What is Destructive Competition?
Destructive competition is, unfortunately, all too common in negotiation. However, it’s also very easy to avoid if we take the right steps.
First offers are a common trigger of destructive competition in negotiation. As many negotiators are aware, even an extreme or arbitrary first offer tends to pull counteroffers in its direction. Fearful of being taken advantage of, offer recipients often devalue their counterpart’s first offer, make aggressive counteroffers that are likely to be rejected, or walk away from the bargaining table. As such, first offers often get a negotiation off to a competitive start and stall or block the process of value creation.
It’s not just first offers, though. Often, destructive competition is triggered by single-issue negotiations where we want a “fair” outcome. Fairness concerns, which are often paramount for negotiators, can overshadow objective outcomes in our minds. But fairness judgments tend to be heavily influenced by our preferred outcome. For example, when two partners are dividing up a business, the partner who invested more money will probably believe she deserves a larger share of the pie—and so will the partner who invested more time. Consciously or not, we determine our preferences and then justify them on the basis of fairness.
This egocentrism is a key contributor to destructive competition.
One very simple way to avoid this problem is through making multiple equivalent simultaneous offers, or MESOs. In MESO negotiation, where multiple offers are presented simultaneously at the negotiation table, effective negotiators seek opportunities to create value. By making tradeoffs across issues, parties can obtain greater value on the issues that are most important to them.
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The following items are tagged destructive competition: