Integrative negotiation is defined as a negotiation strategy that focuses on mutual collaboration to arrive at a common conclusion. It is also known as a win-win situation or interest-based bargaining,
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What is Integrative Negotiation?
Most of the time, companies or two negotiating parties get stuck on a pause. Neither can go ahead without the other compromised and more often than not, it is because of such impasses that negotiation deals don’t get completed. In such cases, integrative negotiation is conducted, which consists of coming to common grounds and interests of each other. Joint decisions are made to avoid conflicts with both parties.
Value creation is tried to create for both parties with the help of integrative negotiation. The entire process of this type of negotiation depends on the skill of a tactful and smart negotiator who can keep the interests of both parties in mind.
The trick is to make both parties feel that they got a fair deal, which in turn translates to a win-win situation. Integrative negotiation is essential when it is essential for you not to lose the deal, and in such cases, integrative bargaining is the least amount of price you pay to get the deal.
After all, it is good, useful, and profitable to be friends with your rival.
Importance of Integrative Negotiation
Negotiation is often tagged as a process in which one party gets it all, and the other party is left feeling dissatisfied, like a hostile takeover. The definition of integrative bargaining says that both parties should have a win-win situation. Therefore the outcomes are satisfactory and usually accepted by both parties.
Integrative negotiation takes care that the process of negotiation does not turn into a compromise for one party/ Interests of both parties are taken into consideration. Of course, to look at it this way, no party can ever be delighted. But think of it this way, if the deal or negotiation went in favor of one party, then it would get 4 points and likewise for the other party. But if integrative bargaining is used, then both the parties get 2 points and lose 2 points each. The creativity in the integrative negotiations will help both the parties to give something they want.
In most cases, integrative bargaining helps both parties to satisfy their needs to some extent. Rather than competing with each other, if the parties negotiate or collaborate, then the process turns out to be beneficial for everyone involved in the process.
This prevents any present or future conflicts. However, both parties must know what exactly they want.
Common interests of both parties are identified on which they have to work, and this is done to figure the best way to reach the ends. Parties use different techniques to find common points in negotiation.
Brainstorming is one common technique to list all common beneficial aspects for both parties. Care should be taken; however, the interests of both parties are kept in mind rather than focusing only on one side.
No side should feel cheated and robbed after the negotiation, and both sides should have something positive to focus on after the process is complete.
Characteristics of Integrative negotiation
As explained in the definition, integrative negotiation works towards a solution that is mutually beneficial so that one part is not left with a feeling of defeat. This is very important to make the negotiation process successful. Following are a few other characteristics of Integrative negotiation:
1. Building relations
The outcome of integrative bargaining is a win-win situation. Therefore both the parties are left with a feeling of satisfaction. Neither of the parties feels cheated or lost, and common happiness is essential to build long term relations in business.
Integrative negotiation helps to build sustainable and long term relations of both parties with each other. Instead of having a company as a rival, it is better and beneficial to have that company as an ally.
Two allies can achieve a lot in every aspect than two companies individually, and integrative negotiation paves a path for that.
2. Trust
Every kind of negotiation tries to extract as much as possible from every party, but integrative negotiation says that both parties should be able to trust each other.
This trust is based on ethical aspects and benefits the business of both parties. The process of integrative negotiation is such that both parties open up with each other to make the process successful.
Honesty, automatically, becomes a building block of the relation established by integrative negotiation.
3. Behavioral foundations
Emotional judgments and spur-of-the-moment decisions should be avoided for a successful negotiation. Understand this thoroughly that people the process of integrative negotiation is such that both the parties lose something and gain something.
Comparing one’s losses with gains of others will never make the negotiation successful because everyone feels that what they have lost is the worst.
This negotiation is going to form the foundation of future businesses, and hence thoughtful decisions should be prioritized over emotional and premature decisions.
4. Information foundation
One of the essential concepts in marketing is BATNA, which applies in this case. BATNA is the Best Alternative to a Negotiated Agreement, which translates to being prepared for the worst-case scenario.
The party should always have a backup list of demands if the first expectations are not fulfilled in the first round of negotiation. The process of negotiations is long and takes days or weeks, and even after such long discussions, both parties are sure to hit an impasse.
If a settlement is not reached, both parties should have an alternative solution by which they can proceed.
5. Potential consequences
Both parties should keep in mind the potential consequences after the process of negotiation. There can be many consequences for both parties, like competition, market share, employee distribution, and profit distribution.
All of these aspects should be given due consideration during the process of negotiation. It shouldn’t happen that since one party does not have a lot of employees in their organization, they should omit the point from the discussion altogether.
Distribution of market share, product portfolio, and profits should be analyzed accordingly.
It is recommended to carry out a dynamic analysis by both parties to understand the other party’s position. This will make the decisions more balanced.
Few points to take care of when negotiating are that both parties will have vested interests in the deal, including person negotiating since personal agendas are common during negotiations.
You cannot satisfy all the expectations in integrative negotiations, and some of them will have to be left off. You have to choose the ones who are least important and will cause the least damage to not only your party but also to the other party.
Process of integrative negotiation
There are primarily three steps in integrative negotiation. These steps are designed to take the interests of both parties and come to a mutually agreeable solution.
Following are three steps:
1. Define needs
The needs of both parties should be appropriately defined and those demands should strictly be kept to needs only. Asking directly what the other party expects is the best way to go ahead.
This will give what their expectations are, and it will also help you to analyze what all can you agree with. Keeping to oneself and bringing up at the end of the negotiation is not a good thing. Transparency is the key to a successful negotiation.
2. Pick commonalities
Now that both the parties have put forth their basic needs pick out the common factors in them. Usually, it doesn’t happen that there is no common factor, but if it does, then make something common or close to common to select it.
3. Multiple solutions
Now that you have common points that are beneficial for both parties, then brainstorm multiple solutions that can help you to close the negotiation successfully.
Share those solutions with the other party and try to come to a common agreement and solution.
Conclusion:
Integrative bargaining is one of the best solutions to solve negotiation impasse. It helps both parties to have a win-win situation without one of them feeling lost. The only important thing is how balanced you keep negotiations and avoid conflicts.
Integrative negotiations are the best tool when your aim is collaboration rather than winning.
Did you know that leveraging integrative negotiation strategies can lead to better long-term business relationships?
A recent study by the Program on Negotiation at Harvard Law School found that over 70% of successful business negotiations involve some form of integrative bargaining steps. By focusing on mutually beneficial outcomes, companies are able to build long-lasting partnerships and enhance collaboration. Moreover, in one notable example, Microsoft’s acquisition of LinkedIn in 2016 was highlighted for its integrative approach, where both companies maintained autonomous operations while benefiting from shared resources, a strategy that was deemed a win-win by industry analysts.
Quick Tip: To excel in integrative negotiation, start by genuinely understanding the other party’s needs and interests. Use techniques like active listening, open-ended questioning, and empathy to gather insights that can help you find common ground. For instance, the Fisher and Ury technique from “Getting to Yes” emphasizes separating the people from the problem, allowing for a more objective approach to negotiation where emotions are set aside, and interest-based deals are prioritized.
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