NEGOTIATION AFTER CONFLICT
Negotiation permeates the interactions of almost everyone in groups and organizations. Thereâ€™s the obvious: Labor bargains with management. Thereâ€™s the not so obvious: managers negotiate with employees, peers, and bosses; salespeople negotiate with customers; purchasing agents negotiate with suppliers. And thereâ€™s the subtle: A worker agrees to answer a colleagueâ€™s phone for a few minutes in exchange for some past or future benefit. In todayâ€™s team-based organizations, in which members are increasingly finding themselves having to work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills become critical.
Weâ€™ll define negotiation as a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. Note that weâ€™ll use the terms negotiation and bargaining interchangeably.
In this article, weâ€™ll contrast two bargaining strategies, provide a model of the negotiation process, ascertain the role of personality traits on bargaining, review gender and cultural differences in negotiation, and take a brief look at third-party negotiations.
There are two general approaches to negotiation
1. Distributive bargaining.
2. Integrative bargaining.
A used car is advertised for sale in the newspaper. It appears to be just what youâ€™ve been looking for. You go out to see the car. Itâ€™s great and you want it. The owner tells you the asking price. You donâ€™t want to pay that much. The two of you then negotiate over the price. The negotiating strategy youâ€™re engaging in is called distributive bargaining. It most identifying feature is that it operates under zero-sum conditions. That is, any gain buyer makes is at the sellerâ€™s expense, and vice versa. Referring back to the used-car example, every dollar you can get the seller to cut from the carâ€™s price is a dollar you save. Conversely, every dollar more the seller can get from you comes at your expenses. So the essence of distributive bargaining is negotiating over who gets what share of a fixed pie.
Probably the most widely cited example of distributive bargaining is in labor and management negotiation over wages. Typically, laborâ€™s representatives come to the bargaining table determined to get as much money as possible out of management. Since every cent more that labor negotiates increases managementâ€™s costs, each party bargains aggressively and treats the other as an opponent who must be defeated.
Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest outcome that is acceptable the point below which they would break off negotiations rather than accept a less favorable settlement. The area between these two points makes up each oneâ€™s aspiration range As long as there is some overlap between A and Bâ€™s aspiration ranges, there exists a settlement range in which each oneâ€™s aspirations can be met.
When engaged in distributive bargaining, oneâ€™s tactics focus on trying to get oneâ€™s opponent to agree to oneâ€™s specific target point or to get s close to it as possible. Examples of such tactics are persuading your opponent of the impossibility of getting to his or her target point and the advisability of accepting a settlement near yours; arguing that your target is fair, while your opponentâ€™s isnâ€™t ; and attempting to get your opponent to feel emotionally generous toward you and thus accept an outcome close to your target point.
A sales representative for a womenâ€™s sport wear manufacturer has just closed a $ 125,000 order from a small clothing retailer. The sales rep calls regarding the order to her firmâ€™s credit department. She is told that the firm canâ€™t approve credit to this customer because of a past slow payment record. The next day, the sales rep and the firmâ€™s credit manager meet to discuss the problem. The sales rep doesnâ€™t want to lose the business. Neither does the credit manager, but he also doesnâ€™t want to get stuck with an uncollectible debt. The two openly review their options. After considerable discussion, they agree on a solution that meets both their needs: The credit manager will approve the sale, but the clothing storeâ€™s owner will provide a bank guarantee that will ensure payment if the bill isnâ€™t paid within 60 days.
This sales credit negotiation is an example of integrative bargaining in contrast to distributive bargaining. Integrative problem solving operates under the assumption that there exists one or more settlements that can create a win â€“ win solution.
In terms of intra-organizational behavior, all things being equal, integrative bargaining is preferable to distributive bargaining because the former builds long term relationships and facilitates working together in the future. It bonds negotiators and allows each to leave the bargaining table feeling that he or she has achieved a victory. Distributive bargaining, on the other hand, leaves one party a loser. It tends to build animosities and deepen divisions when people have to work together on an ongoing basis.