Bargaining Strategies

There are two general approaches to negotiation—distributive bargaining and integrative bargaining. They differ in their goal and motivation, focus, interests, information sharing, and duration of relationship. Let’s define each and illustrate the differences. Distributive bargaining is negotiating over who gets what share of a set amount of goods or services. Its identifying feature is that it operates under zero-sum conditions—that is, any gain I make is at your expense, and vice versa.

In a negotiation, each party has a target point they would like to achieve and a resistance point at the lowest acceptable outcome. As long as there is some overlap, there is a settlement range in which each one’s aspirations can be met. When you are engaged in distributive bargaining, one of the best things you can do is make the first offer and make it an aggressive one. Making the first offer shows power and people tend to fixate on initial information.

Say that you have a job offer, and your prospective employer asks your preferred starting salary. You have a chance to set the anchor, meaning you should ask for the highest salary you think the employer could reasonably offer. What happens much more often is that we ask for less than we could have obtained. In contrast to distributive bargaining, integrative bargaining assumes that one or more of the possible settlements can create a win–win solution. In organizations, integrative bargaining is preferable to distributive bargaining because it builds long-term relationships.

Integrative bargaining allows negotiators to leave the bargaining table feeling they achieved a victory. Compromise may be your worst enemy in negotiating a win–win agreement. People settle for less than they could have obtained if they were forced to consider the other party’s interests.