There are four different approaches to negotiation and the outcome of the negotiation depends on the approach. The various approaches to negotiation are as follows:
Distributive Negotiation or Win-Lose Approach
This is also called competitive, zero sum, or claiming value approach. This approach is based on the premise that one person can win only at the expense of the other. It has the following characteristics:
(i) One side ‘wins’ and one side ‘loses’.
(ii) There are fixed resources to be divided so that the more one gets, the less the other gets.
(iii) One person’s interests oppose the other’s.
(iv) The dominant concern in this type of bargaining is usually to maximize one’s own interests.
(v) The dominant strategies in this mode include manipulation, forcing and withholding information.
Strategy to be used: In this mode, one seeks to gain advantage through concealing information, misleading or using manipulative actions. Of course, these methods have serious potential for negative consequences. Yet even in this type of negotiation, both sides must feel that at the end the outcome was the best that they could achieve and that it is worth accepting and supporting.
The basic techniques open to the negotiator in this kind of approach are the following:
- Influence the other person’s belief in what is possible.
- Learn as much as possible about the other person’s position especially with regard to resistance points.
- Try to convince the other to change his/her mind about their ability to achieve their own goals.
- Promote your own objectives as desirable, necessary, ethical, or even inevitable.
This negotiation approach is adopted when one negotiating partner feels that his own interests are threatened and he does all he can to ensure that the outcome of the negotiation is not suitable to the interests of the other party as well. In the bargain, both the parties end up being the loser. This type of situation arises when the negotiating partners ignore one another’s needs and the need to hurt each other outweighs the need to find some kind of an acceptable solution. This is the most undesirable type of outcome and hence this negotiation approach is best avoided.
This approach provides an outcome which is some improvement over the lose-lose strategy outcome. To avoid a lose-lose situation, both parties give up a part of what they had originally sought and settle for something less than that. A compromise is the best way out when it is impossible for both parties to convince each other or when the disputed resources are limited.
Integrative Negotiation or Win-Win Approach
This negotiation approach is also called as collaborative or creating value approach. It is superior to all negotiation approaches. It results in both the parties feeling that they are achieving what they wanted. It results in satisfaction to both the parties. It has the following characteristics.
(i) There are a sufficient amount of resources to be divided and both sides can ‘win’
(ii) The dominant concern here is to maximize joint outcomes.
(iii) The dominant strategies include cooperation, sharing information, and mutual problem-solving. This type is also called ‘creating value’ since the goal here is to have both sides leave the negotiating feeling they had greater value than before.
Since the integrative approach is most desirable, some of the guidelines to integrative bargaining are listed below:
- Orient yourself towards a win-win approach. Your attitude while going into negotiation plays a huge role in the outcome.
- Plan and have a concrete strategy. Be clear on what is important to you and why it is important.
- Know your Best Alternative to a Negotiated Alternative (BATNA).
- Separate people from the problem.
- Focus on interests, not positions; consider the other party’s situation.
- Create options for mutual gain.
- Generate a variety of possibilities before deciding what to do.
- Aim for an outcome based on some objective standard.
- Pay a lot of attention to the flow of negotiation.
- Take the intangibles into account, communicate carefully.
- Use active listening skills, rephrase and ask questions and then ask some more