BARGAINING STRATEGIES

Distributive bargaining:

is a negotiating strategy that operates under zero-sum (win-lose) conditions. That is, any gain

I make is at your expense, and vice versa. Probably the most widely cited example of distributive bargaining is in labour management negotiations over wages. Typically, management comes to the bargaining table determined to keep its labour costs as low as possible. Since every cent more that labour negotiates increases management’s costs, each party bargains aggressively and treats the other as an opponent who must be defeated.

When engaged in distributive bargaining, a party focuses on trying to get the opponent to agree to a specific target point, or to get as close to it as possible. Examples of such tactics are persuading your opponent of the impossibility of reaching his or her target point and the advisability of accepting a settlement near yours; arguing that your target is fair, while your opponent’s is not; and trying to get your opponent to feel emotionally generous toward you and thus accept an outcome close to your target point.

Integrative Bargaining

In contrast to distributive bargaining, integrative bargaining operates under the assumption that there exists one or more settlements that can create a win-win solution.

In terms of intra-organizational behaviour, all things being equal, integrative bargaining is preferable to distributive bargaining. Why? Because the former builds long-term relationships and makes working together in the future easier. It bonds negotiators and allows both sides to leave the bargaining table feeling that they have achieved a victory.

For instance, in union-management negotiations, both sides might sit down to figure out other ways to reduce costs within an organization, so that it is possible to have greater wage increases. Distributive bargaining, on the other hand, leaves one party a loser. It tends to build animosities and deepen divisions when people must work together on an ongoing basis.

Hard strategy and Soft strategy: 

A soft approach minimizes or avoids the issue and the conflict. It works because many people respond positively to warmth and kindness; they are willing to reciprocate and approprepate your commitment to the relationship. Soft approaches are useful in everyday transactions where the stakes are low or in difficult situations where negotiators are able to call upon the importantce of their relatuoship. 

A hard approach minimizes the relationship and tries to narrow the issue. It works when facing those who have no formulated goals or plans as well as those who lack self confidence. Weak or confused barganiingers are more likely to comply with the proposals of a forceful personality. The hard approach is suited for short term relationships where the other side is not fully prepared.