Integrative Bargaining - Collaborative Moves to Create Value 092SIS19 Jiang Xiaomei

Bargaining Strategies – Distributive Bargaining Both Competitive and cooperative strategies divide a fixed “pie” Win-Lose, Zero-sum Opposed to each other move through a series of concessions competitive moves to claim value 2

Pitfall of adversarial bargaining strategy Pyrrhic negotiation outcomes- the winner’s curse REGRET: PAY TOO MUCH? Disadvantages of win-lose metaphors Zero-sum quality Emphasis on rules rather than relationships exploit rather than negotiate fairly Increase tendency to litigate rather than mediate Induce focus on immediate conflict instead of long term new game zero score at the beginning of the next game exploitive tactics without fear of repercussions anything given up is perceived as forever lost–intransigence Try to fractionate other party-weakening coalitions-easier to defeat No clear leader-difficult to reslove conflict Winning : has the power and potential to create tunnel vision lead people to visualize conflicts in counterproductive ways

Bargaining Strategies – Integrative strategy a problem-solving approach by trying to come up with a creative solution to Reconcile parties’ interests – provides high profits to both Variable amount of resources to divide Search for additional items-increase the pie-Expond options Convergent or congruent with each other try to create WIN-WIN/positive-sum Handled through collaboration or compromise Broad understanding of success Collaborative Moves to Create Value

Negotiation Strategies An Example… Competitive Cooperative Integrative 5

Distributive vs. Integrative Bargaining Distributive Solution Dividing Fisher and Ury’s Famous Orange Distributive Solution Integrative Solution 6 6

Reasons to seek integrative agreement rather than compromises Reconcile parties’ interests to solve conflict More stable Resolution Strengthen the relationship Contribute to the welfare of the broader community

Integrative Bargaining Fisher & Ury’s Principled Negotiation Largely Based on though goes beyound four principles Separate the PEOPLE from the problem. Competitive-change the opponent’s position through sheer willpower Cooperative –build trust in order to reach a fair agreement Focus on INTERESTS, not positions. Invent OPTIONS for mutual gain. Insist on using objective CRITERIA Directly conflict interests(not all) free exchange of information each party’s motives, goals, values are understood and appreciated Meet varied and complementary needs Standard components Major component Underlying principle

The Structure of Problem Solving Identifying the parties’ underlying needs and objectives – springboard for potential solution not all needs are mutually exclusive-meeting varied and complementary needs Creating solutions Meet the parties’ needs Expanding the resources available zero-sum non-zero-sum/positive –sum Substantive-no single, optimal solution shared interests value differences in needs third party Substitute Long/short term…… Just or fair solutions-no Pareto optimal Meet the parties’ needs by solving their problem in broadest sense

Types of integrative solution Brainstorm-develop a new option Logrolling Cost cutting Reach a negotiation beneficial to the other party and assure no similar concessions be expected in the future Heuristic trial and error-facilitating Procedures Dispute should be considered simultaneously develop a set of goals and other requirements incorporate opponent’s suggested solution alter incrementally Party A Party B Concessions… Concessions … Of least important issues for in exchange of the most important!

Methods for integrative agreements Expanding the pie increasing available resources Require no analysis of the interests underlying the parties’demands slim information requirement √ √

Methods for integrative agreements Nonspecific compensation repaid in unrelated compensation what is valuable to the other party How badly the other part is hurting by making comcessions √ √

Methods for integrative agreements Logrolling Several issues under consideration with different priorities Concedes on low priority in exchange for concessions on higher priority √ √

Methods for integrative agreements Cost cutting the other’s cost are reduced-suffers less √

Methods for integrative agreements Bridging reformulation based on an analysis of the underlying interest Satisfies the most important interest underlying initial demands higher priority are served √ √

The nature of problem solving Openess to new alternatives Firm flexibility Be firm with one’s ends Be flexible with the means to these ends

Creativity and outcome -Multiple intelligences Connect the three rows of dots below with four straight lines without moving your pen off the page thinking out of the box

Creativity- problem solving Take a piece of paper and put your body through the page You have four cows in a field. How can you arrange those cows so they equidistant from each other Make a pyramid, three on the base and three on the sides

Conclusion integrative approach is the most productive,interpersonal and outcome understanding and satisfying interests, firm flexibility Right attitude: Positive, Openess, Willingness to Win-Win Sharing each other’s deep interests and needs Accessing the interests at stake Communicate, roleplay, third party, past behavior, professional Organizational affiliation,to Whom they defer, Psychology and culture Accesing trade offs Creat value from a varity of differences: Relative cost/revenue structure, priority/interest, forecast/future, risk, time, capabilities,tax Creativity : Mind-mapping, WWCD, Idea arbitrage problems in application-criticism Suspect premise-irreconcilable notions Weaknesses in each of its core principles a good negotiator can switch and choose between different types

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