What is Strategy in a Negotiation?

Cite this article as:"What is Strategy in a Negotiation?," in The Business Professor, updated October 2, 2017, last accessed July 4, 2020, https://thebusinessprofessor.com/lesson/common-strategic-orientations-in-a-negotiation/.

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What is “strategy” in a negotiation?

Strategy is the orientation or holistic approach of an individual toward achieving an outcome or objective. Strategy is often used to identify the plan for achieving that objective. Collectively, we will use the term strategy to refer to:

  • Strategic Orientation – This is the orientation toward a conflict of interest or dispute.
  • Strategic Objective – This is a method for achieving a desired outcome or objective.
  • Strategic Plan – A plan for achieving that outcome or objective that implements specific tactics.

Generally, a party develops a plan, objectives, and orientation together. Tactics, which are often confused with strategies, are short-term, adaptive moves designed to enact or pursue broad strategies. Strategy is carried out through tactics. Tactics are subordinate to strategy in that they are structured, directed, and driven by strategic considerations.

Some commonly understood strategic orientations are drawn from the dual-concern model and include:

  • Accommodation (Yielding) – This is an orientation toward avoiding conflict by accommodating another parties interests or objectives. It generally involves an imbalance of outcomes, as the accommodating party generally claims less of the total value in the negotiation than the accommodated party. Individuals focusing on a minimum outcome or result may employ this strategy. This strategy, however, can by very useful when concealing a weaker negotiation position or setting the stage for future negotiations.
  • Competition (Contending) – Competition is when one party’s objective is to beat or fair better than the other party. This strategic orientation seeks primarily to grab value rather than create value in the negotiation. As such, it is generally more effective in distributive (win-lose) bargaining. It is generally ineffective to create long-term relationships or value in future negotiations.
  • Collaboration (Problem solving or Integrating) – This is an integrative or win-win orientation. This strategic orientation seeks to cooperate in a way that creates additional total value in the negotiation. If a negotiator pursues an integrative strategy without regard to the other’s strategy, then the other may manipulate and exploit the collaborator and take advantage of the good faith and goodwill being demonstrated.
  • Avoidance (Inaction) – As the name implies, this strategic orientation seeks to achieve an acceptable outcome by not addressing the conflict of interest or dispute. It relies largely upon acceptance of a BATNA or the counterparty’s unilateral willingness concede acceptable terms.
  • Compromising – Demonstrates an intention to engage in the back-and-forth that characterizes negotiation. The orientation focus on “this-for-that” tradeoffs.

Two commonly understood negotiation approaches, which are actually tactics that fall under the aegis of the broader strategic categories, are: 1) being “tough” or 2) being “soft”. These two tactics generally relate to a competitive or accommodative bargaining strategy. Negotiators who have fixed-pie perceptions usually take a suboptimal approach in a negotiation, such as employing soft bargaining tactics as part of an accommodation strategy or hard bargaining as part of a competitive strategy.

Discussion: Can you concisely explain the concept of strategic orientation in one sentence? Can you think of a negotiation strategy that does not fit within these categories? Can you differentiate between the strategic objectives of the negotiation, the orientation toward achieving those objectives, and the planning that goes into carrying out those objectives (through various tactics)?

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