40 / INTERACTING WITH OTHERS
Finding solutions
Integrative, or win–win, bargaining
is generally preferable to
distributive bargaining.
Negotiating
Negotiation is a process by which two or more parties exchange goods
or services and attempt to agree upon the exchange rate for them.
Managers spend a lot of time negotiating, and need to be able to do
it well. They have to negotiate salaries for incoming employees, cut
deals with superiors, bargain over budgets, work out differences with
associates, and resolve conflicts between members of their team.
Understanding approaches
There are two general approaches to
negotiation: distributive and integrative
bargaining. Distributive bargaining
assumes zero-sum conditions, that is:
“Any gain I make is at your expense,”
and vice versa. Integrative bargaining
assumes a win–win solution is
possible. Each is appropriate in
different situations.
Distributive bargaining tactics focus
on getting an opponent to agree to a
deal that meets your specific goals.
Such tactics include persuading
opponents of the impossibility of
getting their needs met in other ways
or the advisability of accepting your
offer; arguing that your position is fair,
while theirs is not; and trying to get
the other party to feel emotionally
generous toward you and accept an
outcome that meets your goals.
Distributive bargaining
tactics focus on getting
an opponent to agree to
a deal that meets your
specific goals
NEGOTIATING / 41
Distributive bargaining leaves one
party a loser, and so it tends to build
animosities and deepen divisions
between people.
For integrative bargaining to work,
both parties must openly share all
information, be sensitive to each
other’s needs, trust each other,
and remain flexible.
Integrative bargaining 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.
CASE STUDY
A WINWIN SOLUTION
After closing a $15,000 order from
a small clothing retailer, sales rep
Deb Hansen called in the order to
her firm’s credit department, and
was told that the firm could not
approve credit for this customer
because of a past slow-pay record.
The next day, Deb and the firm’s
credit supervisor met to discuss the
problem. Deb did not want to lose
the business; neither did the credit
supervisor, but he also didn’t want
to get stuck with a bad debt. The
two openly reviewed their options.
After considerable discussion, they
agreed on a solution: the credit
supervisor would approve the
sale, but the clothing store’s owner
would provide a bank guarantee
that would assure payment if the
bill was not paid within 60 days.
42 / INTERACTING WITH OTHERS
Negotiating well
Careful attention to a few key guidelines can increase
a manager’s odds of successful negotiation outcomes.
Always start by considering the other party’s point
of view. Acquire as much information as you can
about their interests and goals. Always go into
a negotiation with a concrete strategy. Treat
negotiations the way experts play chess games,
always knowing ahead of time how they will
respond to any given situation.
80%
of success in any
negotiation comes down to
preparation—researching
and knowing the facts
How to negotiate
attentively
Begin with a positive
overture, and establish
rapport and mutual
interests.
Make a small concession
early on if you can.
Concessions tend to be
reciprocated and can lead
to a quick agreement.
Concentrate on the issues,
not on the personal
characteristics or
personality of your
opponent.
NEGOTIATING / 43
Pay little attention to initial
offers, treating them as
merely starting points.
If any of your opponents
attack you or become
emotional, let them blow
off steam and don’t take
it personally.
Focus on the other person’s
interests and your own
goals and principles
while you generate
other possibilities.
Emphasize win–win
solutions to the negotiation.
Make your decisions based
on principles and results,
not emotions or pressure.
Always go into a negotiation
with a concrete strategy;
treat the other party with
respect and do not
underestimate their abilities
Start a negotiation by
considering the other
party’s point of view
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