Value creation in negotiation is the process of identifying and generating new value that can be shared by the parties involved in the negotiation. This can be done by identifying and addressing the underlying interests of both parties, as well as by brainstorming creative solutions that meet both parties’ needs.
Value creation is an important part of negotiation because it allows both parties to achieve a better outcome than they would have if they had simply divided up a fixed pie of value. By creating new value, the parties can expand the pie of value and both parties can benefit.
There are a few key strategies that can be used to create value in negotiation. One is to focus on interests, not positions. Positions are the stated demands of the parties, while interests are the underlying needs and concerns that drive those demands. By focusing on interests, the parties can identify new ways to meet both of their needs. Another strategy is to brainstorm creative solutions. In negotiation, there is no one right answer. The parties need to be creative and come up with solutions that both parties can agree on.
Value creation can be a challenging task, but it can be very rewarding. By focusing on interests and brainstorming creative solutions, the parties can create a win-win outcome that benefits both parties.
Value creation in negotiation take place by either:
- addining a new issue to the negotiated agreement
- making a tradeoff between an issue that is worth less in exchange for another issue that is worth more
By understanding the concept of value creation, the parties can increase their chances of reaching an agreement that is beneficial to everyone involved.
