Insights into Negotiations: a negotiation style(s) directly impacts the negotiation outcome

There are several negotiation styles to consider before engaging in a negotiation process. While some experts advocate a hard-line for the deliberations, others encourage a more collaborative approach to help achieve mutually beneficial outcomes. Two of the most wildly known techniques are the Distributive and Integrative negotiation styles.

Distributive Negotiations

The distributive Negotiations center on a single issue—for example, price. The term distributive refers to a dividing of value. In their nature, Distributive Negotiations focus on distributing a limited value between the parties involved. This type of negotiation is also referred to as ‘Fixed Pie’ negotiations. This means that there is only so much available, and the proportion to be divided is limited. As a result, Distributive Negotiations primarily end in a win-lose outcome, with one party better off than the other.

To Christopher Cooper-IND, “It is the hard “bargaining” zero-sum brand of negotiations that opens with both sides adopting relatively extreme positions from which they seek to yield as little as possible………It is rarely adopted and, when used, seldom repeated.”

Brad Spangler sums it up as either  “claiming value,”  “zero-sum,” or “win-lose” bargaining. He further describes it “as a competitive negotiation strategy that is used to decide how to distribute a fixed resource, such as money. The parties assume that there is not enough to go around, and they cannot “expand the pie,” so the more one side gets, the less the other side gets.”

To Kattie Shonk from the Harvard Negotiations Group, Distributive Negotiation is the process of dividing up the pie of value in negotiation. Distributive Negotiation, as postulated by the Grou, P is “haggling”—the back-and-forth exchange of offers, typically price offers, which Howard Raiffa referred to as the “negotiation dance.”

Distributive Negotiation, according to Jason Gordon, “is generally very competitive (a win-lose situation) and does not foster cooperative behavior. A Distributive Negotiation style seeks to grab as much possible in that negotiation”. To him, “the parties seek to claim the same value; thus, any value that one party receives means the other party receives less value in the negotiation. “If the parties are competing for a share of the same pie, one party acquiring a greater percentage of the pie means the other party gets less pie.” He further affirmed.

During Distributive Negotiations, parties enter the Negotiation to claim as much value as possible. If it is a price negotiation, the seller would be focused on selling their product for the best possible price, while the buyer will look to pay as little as possible. The interests of both parties are self-serving, and there is no intention to use the negotiation to build a reputational advantage of positive perceptions.

When entering this type of Negotiation, negotiators should have done their homework and have a realistic understanding of what to expect regarding the negotiation outcomes.

Negotiators must be cautious about how much information their negotiation counterpart provides. Thus the less information the other party supplies, the better one’s position. Negotiators should try to get as much information from their counterparts to understand their best alternative to a negotiated agreement (BATNA) and the zone of a possible deal (ZOPA).

Making the first offer during Distributive Negotiations is also a good idea. This first offer is referred to as the negotiation anchor and will be the starting point for the negotiation process.

To recap, as pointed out by Jason Gordon, Distributive Negotiations can be very competitive and more like going for a win-lose deal which can “lead to animosity between the parties, negative emotions, and cause damage to either party’s reputation.” Outcomes for Distributive Negotiations are either  Win-lose or Lose-win and, in some instances, a Lose-lose!

Integrative negotiations

The second well-known negotiation type is Integrative Negotiation.

Integrative Negotiations are broader in scope with over one issue or focus area. Both parties aim to come out of the process with a gain in these negotiations.

Since the word ‘integrative’ alludes to joining several parts into a whole, this type of negotiation refers to negotiations focused on cooperation and working towards a mutually beneficial outcome. This cooperative approach has many benefits for both parties.

According to  Hitesh Bhasin, Integrative Negotiation is a “negotiation type “that focuses on mutual collaboration to arrive at a common conclusion. It is also known as a win-win situation or interest-based bargaining.”

To the expert negotiators at the Wall Street Journal, “it is a collaborative model in which the parties seek to expand the range of possible outcomes and maximize their benefits by shoring in the collective efforts and results.

Unlike Distributive Negotiations, Integrative Negotiations focus not only on the short-term gains of the negotiation process. Still, they aim to develop long-term relationships that can achieve outcomes in unison.

By the end of Integrative Negotiation, all parties leave the negotiation feeling they have achieved what they wanted. In short, integrative negotiations should be long-term and future-focused.

Since Integrative Negotiations involve several issues and everyone wants a positive outcome, each side must clearly understand the other’s needs and expectations. To do this, open communication and information sharing are crucial and will help to facilitate practical cooperation.

In this negotiation, each party can contribute potential solutions for all involved. It is not just about satisfying your needs but also about looking for ways to ensure your negotiation counterpart is comfortable and in agreement with the value gained. Integrative negotiations mostly end up with a win-win outcome.

Surbhi S. provides the summary difference between the two main negotiation types

Table 1 Surabhi S. Difference Between Distributive Negotiation and Integrative Negotiation 2017

While most popular, distributive and integrative negotiations are not the only negotiation styles. Other techniques include Multi-party negotiations, Team negotiations, and Positional negotiations.

In Multi-party negotiations, three or more parties come together to negotiate for shared understanding and agreement.

With Team Negotiation, two negotiators engage in a negotiation process to work toward positive outcomes.

Positional Negotiations occur when a party entering a negotiation already has a responsible position in mind. A party will aim to defend its position and will not be willing to compromise. There is little agreement and no positive outcomes when this happens.

To sum up, negotiations can be a complex process. There are many variables to consider and plan for. A clear understanding of the negotiation style to adopt has an impact on the process outcome.

Finally, a gentle reminder that all negotiation styles have advantages and disadvantages. Adopting any of them is critical to help maximize the benefits to be derived from the negotiations.

>>>Professor Douglas Boateng (MSc, EngD, FCILT, FSOE, FIPlantE, FCMI, FIC, FInst. D, FIOM, FCIPS, FIoD, CDir) Rtd* is an international chartered director and Africa’s first-ever appointed Professor Extraordinaire for Industrialisation and Supply Chain Governance. He is the CEO of PanAvest International and the founding non-executive chair of MY-future YOUR-Future and OUR-Future (“MYO”) and the top-rated daily Nyansakasa series. Professor Boateng is a recipient of over five (5) lifetime achiever awards, including one in 2018  from HP* (Hewlett Packard), for outstanding contributions to industry and academia. He is currently the non-executive chair of the Minerals Income and Investment Fund (MIIF). Professor Boateng was previously the non-executive chair of the Public Procurement Authority (PPA).