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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Integrative Negotiation — 3 Powerful Strategies + 2 Examples

  • Integrative negotiation involves a commitment to achieving a win-win outcome for all parties by addressing their respective interests.

  • Integrative negotiation is also known as interest-based bargaining or win-win bargaining.

  • The term “integrative” signifies the potential for aligning parties’ interests to generate mutual value, particularly when negotiations involve multiple factors or issues.

Integrative negotiation, also known as interest-based bargaining or win-win bargaining, is a collaborative approach focused on achieving mutually beneficial outcomes for all parties involved.

By fostering open communication, exploring common goals, and seeking creative solutions, integrative negotiation can lead to agreements that create value for everyone involved.

In this article, we will explore the principles, strategies, and benefits of integrative negotiation, along with real-world examples and expert insights to help you master this effective negotiation style.

IntegrativeNegotiation Style: What is it?

The integrative negotiation style refers to a commitment to achieving a win-win outcome for all parties involved. This approach is also known as interest-based bargaining or win-win bargaining.

Integrative negotiation revolves around the development of agreements that benefit all parties by addressing their respective interests. These interests encompass desires, needs, and concerns that hold significance for the negotiating parties. Unfortunately, conflicts often arise in negotiations when these interests are overlooked.

The term “integrative” in negotiation signifies the potential for parties’ interests to align in ways that generate mutual value. This alignment becomes feasible when negotiations involve multiple factors or issues. It requires the parties to find common ground across these matters, enabling both sides to reach a satisfying resolution.

Integrative Negotiation Tips and Strategies

Here are some tips and strategies that you can check and draw inspiration from:

1. Know Your BATNA

BATNA stands for “Best alternative to no agreement”. It’s your backup plan if your negotiation doesn’t lead to a deal. By determining a BATNA you’ll have more confidence because you have a backup plan if the negotiation doesn’t work out. Because of this, you won’t feel forced to make a bad deal. 

Going into any negotiation, it’s important to have a clear understanding of your BATNA. If you’re negotiating with a supplier, be sure about the pricing of alternative suppliers. If you’re negotiating over salary, your alternatives might be a different job offer. 

For example:

Mark, a procurement manager of a large supermarket is negotiating with a supplier of canned food. The supplier offers to deliver 100,000 pieces for a price of $1.50 within two weeks. The procurement manager knows that a different supplier offers the same product for $1.40, therefore Mark knows this offer is worse than his BATNA and he shouldn’t agree.

2. Have a clear strategy

Before your negotiation, it’s important to plan. Key things you should have a clear answer to:

  • Are you in a win-win or win-lose situation?
  • What is your goal?
  • What is your position? What is their position?
  • What are your interests? And theirs?
  • What is the best possible outcome?
  • What would be a fair deal?
  • What is your minimum acceptable deal?

It is very important to think about these things thoroughly. Too many negotiations fail because people get worried about being taken advantage of that they forget what they really need. It’s silly to only focus on preventing the other party from winning, instead focus on your own goals.

In most negotiation situations you will have a continuing relationship with the other person. That’s why it’s important to come to a mutual feeling of ‘winning’ for both parties. If the other person feels like he lost, he might lack commitment in the execution phase of the deal. Or even worse, he will be after retaliation. 

3. Focus on interests instead of positions

A key in integrative negotiation can be found in underlying interests. Sounds vague? Let me explain.

Mark, a procurement manager for a big supermarket is negotiating with a supplier of canned food. Mark’s main goal is to purchase the cans for $1.40 per piece, and he assumes the supplier tries to sell them for $1.60 per piece.

They could just simply negotiate about the price of the cans. But what if they explore the underlying interests? After talking for a bit, Mark finds out the supplier has cash flow problems. 

Suddenly an interesting variable is added to the table. Mark offers to do an upfront payment of 100% of the deal value if the supplier is willing to accept his price. The supplier agrees.

Integrative Negotiation Examples

Here are some examples of integrative negotiation for you to draw inspiration from:

    Example 1:

    John is a 35-year-old procurement manager who works at a large global retailer of electronica.

    He is in charge of air conditioners and is negotiating with a small supplier. John’s company is responsible for 70% of the total sales of the air conditioning producer.

    John calls the supplier and asks how the business has been going the last period, shows interest in the life of the wife & kids and takes time to discuss last night match.

    After talking about personal life for a couple of minutes, he subtly brings up the reason for his call. “I’m looking for 5000 air conditioners and would love to close a deal that’s great for both of us.”

    John is off course looking for a good price, but he understands what are main variables  to the supplier in this negotiation and asks them which one is important to them today.

    Turns out, the supplier would like to be paid in advance, as they’re in a tough cash position.

    “Fair enough”, says John. Let’s take a 2% discount on our previous deal, but I’ll make sure the money is on your account by the end of this week.

    “Deal!”

    Outtake John: “Great news, same product for a cheaper price, proud of my savings”

    Outtake Producer: “Awesome guy, this John. A 2% discount isn’t great, but he definitely listened to my needs. I would definitely do business with him again.”.

    Learning: the distributive negotiation from John leads to a long-term relationship and a direct discount on his purchase.

    Example 2:

    Emma, a 30-year-old luxury real estate agent, is negotiating with a motivated seller who owns a prime penthouse. The seller plans to relocate to be near family. Emma begins by showing genuine interest in the seller’s well-being and family plans. They chat about their experiences and connect over community involvement.

    Transitioning smoothly, Emma discusses the penthouse sale, asking what terms would make the process easy. The seller wants a quick sale and fair price due to their impending move.

    Emma proposes a 30-day closing and a 1% commission reduction to aid the seller’s move. The seller appreciates the tailored offer and agrees.

    Outtake Emma: “Thrilled we reached an agreement benefiting both the seller and my clients. This builds a strong foundation for future business.”

    Outtake Seller: “Emma understood our situation and tailored the deal to our needs. Her flexibility and reduced commission made a difference. Highly recommended.”

    Learning: Emma’s approach led to a successful transaction and a trusting, long-term relationship.

    Whyis Integrative Negotiation Important?

    Integrative negotiation is crucial as it produces satisfactory outcomes for the parties in dispute. Integrative solutions are more gratifying for the parties involved in the negotiation as the true needs and concerns of both parties can align.

    Integrative negotiation is a collaborative process that makes the parties end up helping each other. This prevents any ill will after the negotiation concludes.

    Interest negotiation promotes a constructive and positive relationship between parties who have been in dispute previously.

    In general, there are 2 types of negotiations:

    Distributive negotiation = one party wins, the other loses.

    Integrative negotiation  = both parties win, creating value on both sides.

    Sure, many negotiations contain elements from both sides. For example, if I’m buying a new bike, the bike seller doesn’t want to give too much discount. Although, he probably also wants me to be a happy customer. Because if I am, I’ll probably return to him for bike maintenance and additional accessories. 

    There are many situations that call for an integrative negotiation, as it will create a long-lasting mutual value.

    This article contains 13 negotiation principles that will lead to an integrative negotiation.

    My Experience of Integrative Negotiation

    Discover how platforms like Supplier Gateway are reshaping the procurement landscape. For this article, I shared my insights and perspective on Techno Hubs like Supplier Gateway.

    Negotiation styles are a very important variable to master to achieve a great deal of results. Your ultimate deal will be determined by how skilled you are as a negotiator. The more skilled you are in using different styles, the more the other party will be drawn to settle close to your ideal outcome and closer to their limit.

    Your selection of negotiation style should depend on your personality and the results of your earlier research on the styles that will probably be used by your negotiating counterpart. Getting to recognize the different negotiation styles will help you to negotiate way more efficiently! It’s important to know how and when to use particular styles to get more of what you want from the negotiation.

    In my time as a Procurement Manager, I had to deal with 1500 different products delivered by 70 suppliers every year. Suppliers were traditionally better equipped; most account managers that I had been dealing with, only had to focus on one customer and thus the negotiator: me.

    This led to what I call, the knowledge gap. They had way more time to prepare for negotiations. Most of them kept detailed notes on my negotiation style, likes and dislikes, interests, family details, and so on. In general, they were in a better position to choose the most appropriate style to approach me in the upcoming negotiation.

    My advantage, on the other hand, was the fact that I was negotiating all day & year: that experience leveraged the knowledge gap mostly: I practiced a full year with changing styles & using tactics. This helped me to have one important skill in any negotiation: I was not predictable.

    Do you also want to learn to apply effective tactics yourself and become unpredictable? There are a large number of styles & tactics that you can use in negotiations! In our Certificate Program, we will teach you when which styles to use and in what way you should use them to your advantage!

    Marijn Overvest

    CEO/Founder, Procurement Tactics

    How to use Integrative Negotiation?

    The following is the process of how you can use integrative negotiation:

    1. Outline the needs of each party in the negotiation

    Before you present your solutions in the negotiation, you must know first the hopes and concerns of every party in the negotiation.

    This step enables the parties involved in the negotiation to gain many insights into what they can do in the negotiation.

    2. Know what are your common goals

    After you outline your needs with the other party, it is time for you to look for common goals. Finding common goals can allow you to find a solution that is acceptable for both parties.

    3. Collaborate to formulate multiple solutions

    After you checked your common goals, it is time for both of you to collaborate in order to formulate a solution acceptable to all the parties. You can list many solutions as you want and compare what benefits the parties in the negotiation the most.

    Difference Between Distributive Negotiation and Integrative Negotiation

    The following are some of the common differences between distributive and integrative negotiation:

    Distributive Negotiation
    The outcome of distributive negotiation is always characterized as a win-lose scenario.
    Aims for personal gains or benefits.
    It is a strategy in which a fixed amount of resources are divided among the parties.
    It is more of a competitive negotiation strategy.
    The approach in the negotiation is more controlled and selective.
    Integrative negotiation
    Integrative negotiation is characterized by the intention of a win-win for both parties.
    Aims for mutual gains.
    It is a type of negotiation in which mutual problem-solving techniques are utilized to increase the assets that are to be divided by both parties.
    It is more of a collaborative strategy.
    The approach in integrative negotiation is more open and constructive.

    Integrative NegotiationTechniques

    The following are some of the common integrative negotiation techniques that you can use:

    1. Logrolling

    Logrolling is an integrative strategy in negotiations where parties take turns receiving favorable outcomes for different issues in a conflict.

    They might agree that one side achieves its preferred outcome for the first matter, while the other side attains its desired result for the next issue. This alternating process continues until all the matters are resolved.

    2. Match Compensation

    In negotiations, one party can offer compensation to the other in exchange for accommodating their preferences, based on the perceived value of the concession.

    Let’s consider Emma’s real estate deal. To address the seller’s desire for a quick closing, Emma offers to reduce her commission slightly. In return, the seller compensates Emma by agreeing to a minimum purchase volume, supporting a stable local market. This arrangement benefits both parties and enhances the overall deal.

    3. Bridge Solutions

    Bridge solutions involve both parties generating innovative ideas to reach an agreement, departing from their initial proposals. This method entails both sides outlining their needs and desires, followed by collaborative brainstorming of diverse concepts that fulfill the criteria of both sides. This approach fosters a sense of joint problem-solving to arrive at a mutual resolution.

    Consider our previous example: John, a procurement manager, and a supplier are in discussions. John seeks to acquire 5000 units of a product at a favorable price, while the supplier is keen on upfront payment due to financial constraints. They engage in dialogue, with each side expressing their preferences.

    To bridge the gap, John suggests a bridge solution. He proposes a 2% discount on the purchase, assuring the supplier that the payment will be completed by the week’s end. This approach satisfies both parties’ concerns, creating a collaborative and mutually beneficial outcome.

    Advantages – use this style if:
    The word integrative in negotiation refers to the possibility for the parties’ interests to align in ways that create a joint value.
    The possibility for integration only exists when there are numerous factors or issues that are involved in the negotiation. The parties should be capable of meeting halfway across issues for both parties to be satisfied with the outcome.
    Disadvantages – don't use this style if:
    It’s very time-consuming to come to an agreement.
    You’ll end up spending time on insignificant issues and your trust in your opponent could lead to the other party taking advantage of you.

    Procurement Expert’s Advice on Integrative Negotiation

    For this article, we asked a seasoned procurement professional to share his insights regarding integrative negotiation.

    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.”

    Conclusion

    In conclusion, the integrative negotiation style is a powerful approach that centers on achieving win-win outcomes for all parties involved. It seeks to address the diverse interests, desires, and concerns that hold significance for each party.

    By recognizing the potential for parties’ interests to align and generate mutual value, this approach enables the creation of agreements that satisfy all sides. With the examples that you read, you now know that the principles of integrative negotiation hold the potential to build trust, establish meaningful connections, and create positive, enduring relationships in a wide range of negotiation scenarios.

    Frequentlyasked questions

    What is different about integrative negotiations?

    Integrative negotiations focus on achieving the maximum result for both negotiation partners. Distributive negotiation is the exact opposite, both parties only care about their own interests. Because of this, integrative negotiations have the goal of a happy ending for all parties involved. Therefore, integrative negotiations usually take relatively long.

    Why is integrative negotiation so hard to achieve?

    Integrative negotiation is difficult because you have to focus on the interest of the other party as well. Since you’re also aiming for your targets this will cause a conflict of interest. If you’re planning to work with your partner in the future, it’s extremely important to keep both parties happy. Because of this, integrative negotiations will usually take relatively long.

    Why is BATNA important in integrative negotiation?

    BATNA, or Best Alternative to No Agreement, is crucial in integrative negotiation as it provides a backup plan. Knowing your BATNA gives you confidence and prevents you from accepting unfavorable deals, fostering a more strategic and effective negotiation process.

    About the author

    My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

    Marijn Overvest Procurement Tactics