January 8, 2024

PIECEMEAL AGREEMENTS VS LUMP-SUM AGREEMENTS

Many of today's negotiations can become very complex and involve many varying issues. Should these complex negotiations begin with agreements in principle or are you better served by leaning towards starting with agreement on a fact-by-fact, issue-by-issue basis?

There are advantages and disadvantages to both negotiating approaches. How you start can determine where you end up.

Piecemeal negotiations build gradual trust and permit the parties to get a better feel for the whole story. Each party learns about each other’s needs and priorities. The step-by-step inquiry process uncovers the risk areas and often revels hidden opportunities. The piecemeal process works best when detailed information is available and overall differences between the two parties are not too large.

Advocates of a Lump Sum or “agreement in principle” approach start differently. Logical principles are first established. Then, conflicts involving specific facts and issues can be fitted into the agreed to framework. Issues can be traded in a broad-brush way to for other issues. The focus of bargaining becomes related to overall performance rather than the details.

I favor a hybrid approach that blends both the piecemeal and the lump-sum concepts. I like to start by stating the principles that govern my thinking and exploring what is most important to the other party. I do not seek agreement on principle, but only an insight in the other’s viewpoint. Once this broad framework is established, I negotiate on a piecemeal basis for these tactical reasons:

1. People have a need for closure and this is satisfied, in part, by piecemeal agreements.
2. Piecemeal agreements can reveal much about a person’s personality and the intensity of their needs and positions.
3. Perceptive listening during a piecemeal process may reveal weaknesses in the other party’s position and power structure.
4. An item-by-item discussion permits a person to retreat gracefully from unrealistic positions and still fulfill the behavioral expectations of those he or she represents.
5. During these item-by-item discussions we frequently discover mutual opportunities that neither of us thought about – opportunities that often pave the way to a more satisfying and rewarding agreements for both of us.

If one agrees in principle, one need not agree on the parts. If one agrees on the parts, one need not agree on the whole.

Some people sell themselves short by feeling that their integrity is at stake on each issue. Once committed on a point, they are embarrassed to retreat. Nonsense! In negotiation the sum of the parts need not equal the whole. The deal is done when we shake hands. Not before.