ChatGPT & AI in
Procurement Course

Free Preview Lesson

Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Compromising Negotiation — 3 Powerful Strategies + Examples

Key take-aways

  • Compromising negotiation let the parties simply agree to meet in the middle.
  • Compromising negotiation is different from the other styles as no one wins or loses. 
  • One of the best times to use this style is when there are issues that are out of control.

What exactly goes through your mind when you hear about the compromising negotiations style? Is it about negotiating while trying to get a better deal between you and your opponent? At most times, people assume that the compromising style is all about making promises or concessions.

The concessions part is half-true, but we will get more into that later on.

Whatis Compromise?

In negotiation, compromise is a basic negotiation process in which both parties will give up something that they want for them to get something else that they want more.

Compromise often happens in win-lose scenarios when there is a fixed pie that needs to be divided in which way the other party wins and the other one loses.

In this situation, neither side gets what they really want. However, the parties make concessions to reach an acceptable agreement.

Compromising Negotiation Style– What is it?

The compromising negotiation style is one of several negotiation styles that focuses on striking a balanced deal between you and your opponent. In simple terms, it is a negotiation tactic where no one has the upper hand in the end; both you and the other party simply agree to meet in the middle. No one wins and no one loses.

Sounds boring, yes? Well, there will always be negotiations where sometimes, pushing for something too much or too less are both bad for you. And the same thing can also happen to your opponent. Therefore, it is also a good idea for both parties to simply gain an understanding right in between one another.

Thus, this negotiation style is quite opposite to two other negotiation styles; the collaboration negotiation style (where it’s a win-win situation for you and the other party) and the usual hardball distributive negotiation style (where you are out to win at all cost against the other party).

And that’s why, dear negotiators and procurement managers, is the reason why it’s called the compromising negotiation style.

Compromising Negotiation Strategies to Apply Yourself

Strategy 1 – Be quick and decisive

When using the compromising negotiation style, you need to be quick in determining what the middle ground is. When you’ve recognized what it is, wait until there is no longer an option of negotiating further.

If the outcome of the negotiation is going to be a lose-lose situation, you need to be decisive in putting the middle ground right in front of you and your opponent. Place your card on the table and be quick in delivering it as well.

Example:

Louise is having a hard time trying to win an argument with her co-workers. The company wants to have a get-together and her proposal is an out-of-town beach party. However, her co-workers are budget conscious and would prefer to do some local activities instead.

While running her hand on a local tourism app, she sees a local beach that is just a few meters away from the office.

Louise: “Okay, I just saw a local beach in town and it’s not too far away from our office. Since everyone wants to save money, I think this is the best place for us to hold our get-together party. Does anyone have other ideas?”

Strategy 2 – When decided on the middle ground, reaffirm it via voice and paper again for everyone to agree on.

Once you and the other party have agreed on the compromise, always make sure to reaffirm it again both on voice and on paper so that everyone present during the negotiation is aware of what transpired and what both parties have agreed upon.

This way, both parties understand what was agreed upon and that later negotiations can be held again without wasting anyone’s time.

For any documentation, make sure to send everyone a copy of it.

Example:

Tony and his associates decided on a compromise of selling their product for half the price at twice the agreed-upon number by the opposing party.

Tony: “Again, let me reaffirm that my associates and I agree on selling our products for half the price but we will sell at twice the agreed amount. The details can also be seen on paper here, which I will be sending to each one of you after the meeting.”

Strategy 3 – Always decide on the next negotiation after building the compromise.

Because of the nature of how compromise is almost in any case needed to end negotiations and close deals, always assume that the end is only temporary and that neither party is ever fully satisfied with the outcome. Thus, always decide on when the next negotiation will be after building the compromise itself.

This also holds true if one of the members of the negotiating table is not present at the moment.

Even if the other party makes no mention of another upcoming negotiation, it is always a good practice to be ready for anything. This will also give the other party an idea as to when to expect another call from you if you are not fully satisfied with the compromise.

Examples of Compromising Negotiation Style

The following are some of the examples of compromising style in negotiation:

1. Earn Out Agreement

In the world of business sales, it’s not uncommon for the person selling a company and the person buying it to have different ideas about how much it’s worth. When they can’t agree on a price, they sometimes use a strategy called an “earn out.”

Here’s how it works: Let’s say someone wants to sell their business for $6 million, but the potential buyer thinks it’s only worth $4 million. To meet in the middle, they come up with an earn-out arrangement. In this setup, the buyer agrees to pay $4 million upfront, and then the remaining $2 million gets paid later, like after a year. But, here’s the catch: the extra $2 million will only be paid if the business performs well and achieves specific goals during that time.

So, it’s kind of like a compromise. The seller gets some money right away, which is closer to what the buyer thinks the business is worth. And then, if the business does really well after the sale, the seller might get the extra $2 million, making the total closer to what they originally wanted.

This earn-out is a way for both the seller and the buyer to find middle ground when they can’t agree on the price. The buyer doesn’t have to put up all the money upfront, and the seller still has a chance to get the full amount they hoped for if things go well. It’s like saying, “Okay, we’ll do it your way for now, but if things turn out better than expected, then I get what I wanted too.” It’s a bit of a give-and-take to make a deal happen.

2. Paris Climate Agreement

The Paris Climate Agreement served as a good illustration of an effective compromise negotiation, where various nations address the challenges brought by climate change and how they can stop it.

Here is why the agreement is a good example of a compromise negotiation:

  • Fair shares: Countries agreed to do their part based on how much they had contributed to causing the problem. This way, everyone took responsibility, but it wasn’t too hard for anyone.

  • Personal Plans: Instead of having one strict rule for everyone, each country decided what they could do to help. This was fair because different countries have different needs.

  • Big Goal, Step by Step: They all decided on a big goal: to keep the Earth’s temperature from going up too much. It’s like agreeing on a limit to how hot things can get. This goal made everyone work together.

  • Helping Each Other: Rich countries said they would help poorer countries with money and knowledge to fight climate change. This was like sharing resources to make sure everyone could contribute.

  • Checking and Learning: Countries promised to check on each other’s progress and share their efforts. This way, they could learn from each other and make sure they were doing what they said they would.

3. My Experience in Using Compromising Negotiation Style

Negotiation styles are a very important variable to master to achieve great deal results. Your ultimate deal will be determined by how skilled you are as a negotiator. The more skilled you are in using different styles, the more the other party will be drawn to settle close to your ideal outcome and closer to their limit.

Your selection of negotiation style should depend on your personality and the results of your earlier research on the styles that will probably be used by your negotiating counterpart. Getting to recognize the different negotiation styles will help you to negotiate way more efficiently! It’s important to know how and when to use particular styles to get more of what you want from the negotiation.

“In my time as a Procurement Manager, I had to deal with 1500 different products delivered by 70 suppliers every year. Suppliers were traditionally better equipped; most account managers that I had been dealing with, only had to focus on one customer and thus the negotiator: me. This led to what I call, the knowledge gap. They had way more time to prepare for negotiations. Most of them kept detailed notes on my negotiation style, likes and dislikes, interests, family details, and so on. In general, they were in a better position to choose the most appropriate style to approach me in the upcoming negotiation. My advantage, on the other hand, was the fact that I was negotiating all day & year: that experience leveraged the knowledge gap mostly: I practiced a full year with changing styles & using tactics. This helped me to have one important skill in any negotiation: I was not predictable.”

Do you also want to learn to apply effective tactics yourself and become unpredictable? There are a large number of styles & tactics that you can use in negotiations! In our Certificate Program, we will teach you when which styles to use and in what way you should use them to your advantage!

Want to check out more negotiation case studies? We actually created an overview with 13 inspiring real-life negotiation examples.

Compromising Negotiation Style– When to use it?

So when does a professional negotiator or procurement manager use the compromising negotiation style.

One best instance is when a negotiation can’t be held to the fullest because of certain issues that are out of control.

For example, when the negotiator for the other party cannot meet with you because of an emergency on his side or if the negotiator is present but the deciding factor or person on their end is not available, then a compromise will have to be agreed upon by both parties.

Other instances where the compromising negotiation style is effective to use are the following:

  • An urgent yet temporary decision is needed to settle a complex issue
  • When a decision is needed urgently because there is a lack of time.
  • When both parties cannot come to a decision despite a lengthy negotiation timetable.
Compromising Negotiation Example

Compromising Negotiation StyleCase Lesson

  • Arthur Hahn from Germany is a procurement manager for a non-profit organization that plants trees.
  • He asks a local store for help in procuring 200 shovels for an upcoming tree-planting activity.

Arthur contacts the store for help with purchasing 200 shovels for the members of his non-profit organization for a tree planting activity. Because it is non-profit, the organization is entirely dependent on donations from its members and does not have very deep pockets, so to say.

The owner of the store checks his inventory and tells Arthur the exact price for the 200 shovels. Arthur is crestfallen when he realizes that his organization does not have enough money for the purchase, but he also knows that the trees needs to be planted. The owner is apologetic and suggests to Arthur to ask for more donations to help in getting more money.

However, an idea sparks in Arthur’s mind. Instead of buying shovels, Arthur asks the owner if he is able to give a small discount for customers who are going to join the tree planting activity and want to buy a shovel themself. The owner agrees to the idea and provides all customers that are planning on planting trees, a 40% discount.

While it does not solve Arthur’s initial task of getting 200 shovels for his non-profit organization, this final outcome is even better for as well Arthur and the store owner: when the final day of planting is there, all 200 persons joining the tree-planting activity have been bringing in their own shovels.

Disadvantages– Compromising Negotiation Style

Are there any disadvantages to the compromising negotiation style?

It is weird to talk about disadvantages regarding this negotiation style because there is already a compromise between the two parties, right?

A compromise is not always a good thing because remember when negotiating, your aim is always for the things that you want. So if you’re going for the middle ground, neither you nor your opponent wins. And if no one wins, then no one really gains anything.

Other disadvantages when using the compromising negotiation style are as follows:

  • No one is fully satisfied with the outcome. Thus, the agreement could be short-lived and will usher in more negotiations in the future.
  • More negotiations mean more time and effort used.
  • Short-lived agreements over a complex issue can be frustrating and exhausting for you and the other party.
  • Just because a compromise is reached doesn’t mean that you or the other party is happy about it. It could strain your relationship with the other party in the future.
  • You quickly gain the middle ground during a negotiation could be taken as a sign of weakness or laziness.
  • Quickly conceding a negotiation to the middle ground could damage your reputation as a skilled negotiator or procurement manager.

Procurement Expert’s Insights on Compromising Negotiation Style

For this article, we asked an experienced procurement expert to share her insights on compromising negotiation style.

Hilce Vallenilla
Procurement Manager, Sanofi

LinkedIn Profile: linkedin.com/in/hilce-vallenilla

1. Do you use compromising negotiation in your dealings? If yes, what is the most important thing you learned about compromising negotiation?

One of the most important lessons I’ve learned about negotiation is the significance of honoring agreements with clear rules and possible exceptions. Once an agreement is reached, it is crucial to stick to the terms diligently. Clear documentation plays a vital role in this process, ensuring that both parties have a comprehensive understanding of their commitments and any specified exceptions. This not only promotes transparency but also establishes a foundation of trust between the negotiating parties. Proper documentation serves as a reference point, reducing the risk of misunderstandings and providing a solid framework for the successful implementation of the negotiated terms.

2. What tips can you give procurement professionals when compromising negotiation?

A piece of advice that I would offer to procurement professionals who engage in compromising negotiations is to make sure they have enough decision-making or empowerment authority. Having the power to make compromises on behalf of oneself or the company is essential. This empowerment not only speeds up the negotiation process but also enables quick decision-making.

    In Conclusion

    The compromising negotiation style is a strategic approach to finding a middle ground between parties in a negotiation. It aims to avoid pushing too hard or conceding too little, which could be detrimental to both parties. Instead, it focuses on reaching a practical solution that benefits everyone involved.

    The style involves quick and decisive decision-making, followed by thorough reaffirmation to ensure clarity and avoid misunderstandings. It’s also important to plan for future negotiations after reaching a compromise, recognizing that compromises may be temporary solutions.

    While effective in time-sensitive or temporarily complex situations, the compromising style comes with drawbacks. For instance, it may lead to short-lived agreements, dissatisfaction among parties, and the risk of damaging professional relationships. Therefore, it’s important to navigate this delicate balance skillfully to avoid being perceived as weak or hasty in negotiations.

    Frequentlyasked questions

    What is compromising negotiation?

    It is a negotiation tactic where each party plays at a compromise. This means a balanced deal between you and the other party.

    When to use compromising negotiation?

    A compromise is used when there’s too little time during the negotiations. It is also used when both parties cannot decide on an outcome after hours of negotiations.

    Why would you use a compromising negotiation style?

    A compromise can be agreed upon by both parties to stall for time. This means either party can come back for another round of negotiations.

    About the author

    My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

    Marijn Overvest Procurement Tactics