Integrative Negotiation — Steps and Examples of Win-Win Outcomes

Sjoerd Goedhart
Owner, Goedhart Interim Management & Consultancy

LinkedIn Profile: https://www.linkedin.com/in/sjoerdgoedhart/

1. Can you share a personal example of integrative negotiation? What can readers learn from this?

“A personal learning is that as a procurement professional it’s important to be experienced in different types of negotiation styles. Of course, you have a style which is your natural behavior, but being able to switch between styles and know which style works best in which situation/negotiation is a valuable asset for a professional.”

2. What should readers know about integrative negotiation?

“Integrative negotiations are only successful if both parties want to use this style. So it is important to explore this. In addition, this style can only be successful if you have the right skills to ask questions to understand the needs of the other party.

This style takes time, as well in negotiation, but more importantly, in good preparation. You must have or be willing to make this time to be successful in its application.”

Follow-up Question: Is there really a win-win situation in which both parties can benefit from a negotiation equally?

“While a win-win situation is achievable in negotiations, it’s important to acknowledge that neither party may obtain the best possible result. However, such scenarios can still be beneficial for both parties and contribute to maintaining a positive relationship.”

3. What is the biggest misconception about integrative negotiation? What do most people get wrong about it?

“People often have the idea that this is an easy negotiation strategy because you both want to benefit from it, so both are satisfied. In practice, this strategy requires a lot of preparation, an understanding of the needs of the other, and a clear plan to achieve the desired result.”

4. Can you provide a real-world example where integrative negotiation was successfully implemented in procurement?

“During the Ukraine crisis, a lot of food suppliers were faced with very high price increases for raw materials, energy, and transport. They wanted to increase their selling prices intermediate towards their customers, the food retailers.

In this case, an integrative negotiation was important to have, to have a better understanding of the impact for them (cost-price breakdown) and what important was for them at that moment e.g. besides a price increase they can give other variables to the retailer.

As a customer of that supplier, you don’t want to help them bankrupt because of the unforeseen price increases they were dealing with, with the consequence that you do have not any supply of the good and have out-of-stock in your own stores and customers were forced to change supermarkets for their daily groceries.”

5. What strategies can procurement professionals use to shift from a distributive to an integrative negotiation approach?

“Use the time factor to move from distributive to integrative, or to move the other party towards this style. This can irritate the other party and be alert and prepared for sanctions/measures through which the other party tries to persuade you to continue using the distributive style.”

6. Is integrative negotiation a practical approach in real-life situations, considering that negotiators often prioritize “winning” over the other party?

“In daily life, people unconsciously conduct many integrative negotiations but are often not aware of this. It is an approach from the relational aspect, which is often automatically chosen because in daily life this aspect is generally considered the most important style in the many negotiations we conduct.

Of course, you can also use the disruptive approach where the question is whether you want to go for the most optimal result and do not value a future relationship with the other person.”

Follow-up Question: What are the signs that you are in an integrative negotiation?

“In identifying signs of integrative negotiation, particularly in the context of my business experience, a key indicator is the absence of sanctions or punitive measures towards the other party.

For instance, threats like ‘I’ll stop delivery’ or ‘I’ll cease promotions’ are typically not part of integrative negotiations. An illustrative example from my own experience involves negotiating with PepsiCo for Albert Heijn-Lehse, where despite the significant purchase value and turnover involved, no such measures were discussed or employed.

Both parties engaged in robust negotiations without resorting to escalation tactics, indicating a preference for an integrative negotiating style. This approach allows for challenging negotiations without the risk of detrimental outcomes or threats.

Additionally, it fosters a collaborative atmosphere where mutually beneficial agreements can be reached. However, it’s worth noting that in strategic negotiations, there may be situations where parties leverage their negotiation power, but the absence of punitive measures remains a hallmark of integrative negotiation.

Ultimately, successful integrative negotiation hinges on fostering open communication, understanding mutual interests, and striving for mutually beneficial outcomes.”

7. How can procurement professionals tell if the other party is aiming for a mutually beneficial outcome rather than just seeking an advantage during negotiations?

“A win-win negotiation approach requires identifying and prioritizing the interests of both parties involved. It is a careful exploration of both your own position and that of your counterpart to find a mutually acceptable outcome.

By gathering relevant data and a deep understanding of the supplier’s perspective, you can effectively identify areas of common interest and create mutually beneficial solutions.”