The Pitfall Positional Bargain

In my 25 years of a Sales career, I have noticed that most customers use a Positional Bargain as their primary Negotiation strategy in India.

As per Harvard Program on Negotiation, a Positional Bargain is defined as

“Positional Bargaining is an approach that frames negotiation as an adversarial, zero-sum exercise focused on claiming rather than creating value.”

In Positional Bargain one party will start with the opening position of demand or offer and push the other party to reciprocate with concessions till they arrive at an agreement.

Many times, the agreement may not be possible even.

In Positional Bargain, the negotiator typically is reluctant to accommodate or back down.

The Negotiators typically start with an extreme offer ( Don’t be surprised if that starts with half the price that you have quoted ) and then try how to get the counteroffer of their choice.

Positional Bargain revolves around will and ego and often results in displeasure among the Negotiators.

Concessions and compromise are perceived as weakness and vulnerability rather than value additions.

This is mostly a win-lose situation and this does not enable a long-term mutually beneficial partnership model.

You would have either experienced or heard about stories how some of the customers squeeze the vendors, behaves with them without respect, use all kind of tactics to put pressure and to extract whatever possible from them.

So, the whole negotiation is about what, how, and when.

Tell me the price.

Tell me how you are going to do it.

Tell me by when you are going to do it.

Very little is discussed about the “why” which the most important part of the negotiation.

Why that price?

Why that timeline?

Why that method of delivery?

In a Principled Negotiation or Objective Negotiation that would have been a central discussion.

Since during the negotiation these “whys” are not discussed enough, I have seen how vendors buckle down to pressure and become desperate and commit to prices, timelines, and delivery models which later on may have a lot of challenges.

In the short term, the Principal negotiator ( mostly buyers) may have won, but the project may have suffered and there are delays, unanticipated delivery challenges, etc.

In India, all Government agencies and Public Sector use Positional Negotiation for their procurement process.

The whole tendering process is draconian, one-sided, positional.

And no wonder why most of Govt IT projects are in shambles and the Tier-I IT vendors refrain themselves most of the time from participating in the tenders.

It's time to look for a change in the attitude and culture and adopt the Principled Negotiation philosophy to create an equitable partnership between buyers and sellers so that true value realization can happen for both the stakeholders.

What is your thought?