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7 Types of Negotiation And 1 Big Myth

        posted by , February 14, 2013

Negotiations should all be win-win. After all, why shouldn't everyone win?

Unfortunately, it's a myth that every negotiation has a potential win-win outcome.

Many common types of negotiations are win-lose. For example, negotiating the price of a used car is win-lose.

Example of Win-Lose Negotiations: Used Car Prices

A sales person and a customer negotiate the price of a used car with a fair market value of $25,000.

If the car sells for more than 25k the customer loses.

If the car sells for less than 25k the sales person loses.

If the car sells for exactly 25k no one wins, no one loses. A win-win outcome isn't in the cards.

There are 7 types of negotiations. It's important to consider which type you're facing — each demands a different strategy.

1. Win-Lose Negotiations

In game theory they call a win-lose negotiation a zero-sum game.

The vast majority of games are zero-sum.

A common analogy for a zero-sum game is dividing a pie. The pie doesn't get smaller or bigger — the players play a game to decide who gets the bigger slice.

If you're facing a win-lose negotiation focus your strategy on determining the other party's minimum requirements (e.g. bottom price).

2. Win-Win Negotiations

Win-win negotiations involve expanding the pie. For example, if two people decide to go into business together: their partnership negotiations are win-win.

One partner may win and the other may lose. However, a win-win outcome is possible because they hope to make money on their investment (expand the pie).

Salary negotiations and business-to-business sales can usually be considered win-win.

Win-win negotiations may be just as focused on building a bigger pie as dividing the pie fairly. Every effort should be made to keep negotiations friendly and constructive.

3. Lose-Lose

Lose-Lose negotiations involve a situation in which everyone is going to lose.

Lawsuits are often lose-lose.

Let's say you leave your jacket at a restaurant coat-check and they lose it. Your negotiations for compensation with the restaurant's manager are lose-lose. Your not likely to get more money than the coat was worth. The restaurant also loses.

Lose-lose negotiations can quickly turn bitter and adversarial. Despite the fact that both parties will lose it's important to try to maintain a collaborative approach.

4. Adversarial Negotiations

Adversarial negotiations are highly competitive in nature.

Win-lose and lose-lose negotiations are most likely to be adversarial. Nobody wants to lose, this tends to drive intense competition.

In some cases, win-win negotiations are also adversarial. For example, high stakes business-to-business sales negotiations often become adversarial (customer vs seller).

In extreme cases, negotiations are adversarial because the parties involved intensely dislike each other. In such cases, negotiators may not be interested in winning. Instead, they may seek to maximize the losses of the other party. Negotiations between political rivals may turn destructive in this way.

Adversarial negotiations require battle strategies.

5. Collaborative Negotiations

Collaborative negotiations are creative and friendly. For example, business partnership negotiations are often collaborative. Win-win negotiations that are expected to yield big wins tend to be collaborative.

Collaborative negotiations rely on persuasive techniques, optimism and creativity.

6. Multi-Party Negotiations

Multi-Party negotiations are complex negotiations between two or more parties. They can be extremely challenging and may take years to complete.

International treaties between nations are often multi-party.

Multi-party negotiations require advanced diplomatic techniques.

7. Bad Faith Negotiation

Bad faith negotiation occurs when a party makes commitments that they have no intention of keeping.

Bad faith negotiation is often used as a delay or diversionary tactic. For example, a country may sign an environmental treaty with no intention of implementing it just to relieve political pressure from its citizens.

If you suspect that the other side is negotiating in bad faith, it's time to start thinking about penalties in your agreement.

This post is part of the ongoing series of articles called how to win at negotiation.

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