Distributive vs Integrative Bargaining
Distributive and integrative bargaining requires different strategies, tactics and skill sets in a negotiator to be successfully implemented. Distributive bargaining is know as a win-lose situation based on a fixed amount that has to be divided, whereas integrative bargaining is a win-win situation based on a mutually satisfactory solution. Distributive bargaining is most often referred to as a fixed pix negotiation.
There is only so much to go around and it creates a competitive or sometimes argumentative negotiation with both sides vying to get the bigger share.
This style negotiation is typically used between parties that have no prior history, and little likelihood of future negotiations. There are many different strategies used in a distributive negotiation, one of which is assessing the other party’s target and resistance points. This can be very hard for a negotiator to accomplish, as there is very little sharing of information in this style of negotiation. Both parties keep information to themselves, as they do not want the opposing side to be able to determine their room to maneuver in, as they want to get the best deal or bigger part of the pie for themselves.
Along with this is a negotiating strategy is to manage the other party’s impressions; this can be done by passing along false information or incomplete information to keep another negotiator in the dark. There are many different tactics used in distributive bargaining. One seen in different forms is the use of delaying tactics. This can be done two ways, first by having a negotiator that lacks the power to make a final decision. This adds more time to a negotiation while the agreement is presented to the person who has the authority to approve or reject the agreement.
The second delay tactic is by delaying the negotiation past a deadline and thereby incurring a cost or penalty to the other negotiator. However, the most known type of distributive bargaining tactics is the use of hardball tactics. Hardball tactics take different forms, but consist for a negotiator taking a firm stand or position and intimidate, push or bully their position onto the other negotiator. Some of these methods include good cop bad cop, lowball and highball, nibble and snow jobs. Integrative bargaining is referred to as increasing the pie in negotiation.
This style encourages cooperation to join forces together to create something that works best for both parties. This approach focuses on commonalities rather than differences and working towards a common goal or objective. One of the strategies here is to share information and ideas to create understanding of what is being negotiated to better develop alternate solutions. This is very different from the distributive style as there is no collaboration or information sharing in that approach.
Integrative strategies focus on thinking outside the box to create new and unusual solutions whereas distributive is very focused on their positions and do not look to the parties needs. Integrative tactics includes compromise, unlike distributive bargaining. Compromise actually has many different forms and does not mean that both sides give up something. Variations of compromise include logrolling, creating bridge solutions, cutting the cost for compliance and nonspecific compensation.
Both strategies require skill sets that will take time and experience to develop, however integrative strategy is the more difficult one to develop and implement. Integrative bargaining is a mind-set that a negotiator must live and cannot just give lip service to. Without committing to an integrative style from the very beginning a negotiator can send mixed signals and cause confusion in a negotiation. A negotiator must also be able to “sell” the integrative approach to everyone at the negotiation and be able to move the negotiation towards a collaborative effort.