What is Integrative Negotiation? 3 Powerful Strategies + Examples
Integrative Negotiation Style
The integrative negotiation style is characterized by the intention of a win-win for both parties.
Advantages Integrative Negotiation
Use this style if:
- You want a long-lasting solution with your opponent
- The interests of both parties are too important to be compromised
- You want to develop and maintain a relationship with your opponent
Disadvantages Integrative Negotiation
Potential downside of the integrative negotiation style:
- It’s very time consuming to come to an agreement
- You’ll end up spending time on insignificant issues
- Your trust in your opponent could lead to the other party taking advantage of you
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.
Integrative negotiation example
- John is a 35-year-old procurement manager who works at a large global retailer of electronica.
- He is in charge of airconditioners s and is negotiating with a small supplier. John’s company is responsible for 70% of the total sales of the airconditioning 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.
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.
Want to check out more negotiation case studies? We actually created an overview with 13 inspiring real-life negotiation examples.
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Integrative negotiation tips and strategies
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.
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. What is important to you, and why?
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.
FAQ Integrative Negotiation
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 own personal 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.
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.
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