Simply stated, position-based negotiation is about tactics and relative power base.  It is standard win-lose, competitive negotiation.  Interest-based negotiation is about your own long-term strategic goals – and how to best match them with the goals of your partner.  This is a long-term, collaborative form of negotiation that looks beyond bargaining demands and attempts to uncover the true drivers that lay at the heart of negotiating positions.  It requires honesty, transparency, and senior level buy-in.

This is key for purchasers and buyers in China because you are being pulled in two different directions.  On the one hand, you are expected to bargain hard to meet your internal goals and keep prices as low as possible.  In recent months, you’ve probably noticed that you have more power as demand around the world has plummeted.  Your supervisors and bosses have probably notices the same thing — and are pressuring you to take an even harder line with suppliers.

But on the other hand, you know that strategic relationships with key suppliers are going to be important to you and your firm for the long term — well after the global recession is over.  That’s where interest-based negotiation comes in.   This type of negotiation looks beyond short term tactics and focuses on longer term strategic goals.

Position Based

• Goals are ill defined or relative to broad benchmarks.
• Price or cost are the key – or only – variables
• No relationship with counter-party
• Little or no transparency
• Power struggle
• Limited time & deadlines

Interest Based Negotiation

• Goals are strategic and objective
• Wide range of variables
• History of relationship with partner
• Transparent
• Partnership
• Time is not an issue