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Chapter 5: Integrative Negotiation and Strategy

I. Definition of Integrative Negotiation

Definition – Integrative negotiation is sometimes referred to as interested-based
bargaining because the focus is on the interest of each party as opposed to the
distribution of a fixed resource. The assumption is that resources are not finite, in
other words, the pie is not fixed. Both parties concentrate on finding ways to make
the pie bigger so that everyone can get more.

Why win-win negotiation is always difficult for people to achieve?

People often fail to see it or do not believe that win-win is possible. Consequently
most people do not immediately see opportunities for reaching integrative agreements.
It takes hard work to create integrative opportunities. The following questions are
designed to determine the possibility for win-win negotiation.

II. Signs of Win-Win Negotiation Potential

Most negotiations do not appear to have win-win potential. The following questions
can determine the possibility for win-win negotiation.

1. Does the negotiation contain more than one issue?

Most negotiations are single-issue negotiations. By definition, single-issue
negotiations are not win-win because whatever one party gains, the other party loses.
However, it is possible to identify more than one issue. It is differences in preferences,
beliefs, and capacities that may be profitably traded off to create joint gain. The more
issues are added into negotiation, the less likely that the negotiators have identical
preferences across all issues.

2. Can other issues be brought in?

Other issues can be brought in to consider into the negotiation. For example, in a
four-day negotiation between California Government and the local firefighters
association, the key salary was salary. Firefighters wanted an increase. The
negotiators began searching for several options to reach this goal: (1) connecting
benefits to wages; (2) allowing cost savings to be distributed to firefighters, and (3)
taking on additional duties (thereby increasing incomes). In addition, management
spend a great deal of time providing the firefighters with information on cost-benefit
analyses, operating costs, and other relevant budgetary information so that all parties
could evaluate which options were the most practical and beneficial.

3. Do parties have different preferences across negotiation

issues?
If parties have different strengths of preference across the negotiation issues, it is win-
win negotiation. The key is to determine each party’s preferences and devise a means
of satisfying each party’s most important interests while inducing them to make
concessions on lower-priority issues.

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Let’s consider the orange-splitting example. There are two issues: the juice and the
rind. Moreover, with regard to preferences, one sister cares more about the juice; the
other cares more about the rind. If only a single issue was involved or if both sisters
wanted the juice much more than the rind, then an integrative agreement would not be
possible.

III. Steps for Achieving Integrative Negotiation

Integrative negotiation could be achieved through the following step-by-step
approach.

Step 1 - Build rapport through Mirroring

Rapport occurs when two or more people feel that they are in sync or on the same
wavelength because they feel similar or relate well to each other. Mirroring – getting
into rhythm with the person on as much as possible.

I. Physical (voice, posture, tone and language patterns)

When you are mirroring that person in such a way that you are talking the way that
he or she talks, sitting the way that he or she sits, moving in the general patterns that
he or she is moving, breathing in the same general rhythms, and appearing to share
the same values, you are establishing the basis of rapport.

II. Mental (shared interests)

Shared interest can be an extremely strong rapport builder. You should demonstrate
to the other party, for example, that you fully understand their problem and together
you will work on finding a solution. If there is something that you can relate to that
you also have an interest in e.g. children, football team, hobby, etc... Then you can
use this shared interest to build rapport. Be careful not to sound insincere and
calculating!!

III. Emotional
If a person is emotionally down and you approach them with an enthusiastic manner,
then rapport will not be established. The reverse is also the case, if the person is
feeling on top of the world and you are obviously having a bad day, then the person
will not want to be dragged down to your level of emotion. Meet the person at the
emotion they are displaying. E.g. when the other party look upset, don’t approach
them in an excited manner.

Step 2 - Provide information

In negotiation, people are often reluctant to share information. Negotiators need to share
is not information about their BATNAs, but rather, information about their preferences
and priorities across the negotiation issues. The skilled negotiator knows what
information is safe to reveal in order to reach win-win outcomes.

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In addition to seeking information about the other party, negotiators who provide
information to the other party about their priorities are more likely to reach integrative
agreements than negotiators who do not provide information.

By signalling your willingness to share information about your interests (not your
BATNA), you capitalize on the important psychological principle of reciprocity.

Step 3 - Ask diagnostic questions to discover interests and priorities

Ask “why”? One basic technique is to put yourself in others’ shoes. Examine each
position they take and ask yourself “why?” For instance, does your landlord prefer to fix
the rent – in a five-year lease – year by year? The answer you may come up with, to be
protected against increasing costs, is probably one of his interests. You can ask the
landlord himself why he takes a particular position. If you do, make clear that you are
asking not for justification of this position, but for an understanding of the needs, hopes,
fears or desires that it serves.

In a negotiation, a negotiator could ask the other party any questions. Only two kinds of
question are asked in terms of expanding the pie – questions about underlying interests
and questions about priorities. Interests are different from positions in that interests are
the underlying concerns, needs, desires, or fears that motivate a negotiator to take a
particular position. e.g. I want higher salary to rent a bigger house. In this case, the
hidden interest is a bigger house.

Why can those questions help to reach win-win agreements? It is because that, first, such
questions help negotiators discover where the value is. Second, diagnostic questions do
not tempt the other party to lie or to misrepresent himself or herself. Diagnostic
questions are effective in part because they do not put negotiators on the defensive.

Step 4 - Focus on interests, not positions

Use interests to define the problem

Interests motivate people; they are the silent movers behind the hubbub of positions. We
can look at the same problem with different perspectives (POSITION vs INTERESTS).
The basic problem in a negotiation lies not in conflicting positions, but in the conflict
between each side’s needs, desires, concerns and fears (INTERESTS). In integrative
negotiation, it is important that the parties’ interests be the center of attention to make it
possible to find solutions that meet the needs of both parties, while positions focus on the
needs of only one party.

Golden rule of integrative negotiation

Understanding of underlying interests may permit negotiators to
invent solutions that meet those interests.

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Step 5: How to harmonize or reconcile needs

1. Unbundle the issues

One reason negotiations fail is because negotiators haggle over a single issue, such as
price. If negotiations contain only one issue (e.g. price), they are purely distributive (i.e.
fixed-pie). Skilled negotiators are likely to expand the set of negotiable issues.
Adding issues, and
unbundling issues (break one issue into two e.g. money is replaced by salary and
bonus) can transform a single-issue, fixed-pie negotiation into an integrative, multi-
issue negotiations with win-win potential (Lax & Sebenius, 1986). In addition, the
more issues you add into negotiation, the more likely that differences in priority
setting exist between these two parties.

Most negotiators make a mistake approach when negotiating each issue one by one.
Negotiating each issue does not allow negotiators to make trade-offs between issues.
Single-issue offers lure
negotiators into compromise agreements, which are not the best approach for win-win
negotiations.

2. Make multiple offers simultaneously

The strategy of multiple simultaneous offers involves presenting the other party
with at least two proposals of equal value to oneself.

Example: House Renovation Negotiation

Set A (Ideal) Set B Set C

Renovation cost $300,000 $310,000 $310,000

Deadline < 6 weeks < 4 weeks < 5 weeks

Maintenance period 12 months 18 months 24 months

3. Make use of differences in preferences

It is differences, rather than commonalities, that can be more advantageous in
negotiations. The enlightened negotiator realizes that differences in beliefs,
expectations, and tastes can create greater value then when both negotiators have
identical preferences. The problem is that most people are uncomfortable when
they encounter differences instead of leveraging this opportunity. They either
downplay their differences or ignore them

Golden rule of integrative negotiation

It is differences rather than commonalities that can be more
advantageous in negotiations.
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Step 6: How to generate alternative solutions to achieve win-win

negotiation based on needs or interests

You can choose either one of the following methods.

1. Logroll
Successful logrolling requires the parties to establish more than one issue in conflict;
the parties then agree to trade off among the issues so that one party achieves a highly
preferred outcome on the first issue and the other person achieves a highly preferred
outcome on the second issue.

For the upcoming family

I prefer 3-star hotel to save
travel, I prefer luxury hotel
. money and Thailand for
and Japan for shopping!
water-sport ! Location is
Living in luxury hotel is
my 1st priority! Windsurfing
my 1st priority
is my favorite sport

For example, the husband and wife disagree not only about where to take their vocation
but also about the kind of accommodations. The husband prefers 3-star hotel whereas the
wife prefers a luxury hotel. If the wife decides that the formality of the accommodations
is more important to her than the location, the couple may be able to agree on a luxury
hotel in Thailand as way to meet both needs.

2. Use non-specific compensation

A second way to generate alternatives is to allow one person to obtain his objectives
and pay off the other person for accommodating his interests. The payoff may be
unrelated to the substantive negotiation, but the party who receives it nevertheless
views it as adequate for acceding to the other party’s preferences. The person doing
the compensating needs to know what is valuable to the other person and how
seriously he is inconvenienced. (i.e., how much compensation is needed to make him
feel satisfied.)

In the vocation example, the wife could tell the husband that if he agrees to live in
luxury hotel, she will buy him a new digital camera or set of golf equipments. The

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wife might need to test several different offers to find out how much it will take to
satisfy her husband

Hey! Let's live in Grand Well, my agreement depends on

Hyatt! I will buy you a what model of canon camera you
Canon digital camera if are going to buy for me. I need a
you say yes. Isn’t it good digital camera with excellent
for both of us? quality! Can you compensate me?

.
However, this bears one risk! This discovery process can turn into a distributive
bargaining situation itself, as the husband may choose to set very high demands as
the price for going along to the beach while the wife tries to minimize the
compensation she will pay.

3. Cut the costs for compliance

Through cost cutting, one party achieves her objectives and the other’s costs are
minimized if he agrees to go along. In the vocation example, suppose that the
husband really likes a quiet and peaceful vocation and dislikes shopping because of
the crowds, whereas the wife doesn't want to go to Thailand to avoid too much
sunshine. If skin protection is what the wife really wants, then the wife may be
willing to go to Thailand if the husband assures her that they will stay in a luxury
hotel with good internal entertainment facilities. This cost cutting method is
specifically designed to minimize the other party’s costs and sufferings.

When should I use cutting the costs for compliance and non-specific
compensation instead of logroll?
Sometimes, logroll cannot be used to achieve win-win negotiation when differences
in priority setting of different issues do not exist between the two parties.

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Golden rule of integrative negotiation

1. Adding issues is very essential for win-win negotiation. The above methods –
logrolling, non-specific compensation, cost cutting for compliance are not
applicable when there is ONLY ONE SINGLE issue in negotiation.
2. Depersonalize the problem. When parties are engaged in conflict, they tend to
become evaluative and judgmental. When negotiators depersonalize the problem,
they would not view their own actions and strategies, and preferences in a positive
light and the other party’s actions, strategies, and preferences in a negative light. For
example, “your point of view is wrong and mine is right” inhibits the integrative
negotiation process.

Can I change the resistance points in order to achieve win-win

negotiation?
It is not encouraged but it depends on the situation. During the negotiation process, when
you face negotiation deadlocks, it is likely that negative bargaining zone exists (refer to
chapter 3 for details about this concept). Negotiation settlement will not happen until one
or both sides adjust their resistance points to create positive bargaining zone(s) for
certain issue(s). Even you determine to do so, make sure that you move in the right
direction. You can adjust your resistance point for unimportant issue to trade for
more concession on the important issue from the other party. Remember: never give up
something without anything in return. When you adjust your resistance point, make
sure that the other party compensates you on other issues.
In other words, never adjust your resistance points in win-lose/singe-issue negotiation.
Once you move beyond your resistance points that favor the other party, you can’t get
concession from the other party on the second issues in return.

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Comparison between Distributive and Integrative Negotiation.

Distributive Negotiation Integrative Negotiation

1. Resources to be Fixed Variable; Expanded
divided

2. Issue to be Single, or discuss the issue in a At least two

discussed one-by-one manner
3. Priority and trade- No differences in priority; no Find differences in terms of
off trade-off could be made preferences, risk attitudes,
capabilities…..etc
4. Primary Maximize own outcome Maximize joint outcome
motivation
5. Key attitude I win, you lose I win, You win - what is the best
way to satisfy both parties’ need

6. Information (1)Keep silent Actively revealing information

giving (2)Selective presentation to about one’s priority and preferences
enhance one’s own power in
negotiation
7. Cooperation None Find a creative solution to expand
the pie
8. Communication defensive communication Active listening to discover both
style party’s need

9. Adjustment of Never, only stick to the resistance Only make adjustment on

resistance point points unimportant issues to trade for more
concession on the important issues
from the other party.

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Reference Book:
1. The Mind and Heart of the Negotiator.(2022). By Leigh L. Thompson. Prentice Hall.
Chapter 4.
2. Essentials of Negotiation (2021). By Lewicki, R.J., Saunders D.M., Barry, B., &
Minton J.W. McGraw Hill. Chapter 4.