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Negotiation

Section 01:
Negotiation Fundamentals

Chapter 03:
Strategy and Tactics of
Integrative Negotiation

© 2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
 Overview of the Integrative Negotiation Process
Context Process
Create a free flow of Identify and define the
information. problem.
Attempt to understand the Surface interests and
other negotiator’s needs needs.
and objectives.
Generate alternative
Emphasize things that the solutions.
parties have in common.
Evaluate and select
Search for solutions that alternatives.
meet the goals/objectives of
both parties.

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 Creating a Free Flow of Information

Effective information exchange facilitates integrative

solutions.
• Negotiators must be willing to reveal their true objectives and to listen
to each other carefully.
• In contrast, a willingness to share information is not a characteristic of
distributive bargaining situations.
A free flow of information allows both parties to know and
share their alternatives.
• Known alternatives means negotiators are more likely to soften
resistance points, improve trade-offs, and increase the resource pie.
• It is the negotiator with the alternative who is responsible for
expanding the pie.

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 Understand the Other’s Real Needs and Objectives

You must understand the other’s needs before helping to

satisfy them.
Integrative agreements are facilitated when parties exchange
information about issues, not necessarily about their
positions.
Negotiators must make a true effort to understand what the
other side really wants to achieve.
• In contrast, negotiators in distributive bargaining either make no effort
to understand the other side’s needs or do so only for their own ends.
The more experienced party may need to assist the less
experienced party in discovering their underlying needs.

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 Emphasizing Things in Common

To sustain a free flow of information, negotiators may require

a different outlook or frame of reference.
• Individual goals may need to be redefined through collaborative efforts
directed toward a collective goal.
• At times, the collective goal is clear and obvious.
• Other times it is not clear or easy to keep in sight.

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 Searching for Solutions

Successful integrative negotiation depends on the search for

solutions that meet the needs and objectives of both sides.
• Negotiators must be firm but flexible.
• Firm about primary interests but flexible about how needs are met.
Low concern for the other’s objectives may drive one of two
forms of behavior.
• Negotiators may work to ensure what the other obtains does not take
away from their own accomplishments.
• Negotiators may attempt to block the other from obtaining their objectives
due to a strong desire to win.
In integrative negotiation, outcomes are measured by the
degree they meet both negotiator’s goals.

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 Key Steps in the Integrative Negotiation Process

There are four major steps in the process.

• Identify and define the problem.

• Surface interests and needs.

• Generate alternative solutions to the problem.

• Evaluate those alternatives and select among them.

The first three steps are important for creating value.
The fourth step involves claiming value – distributive skills.
• The Pareto efficient frontier is achieved when no agreement makes any party
better off without decreasing outcomes to any other party.
Creating value must happen before claiming value.
• Creating value is more effective when collaborative and claiming value may
derail the creating value process.

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Figure 3.1: Creating and Claiming Value and the Pareto
Efficient Frontier

Jump to slide containing descriptive text.

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 Step 1: Identify and Define the Problem

Define the problem in a way that is mutually acceptable to both

sides – separate from efforts to generate or choose alternatives.
State the problem with an eye toward practicality and
comprehensiveness and a focus on solving the core problem(s).
State the problem as a goal and identify the obstacles to attaining
this goal – can obstacles be corrected by negotiators?
Depersonalize the problem, allowing both sides to approach the
issue as a problem external to the individuals at the table.
Separate the problem definition from the search for solutions.
• Negotiators should develop standards by which potential solutions will be
judged for how well they fit.

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 Step 2: Surface Interests and Needs

Key to an integrative agreement is understanding and satisfying

each other’s interests.
• Interests are the underlying concerns, needs, desires, or fears that
motivate a negotiator to take a particular position.
• Pursuing positional bargaining allows only one victor at outcome.
In distributive bargaining, negotiators trade positions back and
forth, attempting to achieve a settlement close to their targets.
In integrative negotiation, both negotiators need to pursue the
other’s thinking to determine factors that motive their goals.
• The presumption is that if both parties understand the others’ motivating
factors, they may recognize possible compatibilities.

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 Types of Interests
Interests can be intrinsic or
instrumental, or both.
Substantive interests are
related to focal issues.
• Economic and financial issues.
Process interests relate to
how the negotiation unfolds.
• One party may pursue
distributive bargaining.
• The other may enjoy integrative
negotiation.
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Relationship interests are the
value of ongoing relations.
• Intrinsic relationship interests
exist when the parties value the
relationship.
• Instrumental relationship
interests exist when the parties
derive substantive benefits from
the relationship.
Interests in principle may be
deeply held and serve as
guides.
• Often involve intangibles.
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 Some Observations on Interests

There is almost always more than one type of interest underlying

a negotiation.
Parties can have different types of interests at stake.
Interests often stem from deeply rooted human needs or values.
Interests can change – like positions.
Sometimes people are not even sure about their own interests.
• Listen to your own inner voices.
Surfacing interests is not always easy or to your best advantage.
• Critics to the “interests approach” identified the difficulty of defining
interests and taking them into consideration.

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 Step 3: Generate Alternative Solutions

This is the creative phase of integrative negotiation.

• The objective is to create a variety of possible solutions to the problem.
• Then evaluate and select from among those options in step 4.
Several techniques are available, falling into two general
categories.
• The first requires negotiators reframe the problem to create win-win
alternatives out of what appeared to be a win-lose problem.
• The second takes the problem as given and creates a long list of
options from which the parties can choose.
In integrative negotiation over a complex problem, both types
of techniques may be used, and even intertwined.

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 Inventing Options
Logroll.
• Trade off prioritized issues.
• Unbundling splits one issue into
parts for logrolling.
Expand the pie.
• Add resources in such a way that
both sides win.
Modify the resource pie.
• Modify the pie to support both sides.
Find a bridge solution.
• Invent a new option that meets both
needs.
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Nonspecific compensation.
• One party gets their objectives,
the other is compensated.
Cut the costs for compliance.
• Minimize their costs for agreeing
to a specific solution.
Superordination.
• When the original issue is
replaced by other interests.
Compromise.
• These solutions do not further
the interests of either party.
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 Generating Alternatives to the Problem as Given
Brainstorming.
• Groups work to generate as many
solutions as possible.
• Spontaneous, even impractical
solutions.
• Success depends on the amount
of ideas generated.
Rules of brainstorming.
• Avoid judging solutions.
• Separate people from the problem.
• Be exhaustive in the process.
• Ask outsiders.
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Surveys.
• Brainstorming only gathers ideas
of people present.
• Surveys quickly gather ideas of
those not present.
• Parties miss hearing other’s ideas,
a key brainstorming advantage.
Electronic brainstorming.
• A facilitator presents the problem
and anonymous ideas are
gathered for all to see.
• The facilitator then asks additional
probing questions.
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 Step 4: Evaluate and Select Alternatives

When the issue is simple, this may be a single step.

Otherwise, the steps are: definitions and standards,
alternatives, evaluation, and selection.
Negotiators will need to weigh or rank-order each option
against clear criteria.
• May need to return to definitions or return to standards for revisions.
Finally, the parties engage in a decision-making process and
come to an agreement on the best options.
• The selection of alternatives is the claiming-value stage.
Use the following guidelines to evaluate options and reach a
consensus.

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 Guidelines to Evaluate and Select Alternatives
Narrow the range of solution
options.
Evaluate solutions on the basis
of quality, standards, and
acceptability.
Agree to the criteria in advance
of evaluating options.
Be willing to justify personal
preferences.
Be alert to the influence of
intangibles in selecting options.
Take time out to cool off.
© McGraw-Hill Education
Use subgroups to evaluate
complex options.
Explore different ways to logroll
by exploring differences in risk
preference, expectations, and
time preferences.
Keep decisions tentative and
conditional until all aspects of
the final proposal are
complete.
Minimize formality and
recordkeeping until final
agreements are closed.
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 Assessing the Quality of the Agreement

Assessed along the same two dimensions as distributive

agreements.
• Objective outcomes.
• Subjective value.
Assess objective outcomes against the extent to which both
parties’ interests and needs were met by the agreement.
The subjective value is more important in integrative
negotiations due to the long-term relationship of the parties.

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 Factors Facilitating Successful Integrative Negotiation

Successful integrative negotiation occurs when the parties are

predisposed to finding a mutually acceptable joint solution.
This next section reviews seven factors that facilitate successful
integrative negotiation.
• The presence of a common goal.
• Faith in your own problem-solving ability.
• A belief in the validity of the other party’s position.
• The motivation and commitment to work together.
• Trust.
• Clear and accurate communication.
• An understanding of the dynamics of integrative negotiation.

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 Factors in Successful Integrative Negotiation
Some Common Objective or Goal
There are three types of
goals that may facilitate
integrative agreements.
• A common goal is one all
parties share equally.
• A shared goal is one both
parties work toward but that
benefits them differently.
• A joint goal involves individuals
with different personal goals
agreeing to combine them in a
collective effort.
© McGraw-Hill Education
Faith in Your Problem-Solving
Ability
Parties who believe they
can work together are more
likely to do so.
• Expertise in the focal problem
strengthens understanding.
• Expertise increases the
negotiator’s knowledge base
and their self-confidence.
• Direct experience increases
understanding of the process.
• Knowledge of integrative
tactics leads to an increase in
integrative behavior.
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 Validity, Motivation, and Problem-Solving

Integrative negotiation requires negotiators accept both their own

and the other’s attitudes, interests, and desires as valid.
• Believing in the other’s validity does not mean empathizing.
For successful integrative negotiation, the parties must be
motivated to collaborate rather than compete.
• Maximize your outcomes by assuming a healthy interest in achieving your
own goals while remaining collaborative and problem-solving.
Ways to enhance motivation and commitment to problem-solving.
• Recognize a shared fate and discuss gains from working together.
• Engage in commitments to each other before negotiation begins.
• Called presettlement settlements.

• Create an umbrella agreement as a framework for future discussions.

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 Trust, Communication, and Understanding

Tactics to elicit information when the other mistrusts you.

• Share information and encourage reciprocity.
• Negotiate multiple issues simultaneously.
• Make multiple offers at the same time.
A precondition for integrative negotiation is clear communication.
• Mutual understanding is the responsibility of both sides.
• Multiple channels clarify the message, watch for consistency.
• Metaphors play a role when direct communication is difficult.
• Create formal communication procedures if one party dominates.
Finally, studies indicate that training enhances the understanding
and ability to successfully pursue integrative negotiation.

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 Why Integrative Negotiation is Difficult to Achieve

Integrative negotiation is collaborative, the parties define

their common problem and pursue strategies to solve it.
Conflict and negotiation is essential to the differences
between distributive bargaining and integrative negotiation.
• Negotiators may not pursue integrative agreements if they fail to see
integrative potential or are motivated by their own needs.
Four additional factors contribute to this difficulty.
• The history of the relationship between parties.
• The belief that an issue can only be resolved distributively.
• The mixed-motive nature of most bargaining situations.
• Short time perspectives.

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 History and Beliefs

The more competitive and conflict-laden their past

relationship, the more likely parties will be defensive with a
win-lose attitude.
• Even with no history, expectations create defensiveness.
• Negotiators can proceed past a negative history, but it takes effort.
Conflict dynamics lead negotiators to polarize issues and see
them only in win-lose terms.
• In addition, negotiators may be prone to several cognitive biases that
may preclude them from engaging in behaviors necessary for
integrative negotiation.

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 Nature of Situations and Short Time Perspective

Most situations contain some elements requiring distributive

bargaining processes, others requiring integrative processes.
• Conflict and competitiveness drive out cooperation and trust.
A fundamental challenge is that parties fail to recognize or
search for the integrative potential in a negotiation.
• Primarily to satisfy their own concerns.
Effective integrative negotiation requires sufficient time.
• To process information.
• To reach true understanding of your own and the other party’s needs.
• To manage the transition from creating value to claiming value.

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 Distributive Bargaining versus Integrative Negotiation

Many would argue for integrative negotiations, holding that

distributive bargaining is outdated.
A strong understanding of both is important for two reasons.
• Some negotiators use a purely distributive approach and evidence
shows integrative negotiating is effective against such bargainers.
• Integrative situations involve a claiming-value portion and this may
involve the use of distributive tactics.
• A sound understanding of distributive bargaining makes it more likely you
will be able to identify insincere opponents.

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 End of Chapter 03.

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© 2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.