A Negotiation Is Like a Game, You Can't Get the Best Deal Without a Strategy
Have you ever been in a position where you had to negotiate something?
Perhaps you tried to get a better deal on something, perhaps tried to make two arguing friends see sense. In a negotiation situation it can be difficult to know what to do or say.
A negotiation is like a game, if you go in without having a playing strategy, or not knowing the rules, you’ll find succeeding far more difficult.
The trick is, to start off knowing what you’re going to do and what strategy to use.
In negotiation, there are two useful strategies: Integrative Bargaining and Distributive Bargaining. Either of these should be great tools in your negotiation arsenal and are well worth getting to grips with.
Integrative bargaining: to find a resolution that benefits both parties equally
Integrative Bargaining is otherwise known as “win win bargaining” in it both parties in the negotiation try to find a resolution which benefits them both equally.[1] The needs, desires, and fears (which in many ways can cause the disagreement in the first case) are taken into account.
It is possible that both parties want different things and as such, both could be achievable.
For example, imagine two people were arguing over who gets to eat a slice of pizza.
Now the obvious resolution to this is just cut the slice of pizza in half. However if the parties discussed what they wanted exactly, they could discover that one party liked to eat the pizza crust and was less interested in the rest of it, whereas the other wanted to eat the topping, but ignore the crust. In this way, through integrative bargaining, both parties could get exactly what they wanted.
Distributive bargaining: to negotiate how much each party gets
Distributive Bargaining is, as you might expect, a negotiation strategy employed when you have to distribute and divide something.[2] Where integrative bargaining was a “win win” strategy, distributive bargaining is “win lose”.
Where integrative bargaining worked from collaboration, distributive bargaining is relatively self serving and competitive. Where both parties negotiate how much of something they gait.
Using the above pizza example, where integrative explores what each person hopes to gain from the the negotiation, distributive bargaining explores who gets what.
Where before one party gets exactly what they want, and the other gets what they want, distributive negotiation explores who gets what.
As such integrative bargaining can be the more diplomatic and fairer system of negotiation. However distributive bargaining can be effective (for you) if employed successfully.
Employ these strategies in real life by asking yourself 3 questions
Key to using integrative bargaining, is knowing the answers to these three questions:[3]
What is my best alternative agreement? – This if the negotiations don’t seem to be going your way, what is something else you would agree with/ settle for.
What is most important to me? – Here, you should determine, in ranked order, exactly what you most want to keep in your negotiations, and what can be dropped. Dropping parts of your deal makes you more flexible and allows the a more satisfactory and mutually beneficial agreement to be found.
What is most important to the other party, and what might they settle with? – This can only be determined through careful questioning and careful analysis, but is well worth your time to find out. If you have a good idea of what the other party may settle for, then have a good direction to steer the negotiations.
Knowledge and understanding of these three, crucial questions, can not only make your negotiations effective, but reach the best possible solution for both parties.
Know your bet: how much you are willing to lose in the negotiation
Distributive bargaining also relies on a degree of knowledge, you should know how much you are willing and happy to lose in negotiation, and keep that information quiet.[4] As distributive bargaining is naturally more self serving any information and strategy you have should be kept to yourself. You should also try to ascertain what the other party is willing to part with, and try to make that so.
Personally, I prefer integrative bargaining as a strategy. However if you enter a negotiation without any strategy, integrative, distributive or otherwise, then you will almost certainly lose out more severely than if you would with either strategy.
Reference
| [1] | ^ | Beyond Intractability: Integrative or Interest-Based Bargaining |
| [2] | ^ | Conflict Research Consortium: Distributive Bargaining |
| [3] | ^ | Harvard Law School Program on Negotiation: Use Integrative Negotiation Strategies to Create Value at the Bargaining Table |
| [4] | ^ | Beyond Intractability: Distributive Bargaining |
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