logrolling-negotiation

Logrolling Negotiation In A Nutshell

In a logrolling negotiation, one party offers a concession on one issue to gain ground on another issue. In logrolling, there is no desire by either party to advertise the extent of their power, rights, or entitlements. This makes it a particularly effective strategy in complex negotiations where partial or complete impasses exist.

Understanding a logrolling negotiation

Many tend to assume that negotiations are a strictly distributive affair, where two parties come together to fight over a fixed outcome.

However, the vast majority of negotiations are integrative. This means that each party is provided multiple opportunities to further their interests cooperatively. In other words, each has a focus on appealing to the interests of the other. 

In logrolling, there is no desire by either party to advertise the extent of their power, rights, or entitlements. This makes it a particularly effective strategy in complex negotiations where partial or complete impasses exist.

Preparing for a logrolling negotiation

Before a business enters into a negotiation, it can prepare itself by addressing these steps:

  • Define your elegant negotiables – or concessions a business can make to the other party. Importantly, the party receiving the negotiable must value it more highly than the party who is sending it. This helps each business determine which negotiables they care about most and which can be given away, so to speak.
  • Define a BATNA, or the best alternative to a negotiated agreement. A business should never enter a logrolling negotiation without a Plan B. In logrolling, the business also needs to consider the BATNA of the other party. What might they be willing to settle for? Out of the two BATNAs, whose is better? This gives insight into which business has the stronger bargaining position.
batna
In negotiation theory, BATNA stands for “Best Alternative To a Negotiated Agreement,” and it’s one of the key tenets of negotiation theory. Indeed, it describes the best course of action a party can take if negotiations fail to reach an agreement. This simple strategy can help improve the negotiation as each party is (in theory) willing to take the best course of action, as otherwise, an agreement won’t be reached.
  • Define negotiable variables. Money is the most obvious example of a variable that can be negotiated. However, contract length, time frame, exclusivity, added features, and implementation personnel can also be used.
  • Prioritize parameters. This will depend on the maturity of the business. Younger companies will prioritize payment terms that deliver fast cash. Larger companies with more cash flow might agree to delayed payment terms in exchange for promotional or marketing campaigns.

Logrolling in practice

In theory, each business should enter the negotiation with a core strategy underpinned by the steps outlined in the previous section.

In a logrolling negotiation, each should then seek to find common ground in the zone of potential agreement (ZOPA). Both parties can move toward this zone by making beneficial trades on issues based on a deep understanding of each other’s needs or wants.

Note that the ZOPA lies outside the range of the BATNA of each party. While creating a BATNA is important for negotiations that reach a hard impasse, the ultimate goal of logrolling is to reach an agreement based on common ground. This can only occur when each business understands the unique perspectives and priorities of the other party.

Key takeaways:

  • A logrolling negotiation involves a party conceding one issue to gain ground on another.
  • Preparing for a logrolling negotiation means defining elegant negotiables, or factors a business is willing to concede that the other party values more highly. Defining and then comparing BATNAs can give important clues on which business has the upper hand.
  • In a logrolling negotiation, each business should exchange trade-offs until both arrive in the zone of potential agreement (ZOPA). It should be noted that reaching the ZOPA does not necessitate one party having to use its BATNA.

Read Next: Negotiation, BATNA, WATNA, ZOPA.

Read Next: SWOT AnalysisPersonal SWOT AnalysisTOWS MatrixPESTEL AnalysisPorter’s Five ForcesTOWS MatrixSOAR Analysis.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"