CHAPTER THREEStrategy And Tactics of Integrative Negotiation

INB 350 Lecture By: Ms. Adina Malik (ALK)

Learning Objectives• What is Integrative Negotiation?• Characteristics and Overview of Integrative

Negotiation process• Difference between Distributive & Integrative

Negotiation• Key Steps in Integrative Negotiation Process

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Integrative NegotiationThe fundamental structure of an integrative negotiation is such that it allows both sides to achieve their objectives.

It is a Win-Win negotiation-

means that all creative opportunities are exploited and no resources are left on the table.

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Integrative Negotiation

The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties feeling that they've won, in some way, after the event.

Thus one party’s gain is not at the other party’s expense .

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Overview of the Integrative Negotiation Process

• Create a free flow of information: share the alternatives-> the possibility

of receiving additional benefit is higher->less extreme resistance point.

• Attempt to understand the other negotiator’s real needs and objectives:

Parties should clarify their priorities about particular issues but not position.

• Emphasize the commonalties between the parties and minimize the differences:

Individuals goals should be redefined as best achieved through collaborative efforts.

• Search for solutions that meet the goals and objectives of both sides:

Successful integrative negotiation results in accomplishment of both the parties goals.

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Overview of the Integrative Negotiation Process

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INTEGRATIVE DISTRIBUTIVE

Flow of information

Free & open flow; share information openly

Conceal information, or use it selectively or strategically

Understanding the other

Attempt to understand what the other side really wants & needs

Make no effort to understand, or use the information to gain strategic advantage

Attention to commonalities and differences

Emphasize common goals, objectives, interests

Emphasize differences in goals, objectives, interests

Focus on solutions

Search for solutions that meet the needs of both (all) sides

Search for solutions that meet own needs or block other from meeting their needs

Integrative vs. Distributive

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DISTRIBUTIVE INTEGRATIVE

Goals In fundamental conflict/ mutually exclusive

Not in fundamental conflict /not mutually

exclusive

Relationship Not a high priority Is a high priority

Resources Fixed or Limited Not Fixed or Limited

Trust and Cooperation

Is Lacking Exists

Integrative vs. Distributive

In Distributive Bargaining, negotiators trade positions back and forth, attempting to achieve a settlement as close to their targets as possible.

In Integrative Bargaining, both negotiators need to pursue the other’s thinking and logic to determine the factors that motivated them to arrive at their goals

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What Makes IntegrativeNegotiation Different?

• Focus on commonalties rather than differences

• Address needs and interests, not positions

• Commit to meeting the needs of all involved parties

• Exchange information and ideas

• Invent options for mutual gain

• Use objective criteria to set standards

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Claiming and Creating Value

Claiming and Creating Value• Pareto Efficient Frontier: no other feasible agreement exists

that would improve one party’s outcome while simultaneously not hurting the other party’s outcome.

• The fundamental purpose of Integrative negotiation is to Create Value.

• The heart of negotiation is to explore both common and different interests to Create Value.

• Integrative Negotiation is a process of identifying Pareto Efficient solutions.

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Key Steps in the Integrative Negotiation Process

• Identify and define the problem• Understand the problem fully

– identify interests and needs on both sides• Generate alternative solutions• Evaluate and select among alternatives

The first three steps are important for ‘creating value’.The last step involves ‘claiming value’.

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1. Identify and Define the Problem

• Define the problem in a way that is mutually acceptable to both sides

• State the problem with an eye toward practicality and comprehensiveness: several issues-> find a link

• State the problem as a goal rather than a solution process and identify the obstacles in attaining this goal

• Depersonalize the problem• Separate the problem definition from the

search for solutions

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2. Understand the Problem Fully –Identify Interests and Needs

• Interests: the underlying concerns, needs, desires, or fears that motivate a negotiator to take a particular position .

• During negotiation both parties expose their demands/ positions, in integrative negotiation the aim is to understand the motivating factors for the other .

ExampleTwo men quarrelling in a library. One wants the window open and the other wants it closed. They bicker back and forth about how much to leave it open : a crack, halfway, three quarter of the way. No solution satisfied them both. Enter the librarian, she asks one why he wants the window open . “To get some fresh air.” She asks the other why he wants it closed “To avoid draft/cold air. ” After thinking a minute , she opens wide a window in the next room, bringing in fresh air without a draft.

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Example (cont.)At first, there were two options- window open or close. If the parties continued to pursue distributive / positional bargaining, the set of possible outcomes can include only a victory for one. However , the librarian managed to find out the underlying interest of both the parties and invent a solution that meets the interest of both sides.

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Example (cont.)The Difference Between Position And Interest:

In this classic example of negotiation over position and failing to understand underlying interest , if one party did compromise still it might result in a lose-lose situation because the person who wants the window open he wont get enough fresh air with the window partially open and the other believes that any opening is unsatisfactory.

Another example: • Negotiating for a $5,000 rise in salary• $5,000-> position; reasons for such a demand-> interests

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Identify Interests and Needs

• So the Key is to understand :

Why They Want It? That’s More Important Than What They Want.

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Interests can be intrinsic as well as instrumental.

Types of Interests:– Substantive interests relate to key issues in the negotiation:

tangible issues (economic and financial such as price or rate; division of resources).

– Process interests are related to the way a dispute is settled.– Relationship interests indicate that one or both parties value

their relationship.– Interests in principle: doing what is fair, right, acceptable,

ethical may be shared by the parties. These are intangibles.

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Understand the Problem Fully –Identify Interests and Needs

Observation on Interest

• Usually there is more than one type of interest underlying a negotiation.

• Parties can have different types of interest at stake.• Interest often stems from deeply rooted human

needs or values• Interest can change • Surfacing interest• Focusing on interest sometimes create problem

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3. Generate Alternative Solutions• There are two basic ways to generate

alternative solutions:

1. Invent options by redefining the problem set2. Generate options to the problem as given

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4. Evaluation and Selection of Alternatives

• Narrow the range of solution options• Evaluate solutions based on:

– Quality (what is best/ most rational or logical)– Objective standards (fairness)– Acceptability

• Agree to evaluation criteria in advance • Be willing to justify personal preferences• Be alert to the influence of intangibles in selecting options• Use subgroups to evaluate complex options

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Factors That Facilitate Successful Integrative Negotiation

• Some common objective or goal• Faith in one’s own problem-solving ability• A belief in the validity of one’s own

position and the other’s perspective• The motivation and commitment to work

together• Trust• Clear and accurate communication• An understanding of the dynamics of

integrative negotiation

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Why Integrative Negotiation Is Difficult to Achieve

• The history of the relationship between the parties– If competitive in past, negotiators will look at current

negotiations as win-lose• The belief that an issue can only be resolved distributively

– Negotiators are biased to avoid behaviors necessary for integrative negotiation

• The mixed-motive nature of most negotiating situations– Purely integrative or purely distributive situations are

rare