Distributive Negotiation Vs. Integrative Negotiation
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Negotiations come in two forms- distributive outcomes and integrative arguments. Distributive outcomes, also called, “win-lose” bargaining, is a competitive negotiation strategy that is used to decide how to distribute a fixed resource (i.e. money) between two negotiators so that the more one gets, the less the other gets. In distributive bargaining, each party tries to secure the most benefit for themselves, without regard for the other sides outcome (Roy J.L, David M.S, and John W. M, 1999). For example, when negotiating for a used car — the buyer either gets that extra $2,500 or the dealership does. If the buyer feels that he got a good deal, he “won.” If he walks away feeling like he paid too much money for that car, he “lost.”
In contrast, Integrative bargaining is a negotiation strategy in which all parties collaborate to find a “win-win” solution to their dispute so that all parties achieve maximum mutual gains (Roy J.L, David M.S, and John W. M, 1999). Integrative bargaining is important because it produces more satisfactory outcomes for the parties involved than does Distributive bargaining. Say, a Trade Union is negotiating with the Employers demanding an increase in 2.5% of wages every year with bonus on every Christmas or they would go for Strike. The Employers proposed that the wages can be increased with 1.5% but on every two years and bonus will be given if the workers increase their working hours by 2 hours per day. Therefore, the proposition is profitable by both parties. Workers can get good wages and bonus by only giving an extra two hours. The Company’s work operation will be increased that can lead to increase in sales, and hence increase in profit. Therefore, with Integrative bargaining, both the parties “won”!