1. Strategy And Tactics of Integrative Negotiation
CHAPTER THREE
Strategy And Tactics of Integrative Negotiation
INB 350 Lecture
By: Ms. Adina Malik (ALK)

2. Learning Objectives What is Integrative Negotiation?
Characteristics and Overview of Integrative Negotiation process
Difference between Distributive & Integrative Negotiation
Key Steps in Integrative Negotiation Process

3. Integrative Negotiation
The fundamental structure of an integrative negotiation is such that it allows both sides to achieve their objectives.
It is a Win-Win negotiation-
means that all creative opportunities are exploited and no resources are left on the table.
*Integrative negotiation-cooperative, collaborative, mutual gains or problem solving negotiation.

4. Integrative Negotiation
The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties feeling that they've won, in some way, after the event.
Thus one party’s gain is not at the other party’s expense .
The goals of the parties in integrative negotiation are not mutually exclusive.

5. Overview of the Integrative Negotiation Process
Create a free flow of information:
share the alternatives-> the possibility of receiving additional benefit is higher->less extreme resistance point.
Attempt to understand the other negotiator’s real needs and objectives:
Parties should clarify their priorities about particular issues but not position.
Create a free flow of information: Effective information exchange promotes the development of good integrative solutions. For such, negotiators must be willing to reveal their true objectives and to listen to each other carefully. This means both parties know and share their alternatives. This makes resistance points to be less extreme, improve negotiation trade-offs and increase the size of the pie.
Attempt to understand the other negotiator’s real needs and objectives: When negotiators are aware of the possibility that the other’s priorities are not the same as their own; that they differ in their values and preferences; their needs and wants may not be the same; this can stimulate parties to exchange more information, understand the nature of the negotiation better and achieve higher joint profits.

6. Overview of the Integrative Negotiation Process
Emphasize the commonalties between the parties and minimize the differences:
Individuals goals should be redefined as best achieved through collaborative efforts.
Search for solutions that meet the goals and objectives of both sides:
Successful integrative negotiation results in accomplishment of both the parties goals.
Emphasize the commonalties between the parties and minimize the differences: Individual goals may need to be redefined as best achieved through collaborative efforts directed towards a collective goal. Sometimes the collective goal is clear and obvious, sometimes not.
Search for solutions that meet the goals and objectives of both sides: In this process, negotiators must be firm but flexible-firm about their primary interests and needs, but flexible about how these needs and interests are met.

7. Integrative vs. Distributive
Flow of information
Free & open flow; share information openly
Conceal information, or use it selectively or strategically
Understanding the other
Attempt to understand what the other side really wants & needs
Make no effort to understand, or use the information to gain strategic advantage
Attention to commonalities and differences
Emphasize common goals, objectives, interests
Emphasize differences in goals, objectives, interests
Focus on solutions
Search for solutions that meet the needs of both (all) sides
Search for solutions that meet own needs or block other from meeting their needs

8. Integrative vs. Distributive
Goals
In fundamental conflict/ mutually exclusive
Not in fundamental conflict /not mutually exclusive
Relationship
Not a high priority
Is a high priority
Resources
Fixed or Limited
Not Fixed or Limited
Trust and Cooperation
Is Lacking
Exists

9. Integrative vs. Distributive
In Distributive Bargaining, negotiators trade positions back and forth, attempting to achieve a settlement as close to their targets as possible. In Integrative Bargaining, both negotiators need to pursue the other’s thinking and logic to determine the factors that motivated them to arrive at their goals

10. What Makes Integrative Negotiation Different?
Focus on commonalties rather than differences
Address needs and interests, not positions
Commit to meeting the needs of all involved parties
Exchange information and ideas
Invent options for mutual gain
Use objective criteria to set standards

11. Claiming and Creating Value

12. Claiming and Creating Value
Pareto Efficient Frontier: no other feasible agreement exists that would improve one party’s outcome while simultaneously not hurting the other party’s outcome.
The fundamental purpose of Integrative negotiation is to Create Value.
The heart of negotiation is to explore both common and different interests to Create Value.
Integrative Negotiation is a process of identifying Pareto Efficient solutions.

13. Key Steps in the Integrative Negotiation Process
Identify and define the problem
Understand the problem fully
identify interests and needs on both sides
Generate alternative solutions
Evaluate and select among alternatives
The first three steps are important for ‘creating value’.
The last step involves ‘claiming value’.

14. 1. Identify and Define the Problem
Define the problem in a way that is mutually acceptable to both sides
State the problem with an eye toward practicality and comprehensiveness: several issues-> find a link
State the problem as a goal rather than a solution process and identify the obstacles in attaining this goal
Depersonalize the problem
Separate the problem definition from the search for solutions
The problem should be defined jointly and should accurately reflect both parties’ needs and priorities. Both parties must be committed to state the problem in neutral terms for positive problem solving to occur.
The major focus would be to solve the core problem(s). Anything that distracts from this focus should be streamlined and removed. If there are several issues in an integrative negotiation, then the parties may want to clearly identify the link among them and decide whether they will be approached as separate problems, or as one large problem.
The parties should concentrate on what they want to achieve, rather than how they are going to achieve it. They should then specify what obstacles must be overcome for the goal to be attained. A clear understanding of which obstacles are negotiable and which are not can lead to realistic integrative negotiation.
‘Your point of view is wrong, mine is right.’ –Here, you are attacking the other negotiator rather than the problem. ‘We have different viewpoints on this problem’ allows both parties to approach the issue as a problem rather than the persons.
It is important not to jump to solutions until the problem is fully defined. Parties should avoid stating solutions that favor one side or the other until they have fully defined the problem and examined as many solutions as possible. They can create standards by asking questions such as ‘how will we know that the problem has been solved?’, ‘how will we know that the goal has been attained?’, ‘is there any legitimate interest or position that remains unaddressed by our outcome?’. Developing standards in this way and using them as measures for evaluating alternatives will help negotiators avoid a single-minded, tunnel vision approach and allow them to accomplish a collaborative, integrative resolution.

15. 2. Understand the Problem Fully – Identify Interests and Needs
Interests: the underlying concerns, needs, desires, or fears that motivate a negotiator to take a particular position .
During negotiation both parties expose their demands/ positions, in integrative negotiation the aim is to understand the motivating factors for the other .
Identifying interests is a critical step in the integrative negotiation process.
The key to achieve an integrative agreement is the ability of the parties to understand and satisfy each other’s interests.

16. Example
Two men quarrelling in a library. One wants the window open and the other wants it closed. They bicker back and forth about how much to leave it open : a crack, halfway, three quarter of the way. No solution satisfied them both. Enter the librarian, she asks one why he wants the window open . “To get some fresh air.” She asks the other why he wants it closed “To avoid draft/cold air. ” After thinking a minute , she opens wide a window in the next room, bringing in fresh air without a draft.
Bicker: argue about petty and trivial matters.
‘To avoid draft’: air drifting in an enclosed space.
An example of draft is cold air coming into a room through a window.

17. Example (cont.)
At first, there were two options- window open or close. If the parties continued to pursue distributive / positional bargaining, the set of possible outcomes can include only a victory for one. However , the librarian managed to find out the underlying interest of both the parties and invent a solution that meets the interest of both sides.

18. Example (cont.) The Difference Between Position And Interest:
In this classic example of negotiation over position and failing to understand underlying interest , if one party did compromise still it might result in a lose-lose situation because the person who wants the window open he wont get enough fresh air with the window partially open and the other believes that any opening is unsatisfactory.
Another example:
Negotiating for a $5,000 rise in salary
$5,000-> position; reasons for such a demand-> interests

19. Identify Interests and Needs
So the Key is to understand :
Why They Want It? That’s More Important Than What They Want.

20. Understand the Problem Fully – Identify Interests and Needs
Interests can be intrinsic as well as instrumental.
Types of Interests:
Substantive interests relate to key issues in the negotiation: tangible issues (economic and financial such as price or rate; division of resources).
Process interests are related to the way a dispute is settled.
Relationship interests indicate that one or both parties value their relationship.
Interests in principle: doing what is fair, right, acceptable, ethical may be shared by the parties. These are intangibles.
Intrinsic: The parties value it in and of itself.
Instrumental: The parties value it because it helps them derive other outcomes in the future.
Relationship Interests: Value their relationship with each other and do not want to take actions that will damage it.
Interests in principle: The principles may be deeply held by the parties and serve as the dominant guides to their action. For e.g. three students, who are also good friends collaborated and participated in an essay competition and win a prize of $300. The issue is then how to split the money. They can each take $100, which is one obvious split. However, if they decide to split based on their contribution, then two friends who contributed 90% of the essay should get $135 each, and the third friend should get $30. However, they might feel that money is trivial and what is fair in the situation and about their relationship would be to take $100 each.

21. Observation on Interest
Usually there is more than one type of interest underlying a negotiation.
Parties can have different types of interest at stake.
Interest often stems from deeply rooted human needs or values
Interest can change
Surfacing interest
Focusing on interest sometimes create problem
They can care deeply about the process, the relationship, or the principles at stake.
One party can care deeply about the specific issues under discussion, while the other cares about how the issues are resolved.
Needs can be security and safety needs, recognition, respect, etc. The intensity of many international disputes reflects deep underlying needs for security, protection of ethnic and national identity, and other such fundamental needs.
What was important to the parties last week, even twenty minutes ago, may not be important now. Interaction between the parties may put some interests to rest, while raising others.
Sometimes people are not aware of their interests. Listening to your own inner voices-fears, aspirations, hopes, desires-is important to bring your own interests to the surface.
If a coalition is held together by a commitment to pursue a specific objective in negotiation, then deviating on other interests does not fulfill the coalition’s purpose.

22. 3. Generate Alternative Solutions
There are two basic ways to generate alternative solutions:
Invent options by redefining the problem set
Generate options to the problem as given
This is the creative phase of integrative negotiation.
Invent options by redefining, recasting or reframing the problem (or problem set) to create win-win alternatives out of what appeared to be a win-lose problem.
The second takes the problem as given and creates a long list of options from which the parties can choose.

23. 4. Evaluation and Selection of Alternatives
Narrow the range of solution options
Evaluate solutions based on:
Quality (what is best/ most rational or logical)
Objective standards (fairness)
Acceptability
Agree to evaluation criteria in advance
Be willing to justify personal preferences
Be alert to the influence of intangibles in selecting options
Use subgroups to evaluate complex options
To evaluate the alternatives generated in the previous phase and select the best ones.
Narrow the range of solution options: focus on those options that one or more negotiators strongly agree, and eliminate those that are not strongly advocated.
Be willing to justify personal preferences: people often find hard to explain why they like what they like, or dislike what they dislike.
Be alert to the influence of intangibles in selecting options: one party may favor an option because it helps satisfy an intangible-gaining recognition, looking strong or tough, feeling like a winner, etc. Intangibles or principles can serve as strong interests for a negotiator. It is often a good practice to help the other party identify those intangibles and make them public as part of the negotiation process.
Use subgroups to evaluate complex options: such will be more effective than large groups.

24. Factors That Facilitate Successful Integrative Negotiation
Some common objective or goal
Faith in one’s own problem-solving ability
A belief in the validity of one’s own position and the other’s perspective
The motivation and commitment to work together
Trust
Clear and accurate communication
An understanding of the dynamics of integrative negotiation
When parties believe that they are likely to benefit more from working together than from competing or working separately.
Faith in one’s ability to negotiate is positively related to successful integrative negotiation.
Integrative negotiation requires negotiators to accept both their own and the other’s attitudes, desires and interests as valid.
The parties must be motivated to collaborate, rather than to compete. They need to be committed to reaching a goal that benefits both of them rather than pursuing only their own ends.
Mistrust inhibits collaboration. People who are interdependent and do not trust each other will act defensively. When people trust each other, they are more likely to share information and to communicate accurately their needs, positions and the facts of the situation.
Negotiators must be willing to reveal what they want, and more important, why they want it in specific, concrete terms avoiding generalities and ambiguity.
Training negotiators in integrative tactics lead parties to achieve higher joint outcomes.

25. Why Integrative Negotiation Is Difficult to Achieve
The history of the relationship between the parties
If competitive in past, negotiators will look at current negotiations as win-lose
The belief that an issue can only be resolved distributively
Negotiators are biased to avoid behaviors necessary for integrative negotiation
The mixed-motive nature of most negotiating situations
Purely integrative or purely distributive situations are rare