Introduction
Professional and personal relationships often require involved parties to enter into negotiations to resolve points of contention and reach a satisfactory outcome. Negotiation skills are among the most valuable skill sets individuals can develop to help them succeed in life. Therefore, it is essential to understand how negotiations work in different settings and how to reach an agreement that benefits all parties. This paper considers the importance of the bargaining zone in negotiations and how positive and negative bargaining zones may impact the outcome.
The Role of the Bargaining Zone
When entering a dialogue to resolve a conflict or negotiate a beneficial outcome, one should be aware of the bargaining zone and the bargaining zone of the opposing party. A bargain zone can be defined as a difference between one’s reservation point, the minimum viable option, and the walk-away point or the maximum one is willing to give the opponent (ADR Times, 2023). It should be noted that both of the parties have a particular established bargaining zone.
Therefore, a bargaining zone is a dyadic notion that describes the range of preferences of two or more parties involved in negotiations (Schweinsberg et al., 2021). As both parties’ reservation and walk-away points should be considered during a discussion, the term may be used to describe the range in which they can find mutual understanding (Merino, 2020). Overall, the boundaries of the bargaining zone are determined by the reservation points of the negotiators, and the involved parties should be aware of them during the discussion.
Positive Bargaining Zone
It should be noted that the participants may hold reservation points that will either support or inhibit a beneficial negotiation outcome. Therefore, it is essential to establish early in negotiations whether the existing bargaining zone is positive or negative. Merino (2020) defines a positive bargaining zone as a negotiation situation in which the negotiators’ terms are willing to accept overlap to a certain degree.
For example, in negotiating a salary increase, if the employer is willing to give a 5-10% increase and the employee aims to secure an 8-12% increase, the 8-10% increase is the positive bargaining zone. A positive bargaining zone includes options all the negotiating parties consider acceptable, fosters a collaborative and cooperative environment, and provides several options to discuss. Overall, the overlap in the parties’ reservation points is likely to lead to an outcome regarded as favorable by the negotiators.
Negative Bargaining Zone
Meanwhile, a negative bargaining zone is characterized by an absence of any overlap in the reservation points of the opponents. Thus, if the employee is asking for a 10-15% salary increase, while the employer is only able or willing to provide a 5-7% increase, the bargaining zone of the negotiation is negative. According to Schweinsberg et al. (2021), a negative zone will likely lead to an impasse in negotiations and the parties not receiving the outcome they envisioned. As a result, the negotiators leave the discussion without understanding, or one of the parties is forced to revisit their reservation point.
Conclusion
In summary, understanding what defines a bargaining zone in negotiations is paramount for reaching a successful outcome. A positive bargaining zone facilitates cooperation and compromise between the parties while allowing them to secure a mutually favorable outcome. Conversely, the lack of solutions that benefit both parties is what defines a negative bargaining zone. Overall, it is vital to establish the reservation points when entering a negotiation to satisfy the needs of both parties.
References
ADR Times. (2023). Understanding the bargaining zone in negotiations. Web.
Merino, M. (2020). Understanding the zone of possible agreement. Harvard Business School. Web.
Schweinsberg, M., Thau, S., & Pillutla, M. M. (2021). Negotiation impasses: Types, causes, and resolutions. Journal of Management, 48(1), 49–76. Web.