What is a Fixed Pie in Negotiations?
In many negotiations, the mythical “fixed pie” mindset leads us to interpret the competitive situations as purely win-lose.
One of the most destructive assumptions we bring to negotiations is the assumption that there is a fixed pie of resources. For those negotiators who recognize opportunities to grow the pie of value through mutually beneficial tradeoffs among issues, the complexity of such integrative negotiations is an asset. Tradeoffs allow you and your negotiating partner to achieve more than you would if you merely compromised on each issue.
Once negotiators have broken the assumption of a mythical fixed pie, the search for value can begin. To create value, you need to learn about the other party’s interests and preferences.
Begin with a thorough preparation for negotiation, including reaching an accurate understanding of the zone of possible agreement, or ZOPA, in business.
Your ZOPA analysis should begin with a consideration of your best alternative to a negotiated agreement, or BATNA. BATNA analysis helps you determine each party’s reservation point, or walk away point, in your negotiation. If there is a set of resolutions that both parties would prefer over the impasse, then a ZOPA exists, and it would be optimal for you to reach a settlement.
When we move beyond the fixed pie mindset, we avoid the need to make costly compromises by capitalizing on what each party values most. Great negotiators understand that the more issues they add to the negotiation, the more money they are likely to make. In the vast majority of negotiations, it’s simply not true that “what’s good for them is bad for me,” and vice versa. When we see the flaws in this win-lose attitude, we open up new possibilities to create and claim value.
Discover how to boost your power at the bargaining table in this free special report, BATNA Basics: Boost Your Power at the Bargaining Table, from Harvard Law School.
The following items are tagged fixed pie: