trade off. One party’s gain is the other party’s loss, and each side tries to maximise their gain.
A one-off transaction. With no ongoing relationship between the parties, neither is concerned about whether the other side is happy with the outcome. If you will never see the other person again, you may not care what he thinks of you.
A short time-frame. Time pressure tends to make people more competitive, more focused on what they want, and less focused on the other party’s needs.
In a distributive situation you will adopt a competitive strategy. You will take a more aggressive position and make fewer concessions. You may even use hardball tactics.