Integrative negotiation (or integrative bargaining) is not new. Still, it can feel alien to negotiators who are used to the more familiar distributive negotiation strategy, where there is typically a clear winner and loser. Integrative negotiation strategies focus on delivering a win-win solution for all involved parties so that everyone comes out with an agreeable set of outcomes.
Integrative bargaining is a more creative and collaborative alternative to distributive negotiation, allowing you to address the whole problem rather than individual issues and foster more positive, enduring relationships.
What is integrative negotiation?
Integrative negotiation is a strategy in which the parties collaborate to find a mutually beneficial solution. This approach contrasts with adversarial bargaining, meaning each side seeks to maximise its gains, often at the expense of the other.
In integrative negotiation, the focus is on understanding each other's needs and interests to create value that can be shared by all parties. This often involves creative problem-solving and a willingness to explore a range of possibilities. It is commonly referred to as a "win-win" approach, as opposed to a "win-lose" scenario typical in competitive negotiations.
What are the key aspects of integrative negotiation?
-
Mutual benefits: Unlike adversarial bargaining, where the focus is on winning at the expense of the other party, integrative negotiation seeks outcomes where all parties benefit. This is the hallmark of the "win-win" approach.
-
Understanding interests: A significant emphasis is placed on understanding the underlying interests, needs, and concerns of all parties involved. By identifying these interests, parties can find areas of common ground and explore solutions that address multiple needs.
-
Creative problem-solving: Integrative negotiation encourages thinking outside the box. Parties work together to find innovative solutions that might not be immediately apparent. This often involves brainstorming sessions and open discussions where parties are encouraged to share their thoughts freely.
-
Expanding the pie: Rather than fighting over a fixed set of resources ("zero-sum" scenario), integrative negotiation looks for ways to expand the resources or value in question so that there is more to share. This could involve adding new resources, finding efficiencies, or redefining the scope of the negotiation to include additional elements that provide value to all sides.
-
Preserving relationships: Because the approach is collaborative, integrative negotiation often results in stronger relationships between the parties. This is particularly important in situations where the parties must continue to work together in the future.
-
Communication: Open and honest communication is critical in integrative negotiation. Parties must be willing to share information about their needs and constraints to find mutually beneficial solutions. This level of transparency helps build trust and facilitate cooperation.
6 actionable strategies for successful integrative negotiation
Integrative negotiation is about shifting the focus from competing over a fixed pie to collaborating to make the pie bigger for everyone. The following are some of the best strategies for everyone to win at the negotiation table.
1. Understand your and the other party's interests
The fundamentals of business negotiation tell us that preparation is key to achieving a successful deal, which is also true of integrative bargaining.
When you are preparing for a negotiation, spend some time understanding the other party's goals, including their Best Alternative to a Negotiated Agreement (BATNA), rather than only considering your own interests. You may even ask the other party directly what they want to achieve from the negotiation. Transparency is a key differentiating factor in integrative negotiation strategies.
Only by understanding one another's needs can you begin to work together to reach mutually beneficial agreements by brainstorming potential solutions that are palatable to all.
2. Leverage logrolling technique
Logrolling is where each party takes turns to take a more favourable outcome on each issue under discussion. This approach allows each party to find value in some points while giving value to others.
Imagine a situation where a technology firm is negotiating a partnership with a software development company. The tech firm wants a lower price for software development, while the software company is seeking longer contract terms for stability. In a logrolling approach, the technology firm agrees to a longer contract term, which is more favourable to the software company, in exchange for a lower price on the software development services. This way, each party gets a more favourable outcome on the issues most important to them.
3. Build a bridge
Bridge solutions involve parties coming together during a business negotiation to create new ideas rather than working on the original proposals. Both parties collaborate and list their needs and wants, and then the entire group brainstorms different ideas that meet the brief. The output should be a mutually beneficial solution that everyone agrees on.
For example, two educational institutions are negotiating a merger. Instead of sticking to their initial proposals, which focus on maintaining their own courses and faculties as they are, they decide to approach the negotiation with bridge solutions. They list all the courses and resources they each have and then brainstorm new programmes that could be offered jointly, leveraging the strengths of both institutions. The result is a range of innovative joint degree programmes that attract a larger pool of students, benefiting both parties.
4. Split the difference
This technique is a useful tool when the parties are close to reaching an agreement and only a handful of issues remain. When parties agree to split the difference, they each give up an equal amount to reach an agreement on the remaining points so that both sides feel they are no worse off than the other.
As an example, an author and a publishing house are negotiating the advance payment for the author's next novel. The author asks for £20,000, while the publisher is willing to offer only £12,000. After several rounds of negotiation, they decide to split the difference, settling on an advance of £16,000. This compromise allows them to move forward with the publication while ensuring that neither feels significantly disadvantaged by the agreement.
5. Expand the pie
This allows both parties to identify common issues, which can broaden the interests or resources they have to put on the negotiation table. This is a collaborative process which allows both parties to pursue their own interests with smarter deal structuring and creative solutions.
Let's look at a scenario where a renewable energy company and a landowner are negotiating a deal for a new wind farm. Initially, the negotiation stalls over the lease price for the land. Instead of focusing solely on the cost, they explore ways to expand the pie. They identify that the landowner is interested in sustainable farming practices. The renewable energy company offers to include an investment in eco-friendly agricultural projects on the land, in addition to the lease payment. This not only addresses the landowner's interests but also enhances the energy company's reputation for environmental responsibility. Both parties benefit from a deal that goes beyond the initial scope of negotiation, with the renewable energy company securing the land for their project and the landowner receiving both the lease payment and an investment in sustainable farming.
6. Build and nurture the relationship
Integrative bargaining is about teamwork and collaboration. Since both parties are working together to find a common solution, they will tend to leave the table, viewing the other party as a teammate or ally.
The improved working relationship will leave both parties willing to work together again in future negotiations. A positive relationship is far more likely to result in a win-win outcome the next time you negotiate with them.
Final thoughts
Successful integrative bargaining relies on mutual trust between the involved parties. These tried and tested best practices can help to solidify the relationship. Remember:
-
Act with integrity: Openness, transparency, and honesty are imperative so that all parties understand one another's interests, concerns and, ultimately, what makes them tick.
-
Active listening: To understand one another's issues, both sides must approach the negotiation prepared to listen, without judgement of the other parties' interests.
-
An abundance mentality: Each concession needs to be viewed not as a loss but as a way of enlarging the overall pie so that everyone gets something out of the deal.
Under the right circumstances, an integrative negotiation strategy allows both parties to achieve a satisfactory solution and keeps the door open for future interactions.
Whether you are entirely new to negotiation or looking to advance your negotiation skills, Scotwork UK's negotiation training can help you succeed at the negotiation table! Get in touch today.
