While it is not a new concept, integrative negotiation is a tool that may feel new to some negotiators. When negotiations are starting to fall apart and the parties seem to be making little progress toward an agreement, taking an integrative approach to negotiation may help the parties find common ground or a place where they may be able to work. Integrative negotiation means that the parties approach the negotiations with a holistic approach to the possibilities and potential for an agreement. This is opposed to a bargain based solely on the one thing that is the target of the agreement. Integrative negotiation allows the parties to be creative with their offers and help find the value that may not be as evident from a surface level. However, integrative negotiation may not always be the best option, so it is important to understand what the process is and how it works to determine if integrative negotiation is the best option, or if the parties should stick to a more traditional negotiation design.
This article will begin by defining integrative negotiation, outlining its characteristics, and comparing it to distributive bargaining. It will then discuss the importance of integrative negotiations and why it is a vital part of the negotiation toolbox. After this, the article will examine how integrative negotiation can be used and discuss some techniques for implementing integrative negotiation tactics. Finally, the article will end with a discussion of the possible issues that may be encountered when using integrative bargaining and when it may be best to use a more traditional approach. The goal of this article is to provide an understanding of what integrative negotiation is and how it can be used so that the parties can make informed decisions about their style of negotiation.
Defining Integrative Negotiation:
Integrative negotiation is a strategy for negotiation where the parties attempt to find an agreement that is a “win” for both of them. This kind of negotiation can also be called interest-based bargaining or “win-win” bargaining. The key characteristic of integrative negotiation is that the parties work collaboratively with a win-win solution in mind. Instead of viewing the other party as a competitor, the negotiation can be approached from a teamwork view and can help the parties find common ground that they would not normally find. It involves developing value, finding a mutually beneficial agreement, and looking at the interests of the parties. It takes all issues that the parties may have and considers them one by one. Several characteristics make integrative negotiation distinctive, and these characteristics include:
- Multi-Issue: it requires multiple issues that the parties need to negotiate on. While this can mean that one of the issues is the driving issue for the negotiation and the biggest issue that the parties need to decide on, even in those cases, the parties will have to find other issues to negotiate on to participate in integrative bargaining, or the parties will feel like anything they surrender on the big issue is a loss. When it is one issue, it is difficult to get the parties to work collaboratively when they are only looking at one issue.
- Collaborative: Speaking of working collaboratively, another characteristic of integrative negotiation strategy is that the parties view the negotiation as a collaborative experience rather than an adversarial event. This shifts the focus away from the issues between the parties and encourages them to get creative and work with one another to find an agreement that everyone can support. It gives the parties a chance to see the agreement as one goal to accomplish together rather than the two goals to complete independently.
- Creative: Another characteristic is that the parties will need to be creative, focusing on the interests of the parties to find possible alternatives to make the agreement more of a winning situation. Often, the best option to reach an agreement will be one that is not obvious or common. This creativity will help the parties find undiscovered value and push them toward an agreement that they are on board with.
- Honesty: Another characteristic of integrative negotiation is the preference for honesty. Other styles will often require that parties keep certain information close to protect themselves, but integrative negotiation encourages complete honesty to ensure that the parties have all the information needed to create the best resolution for the dispute. The collaborative nature also encourages honesty because the only way to create a worthwhile solution is, to be honest with each other.
While there are more characteristics to integrative negotiation and bargaining, these are the most distinctive characteristics, and chances are if negotiation is operating with these characteristics, the parties are likely negotiating with an integrative mindset.
Differences between Distributive and Integrative:
Another way to define successful integrative negotiation is to distinguish it from traditional, distributive bargaining. Distributive bargaining is what most people would picture when considering a bargaining situation. It is two or more people dividing up a defined pot of value, where both parties are vying for the same value. When one person “wins,” the other loses. The fixed resources can only be stretched so far, and this type of bargaining is commonly very adversarial and does not preserve the parties’ relationship after the negotiation is completed. However, these styles are not opposites, but rather different styles to tackle the problem. They can be used in part or independently. When we speak of using integrative bargaining, we mean that the negotiation will use integrative more heavily than distributive bargaining. Comparing this to integrative, it can be fairly clear that these are vastly different processes, but it will aid in understanding to flush out the comparisons a little more. These differences include:
- Goals: The goal of distributive bargaining is to leave the table with the most value possible from definite resources without considering the other party’s needs or wants. Conversely, the goal of integrative is to reach a mutually beneficial solution to settle the dispute.
- Who Wins: In distributive bargaining, one party will win and the other will lose. In integrative bargaining, both parties will win in the end.
- Limits: Distributive bargaining best serves disputes where the resources that the parties are attempting to control are limited. Integrative bargaining works best when there are multiple goals or abundant resources to determine.
- View of Other Party: With distributive bargaining, the other party is a competitor and the overall feeling of the negotiations will be adversarial or competitive. When parties negotiate with an integrative approach, they can see the other party as a friend or teammate, and the overall feel will be more collaborative.
- Conflict Management: Negotiation strategies can often be used to help manage and contain conflict during the dispute surrounding the negotiation. Distributive bargaining, on the other hand, will often intensify or highlight any conflict that is already present.
- Motivation: When negotiation is distributive, the parties’ motivation will lie with their interests, and the parties will only consider what they want or need individually. Conversely, if the parties are being integrative, the motivation will be for the parties to find mutually agreeable terms, work to add value for both parties and consider the needs of each party.
- Relationship: Because negotiation is collaborative and addresses and soothes conflict, it often will leave the parties with the same or similar relationship to the one that they had coming into negotiation, making it more common when the relationship is important to the negotiations. Distributive bargaining places the parties against each other, which will often have harsh effects on the relationship between the parties.
- Communication: Distributive bargaining often shuts down communication and the parties will be reluctant and selective when they are bargaining. Integrative encourages open communication because it will help the parties find solutions to the problems they are facing. Speaking openly about what they need will give the parties space to figure out what they need to move forward.
- Issues: Integrative bargaining allows the parties to consider multiple issues at the same time and find solutions that integrate all the issues. Distributive bargaining will focus on one issue at a time, forcing the parties to consider the issues independently without any interaction with other options.
There are pros and cons to each of the styles of negotiation and the best style will depend heavily on the issues at hand and how the parties would like to address them. However, these differences help highlight the good aspects of integrative negotiation and will help a person see which style may be necessary based on the issues and the goals of the parties.
The Importance of Integrative Bargaining:
Integrative negotiation is a vital type of negotiation that has helped many parties settle their disputes effectively and in a way that leaves both parties happy with the results. Finding value can also increase the overall value that a party walks away with, and the creativity that is required will often encourage the parties to add more to their offers. Integrative negotiation process can be a way to resolve a dispute that is longstanding by encouraging a fresh look at the ways that it can be effective in resolving the dispute. Some of the many advantages of integrative bargaining include:
- Relationship: As mentioned above, because of the collaborative goals, the parties in an integrative negotiating process will often be able to leave the table with a good relationship with the other party. Instead of viewing them as a competitor, they will be able to see them as a teammate or companion in achieving the outcome. For these reasons, if the parties need to heal or preserve their relationship, integrative bargaining is a great way to do so.
- Holistic: Negotiation allows the parties to consider the whole of the problem at one time, rather than one issue at a time. This gives the parties a holistic picture of the resolution and allows the parties to consider areas that they would be willing to compromise on while ensuring that their main interests are protected.
- Mutually Beneficial: When negotiating parties find a solution, the solution will be mutually agreeable and beneficial. Both parties will likely be satisfied with the outcome and able to move on from the dispute. While both parties will need to compromise on some of the issues, the parties will win in some way on the overall agreement.
- Lasting: Because both parties are more likely to be happy with the agreement, they will also be able to follow the agreement and less likely to need to resolve the same or similar issues in the future. Additionally, because the parties have been able to collaborate and achieve a solution, they will also likely be able to work through any problems that arise and will be able to work through conflict more effectively.
These are only some of the advantages that integrative negotiation will present, along with a host of others that will be evident in a specific situation at the end of the negotiation.
While there are a host of advantages to this type of negotiation, there are also a few disadvantages. Many of these disadvantages do not apply to every situation but are often influenced by another factor in the negation. Some of these disadvantages include:
- Oversharing: Some people feel that the requirement of honesty and transparency required by negotiation will cause them to reveal too much of their sensitive information that the other party could then use against them. This can also happen accidentally when a party will overshare their information and it can throw the negotiation off track.
- Dishonesty: Another common issue is that one of the parties will be dishonest or intentionally misleading to gain an advantage. This can be an unfortunate result of the personalities of bargainers and can cause further issues as well. To protect against this, it may be better to have a neutral aid in the negotiations to keep the parties in line.
- Communication Breakdown: When the parties attempt to do negotiation and do not reach an agreement through that style for one reason or another, it can cause the communication between the parties to break down, making it even harder to distributivity bargain together.
- Overconfidence: In some cases, the parties may see the win-win situation as a guarantee with integrative bargaining and come in with more confidence in the process than they are prepared for, which can make the negotiations go poorly.
- Compromise: When the parties are negotiating in an integrative manner, there may be a tendency to confuse compromise with collaboration, which will result in the loss of possible value that could be added for the sake of a misunderstanding of collaboration.
- Relationship Focus: When the parties are overly focused on keeping the relationship intact, there is a high risk that one or both parties will accommodate the other party’s demands for the sake of the relationship. Maintaining the relationship can be a goal, but if parting ways is better for the overall agreement, it may be better to leave the relationship behind.
While there are a few issues that the parties that are considering integrative negotiation need to think through, many of these issues can be avoided by evaluating the parties and determining if they are the people that can work together and be creative to achieve a worthwhile result.
When to Use Integrative Bargaining:
As noted above, there are specific instances where integrative approach would be helpful, and other situations where integrative negotiation strategy could be harmful to the parties involved. A key point in understanding how to use integrative negotiation is to identify the types of disputes that would benefit from integrative bargaining and those that would not. This section will outline some of these situations and how to spot them before they become a problem. First, the situations where integrative bargaining can be helpful for the overall goal:
- Relationship: While focusing too heavily on the overall relationship can be a downfall of integrative negotiation, between integrative and distributive negotiation, integrative bargaining is the best option when the relationship between the parties is at stake and necessary for the agreement. Consider when two businesses are bargaining for a contract between the two of them. Working through an integrative approach may ensure that they can continue working together in the future.
- Multi-Issue: When negotiations have multiple issues, distributive bargaining will treat each one as an independent issue, missing an opportunity to use the whole of the situation together. This makes some level of integrative negotiation a better option when there are multiple issues because it will add value to the agreement as a whole if the issues are discussed and negotiated together.
- Need Creativity: Sometimes, parties will begin their negotiations from a distributive negotiation standpoint, not realizing that there is another way to approach the negotiation. When this happens, they may get stuck and need to find a new way to approach their agreement. Integrative bargaining gives them the flexibility of using issues to work with each other and possibly reach a creative agreement that wasn’t available to them otherwise.
While these instances are ones where integrative bargaining will likely be a good option, there are also instances where integrative bargaining could harm the parties or the agreement. These instances include:
- Power Imbalances: Integrative bargaining relies on the parties to create a collaborative environment and agreement. If the power is not equally distributed between the parties, this environment can quickly become manipulative and will result in a win-lose situation if not kept in check. Dramatic power imbalances should focus on slightly stricter distributive negotiation and should involve a neutral or some other balancing force to ensure that the power imbalance does not override the needs of the parties. It may be possible to use integrative bargaining with a power imbalance; however, a neutral would likely be needed.
- Lack of Trust: Because integrative bargaining relies so heavily on collaboration and cooperation, if there is a lack of trust between the parties, they may have a difficult time participating in the integrative process as they will be guarded and not fully honest. While there are instances where there may be room to build trust in a negotiation, if the parties have had circumstances that have broken trust, it may be very unlikely that they will be able to reach an agreement.
Overall, the decision to use integrative bargaining will need to be made on a case-by-case basis. If the parties are capable of collaboration and there is not a large obstacle to attempting the style, it may be worth the option. With the goals in mind, the parties will likely be able to at the very least resolve some of the issues that are in front of them through integrative bargaining. However, at the first sign of dishonesty or untrustworthiness, it may be necessary to move away from integrative bargaining.
How to Use Integrative Bargaining:
Now that this article has outlined the characteristics, goals, advantages, and disadvantages of integrative bargaining and has identified instances to use or avoid integrative negotiation, it will examine the process by outlining common steps to follow and some techniques that may be implemented in the process. Integrative bargaining has a variety of key actions that can help the parties create a process to create a solution to their problem. While these “steps” will be discussed in chronological order, integrative bargaining, and negotiation in general, will rarely move in a perfectly straight line from start to finish. There will be points where the parties will circle through two or three steps a variety of times until they find a way to reach an agreement. The step or actions in this process are:
- Identify the Problem: This portion may be fairly straightforward, but the more the parties identify and define the problem, the better they will understand what needs to be done to solve the problem. This will be a collaborative process and ensure that the parties agree on the problem before moving forward. It can also help identify smaller issues that are only evident to one party.
- Share Interests: This portion of the negotiation will require the parties to present their interests to each other. Interests are both the goals for the negotiation and the driving factors behind those goals. Sharing goals helps the parties see what will need to be accomplished to resolve, and sharing the factors influencing these goals will help the parties identify areas they could add value. It is key that the parties be honest at this step to ensure that they are making fully informed offers and decisions.
- Create Options: This is the actual bulk of the negotiation, as it is the point where the parties create and share options for resolving the dispute. The parties will need to consider the goals and underlying interests to find creative ways to create value. Creating value is a way to provide consideration for a party that is giving up something. It can be money, or it can be a creative solution that the party needs, such as an apology or service.
- Compare Options: At this phase, the parties will look at the various ways they have found to settle the dispute and will identify the strengths of each until they choose a solution. Once a solution is chosen, the parties will sign an agreement, and the dispute will be resolved.
These phases of the negotiation will help the parties collaborate and find creative ways to resolve their differences.
Techniques for Integrative Bargaining:
Even when the parties follow these steps perfectly, they may have difficulty reaching a solution. This is where certain techniques will come into play to help the parties reach an outcome that they can agree with. These techniques are ways that the parties can add value in some way without compromising for either of the parties. Some common techniques that the parties can try include:
- Logrolling: Logrolling is a tactic where the parties identify multiple issues and they divide who “wins” in each issue. Say two parties are negotiating over two issues, they will agree that they each have a more successful outcome on one of the issues and allow the party to succeed on the other. This gives each party a place to find value while agreeing that they will give value in other ways.
- Brainstorming: Brainstorming involves identifying all the possible solutions together. This can often create solutions that the parties would not necessarily consider right away and can help the parties identify creative solutions.
- Unbundling and Bundling: This involves taking the overall dispute and breaking it into smaller issues that are affecting the overall outcome. This can help the parties see each of the issues contributing to the problem and can allow them to make package deals by bundling some of the issues together and creating value for all the parties.
- Bridge Solutions: Bridge solutions are solutions that arise from new ideas that the parties can agree on. The parties identify their interests and need to help them think of different options that will help the parties reach an agreement. This helps the parties identify the needs of the other party and help shape their offers around those, giving the parties a chance to work together.
- Split the Difference: This technique can be used on an individual issue when the parties are very close to a solution. Here, the parties will split the difference between their positions to reach an agreement, each giving up an equal amount to reach an agreement. By agreeing to compromise the same amount, the parties do not feel as if they are losing any more than the other party is gaining.
- Expand the Pie: This is the overall goal of the creativity of integrative negotiation, to create more solutions and options to consider. This includes identifying interests and adding resources to help the parties have more to bargain with rather than one party losing when the other gains. Creating more resources will help the parties find common ground without losing.
If the parties in integrative negotiation are stuck, picking one of these solutions may be an option to help move forward in the negotiation.
Integrative negotiation helps the parties identify and claim their interests while reaching a mutually agreeable solution. In many situations, the parties can keep relationships intact, find creative solutions, and gain more than they anticipated. Understanding the process and the techniques will help parties determine if the style will be the best for them in their negotiation. Identifying these interests and creating value to collaborate can help the parties move toward resolution and find themselves in a position that they never expected but is the best one for their situation. When the parties are stuck or need to find a solution that works for their problem, integrative negotiation can be a fantastic option to resolve their dispute.