Negotiation

Question 1

Negotiation

Answer 1

Deciding on the terms of an exchange
Negotiation: when people exchange goods or services and attempt to agree on the exchange rate for them
-Price for goods & services (including employment )
-Dividing a shared resource
-Resolution of a conflict

Question 2

Distributive bargaining

Answer 2

“Fixed pie” or “win-lose” negotiation
There are only so many resources to be distributed
The more I get, the less you get (and vice versa)
Ex: one-time purchases

Question 3

Integrative bargaining

Answer 3

“Win-win” negotiation – increasing the size of the pie
Thinking creatively, adding more issues to the table
Accommodating what each other values so that both can benefit

Especially important when relationship will be long-term
Ex: employment negotiations, intra-organizational negotiations, customers & suppliers

Many people enter negotiations with a competitive focus, expecting a distributive outcome
Result is negative impact on relationships, particularly for “loser”
Integrative outcomes are possible in a wide variety of negotiations

Question 4

What is distributive bargaining

Answer 4

“Fixed pie”: negotiate over 1 issue (or few issues)
Characterized by guarded information
Can be tense or antagonistic
Should be limited to one-time interactions

Question 5

What is integrative bargaining?

Answer 5

“Expand the pie”: incorporate other issues into the negotiation beyond just 1 number
Works because other issues are never valued equally by both parties
Characterized by openness about goals and positions
Can be pleasant and cooperative
Especially valuable when long-term interaction is desired

Question 6

Success in integrative negotiation?

Answer 6

Go after issues, not people
“Soft on people and hard on the problem”
Try to take the other’s perspective
Positive emotions (not anger) are more effective here

Insist on objective criteria that both parties can agree on
Ex: Blue Book, salary figures from reputable source

Continue to creatively invent new options for mutual gain
Package, package, package!

Focus on interests, not positions
Just being “pro” or “con” an idea may mask underlying interests and block progress

Question 7

Integration vs compromising

Answer 7

Integration is not just compromising ….
Compromising may yield suboptimal terms for both parties
Positions: stances/offers in the language of deal terms
“I want the orange.”
“But I want the orange!”
Interests: underlying desires/needs that give rise to positions and motivate the negotiation
“I’m hoping to bake a cake.”
“I’d love some juice.”