Negotiation: Integrative and
Distributive Bargaining
Negotiation is an interpersonal decisionmaking process by which two or more
people agree how to allocate scarce
resources
Two Main Types of Negotiation:
1.Adversarial (Win-Lose): Negotiation is a
contest. Each side pursues its own
interests – at the expense of the other, if
necessary.
2.Cooperative (Win-Win): Negotiation is a
collaboration. Both sides work together
for mutual satisfaction.
Distributive Bargaining: Slicing the Pie
• also known as competitive, adversarial, or win-lose
bargaining
• the goals of one party are usually in fundamental
and direct conflict with the goals of the other party
• resources are fixed & limited, and both parties want
to maximize their share of the resources
• one party tries to give information to the other party
only when it provides a strategic advantage
• negotiation power depends on the
information one can gather about the
other party
• negotiating parties focus much on their
differences that they ignore what they
have in common
Why study Distributive
Bargaining?
1.
2.
Some interdependent situations you
face ARE distributive and to do well
you need to understand how they
work.
Some negotiators will use DB
strategies and tactics exclusively so
need to know how to counter their
effects.
Distributive Bargaining
Problem:
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DB can often be costly and
counterproductive. Often cause the
negotiating parties to focus so
much on their differences that they
ignore what they have in common.
People issues often arise as a
result of “selfish” perception of
negotiation (reputation and trust)
When is Distributive Bargaining effective for
you:
Distributive Bargaining strategies and
tactics are quite useful when a
negotiator wants to:
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maximize the value obtained in a
SINGLE DEAL
the relationship is UNIMPORTANT
Integrative
Bargaining
Integrative Bargaining:
Expanding the Pie
• also known as cooperative,
collaborative, win-win, mutual gains,
or problem solving bargaining
• the goals of the parties are not
mutually exclusive (i.e. one party’s
gain is not at the other party’s
expense)
• negotiating parties focus on
commonalities rather than differences
• negotiators attempt to address needs
and interests, not positions
• both parties willingly exchange
information and ideas
• negotiators invent options for mutual
gain
• negotiators use objective criteria for
standards of performance
Key Steps in the Integrative
Negotiation Process:
1. Identify and define the problem
2. Understand the problem and bring
interests and needs to the surface
3. Generate alternative solutions to the
problem
4. Evaluate those alternatives and
select among them
Brainstorming Guidelines:
• Avoid judging or evaluating solutions
• Separate the people from the
problem
• Be exhaustive in the brainstorming
process
• Ask outsiders
Overview Integrative
Negotiation Process
1.
2.
3.
4.
Create a Free Flow of Information
Attempt to Understand the Other
Negotiator’s Real Needs and Objectives
(Interests-Positions)
Emphasize What is in Common Between
Parties and Minimize the Differences
Search for Solutions That Meet
Goals/Objectives of Both Sides
10 Factor Framework
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Negotiating goals
Attitudes to negotiation process
Personal styles
Styles of communication
Time sensitivity
Emotionalism
Agreement form
Agreement building process
Negotiation team organization
Risk taking
Negotiating Goals
Contract------------------Relationship
Some cultures view contracts as a
definitive set of rights and duties
that strictly bind the two sides and
determine their interaction thereafter
while others view the contract as the
beginning and the relationship
dictates interaction thereafter.

Negotiating Attitudes
Win/Lose-----------------------Win/Win
1/ negotiation is a win/win where both
sides can win as both sides have
compatible goals (integrative)
2/ negotiation is a win/lose where one
side wins and other side loses as
there are incompatible goals
(distributive)
Personal Styles
Informal-------------------------Formal
Concerns the form a negotiation uses
to interact with counterparts at the
table
Each culture has its own formalities
and they have special meanings
within that culture
Communication
Direct---------------------------Indirect
Indirect style often make assumptions
about the level of knowledge
possessed by their counterparts;
communicate with veiled references,
figurative and body language
Direct style use clear and definitive
responses to proposals and
questions.
Sensitivity to Time
High------------------------------Low
Cultural discussions concerning time in
negotiation often refer to two
elements:
1. Promptness in meeting deadlines
2. Amount of time devoted to
negotiation
Emotionalism
High------------------------------Low
Accounts of negotiation behavior
almost always point to a particular
groups tendency or lack thereof to
display emotions
Various cultures have different rules as
to the appropriateness and forms of
displaying emotion and these rule
are brought to the negotiating table.
Agreement Form
General------------------------------Specific
Cultural factors may influence the form of
written agreement that the parties make.
Some prefer detailed contracts that attempt
to anticipate all possible eventualities no
matter how unlikely
Some claim that essence of the deal is the
relationship between parties, if
unexpected circumstances arise parties
should address the relationship and not
the contract
Building an Agreement
Bottom-up-------------------Top-down
Related to the form of agreement, is it a
inductive or deductive process
Inductive (bottom-up)- does it begin with
agreement on specifics (price, quantity)
and the sum total of this becomes the
contract.
Deductive (top-down) does it begin with
agreement in principle and proceed to
specific items.
Team Organization
One leader---------------------Group
consensus
Some cultures emphasize the
individual while others stress the
group and these values may
influence the organization of the
team
Risk Taking
High------------------------------Low
In negotiation the culture of
negotiators can affect the willingness
of one side to take risks in
negotiation for example to divulge
information, try new approaches, or
to tolerate uncertainties in a
proposed course of action.