Negotiation Skills – Win/Lose Strategies

April 11, 2012

 

The second strategy you can choose to use is the Win-Lose strategy, also known as distributive bargaining. It’s based on an attempt to divide up an amount of resources, resulting in a win-lose situation. When choosing this strategy, one takes on an adversarial or competitive view. The focus is on achieving immediate goals, with little or no regard for building future relationships. Little time or energy is needed in resolving conflicts using a win-lose strategy, because few if any creative solutions are considered.

Generally, one or two fixed solutions are presented and a decision or choice is expected almost immediately. Some negotiators that employ the win-lose strategy engage in manipulative tactics to trick or force the other party into a decision. Now don’t get me wrong. I’m not saying that this tactic is bad, simply that this strategy should not be used when resolving issues. It can be used in situations where achieving short-term goals is more important than maintaining or building a long-term relationship. Think about it this way. If the couple in our previous post decided to use a win-lose strategy in picking out a movie to rent, the individual would more than likely say something like, “This is the movie I want to see. Take it or leave it.” There would be no real discussion about the wants and interests of both parties. The resolution would be reached either by dictate or after some fierce arguing.

I recommend using this strategy if the negotiation involves someone you have never had a previous interactive relationship with, nor are you likely to do so again in the future. Think about when you are negotiating the purchase of a car or house. You have no real interest in forming a relationship with the other party, except for the purpose of the deal. You are less concerned with how they perceive you or how they might regard your reputation. When using a win-lose strategy your interests are self-serving.

How about this example? Brian is wanting to purchase a car. He has researched for days and is ready to negotiate. He knows from the beginning that the dealership is asking $3,000 more than the market value of the car. Brian thinks everything goes great with the car salesman because they agree on a price that is $500 less than the market value of the car. He is then sent in to speak with the financial officer. What Brian doesn’t know is that the financial officer has been advised to use a win/lose strategy to make up for what the dealership lost out on on the car. Before he knows it he has agreed to an extended warranty and a higher than average interest rate on the car. Needless to say the dealership is more than happy after the negotiations, because they came out with even more money than if Brian would have paid the original asking price.

The company didn’t care about building a relationship with Brian or what his needs were. They pretended to care at the beginning of the negotiation—that’s how he got the fair price—but in the end the company achieved their short-term goal of making the quarter. Remember distributive bargaining or win-lose strategies are only effective when there is no regard to build a relationship and there is a fixed amount of resources—in the previous case the resources were the car, the available options, and money. The company improved at the expense of the customer.

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