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How To Find The ZOPA in Business Negotiation

In negotiations, understanding the Zone of Possible Agreement (ZOPA) is crucial to avoid the pitfalls of accepting inferior deals or walking away from beneficial ones. Analyzing one's Best Alternative to a Negotiated Agreement (ATNA) and the other party's ATNA helps identify reservation points and potential overlaps that constitute a ZOPA. Thorough preparation and rational analysis of these factors can lead to more favorable negotiation outcomes.

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16 views1 page

How To Find The ZOPA in Business Negotiation

In negotiations, understanding the Zone of Possible Agreement (ZOPA) is crucial to avoid the pitfalls of accepting inferior deals or walking away from beneficial ones. Analyzing one's Best Alternative to a Negotiated Agreement (ATNA) and the other party's ATNA helps identify reservation points and potential overlaps that constitute a ZOPA. Thorough preparation and rational analysis of these factors can lead to more favorable negotiation outcomes.

Uploaded by

benjadombc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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How to Find the ZOPA in u ine Negotiation

Determine whether a deal would e wi e narrowing in on the zopa in u ine


Y KATI HONK — ON NOV M R 21 T, 2017 / U IN N GOTIATION

In u ine negotiation, two polar-oppo ite error are common: reaching agreement when it wouldn’t e wi e
to do o, and walking awa from a mutuall eneficial outcome.

How can ou avoid the e pitfall ? Through careful preparation that include an anal i of the zone of
po i le agreement, or ZOPA in u ine negotiation .

The Agreement Trap


The “agreement trap” de cri e the tendenc to agree to a deal that i inferior to our ATNA, or e t
alternative to a negotiated agreement. That i , we ometime reach agreement even though a ignificantl etter deal i availa le to u el ewhere.

Negotiator can fall victim to the agreement trap for a num er of rea on , according to re earcher Ta a R. Cohen (Carnegie Mellon Univer it ), Geoffre J.
Leonardelli (Univer it of Toronto), and Leigh Thomp on (Northwe tern Univer it ). Fir t, one part ma ucce full hide the fact that a propo ed deal
would not e in the other part ’ e t intere t. For example, a contractor might attempt to ignificantl overcharge a homeowner when idding for a
renovation project.

econd, partie ma e reluctant to walk awa from a u par deal due to the ignificant time, mone , and energ the ’ve inve ted in the negotiation
proce . Thi phenomenon, known a e calation of commitment, wa fir t identified Univer it of California at erkele profe or arr M. taw.
ecau e pa t negotiation co t cannot e recovered, we houldn’t con ider them when deciding whether to commit further in a negotiation, economi t
tell u . Yet a undant re earch ugge t that we will e driven to tr to recoup our lo e .

Third, a de ire to trengthen the relation hip and plea e the other part ma prevent u from recognizing that it’ time to walk awa , according to Cohen
and her team.

ATNA and anal i of ZOPA in u ine


Avoiding the e twin peril —either accepting a u par deal or walking awa from a great one— egin with thorough preparation for negotiation, including
reaching an accurate under tanding of the ZOPA in u ine .

Your ZOPA anal i hould egin with a con ideration of our e t alternative to a negotiated agreement, or ATNA, write Roger Fi her, William Ur , and
ruce Patton in their eminal negotiation text Getting to Ye : Negotiating Agreement Without Giving In. Your ATNA i the cour e of action ou would take if
ou do not reach agreement in the current negotiation. For example, if ou decide not to accept le than $70,000 per ear for a particular jo offer, our
ATNA if ou cannot negotiate thi alar might e to accept a different jo , to look harder for other opportunitie , or to go ack to grad chool.

Your ATNA i “the onl tandard which can protect ou oth from accepting term that are too unfavora le and from rejecting term it would e in our
intere t to accept,” according to Fi her, Ur , and Patton.

In addition, anal ze the other part ’ ATNA. exploring the other part ’ alternative —whether through re earch or a king him que tion directl —
ou can gain a reali tic en e of what to expect from the negotiation.

ATNA anal i help ou determine each part ’ re ervation point, or walkawa point, in our negotiation. If there i a et of re olution that oth partie
would prefer over impa e, then a ZOPA exi t , and it would e optimal for ou to reach a ettlement. For example, if a jo candidate would accept an offer
etween $70,000-$80,000 per ear, and an organization i willing to pa etween $65,000-$75,000, then a ZOPA of $70,000-$75,000 exi t . (I ue other
than price can and hould e incorporated into the ZOPA a well, uch a vacation time and work a ignment .)

If, contra t, there i no overlap etween the two (or more) partie ’ re ervation point —for example, if the jo candidate will accept no le than
$70,000, and the organization will pa no more than $65,000, then no ZOPA exi t , and oth ide would e etter off pur uing their ATNA .

Through a rational anal i of the ZOPA in negotiation, ou will e etter equipped to avoid the trap of reaching agreement for agreement’ ake and
viewing the negotiation a a pie to e divided.

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