Hawassa University

College of Business and Economics

Department of Logistics and Supply Chain
Management

Course Title:- Negotiation and Contract Management

Chapter Three
Strategy and Tactics of Integrative Bargaining

Prepared by:- Moges A. (Lecturer /MBA)

• What Makes Integrative Negotiation Different
– Focus on commonalties rather than differences.
– Attempt to address needs and interests, not positions.
– Commit/obligate to meeting the needs of all involved parties.
– Exchange information and ideas.
– Invent/create options for mutual gain.
• Managing integrative negotiations involves
– creating a process of problem identification
– understanding the needs and interests of both parties
– generating alternative solutions, and selecting among
alternative solutions.
• Key contextual factors in integrative bargaining includes
– creating a free flow of information
– attempting to understand the other negotiator’s real needs and
objectives
– emphasizing commonalities between parties
– searching for solutions that meet the goals and objectives of
both parties.
1. Creating a Free Flow of Information
• Creating a free flow of information includes having both parties
know and share their alternatives.
• Pinkley (1995) discovered that negotiators who are aware of each
other’s alternatives to a negotiated agreement were more likely to
– make their resistance points less extreme
– improve negotiating trade-offs
– increase the size of the resource pie
2. Attempting to Understand the Other Negotiator’s Real Needs and Objectives
• Negotiators differ in their values and preferences, as well as their
thoughts and behaviors.
• One side needs and wants may or may not be the same as the
other’s party needs and wants.
• One must understand the other’s needs before helping to satisfy
them.
• When negotiators are aware of the possibility that the other’s
priorities are not the same as their own, this can
– stimulate the parties to exchange more information
– understand the nature of the negotiation better
– achieve higher joint gains.
3. Emphasizing the Commonalities between the Parties and
Minimizing the Differences
• To sustain a free flow of information and the effort to understand
the other’s needs and objectives, negotiators may need a different
outlook or frame of reference.
• Individual goals may need to be redefined as best achieved
through collaborative efforts directed toward a collective goal.
4. Searching for Solutions That Meet the Needs and Objectives of
Both Sides
• The success of integrative negotiation depends on the search for
solutions that meet the needs and objectives of both sides.
• In this process, negotiators must be firm/hard but flexible— firm
about their primary interests and needs, but flexible about how
these needs and interests are met
• When the parties are used to taking a combative, competitive
orientation toward each other, they are generally concerned only
with their own objectives.
four major steps in the integrative negotiation process
– Identify and define the problem,
– understand the problem and bring interests and needs to the
surface,
– Generate alternative solutions to the problem, and
– Evaluate those alternatives and select among them.
• The first three steps of the integrative negotiation process are
important for creating value.
• To work together to create value, negotiators need to understand
the problem, identify the interests and needs of both parties, and
generate alternative solutions.
• The fourth step of the integrative negotiation process, the
evaluation and selection of alternatives, involves claiming value
• Pareto efficient frontier is a point where “there is no agreement
that would make any party better off/comfortable without
decreasing the outcomes to any other party.
• One way to conceptualize integrative negotiation is that it is the
process of identifying Pareto efficient solutions.
• The first three steps to integrative negotiation aim to ensure that
negotiators do not agree to solutions that are below the Pareto
efficient frontier because these solutions are suboptimal for both
negotiators
1. Identify and Define the Problem
• The problem identification step is often the most difficult one, and
it is even more challenging when several parties are involved.
• The problem definition process is critical for integrative
negotiation because it sets broad parameters regarding what the
negotiation is about and provides an initial framework for
approaching the discussion.
2. Understand the Problem Fully—Identify Interests and Needs
• a key to achieving an integrative agreement is the ability of the
parties to understand and satisfy each other’s interests.
• while negotiators may have difficulty in satisfying each other’s
specific positions, an understanding of the
underlying/fundamental/ interests may permit them to
invent/create/ solutions that meet each other’s interests
3. Generate Alternative Solutions
• The search for alternatives is the creative phase of integrative
negotiation.
• Once the parties have agreed on a common definition of the
problem and understood each other’s interests, they need to
generate a variety of alternative solutions.
• The objective is to create a list of options or possible solutions to
the problem.
4. Evaluate those alternatives and select among them:-
• Evaluating and selecting among those options which is described
above is the final phase.
Factors That Facilitate Successful Integrative Negotiation
• the presence of a common goal
• faith in one’s own problem-solving ability
• belief in the validity of the other party’s position
• the motivation and commitment to work together
• clear and accurate communication, and trust
• An understanding of the dynamics of integrative negotiation

1. The Presence f Common Goals

• Some Common Objective or Goal
• When the parties believe they are likely to benefit more from working
together than from competing or working separately, the situation offers
greater potential for successful integrative negotiation.  
• Three types of goals:- common, shared, and joint may facilitate
the development of integrative agreements.
A. Common goals: One that all parties share equally, each one
benefiting in a way that would not be possible if they did not
work together.
– A town government and an industrial manufacturing plant
may debate the amount of taxes the plant owes, but they are
more likely to work together if the common goal is to keep
the plant open and employ half the town’s workforce.
B. Shared goals-one that both parties work toward but that benefits
each party differently.
– For example, partners can work together in a business but
not divide the profits equally.
– One may receive a larger share of the profit because he or
she contributed more experience or capital investment.
C. A joint goal involves individuals with different personal goals
agreeing to combine them in a collective effort.
• For example, people joining a political campaign can have different
goals:
– one wants to satisfy personal ambition to hold public office,
– another wants to serve the community, and
– yet another wants to benefit from policies that will be
implemented under the new administration.
• All will unite around the joint goal of helping the new
administration get elected
2. Faith in One’s Problem-Solving Ability
• Parties who believe they can work together are more likely to be
able to do so.
• Those who do not share this belief in themselves and others are less
willing to invest the time and energy in the potential payoffs of a
collaborative relationship, and they are more likely to assume a
contending /opposing/ or accommodating/accepting/ approach to
negotiation.
3. A Belief in the Validity of One’s Own Position and the other’s
Perspective
• In distributive bargaining, negotiators invest time and energy
inflating/increasing/ and justifying the value of their own point of
view and debunking/deflating/ the value and importance of the
other’s perspective.
• In contrast, integrative negotiation requires negotiators to accept
both their own and the other’s attitudes, interests, and desires as
valid.
4. The Motivation and Commitment to Work Together
• For integrative negotiation to succeed, the parties must be
motivated to collaborate/cooperate to each other/ rather than to
compete.
• They need to be committed to reaching a goal that benefits both
of them rather than to pursuing only their own ends.
• They should adopt interpersonal styles that are
– more congenial/friendly/ than combative/aggressive/argumentative/,
– more open and trusting than evasive and defensive,
– more flexible (but firm) than stubborn/inflexible/ (but yielding/soft).
• Specifically, they must be willing to make their own needs
explicit/clear/open/, to identify similarities, and to recognize and
accept differences.
• They must also tolerate uncertainties and unravel inconsistencies.
5. Trust
• Although there is no guarantee that trust will lead to collaboration,
there is plenty of evidence to suggest that mistrust
inhibits/hampers/reduces/ collaboration.
• People who are interdependent but do not trust each other will
act tentatively or defensively.
• Defensiveness means that they will not accept information at face
value but instead will look for hidden, deceptive/misleading/
meanings.
• When people are defensive, they withdraw and withhold/refuse to
give/ information.
6. Clear and Accurate Communications
• Another precondition for high-quality integrative negotiation is
clear and accurate communication.
• First, negotiators must be willing to share information about them.
– They must be willing to reveal what they want and, more
important, must be willing to state why they want it in specific,
concrete terms, avoiding generalities and ambiguities.
• Second, the other negotiators must understand the
communication.
– At a minimum, they must understand the meaning they each
attach to their statements; hopefully, the parties each interpret
the basic facts in the same way, but if they don’t then they
should reconcile/resolve/ them.
7. An Understanding of the Dynamics of Integrative Negotiation
• Several studies indicate that training in integrative negotiation
enhances the ability of the parties to negotiate interactively.

Why Integrative Negotiation is Difficult to Achieve

– The history of the relationship between the parties,
– The belief that an issue can only be resolved distributive,
– The mixed-motive nature of most bargaining situations, and
– Short time perspectives.
1. The history of the relationship between the parties,
• The more competitive and conflict-laden their past relationship, the
more likely negotiators are to approach the current negotiation with
a defensive and win–lose attitude.
• Long-term opponents are not likely to trust each other or to believe
that a cooperative gesture/sign/ is not a ruse/trick/ or setup for
future exploitation/mistreatment/misuse/.
2. A Belief That an Issue Can Only Be Resolved Distributive
• Conflict dynamics tend to lead negotiators to polarize issues or see
them only in win–lose terms.
• In addition, negotiators may be prone/inclined/ to several
cognitive/mental/ biases or heuristic decision rules that
systematically bias
– their perception of the situation,
– the range of possible outcomes, and
– the likelihood of achieving possible outcomes,
• all of which tend to preclude/prevent/exclude/ negotiators from
engaging in the behaviors necessary for integrative negotiation.
3. The Mixed-Motive Nature of Most Negotiating Situations
• Purely integrative or purely distributive negotiation situations are
rare.
• Most situations are mixed-motive, containing some elements that
require distributive bargaining processes and others that require
integrative negotiation.
4. Short Time Perspectives
• Effective integrative negotiation requires sufficient time
– To process information,
– To reach true understanding of one’s own and the other party’s
needs, and
– to manage the transition from creating value to claiming value.