IFB204TC PURCHASING AND
NEGOTIATION
BSC SUPPLY CHAIN MANAGEMENT
WEEK 5 GUEST LECTURES
DR JIYAO XUN
Objectives
• Strategy and Tactics of Distributive Bargaining
• Strategy and Tactics of Integrative Negotiation
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Theme 1
• Strategy and Tactics of Distributive Bargaining
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The Distributive Bargaining Situation
• The target point is a negotiator’s optimal goal.
– Also called a negotiator’s aspiration.
• The resistance point is a negotiator’s bottom line.
– Also called a reservation price.
• The asking price is the initial price set by a seller.
– The buyer may counter with their initial offer.
• The spread between resistance points – the
bargaining range, settlement range, or zone of
potential agreement – is important.
– When the buyer’s resistance point is above the seller’s,
there is a positive bargaining range.
4
The Role of Alternatives to a Negotiated Agreement
• What will you do if no agreement is reached?
– What is your best alternative to a negotiated agreement – BATNA?
– What is your worst alternative to a negotiated agreement – WATNA?
• Alternatives give negotiators the power to walk away.
– Negotiators can set their goals higher and make fewer concessions.
– Good bargainers know their realistic alternatives before starting
discussions and try to improve their alternatives during negotiation.
• Strong BATNAs can influence how a negotiation unfolds.
– Negotiators with strong BATNAs usually make the first offer.
– Benefits of a good BATNA are strongest when the bargaining range is
small and negotiations are competitive or unlikely to reach agreement.
5
Settlement Point
• The fundamental process of distributive bargaining is to
reach a settlement within a positive bargaining range.
– Both sides want to claim as much of the bargaining range as
possible.
• Both parties know they may have to settle for less than
they prefer, but hope it is better than their own
resistance point.
– Both must believe the settlement is the best they can get.
• Very important, both for the agreement and for the support of the
agreement after negotiation ends.
• Another factor affecting satisfaction with the agreement
is whether the parties will see each other again.
– Those expecting future negotiations with the other party are
less likely to use distributive bargaining.
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Bargaining Mix
• The package of issues for negotiation is the
bargaining mix.
– Each item in the mix has its own starting, target, and
resistance points.
– Some items are important to both parties, others only
to one party.
– Negotiators need to understand what is important to
them and to the other party, and take this into account
during the planning process.
• As the bargaining mix gets larger, there is more
opportunity for trade-offs across issues.
– This part may require integrative negotiation strategies
and tactics.
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Discovering the Other Party’s Resistance Point
• The more you can learn about the other party’s target,
resistance point, motives, and so on, the more likely you will
settle favorably.
• At the same time, you do not want the other party to have
certain information about you.
– Your resistance point, some of your targets, and any information
on weaknesses is best kept concealed.
– You may want the other party to have certain information.
• Some factual and correct.
• Some contrived to lead the other party to believe things favorable to
you.
• Each side wants to obtain information and conceal
information.
– As a result, communication can become complex, conveyed in a
type of code that evolves during the negotiation.
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Influencing the Other Party’s Resistance Point
• The resistance point is set by the value expected from a particular
outcome – the product of the worth and costs of an outcome.
• A factor in shaping the other person’s understanding of what is possible
is the other’s understanding of your own situation.
– The other party’s understanding of your value for a particular outcome,
costs you attach to delay, and your cost of ceasing negotiations.
• The four major ways to weaken the other party’s resistance point.
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Reduce the other party’s estimate of your cost of delay or impasse.
Increase the other party’s estimate of their own cost of delay or impasse.
Reduce the other party’s perception of the value of an issue.
Increase the other party’s perception that you value an issue.
• Take care when trying to influence the other party’s resistance point.
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Tactical Tasks
• Within distributive bargaining, there are four
important tactical tasks concerned with targets,
resistance points, and the costs of terminating
negotiations.
– Assess the other party’s target, resistance point, and
cost of terminating negotiations.
– Manage the other party’s impression of the negotiator’s
target, resistance point, and cost of terminating
negotiations.
– Modify the other party’s perception of their own target,
resistance point, and cost of terminating negotiations.
– Manipulate the actual costs of delaying or terminating
negotiations.
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Assess the Other Party’s Positions
• The negotiator can pursue two general routes for
information on the other party’s target and resistance
points.
– Indirect assessment.
• Determine what information the other party likely used to set target
and points and see how they may have interpreted this information.
• A variety of information sources can be used for this indirect
assessment.
– Direct assessment.
• Sometimes, the other party will provide accurate information if in
need of a quick settlement.
• If the other party is not so forthcoming, other methods can be used.
– Recruit spies.
– Provoke the other party into an angry outburst.
– Simulate exasperation and walk out of negotiations.
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Manage the Other Party’s Impression of Your Position
• Negotiators need to screen information about their own position.
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Concealment is the most general screening activity.
When using a representative, calculated incompetence may be used.
In team negotiations, channel communication through a spokesperson.
Present many items for negotiation, only a few of which are important.
• Negotiations can use direct action to alter impressions.
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Selective presentation reveals only the facts to support your case.
Justify your positions in order to influence the other party’s impressions.
Display emotional reaction to facts, proposals, and possible outcomes.
Time and detail of presentation conveys importance of an issue.
• Use care when choosing to take direct action.
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Modify the Others’ Perceptions of Their Own Position
• A negotiator can alter the other party’s
impressions of their own position by making
outcomes less attractive or costs higher.
– One approach is to interpret for the other party
what the outcomes of their proposal will really be.
• Maybe highlighting a previously overlooked item.
– Another approach to modifying the other’s
perceptions is to conceal information.
• Concealment strategies carry ethical hazards and
negotiators must ensure they negotiate in good faith.
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Manipulate the Costs of Delay or Termination
• There are three ways to manipulate the costs of
delay.
– Plan disruptive action.
• Public picketing, boycotting, and locking negotiators in a room
until they reach agreement are all forms of disruptive action
that increase costs.
– Form an alliance with outsiders.
• Involve other parties who can somehow influence the
outcome in the process, this will also increase the costs of
delay.
– Manipulate the scheduling of negotiations.
• Use the negotiation schedule to increase time pressure.
• Opportunities to increase or alter the timing of negotiation
vary widely.
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Positions Taken During Negotiation
• Effective distributive bargainers need to understand the process
of taking positions during bargaining, including the following.
– The importance of the opening offer and the opening stance.
– The role of making concessions throughout the negotiation process.
• Each party takes a position at the beginning of negotiations.
– Negotiation is iterative and provides opportunity for both sides to
communicate information and their positions may change.
• You must be sensitive to two factors when creating offers.
– Value characteristics are how much the issues and options of
different issues are worth to a negotiator.
– Content characteristics involve the way the negotiation is
constructed.
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Opening Offers and Opening Stance
• Making the first offer is
advantageous as it can
anchor a negotiation.
• Those with better BATNAs
are more likely to offer first.
• Exaggerated opening offers
give room for movement.
– Sends the message of a long
way to go and makes them
doubt their own position.
– But it may be seen as too
tough and rejected.
• An opening stance is the
attitude a negotiator will
adopt at the start of
negotiation.
• Choose carefully as
opponents may respond
in kind.
• Keep a consistent
message with opening
offer and stance.
– When the messages
conflict, the other party
may find them confusing.
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Initial Concessions
• Opening offers, met with counteroffers, define the bargaining
range – after which is time to hold firm or offer concessions.
– The first concession conveys a message of how you will proceed.
• Elements at the start of negotiations communicate
intentions.
– An exaggerated opening offer, a determined opening stance, and a
very small initial concession signals a position of firmness.
• Research shows firm negotiators achieve better economic outcomes.
• There are several good reasons for a flexible position.
– Taking different stances throughout a negotiation may reveal the
other party’s targets by observing their reactions.
– Negotiators may use cooperation hoping for a better agreement.
– Flexibility keeps the negotiations proceeding.
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Role of Concessions
• Concessions are central to negotiation – without them,
negotiation would not exist.
• Negotiators generally resent a take-it-or-leave-it approach.
• Parties feel better about a settlement when the negotiation
involved a progression of concessions rather than not.
– Intangible factors may be as important as the tangibles.
• Reciprocal concessions cannot be haphazard.
• To encourage further concessions, negotiators may link their
concessions to a prior concession made by the other.
– “Because you have reduced your demand for X, I am willing to
concede on Y.”
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Pattern of Concession Making
• The pattern of concessions made during a negotiation
contains valuable information – though not always easy to
interpret.
– When successive concessions get smaller, the obvious message is
that the concession maker’s position is getting firmer.
– Consider two salesmen telling their clients they have no more
concessions they can make.
– The believable salesman is the one who has made four previous
concessions of decreasing value.
– The unbelievable salesman has made three previous concessions
of the same value.
• In multi-issue negotiations, skilled negotiators will offer
different forms of a potential settlement worth about the
same to them.
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Figure 2.4: Pattern of Concession Making for Two Negotiators
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text.
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Final Offers
• Eventually, a negotiator conveys a message that
there is no more room for movement – the
present offer is the final one.
– They may choose to let the absence of concessions
be the signal.
• One way to convey the message is to make the
last offer more substantial.
– This implies the negotiator is throwing in the
remainder of the negotiating range.
– A personalized concession also signals the last
concession.
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Commitment
• One definition is the taking of a bargaining position with
some explicit or implicit pledge to a future course of action.
– The purpose is to remove ambiguity about the negotiator’s
intended course of action.
– They also reduce the other party’s options and are designed to
constrain the other party to a reduced portfolio of choices.
• Often interpreted by the other party as a threat.
– Some can be threats but others are statements of intent, leaving
the responsibility for avoiding disaster in the hands of the other
party.
– They involve future promises.
• Because of their nature, they require a follow through in
action.
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Tactical Consideration in Using Commitments
• Like many tools, commitments are two-edged.
– They exchange flexibility for certainty of action, but
create difficulties if you want to move to a new
position.
– You should also make contingency plans for a graceful
exit if you need it – but keep the contingency plan a
secret.
• Commitments may be useful to you as a
negotiator, but you want to prevent the other
party from becoming committed.
– If they should take a committed position, keep open
one or more ways for them to get out of the
commitment.
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Establishing a Commitment
• There are three properties to a commitment statement.
– A high degree of finality, a high degree of specificity, and a
clear statement of consequences.
• Public pronouncement.
– This increases potency and reduces the chance of changes.
• Linking with an outside base.
– Link with outside allies, or make it difficult to break a
commitment.
• Increase the prominence of demands.
– Repetition is one of the most powerful tools for prominence.
• Reinforce the threat or promise.
– Simple, direct statements of demand are the most effective.
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Prevent the Other from Premature Commitment
• It is important to prevent the other party from
committing.
– People often commit when angry – so pay attention to anger
levels.
– Deny your opponent the necessary time to make a
commitment.
– Ignore or downplay a threat.
• There are times when it is to your advantage for the
other party to become committed.
– When your opponent takes a position early, you may want to
lock it in.
– This can be handled in one of two ways.
• By identifying the significance of the commitment when it is made.
• By taking notes and keeping track of the other’s statements.
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Finding Ways to Abandon a Committed Position
• Plan a way out.
– Simultaneously plan a private way out of any commitment.
• Let it die silently.
– After some time, make a new proposal without mentioning
the first.
• Restate the commitment.
– Restate the commitment in more general terms, changing
some details to fit your current needs.
• Minimize the damage.
– If the other party backs off a committed position, help them
save face.
– One way is to make a public statement about how the other
party’s move was for a noble or higher outside cause.
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Closing the Deal
• Provide alternatives.
– Provide two or three alternative packages – people like
choices.
• Assume the close.
– Act as if the decision has already been made.
• Split the difference.
– When an agreement is close, suggest the parties split the
difference.
• Exploding offers.
– This offer has a very tight deadline, applying pressure to
agree quickly.
• Sweeteners.
– Save a special concession for the close – but plan ahead.
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Assessing the Quality of the Agreement
• Objective outcomes.
– Include assessment of the agreement against the
negotiator’s target and resistance points.
– Another way is to compare against what the other party
would have paid, but this information is not always available,
or is suspect.
• Subjective value.
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Feelings about the outcome – distributive fairness.
Feelings about the self – Did you lose face?
Feelings about the process – Did the other party listen?
Feelings about the relationship – Do you trust the other
negotiator?
• There is no perfect assessment, but try.
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Hardball Tactics
• Designed to pressure negotiators into doing things
they normally would not do.
– Their presence signals a distributive bargaining
approach.
– Their effect is unproven and can backfire.
– Many find these techniques offensive.
– Many negotiators consider these tactics out-of-bounds
– The authors do not recommend using these tactics.
• It is important to understand hardball tactics and
how they work.
– So you can recognize, and deflect, them when used
against you.
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Dealing with Typical Hardball Tactics
• A good strategic response is identify the tactic quickly
and understand how it works – response will depend on
your goals.
• Discuss them.
– Label the tactic and indicate you know what is going on.
• Ignore them.
– Not responding to a threat is often the best way of dealing
with it.
• Respond in kind.
– You can always respond with a hardball tactic of your own.
• Co-opt the other party.
– Try to befriend the other negotiator before they use such
tactics on you.
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Hardball Tactics and Their Weaknesses
• Good cop/bad cop.
– Transparent and easily
countered, difficult to
enact.
• Lowball/highball.
– The risk in using this is the
other party may end talks.
• Bogy.
– Deceptive and difficult to
enact, may get trapped.
• Nibble.
– Many feel this is bargaining
in bad faith, may illicit
feelings of revenge.
• Chicken.
– Turns negotiations into a
serious game, difficult to
avoid.
• Intimidation.
– May use anger, legitimacy,
or guilt, teams may help.
• Aggressive behavior.
– Halt negotiations, a team
may help here too.
• Snow job.
– Ask questions and listen
carefully to deflect this
tactic.
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Distributive Skills Used in Integrative Negotiations
• Distributive bargaining skills are applicable in
integrative negotiation when claiming value.
• Applicable skills include the following.
– Setting clear target and resistance points.
– Understanding and working to improve your
BATNA.
– Starting with a good opening offer.
– Making appropriate concessions.
– Managing the commitment process.
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Theme 2
• Strategy and Tactics of Integrative Negotiation
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Overview of the Integrative Negotiation Process
Context
Process
Create a free flow of
information.
Identify and define the
problem.
Attempt to understand the
other negotiator’s needs and
objectives.
Surface interests and needs.
Emphasize things that the
parties have in common.
Generate alternative solutions.
Evaluate and select
alternatives.
Search for solutions that meet
the goals/objectives of both
parties.
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Creating a Free Flow of Information
• Effective information exchange facilitates
integrative solutions.
– Negotiators must be willing to reveal their true
objectives and to listen to each other carefully.
– In contrast, a willingness to share information is not a
characteristic of distributive bargaining situations.
• A free flow of information allows both parties to
know and share their alternatives.
– Known alternatives means negotiators are more likely
to soften resistance points, improve trade-offs, and
increase the resource pie.
– It is the negotiator with the alternative who is
responsible for expanding the pie.
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Understand the Other’s Real Needs and Objectives
• You must understand the other’s needs before helping to
satisfy them.
• Integrative agreements are facilitated when parties
exchange information about issues, not necessarily
about their positions.
• Negotiators must make a true effort to understand what
the other side really wants to achieve.
– In contrast, negotiators in distributive bargaining either
make no effort to understand the other side’s needs or do so
only for their own ends.
• The more experienced party may need to assist the less
experienced party in discovering their underlying needs.
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Emphasizing Things in Common
• To sustain a free flow of information,
negotiators may require a different outlook or
frame of reference.
– Individual goals may need to be redefined through
collaborative efforts directed toward a collective
goal.
– At times, the collective goal is clear and obvious.
– Other times it is not clear or easy to keep in sight.
37
Searching for Solutions
• Successful integrative negotiation depends on the search
for solutions that meet the needs and objectives of both
sides.
– Negotiators must be firm but flexible.
– Firm about primary interests but flexible about how needs
are met.
• Low concern for the other’s objectives may drive one of
two forms of behavior.
– Negotiators may work to ensure what the other obtains does
not take away from their own accomplishments.
– Negotiators may attempt to block the other from obtaining
their objectives due to a strong desire to win.
• In integrative negotiation, outcomes are measured by
the degree they meet both negotiator’s goals.
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Key Steps in the Integrative Negotiation Process
• There are four major steps in the process.
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Identify and define the problem.
Surface interests and needs.
Generate alternative solutions to the problem.
Evaluate those alternatives and select among them.
• The first three steps are important for creating value.
• The fourth step involves claiming value – distributive skills.
– The Pareto efficient frontier is achieved when no agreement
makes any party better off without decreasing outcomes to any
other party.
• Creating value must happen before claiming value.
– Creating value is more effective when collaborative and claiming
value may derail the creating value process.
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Figure 3.1: Creating and Claiming Value and the Pareto
Efficient Frontier
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text.
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Step 1: Identify and Define the Problem
• Define the problem in a way that is mutually acceptable to both sides
– separate from efforts to generate or choose alternatives.
• State the problem with an eye toward practicality and
comprehensiveness and a focus on solving the core problem(s).
• State the problem as a goal and identify the obstacles to attaining this
goal – can obstacles be corrected by negotiators?
• Depersonalize the problem, allowing both sides to approach the issue
as a problem external to the individuals at the table.
• Separate the problem definition from the search for solutions.
– Negotiators should develop standards by which potential solutions will
be judged for how well they fit.
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Step 2: Surface Interests and Needs
• Key to an integrative agreement is understanding and
satisfying each other’s interests.
– Interests are the underlying concerns, needs, desires, or fears that
motivate a negotiator to take a particular position.
– Pursuing positional bargaining allows only one victor at outcome.
• In distributive bargaining, negotiators trade positions back
and forth, attempting to achieve a settlement close to their
targets.
• In integrative negotiation, both negotiators need to pursue
the other’s thinking to determine factors that motive their
goals.
– The presumption is that if both parties understand the others’
motivating factors, they may recognize possible compatibilities.
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Types of Interests
• Interests can be intrinsic
or instrumental, or both.
• Substantive interests are
related to focal issues.
– Economic and financial
issues.
• Process interests relate
to how the negotiation
unfolds.
– One party may pursue
distributive bargaining.
– The other may enjoy
integrative negotiation.
• Relationship interests are
the value of ongoing
relations.
– Intrinsic relationship
interests exist when the
parties value the
relationship.
– Instrumental relationship
interests exist when the
parties derive substantive
benefits from the
relationship.
• Interests in principle may
be deeply held and serve as
guides.
– Often involve intangibles.
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Some Observations on Interests
• There is almost always more than one type of interest
underlying a negotiation.
• Parties can have different types of interests at stake.
• Interests often stem from deeply rooted human needs or
values.
• Interests can change – like positions.
• Sometimes people are not even sure about their own
interests.
– Listen to your own inner voices.
• Surfacing interests is not always easy or to your best
advantage.
– Critics to the “interests approach” identified the difficulty of
defining interests and taking them into consideration.
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Step 3: Generate Alternative Solutions
• This is the creative phase of integrative negotiation.
– The objective is to create a variety of possible solutions to
the problem.
– Then evaluate and select from among those options in step
4.
• Several techniques are available, falling into two general
categories.
– The first requires negotiators reframe the problem to create
win-win alternatives out of what appeared to be a win-lose
problem.
– The second takes the problem as given and creates a long list
of options from which the parties can choose.
• In integrative negotiation over a complex problem, both
types of techniques may be used, and even intertwined.
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Inventing Options
• Logroll.
– Trade off prioritized issues.
– Unbundling splits one issue
into parts for logrolling.
• Expand the pie.
– Add resources in such a way
that both sides win.
• Modify the resource pie.
– Modify the pie to support
both sides.
• Find a bridge solution.
– Invent a new option that
meets both needs.
• Nonspecific compensation.
– One party gets their
objectives, the other is
compensated.
• Cut the costs for compliance.
– Minimize their costs for
agreeing to a specific solution.
• Superordination.
– When the original issue is
replaced by other interests.
• Compromise.
– These solutions do not further
the interests of either party.
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Generating Alternatives to the Problem as Given
• Brainstorming.
– Groups work to generate as
many solutions as possible.
– Spontaneous, even
impractical solutions.
– Success depends on the
amount of ideas generated.
• Rules of brainstorming.
– Avoid judging solutions.
– Separate people from the
problem.
– Be exhaustive in the
process.
– Ask outsiders.
• Surveys.
– Brainstorming only gathers
ideas of people present.
– Surveys quickly gather ideas
of those not present.
– Parties miss hearing other’s
ideas, a key brainstorming
advantage.
• Electronic brainstorming.
– A facilitator presents the
problem and anonymous
ideas are gathered for all to
see.
– The facilitator then asks
additional probing
questions.
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Step 4: Evaluate and Select Alternatives
• When the issue is simple, this may be a single step.
• Otherwise, the steps are: definitions and standards,
alternatives, evaluation, and selection.
• Negotiators will need to weigh or rank-order each option
against clear criteria.
– May need to return to definitions or return to standards for
revisions.
• Finally, the parties engage in a decision-making process
and come to an agreement on the best options.
– The selection of alternatives is the claiming-value stage.
• Use the following guidelines to evaluate options and
reach a consensus.
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Guidelines to Evaluate and Select Alternatives
• Narrow the range of
solution options.
• Evaluate solutions on the
basis of quality, standards,
and acceptability.
• Agree to the criteria in
advance of evaluating
options.
• Be willing to justify
personal preferences.
• Be alert to the influence of
intangibles in selecting
options.
• Take time out to cool off.
• Use subgroups to evaluate
complex options.
• Explore different ways to
logroll by exploring
differences in risk
preference, expectations,
and time preferences.
• Keep decisions tentative
and conditional until all
aspects of the final proposal
are complete.
• Minimize formality and
recordkeeping until final
agreements are closed.
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Assessing the Quality of the Agreement
• Assessed along the same two dimensions as
distributive agreements.
– Objective outcomes.
– Subjective value.
• Assess objective outcomes against the extent to
which both parties’ interests and needs were
met by the agreement.
• The subjective value is more important in
integrative negotiations due to the long-term
relationship of the parties.
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Factors Facilitating Successful Integrative Negotiation
• Successful integrative negotiation occurs when the
parties are predisposed to finding a mutually acceptable
joint solution.
• This next section reviews seven factors that facilitate
successful integrative negotiation.
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The presence of a common goal.
Faith in your own problem-solving ability.
A belief in the validity of the other party’s position.
The motivation and commitment to work together.
Trust.
Clear and accurate communication.
An understanding of the dynamics of integrative negotiation.
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Factors in Successful Integrative Negotiation
Some Common Objective or Goal
There are three types of goals
that may facilitate integrative
agreements.
Faith in Your Problem-Solving
Ability
Parties who believe they can
work together are more likely
to do so.
• A common goal is one all
parties share equally.
• Expertise in the focal problem
strengthens understanding.
• A shared goal is one both
parties work toward but that
benefits them differently.
• Expertise increases the
negotiator’s knowledge base
and their self-confidence.
• A joint goal involves
individuals with different
personal goals agreeing to
combine them in a collective
effort.
• Direct experience increases
understanding of the process.
• Knowledge of integrative
tactics leads to an increase in
integrative behavior.
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Validity, Motivation, and Problem-Solving
• Integrative negotiation requires negotiators accept both their
own and the other’s attitudes, interests, and desires as valid.
– Believing in the other’s validity does not mean empathizing.
• For successful integrative negotiation, the parties must be
motivated to collaborate rather than compete.
– Maximize your outcomes by assuming a healthy interest in
achieving your own goals while remaining collaborative and
problem-solving.
• Ways to enhance motivation and commitment to problemsolving.
– Recognize a shared fate and discuss gains from working together.
– Engage in commitments to each other before negotiation begins.
• Called presettlement settlements.
– Create an umbrella agreement as a framework for future
discussions.
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Trust, Communication, and Understanding
• Tactics to elicit information when the other mistrusts you.
– Share information and encourage reciprocity.
– Negotiate multiple issues simultaneously.
– Make multiple offers at the same time.
• A precondition for integrative negotiation is clear
communication.
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Mutual understanding is the responsibility of both sides.
Multiple channels clarify the message, watch for consistency.
Metaphors play a role when direct communication is difficult.
Create formal communication procedures if one party dominates.
• Finally, studies indicate that training enhances the
understanding and ability to successfully pursue integrative
negotiation.
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Why Integrative Negotiation is Difficult to Achieve
• Integrative negotiation is collaborative, the parties define
their common problem and pursue strategies to solve it.
• Conflict and negotiation is essential to the differences
between distributive bargaining and integrative negotiation.
– Negotiators may not pursue integrative agreements if they fail to
see integrative potential or are motivated by their own needs.
• Four additional factors contribute to this difficulty.
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The history of the relationship between parties.
The belief that an issue can only be resolved distributively.
The mixed-motive nature of most bargaining situations.
Short time perspectives.
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History and Beliefs
• The more competitive and conflict-laden their past
relationship, the more likely parties will be
defensive with a win-lose attitude.
– Even with no history, expectations create defensiveness.
– Negotiators can proceed past a negative history, but it
takes effort.
• Conflict dynamics lead negotiators to polarize
issues and see them only in win-lose terms.
– In addition, negotiators may be prone to several
cognitive biases that may preclude them from engaging
in behaviors necessary for integrative negotiation.
56
Nature of Situations and Short Time Perspective
• Most situations contain some elements requiring
distributive bargaining processes, others requiring
integrative processes.
– Conflict and competitiveness drive out cooperation and
trust.
• A fundamental challenge is that parties fail to recognize
or search for the integrative potential in a negotiation.
– Primarily to satisfy their own concerns.
• Effective integrative negotiation requires sufficient time.
– To process information.
– To reach true understanding of your own and the other
party’s needs.
– To manage the transition from creating value to claiming
value.
57
Distributive Bargaining versus Integrative Negotiation
• Many would argue for integrative negotiations,
holding that distributive bargaining is outdated.
• A strong understanding of both is important for
two reasons.
– Some negotiators use a purely distributive approach
and evidence shows integrative negotiating is effective
against such bargainers.
– Integrative situations involve a claiming-value portion
and this may involve the use of distributive tactics.
• A sound understanding of distributive bargaining makes it
more likely you will be able to identify insincere opponents.
58
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