Types of Negotiations

There are several types of negotiations that can occur in sourcing, including:

Distributive negotiation: This type of negotiation involves a fixed amount of resources that are being divided between the buyer and the supplier. The goal is for one party to maximize their share of the resources, and it is typically a zero-sum game where one party’s gain is the other party’s loss.

Integrative negotiation: This type of negotiation involves finding a solution that meets the needs of both the buyer and the supplier. The goal is to create value and expand the available resources, resulting in a win-win outcome.

Multi-party negotiation: This type of negotiation involves three or more parties who are negotiating to reach an agreement. Multi-party negotiations can be complex and require a high level of coordination and communication to achieve a successful outcome.

Cross-cultural negotiation: This type of negotiation involves negotiating with suppliers from different cultural backgrounds. Cross-cultural negotiations require an understanding of cultural differences, communication styles, and business practices to ensure that both parties can effectively communicate and reach an agreement.

Team negotiation: This type of negotiation involves a team of buyers and suppliers negotiating together. Team negotiations can be beneficial because they can bring diverse perspectives and expertise to the negotiation process.

The type of negotiation used will depend on the situation, the goals of the negotiation, and the relationship between the buyer and the supplier. Effective sourcing professionals should be able to adapt their negotiation style to the situation and use different strategies to achieve their goals.