Distributive Negotiation Vs. Integrative Negotiation
Relative value of distributive agreement is determined based on the competitiveness of the market which negotiation is conducted about. For instance, in a market under perfect competition, where there are many buyers and sellers, prices mainly reflect supply and demand, and the parties are simply price takers, the value of distributive approach to negotiation will be trivial since any potential agreement will be at a pre-determined “market price”. Slight variance to that value will trigger failure in the negotiation. On the other hand, under conditions of monopolistic competition where number of producers or provides is very limited and uniqueness of the product or service is extremely high,
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Sia’s maximum that he would be willing to pay, is $12,000 and Mike’s minimum he would be willing to accept is $10,000. An agreement, if one is reached, will create $2,000 in integrative value compared with no deal, because Sia one-sidedly values the car $2,000 more than does Mike. How that $2,000 is divided between them whether, let 's say, the price agreed to is $10,000, $11,000, or $12,000 is a matter of distributive negotiating: any gain for Sia means pain for Mike, and the other way around. It’s, therefore, fair to describe this as generation of $2,000 in distributive value, distributed in accordance with distributive negotiating skills. On the other hand, what if Mike is an exceptional mechanic and enjoys spelunking in his spare time. Sia, conversely, can’t fix anything, and he hates having to take his car to unfamiliar mechanic shops since he fears that they will take advantage of him. These details propose that more integrative value might be created by the sale of the car if Mike will guarantee to repair any item that breaks for 9 months after the transaction. Let’s assume, for example, that this would cause Sia’s maximum price to increase to $12,500, while Mike minimum price would increase only to $10,200. Any deal that incorporated the repair agreement would be collaborative because it would generate more integrative value than the parties could achieve through the sale of the car alone. The additional $300 can be explained as the value that can be created by the negotiators’ integrative negotiating skills. “In addition, positive emotions make the parties less contentious and more optimistic about the future, which, in turn, increases the chances they will search for multiple alternatives and find a better integrative—win–win—agreement.
Distributive bargaining consists of two parties in competition to maximize their share of a limited resource. In distributive bargaining, the goals of one party are in fundamental and direct conflict with the goals of the other party (Lewicki, Barry, & Saunders, 2011). In the negotiation over the job offer at Robust Routers, the resources being distributed were the items in the bargaining mix. As the human resources director, my goal was to gain more by giving less, and Joe’s goal was to gain more by receiving more of the company’s resources.
Lewicki, J. R., Barry, B., & Saunders, M. D. (2011). Essentials of negotiation (5th ed.). New York, NY: McGraw Hill. ISBN-13: 9780073530369
Negotiations styles are scholastically recognized as being broken down into two general categories and those are distributive bargaining styles and integrative negotiation styles. Distributive bargaining styles of negotiation are understood to be a competitive type of negotiation. “Distributive bargaining, also known as positional bargaining, negotiating zero-sum, competitive negotiation, or win-lose negotiation, is a type or style of negotiation in which the parties compete for the distribution of a fixed amount of value” (Business Blog Reviews, 2011). This type of negotiation skill or style approach might be best represented in professional areas such as the stock market where there is a fixed goal in mind or even in a garage sale negotiation where the owner would have a specific value of which he/she would not go below. In contrast, an integrative negotiation approach/style is that of cooperative bargaining, or win-win types ...
Lewicki, R. J., Saunders, D. M., & Barry, B. (2011). Essentials of Negotiation (5th ed.). New York, NY, US: McGraw-Hill.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2005). Negotiation, Fifth Ed. New York, NY: McGraw-Hill Irwin.
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation: Readings, exercises, and cases. New York: McGraw-Hill Irwin
Lewicki, R., Saunders, D.M., Barry B., (2010) Negotiation: Readings, Exercises, and Cases. 6th Ed. McGraw-Hill Irwin. New York, NY
BUSI 2465 is an interesting course. I participated in numerous ways. I thought of this course as a bargaining process in which bargaining was used among two different business people in order to close a deal or come to an agreement. Before the first class I wondered if negotiations was only consist of winning over each other rather than for mutual gains. I only thought it would be distributive where both the parties keep their information and interests hidden and moreover it is one time relationship. But, I never thought it would be integrative where both the parties share information and interest with each other and continue the long term relationship. Another question comes into my mind was that what are the necessary skills behind winning
Negotiation has been used as a vital communication tool not only in business but also in social intercourse. It helps people make common agreement and avoid conflict. So we need to use the tactics which we learned from this course and books to do more practice, only in this way we can gain advantages in negotiation.
Markets have four different structures which need different "attitudes" from the suppliers in order to enter, compete and effectively gain share in the market. When competing, one can be in a perfect competition, in a monopolistic competition an oligopoly or a monopoly [1]. Each of these structures ensures different situations in regards to competition from a perfect competition where firms compete all being equal in terms of threats and opportunities, in terms of the homogeneity of the products sold, ensuring that every competitor has the same chance to get a share of the market, to the other end of the scale where we have monopolies whereby one company alone dominates the whole market not allowing any other company to enter the market selling the product (or service) at its price.
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
If competitors offer equally attractive products and services, then one will most likely have little power in the situation, because suppliers and buyers will...
Fontaine and Mr. Gaudin were not effective for what they were trying to accomplish. The style of Fontaine and Gaudin was an integrative bargaining style. The textbook illustrates integrative negotiation as managing “both context, and the process of the negotiation in order to gain the cooperation and commitment of all parties” (Lewicki, Saunders, & Barry, 2011).
In a distributive bargaining approach, each negotiator’s objective is in direct conflict with the other. Looking at our situation, each party is concerned about the final price and has a limited number of resources. In starting a new business, Matt’s cash flow is low and there is limit on what he will spend for the service. On the other hand, Chris wants to ensure a high fee but also guarantee he will not lose money after buying gas for his lawnmower. The goal in distributive bargaining is not to find a mutually accepted outcome, but rather that one side gains preferential treatment. In other words, the final result is a win-lose scenario. In distributive bargaining, each party must decide before the negotiation where certain breakpoints lie. For Chris, maybe he can not afford more than $20 for the service, but is willing to pay $15. Conversely, Matt cannot accept less than $12, but would prefer $18. The spread between the resistance points, $12-$20, defines the bargaining range and where a settlement is likely to occur. If the resistance points did not overlap, a negotiation would no...
Negotiation over a car, or anything of interest involves a distribution of attention from one side to another. Just as a car has a seller and a buyer, the government has different political parties, and each issue has a group for and against it. Gaining cooperation from the other side requires strategy.