Package Negotiation

• Difficulty: Intermediate
• Estimated effectiveness: High
• Time to implement: Lengthens the negotiation but smooths the agreement
• Fields of application: Integrative negotiation, International trade, Diplomacy, HR, Procurement
• Synonyms: Package deal, Overall agreement, Bundled negotiation, Single undertaking
• Tags: package deal, everything is linked, trade-off, salami, overall negotiation

Package deal negotiation opens up the space for trade-offs between issues (the basis for logrolling) and neutralises the salami tactic that nibbles away concessions one at a time. It produces overall balances often unattainable in sequential mode. Its downside: complexity and the risk that a single sticking point causes the overall agreement to collapse, where partial agreements would at least have secured the essentials.

Adopt it whenever there are several interdependent issues and an interest in compensating between them, complex commercial negotiations, treaties, collective agreements. Impose it when facing a counterpart who practises the salami. Temper it when a quick partial agreement builds trust, or when the overall complexity threatens to paralyse everything.

Recognise it: the other side refuses to lock in anything and repeats « everything is linked » to keep its room for trade-offs. Neutralise it: obtain intermediate agreements in principle (without a firm concession) to gauge progress and avoid permanent vagueness. Turn it around: bundle in your turn and link your concessions to theirs, so that the whole stays balanced and not one-sided.

The « all or nothing » principle can become a tool of obstruction: knowingly blocking a point to sink the whole is a weapon of bad faith. It weighs down and lengthens negotiations, sometimes at the expense of useful partial agreements. Ethically, using it to conceal unbalanced concessions within the bulk of the package undermines transparency. Finally, it demands an overall vision that not all parties possess.

The natural basis for Logrolling and MESOs, which need issues open simultaneously. Diplomatic version: the WTO's single undertaking. It stands opposed to sequential negotiation (point by point) and serves as a bulwark against the salami tactic. Complementary to interest mapping, which feeds the package.

• David Lax & James Sebenius, The Manager as Negotiator, 1986.
• Howard Raiffa, The Art and Science of Negotiation, 1982.
• I. William Zartman, The Practical Negotiator, 1982.

• Create value by crossing asymmetric priorities: giving up the points that cost little to oneself but are precious to the other, and vice versa (logrolling).
• Avoid the deadlock of point-by-point negotiation, where each isolated question turns into a purely distributive tug of war.
• Keep a bargaining lever right to the end thanks to the « nothing is agreed until everything is agreed » principle.
• Reveal the other party's real priorities by submitting several roughly equivalent packages and observing their preferences.
• Secure the overall balance of the agreement: accept losing on certain lines if the overall package remains a winner.

Diplomatic · Camp David (1978): Sinai for peace, an agreement as a block: In September 1978, Jimmy Carter brought Anwar Sadat and Menachem Begin together at Camp David for thirteen days of negotiations. The questions, the return of the Sinai, the dismantling of Israeli settlements, security guarantees and demilitarised zones, diplomatic recognition, were treated as an inseparable package, reworked through 23 successive versions of the text. No point was settled in isolation: Begin ultimately agreed to hand back the whole of the Sinai, a major concession, because it was compensated within the same package by peace, demilitarisation and Egypt's full diplomatic recognition. Negotiated separately, each of these questions would probably have ended in deadlock.

Commercial · Annual supplier-retailer negotiation (representative scenario): Representative scenario: during the annual negotiation, a retailer demands a 4% price cut. Rather than fighting over that single figure, the manufacturer widens the table: price, guaranteed volumes, payment terms, logistics schedule and promotional budget are put back into a single package. He concedes a longer payment term (inexpensive for him, his cash position being solid) and a limited price gesture of 1.5%, in exchange for a higher volume commitment and wider listing. Each concession is announced « subject to agreement on the whole ». The final agreement is better for both parties than a halfway compromise on price alone.

Company · A package labour agreement during mandatory annual pay talks (representative scenario): Representative scenario: in an industrial SME, the mandatory annual negotiation gets bogged down on the general pay rise alone (the unions ask for 5%, management offers 2%). The HR director reframes the discussion as a package: general pay rise, value-sharing bonus, remote-working days, time-savings account and a review timetable. The representatives, whose real priority is the immediate purchasing power of the lowest earners, accept a targeted 2.8% rise coupled with a bonus and an extra remote-working day, elements that are less costly for the company in the long run than a 5% general rise, but more visible for the employees. The package lets everyone claim a gain.

• Being drawn into point-by-point mode and « locking in » each question definitively as you go: you reach the difficult subjects with no bargaining currency left.
• Conceding an element without explicitly conditioning it on the overall agreement, every concession must remain « subject to an overall agreement ».
• Building an unreadable package with too many variables: the other party can no longer compare, suspects a manoeuvre and retreats into defensive positions.
• Swapping concessions of equal importance for both parties (a mere compromise) instead of crossing asymmetric priorities: the package then creates no value.
• Using the package to bury an unfavourable clause in the hope it goes unnoticed: its discovery destroys trust and can sink the entire agreement.

• Froman, L. A. Jr. & Cohen, M. D. (1970) Compromise and logroll: Comparing the efficiency of two bargaining processes Behavioral Science, vol. 15, no. 2, pp. 180-183, DOI: 10.1002/bs.3830150209
• Raiffa, H. (1982) The Art and Science of Negotiation Belknap Press of Harvard University Press
• Fisher, R. & Ury, W. (1981) Getting to Yes: Negotiating Agreement Without Giving In Houghton Mifflin