Negotiation Types

Summary
There are two opposite types or schools of negotiation: integrative and
distributive. This article introduces the important differences between
each negotiating type and gives advice on which one may be right for
your negotiation.

Negotiation is a part of our everyday lives and our history—from

trading cards as kids to asking our boss for a salary raise or bargaining
a purchase as adults. Sales training teaches how to negotiate price
increases and to ask for discounts when we buy.
Our negotiation skills are also frequently used to maintain our personal
relationships. Most of us have family and friends we organize things
with, budget with, and bargain about bedtime with. At some level, we
often negotiate without even realizing it.
Many people don’t like to negotiate, viewing the process as a hassle. We
might think we’re avoiding the negotiation process. However, we
usually end up negotiating anyway, without realizing it. So, we may as
well learn how to negotiate well. Learning about the two main
negotiation types is one effective way of learning the foundations of
negotiation.
The two distinctive negotiation types are distributive negotiations and
integrative negotiations. The Negotiation Experts’ sales course
and purchasing negotiation training teach both methods. Both types
are essential to negotiating successfully in business.

Distributive Negotiations – The Fixed Pie

The
term distributive means a giving out or a scattering of value. By the
nature of the business, there is a limited amount of what’s being
distributed or divided. So, this type of negotiation is often referred to
as “The Fixed Pie.” There is only so much to go around, and the
proportion to be distributed is limited and variable.
How often has somebody shouted out, “Who wants the last piece of
pizza?” Everyone looks at each other, then two or more hands rush to
grab the last slice.
In the real world of negotiations, two teams enter discussions with the
goal of claiming as much value as possible. The seller wants to go after
the best price they can obtain. The buyer wants to pay the lowest price
to achieve the best bargain. It’s good old-fashioned haggling.
A distributive negotiation usually involves starting talks with no pre-
existing relationship. A long-term relationship is also unlikely to
develop. Everyday examples include buying or selling a car or a house.
The purchasing of products or services is a simple business example.
Here, distributive negotiation bargaining is often employed.
 Let’s say we’re dealing with someone unknown to us, and it’s a one-
time-only occurrence. Except for the deal itself, there is no real benefit
in investing in the relationship. So, we are generally less concerned with
how the other person perceives us. We are also less concerned about
how the other person might view our reputation. Our interests and the
other side’s interests are usually self-serving.
Distributive Bargaining Basics

 Play your cards close to your chest – Give little or no information to the
other side. The less the other negotiator knows about our interests,
the better our position. This can include why we want to make the
purchase, our preferences, or the point at which we’d decline the deal.
Expressing eagerness or need reveals a weakness that could be
exploited.

 The opposite is equally true – Try to obtain as much information from

the other side as you can. Any further information uncovered is
potential leverage to negotiate a better deal.

 Let the other side know you have options – The only information we
should reveal is the fact we have options. This includes other sellers we
can purchase from at a competitive price. Reminding the seller of their
 competition shows our willingness to walk if necessary. It also lets the
seller know there will be no negative consequences for us.

 Make the first offer – Whatever the first offer is will generally act as
a negotiation anchor. The anchor becomes the point on which the rest
of the negotiation will likely revolve. Try to make the first offer to
ensure discussions set off in your favor.

 Be realistic – Being too greedy or too stingy will likely result in no

agreement. So, keep expectations realistic.

Integrative Negotiations – Everyone Wins

Something (Usually)

Integrative negotiations
need a more developed type of business negotiation skills. For this
reason, we typically start our negotiation skills training with simple
distributive bargaining role-plays. We then build up to more complex
team-based integrative negotiation role-plays.
The word integrative means to join several parts into a whole.
Integration implies cooperation, or a joining of forces, to achieve
something together. It usually involves a higher degree of trust and a
forming of a relationship. Both teams want to walk away feeling they’ve
achieved something that has value. Ideally, this means each team
achieving what they want.
 In the real world of business, the results often tilt in favor of one
side over the other. This is because it’s unlikely that both sides will
come to the table at equal strength when talks begin.
Nonetheless, there are many advantages when both teams take a
cooperative approach. Skillful mutual problem-solving generally
involves some form of making value-for-value concessions. This is
usually in conjunction with creative problem-solving.
Generally, integrative negotiations are future-focused, with long-term
relationships in mind. The aim of our on-site negotiation training is to
create ongoing mutual gains. This mutually beneficial type of
negotiation outcome is often described as the win-win scenario.
Integrative Negotiation Basics
 Multiple Issues – Integrative negotiations usually involve many issues
that are up for discussion. Each side wants to get something of value
while trading something of lesser value. In contrast, distributive
negotiations generally revolve around the price or a single issue.

 Sharing – To understand each other’s situation, both sides should

share as much information as possible. This helps each side
understand the other’s interests. You can’t solve a problem without
knowing the parameters. Cooperation is essential.

 Problem Solving – Find solutions to each other’s problems. For

example, offer something valuable to the other side that is of lesser
value to you. If you can make this trade while realizing your goal, you
have integrated your problems into a positive solution.

 Bridge Building – More and more businesses are engaging in long-term

relationships. Relationships offer greater security and the promise of
future success.

Conclusion
We often use the two types of negotiation described above in our
business and personal lives. Sometimes, these two usually distinct
forms of negotiation can even overlap. By understanding these
negotiating types, we can be better prepared in different situations.
When we continue to learn, we can boost our personal and
professional relationships and skills. By knowing how we can use the
negotiation process, we can harness the power of persuasion.
Rate this Article
4.6 out of 5 from 44 responses

10 COMMENTS

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A Small on 3 Jun 2017 at 1:49 pm
Very clearly worded for someone who has little understanding of the
subject (me).
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Dawn on 5 Feb 2017 at 8:15 pm
Thanks for this site. It's helped me a understand things a whole lot
clearer. Short and to the point, no waffle. It's great.
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Veronika on 30 Jan 2013 at 4:44 am
Good summary, practical and concise.
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▼Bob on 8 Mar 2012 at 9:24 am
Great
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Anon on 2 Feb 2012 at 11:56 pm
Excellent! helped me with a Project!!! 😀
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Joyce Jose VanScoote on 21 Jan 2011 at 11:46 pm
You have such a great article. I love you story like how you list the
diffferent kinds of Nigotiting. I am currently a nigotiater, which it is my
occupation. You have a good story… Keep progressing, and write more
articles. I am looking forward to read some more of your articles. I also
wrote a little bit article about my job, and what we usually solve with
people who needs help. Plus, they have a big problem, and try to make
themselves feel better. So, he is the right team for you! We help them
nigotiate what they are stuck with so we can help them out. Also,
discuss with them, ways to not be that stress out. And make a win win
situation. Your article helped me to learned more and know more
about this topic. God Job on your paragraph/article!!!
Reply
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Anand on 9 Jun 2010 at 12:51 am
The skill asset as above negotiation in person is rare in nature.
The whole sum is a mix up of both types in real business world.
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A Law Student on 4 Apr 2009 at 6:51 am
In addition, there are also:
1. Distributive Negotiation; and
2. Principled Negotiation.
A short description is:
Distributive ; make an offer, make counter-offer, there is a shade (area)
of offer
Principled ; the orange-principle; AKA interest-based bargaining, not
based on legal position, BATNA(best alternative to negotiated
agreement), WATNA, acknowledge each others interests