NEGOTIATION AND ITS TYPES

INDEX

Topics Page No.

 Introduction 1
 Negotiation 1
 Elements of Negotiation 2
 Stages of Negotiation 3
 Types of Negotiation 4
 Key Differences between Distributive Negotiation and Integrative
Negotiation 9
 Conclusion 10
 Bibliography 11
 NEGOTITATION AND ITS TYPES

INTRODUCTION

“Disputes are inevitable element of human interaction and society needs to develop efficient and
innovative methods of dealing with them." To resolve disputes man has developed the system of
courts. However, there are a large number of cases pending in the courts. Lack of sufficient
machinery retards the process in resolving these disputes. An alternative to court, we have is
called Alternative Dispute Resolution (ADR). It has been described as “A halfway house
between the certainty of the adversarial system and flexibility of negotiation".

ADR comes in as a handy and productive mode of resolving conflicts between parties without
making them resort to the conventional domains of Courts of Law. However, within the overall
concept, lie numerous methods with different fundamental notions, procedures and aims, which
in a way makes it flexible enough for parties to choose the most suitable method. One of these
methods is ‘Negotiation’.

There is a very popular maxim underlying the concept of Negotiation as mode of ADR. ‘Consilia
omnia verbis prius experiri, quam armis sapientem dect’. It puts forth that ‘it is a part of wisdom
to exhaust negotiation before resorting to arms’. Negotiation is an effective way of solving any
type of conflict. Negotiation occurs in business, non-profit organizations, government branches,
among nations and in personal situations such as marriage, divorce and in everyday life. People
settle their differences by compromising and reaching an agreement by negotiating.

NEGOTIATION

Negotiation is a strategic discussion that resolves an issue in a way that both parties find
acceptable. In a negotiation, each party tries to persuade the other to agree with his or her point
of view. Negotiation is a process of discussion between two or more disputants, who seek to find
out a common solution for a common problem, one that meets their needs and of interests.
Negotiation is the process of conferring to arrive at an Agreement between different parties, each
with their own interests and preferences. A give and take decision making process involving
inter- dependent parties with different preferences. Various scholars from various disciplines
have attempted to define and describe the process of negotiation.

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 McKay, Davis and Fanning (2009) describe negotiation as, “A skill that helps you get what
you want from others without alienating them…. A process whereby people with different or
even opposing needs can arrive at a fair agreement.”
 Sebenius (1987) defines negotiation as, “…a process of potentially opportunistic interaction,
by which two or more parties, with some apparent conflict, seek to do better through jointly
decided action than they could otherwise.”
 Gulliver (1979) defines negotiation as, “…a process in the public domain, in which two
parties, with supporters of various kinds, attempt to reach a joint decision, on issues under
dispute.”
 Robinson and Volkov (1998) define negotiation as, “…a process in which participants bring
their goals to a bargaining table, strategically share information, and search for alternatives
that are mutually beneficial.”
 Putnam and Roloff (1992) define negotiation as, “…a special form of communication that
centers around perceived incompatibilities and focuses on reaching mutually accepted
agreements.”

Even though these definitions seem quite different from each other, the few things that all of
them convey about the process of negotiation are:

 Negotiation involves two or more independent participants.

 Each of the participants has some individual goals that may be partially incompatible.
 The participants are engaged in some form of process together that is being disturbed by this
incompatibility of individual goals.
 Participants with incompatible goals come together to generate alternatives.
 The alternatives are generated with the explicit purpose of agreeing upon one of them.1

ELEMENTS OF NEGOTIATION

Negotiation can be successful only when the parties involved are clear about the matter and the
manner in which it is to be performed. The basic elements of a negotiation are:

1
Aradhna Malik, Lecture 33: Negotiation and Conflict Resolution, National Programme on Technology Enhanced
Learning (Phase II), at: https://nptel.ac.in/courses/110105051/m33l33.pdf, (accessed on: 2/10/18)

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 Context: Context refers to the physical and ideological environment in which the negotiation
takes place.
 Norms: Norms refer to the acceptable patterns of behaviour of the people involved in the
process of negotiation. Behaviour refers to the communication and negotiation styles that
parties use
 Issues: Issues refer to the reasons that led to the need for negotiation.
 Goals: Goals refer to the “specific measurable outcomes” at the end of the negotiation
situation, or a clear statement of what negotiators desire at the end of the negotiation
process.2

STAGES IN NEGOTIATION

A structured approach towards negotiation is very important for getting the desired outcome. The
process of an effective negotiation includes following stages:
1. Preparation: The old maxim ‘proper preparation prevents poor performance’ is as crucial in
negotiating as it is in other areas like presentations, businesses etc. Parties must be clear with
their objectives and must plan their approach towards its attainment. Further, it is also
important to anticipate the other party’s approach so that a framework can be prepared for
negotiation. Preparation also involves making decisions related to the most important issues
and planning one’s tactics.
2. Discussion: After preparation, the time comes when parties meet each other. During this
stage, members from each side put forward their understanding of the situation. Key
elements of this stage are questioning, listening and clarifying. Parties involved should try to
understand each other’s viewpoint and should take notes during the discussion to record all
points put forward related to the case. Discussing each other’s hopes and expectations sets
the tone for the negotiation. Discussion also involves asking questions and understanding the
key points important for reaching an agreement.
3. Reassessment of tactics: After initial discussion is over next important thing is re-
assessment of tactics by the parties. Here parties consider viewpoints of each other, set their
priorities and summarize before starting to make proposals and bargain.

2
NEGOTIATION EXPERTS, at: https://www.negotiations.com/articles/negotiation-types/, (accessed on: 30/09/18).

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4. Make Proposals: Now, the parties make the proposals before each other. A proposal is an
offer with a condition or conditions. The parties must show flexibility in their offers and must
know when to adjourn in a negotiation.
5. Bargaining: Here parties must bridge the gaps between their proposals. This stage focuses
on what is termed a win-win outcome where both sides feel that their point of view have
been taken into consideration and both sides feel they have gained something positive
through the process of negotiation.
6. Agreement: After viewpoints and interests of both sides are considered, agreement is
achieved. Agreement must be clear so that both parties know what has been decided.
7. Implementing a Course of Action: From the agreement, a course of action is developed
which is to be followed by the parties. Course of action is the manner in which parties
perform their duties.3

TYPES OF NEGOTIATIONS

Most negotiations fall into one of the two categories:

 Competitive or Distributive Negotiation: A situation in which one party wins and the other
loses
 Collaborative or Integrative Negotiation: A situation in which both parties come to a
common understanding and acceptability of drawing part of what they desire from the
situation, losing a little on both sides, but resulting in an overall a win-win situation for both
parties.4

COMPETITIVE OR DISTRIBUTIVE NEGOTIATION

Distributive bargaining, also called "claiming value," "zero-sum," or "win-lose" bargaining, is 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.5 Therefore, distributive bargaining is

3
Priyanshu Upadhyay, Basics of Conflict Resolution through Negotiation, IPLEADERS , at:
https://blog.ipleaders.in/basics-of-conflict-resolution-through-negotiation/, (accessed on: 2/10/18).
4
Negotiation, LAWYERS CLUB INDIA, AT: http://www.lawyersclubindia.com/articles/Negotiation-8407.asp, (accessed
on: 2/10/18).
5
Brad Spangler, Distributive Bargaining, KNOWLEDGE BASE, At:
https://www.beyondintractability.org/essay/distributive_bargaining ,(accessed on: 1/10/18).

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a competitive bargaining strategy in which one party gains only if the other party loses
something. It is used as a negotiation strategy to distribute fixed resources such as money,
resources, assets, etc. between both the parties.6 Distributive bargaining is important because
there are some disputes that cannot be solved in any other way -- they are inherently zero-sum.

For example, if you go to the supermarket and buy some products, you won't be able to bargain
because they have a fixed price. Either you can buy the product or leave it.

Let's understand distributive bargaining approach with the help of another example. You go to
Lajpat Nagar market in New Delhi to buy a rug. You are visiting the shop for the first time and if
the rug is of adequate quality, both the parties might not see each other again. The shopkeeper
will quote you one price, rather than any lower rate as suggested by you.7

The Pros and Cons of Distributive Bargaining

Some conflict resolution theorists believe that distributive bargaining is unnecessary. Any
conflict, they argue, may be solved cooperatively through integrative bargaining. For example, in
their book Getting to Yes, Fisher, Ury, and Patton argue that with creativity, disputants can
almost always work together to "expand the pie" and create outcomes that benefit both sides.8
Even when budgets have to be cut, they would argue, the parties make the decisions together so
that all sides get the best possible outcome. Distributive bargaining has also been criticized
because it tends to lead to destructive actions and sometimes forces the involved parties to focus
too much on their differences. If people want to maintain a good relationship with one another, it
is argued, they should take an integrative approach to distribution as well as expansion of the pie.

6
Definition of 'Distributive Bargaining', THE ECONOMIC TIMES, AT:
https://economictimes.indiatimes.com/definition/distributive-bargaining, (accessed on: 30/09/18).
7
Review Of Literature, SHODHGANGA, At:
http://shodhganga.inflibnet.ac.in/bitstream/10603/10155/11/11_chapter%202.pdf, (accessed on: 1/10/18).
8
Roger Fisher and William Ury. Getting to Yes: Negotiating Agreement Without Giving In, 3rd ed. (New York:
Penguin Books, 2011.

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However, in cases where the "negotiator wants to maximize the value obtained in a single deal
and when the relationship with the other party is not important," distributive bargaining tactics
may be very useful.9

Process and Strategy in Distributive Negotiations

The process of distributive negotiation involves the interplay of one's walk away value -- the
minimum or maximum one can accept before "walking away" from the deal -- and the
adversary's walk away value. The trick is to get an idea of your opponent's walk away value and
then try to negotiate an outcome that is closer to your own goals than theirs. Whether or not
parties achieve their goals in distributive bargaining depends on the strategies and tactics they
use.

Information is the key to gaining a strategic advantage in a distributive negotiation. You should
do your best to guard your information carefully and also try to get information out of your
opponent. To a large extent, your bargaining power depends on how clear you are about your
goals, alternatives, and walk away values and how much you know about your opponents'. Once
you know these values, you will be in a much stronger position to figure out when to concede
and when to hold firm in order to best influence the response of the other side.10

COLLABORATIVE OR INTEGRATIVE NEGOTIATION

Integrative bargaining (also called "interest-based bargaining," "win-win bargaining") is a

negotiation strategy in which parties collaborate to find a "win-win" solution to their dispute.
This strategy focuses on developing mutually beneficial agreements based on the interests of the
disputants. Interests include the needs, desires, concerns, and fears important to each side. They
are the underlying reasons why people become involved in a conflict.

9
Ibid, p. 71.
10
Gates, Steve (2011). The Negotiation Book. United Kingdom: A John Wiley & Sons Ltd., Publication. p. 240.
ISBN 978-0-470-66491-9.

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"Integrative refers to the potential for the parties' interests to be combined in ways that create
joint value or enlarge the pie."11 Potential for integration only exists when there are multiple
issues involved in the negotiation. This is because the parties must be able to make trade-offs
across issues in order for both sides to be satisfied with the outcome.

Importance of Integrative Bargaining

Integrative bargaining is important because it usually produces more satisfactory outcomes for
the parties involved than does positional bargaining. Positional bargaining is based on fixed,
opposing viewpoints (positions) and tends to result in compromise or no agreement at all.
Oftentimes, compromises do not efficiently satisfy the true interests of the disputants. Instead,
compromises simply split the difference between the two positions, giving each side half of what
they want. Creative, integrative solutions, on the other hand, can potentially give everyone all of
what they want.12

There are often many interests behind any one position. If parties focus on identifying those
interests, they will increase their ability to develop win-win solutions. The classic example of
interest-based bargaining and creating joint value is that of a dispute between two little girls over
an orange. Both girls take the position that they want the whole orange. Their mother serves as
the moderator of the dispute and based on their positions, cuts the orange in half and gives each
girl one half. This outcome represents a compromise. However, if the mother had asked each of
the girls why she wanted the orange -- what her interests were -- there could have been a
different, win-win outcome. This is because one girl wanted to eat the meat of the orange, but the
other just wanted the peel to use in baking some cookies. If their mother had known their
interests, they could have both gotten all of what they wanted, rather than just half.13

Integrative solutions are generally more gratifying for all involved in negotiation, as the true
needs and concerns of both sides will be met to some degree. It is a collaborative process and
therefore the parties actually end up helping each other. This prevents ongoing ill will after the
11
Watkins, Michael and Susan Rosegrant, Breakthrough International Negotiation: How Great Negotiators
Transformed the World's Toughest Post-Cold War Conflicts (San Francisco: Jossey-Bass, 2001), 31.
12
Sparks, D. B. (1993). The Dynamics of Effective Negotiation (second edition). Houston: Gulf Publishing Co.
13
Pon Staff, Use Integrative Negotiation Strategies to Create Value at the Bargaining Table, PROGRAM ON
NEGOTIOATION- HARVARD LAW SCHOOL, at: https://www.pon.harvard.edu/daily/negotiation-skills-daily/find-more-
value-at-the-bargaining-table/, (accessed on: 2/10/18).

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negotiation concludes. Instead, interest-based bargaining facilitates constructive, positive
relationships between previous adversaries.14

Process and Strategy in Integrative Negotiations

Identifying Interests: The first step in integrative bargaining is identifying each side's interests.
This will take some work by the negotiating parties, as interests are often less tangible than
positions and are often not publicly revealed. A key approach to determining interests is asking
"Why?" Why do you want that? Why do you need that? What are your concerns? Fears? Hopes?
If you cannot ask these questions directly, get an intermediary to ask them.

The bottom line is you need to figure out why people feel the way they do, why they are
demanding what they are demanding. Be sure to make it clear that you are asking these questions
so you can understand their interests (needs, hopes, fears, or desires) better, not because you are
challenging them or trying to figure out how to beat them.

Next you might ask yourself how the other side perceives your demands. What is standing in the
way of them agreeing with you? Do they know your underlying interests? Do you know what
your own underlying interests are? If you can figure out their interests as well as your own, you
will be much more likely to find a solution that benefits both sides.

You must also analyze the potential consequences of an agreement you are advocating, as the
other side would see them. This is essentially the process of weighing pros and cons, but you
attempt to do it from the perspective of the other side. Carrying out an empathetic analysis will
help you understand your adversary's interests. Then you will be better equipped to negotiate an
agreement that will be acceptable to both of you.

There are a few other points to remember about identifying interests. First, you must realize that
each side will probably have multiple interests it is trying to satisfy. Not only will a single person
have multiple interests, but if you are negotiating with a group, you must remember that each
individual in the group may have differing interests. Also important is the fact that the most
powerful interests are basic human needs - security, economic well being, a sense of belonging,

14
Shell, R. G. (2006). Bargaining for advantage. New York: Penguin Books.

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recognition, and control over one's life. If you can take care of the basic needs of both sides, then
agreement will be easier. You should make a list of each side's interests as they become apparent.
This way you will be able to remember them and also to evaluate their relative importance.15

Creating Options: After interests are identified, the parties need to work together cooperatively
to try to figure out the best ways to meet those interests. Often by "brainstorming" -- listing all
the options anyone can think of without criticizing or dismissing anything initially, parties can
come up with creative new ideas for meeting interests and needs that had not occurred to anyone
before. The goal is a win-win outcome, giving each side as much of their interests as possible,
and enough, at a minimum that they see the outcome as a win, rather than a loss.16

KEY DIFFERENCES BETWEEN DISTRIBUTIVE NEGOTIATION AND

INTEGRATIVE NEGOTIATION

The difference between distributive and integrative negotiation are explained hereunder:

1. Distributive Negotiation connotes a negotiation technique wherein the parties try to gain
maximum value for themselves, from definite resources. Conversely, Integrative Negotiation
can be described as negotiation strategy which attempts to settle the dispute, with a mutually
acceptable solution.
2. Distributive Negotiation is a competitive strategy, whereas integrative negotiation uses a
collaborative approach.
3. Distributive Negotiation has a win-lose orientation. On the contrary, integrative negotiation
is based on win-win orientation.
4. When the resources are limited, distributive negotiation is better. As against, the integrative
negotiation is used when the resources are in abundance.
5. In distributive negotiation, the parties self-interest and individual profit motivate the parties.
Unlike, in integrative negotiation mutual interest and gain act as a motivation for the parties
involved.

15
The principal ideas regarding identifying interests outlined here were drawn from: Roger Fisher and William
Ury. Getting to Yes: Negotiating Agreement Without Giving In, 3rd ed. (New York: Penguin Books, 2011).
16
Brad Spangler, Integrative or Interest-Based Bargaining, KNOWLEDGE BASE, At:
https://www.beyondintractability.org/essay/ interest-based_bargaining, (accessed on: 2/10/18).

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6. Distributive Negotiation discusses only one issue at a time, whereas multiple issues are taken
into account in an integrative negotiation.
7. The communication climate is open and constructive in an integrative negotiation. In
contrast, controlled and the selective environment is there in a distributive negotiation.
8. When the relationship between parties does not have a high priority, distributive negotiation
is used. On the other hand, integrative negotiation is used when the parties try to develop a
long-term relationship with one another and have a very high priority.17

CONCLUSION

Negotiation involves discussions aimed at reaching an agreement. Intention of any negotiation is

to reach an understanding, resolve points of differences and produce an agreement, which
satisfies the interests of the parties involved in the negotiation process. Through proper
negotiation, any kind of disputes can be solved whether it is personal or professional. Thus,
negotiation provides solution to the problems of two or more disputants through proper
discussions and agreements.

Although distributive bargaining is frequently seen as the opposite of integrative bargaining, the
two are not mutually exclusive. Distributive bargaining plays a role in integrative bargaining,
because ultimately "the pie" has to be split up.

Integrative bargaining is a good way to make the pie (joint value) as large as it possibly can be,
but ultimately the parties must distribute the value that was created through negotiation. They
must agree on who gets what. The idea behind integrative bargaining is that this last step will not
be difficult once the parties reach that stage. This is because the interest-based approach is
supposed to help create a cooperative working relationship. Theoretically, the parties should
know who wants what by the time they split the pie.

Conflict, negotiations, conflict resolution, and collaboration and team work are essential
processes in all work environments. Communication is the tool that facilitates or hinders these
processes and culture is what makes these processes and communication within these processes
more complex.

17
Surbhi S, Difference Between Distributive Negotiation and Integrative Negotiation, KEY DIFFERENCES, at:
https://keydifferences.com/difference-between-distributive-and-integrative-negotiation.html, (accessed on: 2/10/18)

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BIBLIOGRAPHY

 www.beyondintractability.org
 www.blog.ipleaders.in
 www.economictimes.indiatimes.com
 www.keydifferences.com
 www.lawyersclubindia.com
 www.negotiations.com
 www.nptel.ac.in
 www.pon.harvard.edu
 www.shodhganga.inflibnet.ac.in

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