Integrative Negotiation: What is it and why it matters.
Integrative negotiation isn’t new, but it can feel alien to negotiators used to the more familiar distributive negotiation strategy, where there’s typically a clear winner and loser. By contrast, integrative negotiation strategies focus on delivering a win-win solution for all involved parties – so that everyone comes out with an agreeable set of outcomes.
A more creative and collaborative alternative to distributive negotiation, integrative bargaining can allow you to address the whole problem rather than individual issues and foster more positive, enduring relationships.
What is integrative negotiation?
Also known as integrative or interest-based bargaining, integrative negotiation is a collaborative approach where parties work together to find a solution that is satisfactory for everyone. It means that while there will certainly be compromise and bargaining involved, each party leaves the negotiation table feeling that it got something out of the overall agreement.
Understanding Your Interests and the Interests of the Other Party
The fundamentals of business negotiation training tell us that preparation is key to achieving a successful deal, which is also true of integrative bargaining.
When you’re preparing for a negotiation, spend some time understanding the other party’s goals, including their Best Alternative to a Negotiated Agreement (BATNA), rather than only considering your own interests. You may even ask the other party directly what they want to achieve from the negotiation. Transparency is a key differentiating factor in integrative negotiation strategies.
Only by understanding one another’s needs can you begin to work together to brainstorm potential solutions that are palatable to all.
Techniques for Maximising Value in Integrative Negotiation
In principle, both parties work together to identify areas that each side is prepared to compromise on until an acceptable agreement is reached. There are many practical techniques that can help you to achieve that goal:
Logrolling is where each party takes turns to take a more favourable outcome on each issue under discussion. This approach allows each party to find value in some points while giving value to others.
The involved parties come together to create new ideas, rather than working on the original proposals. Both parties list their needs and wants, and then the entire group brainstorms different ideas that meet the brief. The output should be a mutual solution that everyone agrees on.
Split the Difference
This technique is a useful tool when the parties are close to reaching an agreement and only a handful of issues remain. When parties agree to split the difference, they each give up an equal amount to reach an agreement on the remaining points, so that both sides feel they are no worse off than the other.
Expand the Pie
Expanding the pie allows both parties to identify common issues, which can broaden the interests or resources they have to put on the negotiation table.
Underpinning integrative bargaining are the notions of teamwork and collaboration. Since both parties are working together to find a common solution, they’ll tend to leave the table viewing the other party as a teammate or ally. The improved working relationship will leave both parties willing to work together again in the future.
Implementation of integrative bargaining
Integrative bargaining is a great option when you want to develop a long-lasting relationship with your counterpart and where there are multiple issues on the table. It allows you to view the issues holistically, creating an agreement that is mutually beneficial.
The techniques you choose to use will characterise individual negotiations. However, there are some core steps that will allow you to implement integrative bargaining into your approach.
- Identify the issues, interests, and goals of both parties. Ensure that both sides are aware of and understand the concerns and objectives in play.
- Collaborate and brainstorm together to determine possible solutions that are tailored towards resolving the dispute. Logrolling, bundling, unbundling, and expanding the pie can help to unlock potential value.
- Compare the options on the table to identify the strengths until an agreeable solution has been found.
Integrative negotiation best practices
Integrative bargaining relies on mutual trust between the involved parties and adhering to tried and tested best practices can help to solidify the relationship:
- Act with integrity: Openness, transparency and honesty are imperative so that all parties understand one another’s interests, concerns and ultimately, what makes them tick.
- Active listening: To understand one another’s issues, both sides must approach the negotiation prepared to listen, without judgement.
- An abundance mentality: Each concession needs to be viewed not as a loss but as a way of enlarging the overall pie so that everyone gets something out of the deal.
Under the right circumstances, an integrative negotiation strategy allows both parties to achieve a satisfactory solution and keeps the door open for future interactions.