What is MUTUAL GAINS APPROACH? What does MUTUAL GAINS APPROACH mean? MUTUAL GAINS APPROACH meaning - MUTUAL GAINS APPROACH definition - MUTUAL GAINS APPROACH explanation.
Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.
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The Mutual Gains Approach (MGA) to negotiation is a process model, based on experimental findings and hundreds of real-world cases, that lays out four steps for negotiating better outcomes while protecting relationships and reputation. A central tenet of the model, and the robust theory that underlies it, is that a vast majority of negotiations in the real world involve parties who have more than one goal or concern in mind and more than one issue that can be addressed in the agreement they reach. The model allows parties to improve their chances of creating an agreement superior to existing alternatives.
MGA is not the same as "win-win" (the idea that all parties must, or will, feel delighted at the end of the negotiation) and does not focus on “being nice” or “finding common ground.” Rather, it emphasizes careful analysis and good process management.
The four step Mutual Gains Approach was developed by scholars and practitioners at the Consensus Building Institute, a Cambridge, Massachusetts based company founded by MIT professor Lawrence Susskind
Prepare by understanding interests and alternatives. More specifically, estimate your BATNA and how other parties see theirs (BATNA stands for “best alternative to a negotiated agreement”). Having a good alternative to agreement increases your power at the table. At the same time, work to understand your own side’s interests as well as the interests of the other parties. Interests are the kind of things that a person or organization cares about, in ranked order.
Good negotiators listen for the interests behind positions or the demands that are made. For instance, “I won’t pay more than ninety thousand” is a position; the interests behind the position might include limiting the size of the down payment; a fear that the product or service might prove unreliable; and assumptions about the interest rates attached to future payments. The party might also be failing to articulate other non-financial interests that are nonetheless important.
2. Value Creation
Create value by inventing without committing. Based on the interests uncovered or shared, parties should declare a period of “inventing without committing” during which they advance options by asking “what if…?” By floating different options and “packages” —bundles of options across issues—parties can discover additional interests, create options that had not previously been imagined, and generate opportunities for joint gain by trading across issues they value differently.
3. Value Distribution
At some point in a negotiation, parties have to decide on a final agreement. The more value they have created, the easier this will be, but research suggests that parties default very easily into positional bargaining when they try to finalize details of agreements. Parties should divide value by finding objective criteria that all parties can use to justify their “fair share” of the value created.
By identifying criteria or principles that support or guide difficult allocation decisions, parties at the negotiating table can help the groups or organizations they represent to understand why the final package is not only supportable, but fundamentally “fair.” This improves the stability of agreements, increases the chances of effective implementation, and protects relationships.
4. Follow Through
Follow through by imagining future challenges and their solutions. Parties near the end of difficult negotiations—or those who will “hand off” the agreement to others for implementation—often forget to strengthen the agreement by imagining the kinds of things that could derail it or produce future conflicts or uncertainty.
While it is difficult to focus on potential future challenges, it is wise to include specific provisions in the final document that focus on monitoring the status of commitments; communicating regularly; resolving conflicts or confusions that arise; aligning incentives and resources with the commitments required; and helping other parties who may become a de facto part of implementing the agreement. Including these provisions makes the agreement more robust and greatly assists the parties who will have to live with it and by it.