zone of possible agreement
What is the Zone of Possible Agreement?
How can you avoid common business negotiation pitfalls? Through careful preparation that includes an analysis of the zone of possible agreement, or ZOPA.
In a business negotiation, two polar-opposite errors are common: reaching agreement when it wouldn’t be wise to do so, and walking away from a mutually beneficial outcome.
Avoiding these twin perils—either accepting a subpar deal or walking away from a great one—begins with thorough preparation for negotiation, including reaching an accurate understanding of the zone of possible agreement, or ZOPA.
In fact, rigorously analyzing your best alternative to a negotiated agreement or BATNA, evaluating the zone of possible agreement, and investigating all the issues at stake are three complementary steps you can take to help achieve the best results.
As an example, if a job candidate would accept an offer between $70,000-$80,000 per year, and an organization is willing to pay between $65,000-$75,000, then a ZOPA of $70,000-$75,000 exists.
When you know the zone of possible agreement, and where you and your counterpart are in alignment (and those areas on which you diverge), a skilled negotiator can craft an agreement that most closely approximates her own and her counterpart’s needs while building a bargaining relationship with her counterpart. Rather than antagonistic, the negotiation process becomes a value-creating, integrative situation in which each side gets a “fair share” of the pool of resources.
To learn more about discovering and using your BATNA and ZOPA, and learning how to make better business deals, you can download a complimentary copy of our special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, right now!
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