Introduction:
“Negotiations in the classic diplomatic sense assumes parties more anxious to agree than to disagree”- Dean Acheson.
Every negotiation is commenced with the objective of either winning or creating a mutual agreement between the parties. The subjectivity of the matter is that the objective is highly dependable on the party’s perception. This is where the necessity of competitive and collaborative negotiation can be seen. The theory allows the parties to the dispute to stick to the type of negotiation that fulfills their particular requirements. This article will elaborate on the concept of competitive and collaborative negotiation with reference to an international perspective. Further, the article will discuss various important facets of this theory along with a few case studies to conclude the discussion accordingly.
Jurisprudence of Competitive and Collaborative Negotiation
Sir Thompson defines negotiation as “A process necessary to undergo whenever any kinds of conflicts arise, with no fixed roadmap to reach to a conclusion”[1].
A dispute is always undertaken with a perspective of reaching to a concluding verdict, however, the means through which the parties choose to reach to a conclusion can vary. Competitive and collaborative negotiation are two varied categories of negotiation that seeks to achieve different objectives.
Competitive negotiation is a sort of negotiation where the parties are most of the time not willing to reach to a flexible decision. It means that the parties to the dispute are adamant about their arguments, so much that they wish to either lose completely or win finally. Theories suggest that people undergoing this type of negotiation are very less likely to resort to collaborative negotiations.
Contrary to the concept of competitive negotiations collaborative negotiations are commenced to reach a mutual agreement between the parties. The dispute in this type is partly won by both parties. This implies that both parties get something to keep whereas in competitive negotiation it is either win or lose. Therefore, it can be said that collaborative negotiations are a kind of alternative dispute resolution which provides a mutual resolution to a dispute.
Regardless of the subjectivity of the concept no negotiation can be performed with a vague vision. Thereby, it is a basic prerequisite that the parties to dispute know beforehand their expectation from a negotiation. There are four major steps of undertaking any negotiation: the preparatory phase, opening phase, negotiating, and finally concluding[2]. Hence, any negotiation process commenced without being aware of the objectives of both parties is pointless. Theoretically, short term targets are best achieved through the competitive counter, although if the parties are seeking long term relationships, collaborative negotiation is the best decision.
Collaborative and competitive negotiations are two negotiating strategies that enable the parties to a dispute reach resolution.
Collaborative Negotiation Strategy
People willing to reach a mutual agreement and not willing to take 100% risk resort to collaborative strategy. They rather choose to win half-way than to lose completely. This strategy is considered as a problem-solving approach and is appreciated among scholars. This bridges the gap and communication barriers between parties, and after conversations, both parties decide their priorities and points of cooperation. This is best suited to reach a cooperative decision when the parties are willing to maintain healthy relationships. This way both parties get to keep half portion of the pie.
Competitive Negotiation Strategy
Competitive negotiation is considered more of an ‘aggressive’ strategy of negotiation. This strategy is rigid as it does not allow a lot of interaction between the parties. Both parties are highly obstinate in their arguments and expectations and neither of them is looking for a long-term relationship. The verdict can be only in the favour of one party entirely, eliminating any scope of flexibility and mutual agreement. The parties in competitive negotiation are only interested in individual consequences. The pro side of this strategy the profitability margins of one party are very high. That implies one party gets to keep an entire pie without sharing.
Many pieces of research also argue that women are more likely to undergo collaborative negotiations as they are more conceptive of interdependence and they attach more value to the process of negotiation itself than the outcome[3].
Collaborative negotiations cannot be reached without a zone of possible agreement, otherwise known as ZOPA. Usually, both parties to a dispute have a lower limit of negotiation beyond which the negotiation is pulled-off. This point is known as reservation point, any negotiation agreement above that is generally made up. The reservation point in this negotiation helps in the foreseeing zone of possible agreement. Moreover, behavioral theories also play a crucial role in determining the type of negotiation a party would undergo. A person with an individualistic approach and demeanor would prefer competitive negotiations, on the other hand, a person with an altruistic approach would seek collaborative negotiations[4].
International Perspective
The concept of negotiation is used globally, however, culture at the same time affects negotiation a lot. Cultural differences create a different interpretation of negotiation among different people. Similarly, American’s have more of an individualistic culture where only the concerned party is the decision-maker. While in the case of Asian’s they follow a collective culture of negotiation, inferring that every person affected by the process is equally a part of the process[5]. Subsequently, American’s are more inclined towards competitive negotiation and Asian’s prefer a collaborative process. Therefore, the process is very subjective when it comes to a global perspective as cultures have a very crucial role to define the choices of the parties.
Present Scenario
The case of collaborative negotiations sometimes is not the best alternative. In situations where the party is not getting the desired negotiation ZOPA eliminates and BATNA comes into the picture. BATNA is the best alternative to a negotiated agreement’ which forwards the process of finding an alternative solution that will further create a zone of a possible agreement between the parties. Due to high dynamism in the concepts, it gets difficult to assess the probability of achieving the desired outcome. Hence, the parties to dispute usually decide their BATNA before deciding ZOPA. This ensures that the mutual agreement benefits both equally, and no party is in a dominating position.
Collaborative Negotiation Case Study
Negotiation between a Retailer and a Shopping Center
In 2008, Soleto shifted to capital shopping, and after long arguments accepted the space on the third floor for 5 years. Soleto sales dropped in the following year, and they approached the owners to provide a concession in rent. The request was constantly denied until the sales of the store dropped drastically[6]. The owner requested financial reports to confirm low sales which were denied by Soleto on the ground of confidentiality and were showing constant reluctance. In 2010, Soleto’s payment started to get due for long terms. Finally, capital shopping conducted an audit for the store and provided long deadlines for payment of the rent to help the store. However, they still did not grant a pay relief. High overdue of rent pushed them to resort to judicial help and resort to a mutual negotiation.
Conclusion
Negotiation is a concept that is subjective to people and their expectations. Parties in dispute not always are inclined towards getting something, rather want to get everything. This highly depends on the kind of perspective or requirements a person carries. Nonetheless, both are highly practiced by people. A combination of collaborative and competitive negotiation is also highly practiced by people. A parity of cooperation and competitiveness is required to achieve the desired results and hence is the practice to take any negotiation ahead. A parity of both means to have enough competitiveness when it comes to achieving a bit higher than the reservation point, yet enough corporation to create a safe space for both the parties.
References:
[1] Stephanie Powell Thomas, Competitive vs. collaborative: exploring the negotiation strategy impact on rational outcomes in the ongoing buyer-supplier relationship, (2013), Electronic Thesis and Dissertations, 59. https://digitalcommons.georgiasouthern.edu/etd/59
[2] Shivam Jasra, competitive vs. collaborative negotiation: a critical analysis, Latestlaws, (June 28, 2020), https://www.latestlaws.com/articles/collaborative-v-competitive-negotiation-a-critical-analysis/ .
[3] Morial Shah, negotiations: women’s voices, 20Pepp. Disp. Resol. L. J. 167 (2020). https://digitalcommons.pepperdine.edu/drlj/vol20/iss2/2
[4] Tanya Alfredson, Azeta Cungu, Negotiation theory, and practice: a review of the literature, FAO. (2008).
[5] John Sae, best practice in global negotiation strategies for leaders and managers in the 21st century, Journal of Business economics and Management, 9:4, 309-318, https://doi.org/10.3846/1611-1699.2008.9.309-318 .
[6] Case study: a negotiation between a shopping Centre and a retailer, NOVA, (2014), https://run.unl.pt/bitstream/10362/11822/1/Freitas_2014.pdf
0 Comments