Expanding the Pie: Integrative versus Distributive Bargaining Negotiation Strategies

Imagine that you’re buying a used car from its original owner. Of course, you want to get the best deal you can for your money, while your counterpart wants to maximize the value of his asset. After haggling with one another, each side finally arrives at a price point acceptable to both parties. But how much better could the deal have been for both sides if they’d used integrative bargaining?

The above scenario is common in many transactional negotiations: You hold your cards close and share as little information as needed to achieve your goal.

Michael Wheeler, Harvard Business School faculty member, asks us to imagine a different scenario, one in which both parties reveal their interests at the onset of a negotiation.

An article by Katie Johnston for Harvard Business School, “The Art of Haggling,” describes the difference between distributive bargaining and integrative bargaining. Getting to Yes, the seminal work from Harvard Law School professor and Program on Negotiation founder Roger Fisher and Harvard Negotiation Project Senior Fellow and Program on Negotiation cofounder William Ury, advocates for integrative bargaining. In integrative bargaining, each side seeks to create an agreement beneficial to both parties.

The integrative approach is taught in most professional schools. Professor Wheeler emphasizes that situations that initially look like win-lose negotiations can often be turned into opportunities for mutual gain and value creation.

Of course, the integrative approach has its limits, and Wheeler notes that the art of negotiation lies in simultaneously creating and claiming value, or “riding two different horses at the same time.”

Negotiators are often cautious about revealing too much information, but integrative bargaining explicitly relies upon revealing preferences and interests. As Professor Wheeler cautions, “Sometimes getting 70 percent of the small pie might be better than getting 50 percent of a marginally larger one.” An emphasis on relationship building marks integrative bargaining’s approach as being oriented toward a long-term vision for future negotiations with your counterpart.

Related Articles:

Managing Cultural Differences: Negotiation Strategy and Diplomacy: Russian President Vladimir Putin’s negotiating style has isolated him from his neighbors in Europe. Are his tactics part of a larger strategy in Europe or is he merely improvising as he goes along? Are some of Putin’s tactics useful to negotiators looking to create and claim value at the bargaining table? This article explores this ongoing international negotiation challenge and offers insights into negotiation skills.

Adaptability at the Bargaining Table: How Improvisation and Jazz Music Inform Negotiation Strategy: Hard-bargaining negotiation strategies may seem appealing, but Harvard Business School faculty member Michael Wheeler argues that adaptability to ever-changing circumstances is essential for the negotiations one encounters in daily life. In his book, The Art of Negotiation, Prof. Wheeler researched negotiations from a random, chaotic perspective: “I had this bug in my head that it’s all well and good in terms of decision trees and probabilities and so forth, but the fact of the matter is everyday transactions cannot be scripted or even necessarily predicted.” Read this article to learn more about Prof. Wheeler’s insights into the nature of everyday negotiations and how the skilled negotiator can benefit from a bit of improv in negotiations.

How have you used integrative bargaining? Let us know in the comments.

Originally published in 2012.

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