Tuesday, September 14, 2010

Distributive vs. Integrative...Fight! (or be friends)

Distributive bargaining is obviously an aggressive type of bargaining.  It is inherently “zero sum” with winners and losers on specific items of a negotiation.  Integrative bargaining is about resolving conflicts by finding a positive outcome for both parties.  I can tell you which one I prefer after you tell me what I am negotiating.  No one wants to engage in distributive bargaining when you don’t have much leverage.  You will just get bossed around.  The is a competitive “game,” and you can trade off items in the negotiations, but this hard-nosed approach is much more fitting for a bad break.  Trying to reach goals together is almost always better if you plan on working with the other party again. 

Then again, if one party is hard-nosed (using distributive bargaining), they could have a leg up on a party trying to meet everyone’s needs.  If they can sell for as low as $1000, the other party is playing hardball, and the first party will not…they may sell for $1000.

If you trust the other party, integrative bargaining can help both parties reach their needs, and it can be done in a timely fashion.  With distributive bargaining, it is more likely that at least one party can lose.  If you have leverage or feel you need to get certain parts of a deal, the intensity of distributive bargaining can be a good way to get the most for a client.

Both are valid ways to negotiate, and depending on your relationship with the other side, and the needs of your party, that is how one should realistically approach the negotiations.

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