Integrative Approach

1
Benefit of Integrative Negotiation--1

Often referred to as win-win

The interest is to create a mutual

gain; i.e., to create a bigger pie
2
Tips of Integrative Negotiation--1

Rather than negotiating issues one by one serially, it

will better to considering the issues simultaneously
to find opportunities to enlarge the pie.
Case Vacation Plan: How to enlarge pie?
• This exercise is a negotiation between two friends
planning a vacation: Carson and Kyle
• There are 5 issues you will be discussing:
(1) Destination;
(2) Hotel quality;
(3) Mode of travel;
(4) Length of stay;
(5) Season
• If you are a consultant for them, please find the
maximum total pie possibly created from the
negotiation, in which each every player has identical
portion of the pie! The total pie is sum of scores gotten
by Carson and Kyle.
4
Alternatives Carson’s Points Kyle’s Points Alternatives Carson’s Points Kyle’s Points
DESTINATION LENGTH OF STAY
Northeast 80 0 1 wk 0 0
Southeast 60 105 1.5 wks 35 35
Midwest 40 210 2 wks 70 70
Southwest 20 315 2.5 wks 105 105
Northwest 0 420 3 wks 140 140
HOTEL RATING SEASON
5-star 220 0 Spring 260 0
4-star 165 55 Early Summer 195 65
3-star 110 110 Late Summer 130 130
2-star 55 165 Fall 65 195
1-star 0 220 Winter 0 260
MODE OF
TRAVEL
Air 420 0
Car 345 20 Distributive
Motorhome 210 40 Carson=40+110+210+70+130=560
Greyhound 105 60
Train 0 80 Kyle=210+110+40+70+130=560
5
Alternatives Carson’s Points Kyle’s Points Alternatives Carson’s Points Kyle’s Points
DESTINATION LENGTH OF STAY Compatible
Logrolling
Northeast 80 0 1 wk 0 0
Southeast 60 105 1.5 wks 35 35
Midwest 40 210 2 wks 70 70
Southwest 20 315 2.5 wks 105 105
Northwest 0 420 3 wks 140 140
HOTEL RATING SEASON
5-star 220 0 Spring 260 0
4-star 165 55 Early Summer 195 65
3-star 110 110 Late Summer 130 130
2-star 55 165 Fall 65 195
1-star 0 220 Winter 0 260
MODE OF
TRAVEL Distributive
Air 420 0 Distributive
Car Logrolling
345 20
Motorhome 210 40 Enlarge the pie.
Greyhound 105 60
Train 0 80 Carson=0+110+420+140+130=800
Kyle=420+110+0+140+130=8006
 Problem of Positional
Bargaining_Distributive Approach

When negotiators
bargain over positions
they tend to lock
themselves into those
positions.

7
 Position and Threat

Do …. then I will do …. If not, I will do ….

Position Threat

8
Negotiating is about WHY, not WHAT

The purpose of negotiating is seeing

if you can get your interests met
through and agreement

Positions are WHAT we want

Interests are WHY we want

something

Negotiate the WHY….not the WHAT

9
 Tips of The integrative Negotiation--3
A more careful assessment of each side’s interest can produce
more joint profit than a purely distributive agreement
Broaden the options on the table, rather than look for a single
answerExplore different interest.
Search for mutual gains.

Two sisters both wanted a single orange. A compromise, dividing

the orange equally, would leave each sister with only half.
If you have a clear understanding of each side’s
interests and their importance, your negotiation
can be both successful and rational
10
By trading the rind for the juice, however, one sister got all of the juice she
wanted to drink, and the other sister got all the rind to bake a cake.
Benefit of Integrative Negotiation--2

Every player is satisfied

concerning to their most
important interests (win-
win).
11
 Camp David Negotiation
‘When Egypt and Israel sat down to negotiate at Camp
David in October 1978, it appeared that they had
before them an intractable conflict. Egypt demanded
the immediate return of the entire Sinai Peninsula;
Israel, which had occupied the Sinai since the 1967
Middle East War, refused to return an inch of this land.
Efforts to reach agreement, including the proposal of a
compromise in which each nation would retain half of
the Sinai, proved completely unacceptable to both
sides.” As long as the dispute was defined in terms of what
percentage of the land each side would control, no
12
agreement could be reached.
 Camp David Negotiation
‘When Egypt and Israel sat down to negotiate at Camp David in
October 1978, it appeared that they had before them an intractable
conflict. Egypt demanded the immediate return of the entire Sinai
Peninsula; Israel, which had occupied the Sinai since the 1967
Middle East War, refused to return an inch of this land. Efforts to
reach agreement, including the proposal of a compromise in which
each nation would retain half of the Sinai, proved completely
unacceptable to both sides.” As long as the dispute was defined in
terms of what percentage of the land each side would control, no
agreement could be reached. However, once both realized that what
Israel really cared about was the security that the land offered while
Egypt was primarily interested in sovereignty over it, the stalemate was
broken. The two countries were then able to reach an integrative
solution:
Israel would return the Sinai to Egypt in exchange for assurance of a 13
demilitarized zone and Israeli air bases in the Sinai.
Distributive Integrative

14
Techniques of Integrative Approach
Non-Specific
Compensation

Contingency
Cost Cutting
Contract

Log Rolling Bridging

15
 Non-Specific Compensation

• In this method, proposal of the other side will

be accepted if your proposal of compensation is
also accepted (Trading)
• For example: Computer’s price is traded with
additional software installed in it.

16
Cost Cutting

You will accept the

other side’s proposals,
if your proposals
about payment
methods, discounts,
and taxes are also
accepted. 17
 Bridging
Creating a new proposal based on new issues
based on understanding about interests of
partners.

This new proposal is expected to be accepted by

his partner.

18
 Camp David Negotiation
‘When Egypt and Israel sat down to negotiate at Camp David in
October 1978, it appeared that they had before them an intractable
conflict. Egypt demanded the immediate return of the entire Sinai
Peninsula; Israel, which had occupied the Sinai since the 1967
Middle East War, refused to return an inch of this land. Efforts to
reach agreement, including the proposal of a compromise in which
each nation would retain half of the Sinai, proved completely
unacceptable to both sides.” As long as the dispute was defined in
terms of what percentage of the land each side would control, no
agreement could be reached. However, once both realized that what
Israel really cared about was the security that the land offered while
Egypt was primarily interested in sovereignty over it, the stalemate was
broken. The two countries were then able to reach an integrative
solution: Israel would return the Sinai to Egypt in exchange for
19
assurance of a demilitarized zone and Israeli air bases in the Sinai.
 Log Rolling

Negotiator will yield on not

important issues, but
defend on important
issues.
20
Friday evening dinner and movie with your
date

Consider a Friday evening dinner and a movie. You

and your date like each other’s company, but you
have difference tastes in restaurants and movies.

Instead of haggling about each issue separately, see

if one of you cares more about restaurant and the
other more about the movie. If you do, you can
work out an integrative trade-off—one picks the
restaurant and the other the movie—in which you
both get what is most important to you.

21
 Contingency Contract

If you have different

perception/expectation about issues in
the future, then you can propose a
contract: if the other side is true then
he/she receives amount of money
rebate from you; if not, the other side
pays amount of money surcharge to
you.
22
 Steps of Rational Negotiation

Rational Negotiation requires negotiator

to follow a procedure leading to an
optimal results by combining the
following two approaches:
1. Distributive Approach
 Competing to get a bigger share of a pie
2. Integrative Approach
 Collaborating to create a bigger pie

23
 Claiming Vs Creating Value

Integrative Approach
can minimize “leaving
money on the table!”
Utility to Party B

All possible
agreements

Integrative
Approach

Distributive
Approach

Utility to Party A

24
 Collaboration: Growing Together

Sharing a Pie:
Sharing a Pie: Collaborative Version
Competitive Version
Creating
Value

1/4 1/4
Value Co-Creation

Resources Sharing
1/4 1/4
Thanks