Bargaining Phase

During the bargaining phase, each party discusses their goals and seeks to get an agreement. A natural

part of this process is making concessions, namely, giving up one thing to get something else in return.

Making a concession is not a sign of weakness—parties expect to give up some of their goals. Rather,

concessions demonstrate cooperativeness and help move the negotiation toward its conclusion. Making

concessions is particularly important in tense union-management disputes, which can get bogged down

by old issues. Making a concession shows forward movement and process, and it allays concerns about

rigidity or closed-mindedness. What would a typical concession be? Concessions are often in the areas of

money, time, resources, responsibilities, or autonomy. When negotiating for the purchase of products, for

example, you might agree to pay a higher price in exchange for getting the products sooner. Alternatively,

you could ask to pay a lower price in exchange for giving the manufacturer more time or flexibility in

when they deliver the product.

One key to the bargaining phase is to ask questions. Don’t simply take a statement such as “We can’t do

that” at face value. Rather, try to find out why the party has that constraint. Let’s take a look at an

example. Say that you’re a retailer and you want to buy patio furniture from a manufacturer. You want to

have the sets in time for spring sales. During the negotiations, your goal is to get the lowest price with the

earliest delivery date. The manufacturer, of course, wants to get the highest price with the longest lead

time before delivery. As negotiations stall, you evaluate your options to decide what’s more important: a

slightly lower price or a slightly longer delivery date? You do a quick calculation. The manufacturer has

offered to deliver the products by April 30, but you know that some of your customers make their patio

furniture selection early in the spring, and missing those early sales could cost you $1 million. So you

suggest that you can accept the April 30 delivery date if the manufacturer will agree to drop the price by

$1 million.

“I appreciate the offer,” the manufacturer replies, “but I can’t accommodate such a large price cut.”

Instead of leaving it at that, you ask, “I’m surprised that a two-month delivery would be so costly to you.

Tell me more about your manufacturing process so that I can understand why you can’t manufacture the

products in that time frame.”