Strategy and Tactics of Distributive

and Integrative Negotiation

Introduction :
Distributive negotiation is a negotiation strategy used when the
available resources are fixed and limited.

The objective of each party is to maximize its own share of

these resources.
Characteristics of
Distributive negotiation
Distributive negotiation has three main
characteristics:
•The goals of one party directly conflict with the goals of the
other party.
•The available resources are limited.
•Each party aims to maximize its own outcome.

Example: Negotiating the price of a used car. A higher price

benefits the seller, while a lower price benefits the buyer.
Important Negotiation Points
Every distributive negotiation includes four important points:
[Link] Point (Initial Offer)
The first offer made by a negotiator.
Example: A seller asks for $12,000 for a car.
[Link] Point
The desired outcome the negotiator hopes to achieve.
Example: The seller expects to sell the car for $11,000.
Important Negotiation Points
[Link] Point (Walk-Away Point)
The minimum or maximum acceptable outcome before leaving
the negotiation.
Example: The seller refuses to accept less than $10,000.
[Link] (BATNA)
The best option available if no agreement is reached.
Example: Selling the car to another buyer.
The Importance of BATNA
BATNA (Best Alternative to a Negotiated Agreement)
Represents the negotiator's strongest alternative if
negotiations fail.
A strong BATNA allows negotiators to:
Set higher targets.
Make fewer concessions.
Walk away confidently.
A weak BATNA reduces bargaining power.
Questions
 Question (1)
What is the main characteristic of distributive negotiation ?
A) Resources are unlimited and can be expanded
B) Resources are fixed and limited
C) Both parties always achieve equal benefits
D) The focus is on building long-term relationships

Explanation: Distributive negotiation occurs when

parties negotiate over a fixed amount of resources, where Answer (B)
one party’s gain may represent the other party’s loss.
 Question (2)
The primary objective of each party in distributive negatiation is to:
A) Create value for both sides
B) Avoid negotiation conflicts
C) Maximize its own share of available resources
D) Develop a cooperative relationship

Explanation: Each party tries to obtain the largest

possible portion of the limited resources.
Answer (C)
 Question (3)
3. Distributive negotiation is often described as a:
A) Win–lose negotiation approach
B) Win–win negotiation approach
C) Collaborative problem-solving approach
D) Relationship-building approach

Explanation: Because the resources are fixed, one

party’s advantage often means a disadvantage for the Answer (A)
other party.
 Question (4)
4. Which situation is an example of distributive bargaining?
A) Two companies creating a joint project to increase profits
B) A buyer and seller negotiating the price of a car
C) Employees and managers designing a new training program together
D) Two departments sharing ideas to improve performance

Explanation: The price is a limited resource; the buyer

wants to pay less while the seller wants to receive Answer (B)
more.
 Question (5)
In distributive bargaining, negotiators mainly focus on:
A) Expanding the available resources
B) Finding solutions that satisfy all parties equally
C) Claiming the largest possible portion of the fixed resources
D) Avoiding any disagreement

Explanation:The focus is on dividing a fixed amount

rather than creating additional value.
Answer (c)
 Question (6)
Emma wants to sell her laptop. She asks for $900, hopes to sell it for $850, and will not
accept less than $800. If no deal is reached, she will sell it to her cousin for $820.
Question: What is Emma's Target Point?
A) $900
B) $850
C) $800
D) $820

Explanation:The target point is the negotiator's

desired outcome.
Answer (B)
Question (7)
Sarah receives a job offer of $58,000. She hopes to negotiate a salary of $65,000. If the
company refuses to offer at least $60,000, she plans to accept another company's offer
of $62,000.
Question: What is Sarah's BATNA?
A) $65,000 salary
B) $60,000 minimum salary
C) Accepting another company's offer
D) The employer's first offer

Explanation:BATNA is the best alternative if Answer (C)

negotiations fail.
Question (8)
John offers his used car for $15,000. His goal is $14,000, and his minimum
acceptable price is $13,000.
Question: Which amount represents John's Starting Point?
A) $13,000
B) $14,000
C) $15,000
D) $16,000

Explanation:The starting point is the initial Answer (C)

offer.
 Question (9)
A customer wants to buy a dining table. The seller's first price is $2,000, but the
customer immediately offers $1,600.

Question: Which statement is correct?

A) $2,000 is the customer's target point.

B) $1,600 is the seller's BATNA.
C) $2,000 is the seller's starting point.
D) $1,600 is the seller's resistance point.

Explanation: The first offer made is the Answer (C)

starting point.
 Question (10)
A graphic designer quotes $3,000 for a project. She hopes to receive $2,800 and will
reject any offer below $2,500. Another client has already offered $2,700.

Question: What is the designer's BATNA?

A) $2,500
B) $2,700
C) $2,800
D) $3,000

Explanation:BATNA is the best available Answer (B)

alternative outside the current negotiation.
 Understanding the Other Party
Successful negotiators attempt to:
•Discover the other party's resistance point.
•Understand their interests and priorities.
•Estimate the costs of agreement or disagreement for the other party.

This information helps negotiators develop more effective strategies.

 Managing Perceptions
Negotiators often influence how the other party
views the negotiation by:
• Presenting information carefully.
• Emphasizing the strengths of their own position.
• Reducing the attractiveness of the alternatives available to the
other party.
 Managing Time and Pressure
Time can influence negotiation outcomes.

Negotiators may:
• Increase the cost of delay.
• Use deadlines effectively.
• Seek support from outside parties when appropriate.
Opening the Negotiation
Three important decisions must be made before
negotiation begins:
Opening Offer
The first proposal presented.
Opening Stance
The negotiator's initial attitude, such as competitive or
cooperative.
Initial Concessions
Whether to make early concessions and how large they
should be.
Concession Making
Concessions are essential for reaching agreement.
Effective negotiators:
Make concessions gradually.
Avoid making large concessions too early.
Expect concessions from the other party in return.
Commitment
A commitment is a clear statement that limits future flexibility.
An effective commitment should have:
•Finality – It clearly states the final position.
•Specificity – It is clear and precise.
•Consequences – It explains what will happen if the
commitment is ignored.
Negotiators should avoid making commitments too early.
Closing the Negotiation
Common techniques for closing a negotiation include:
• Offering two or three alternative packages.
• Assuming the agreement will be accepted.
• Splitting the difference.
• Making time-limited offers.
• Adding small incentives to encourage agreement.
Hardball Negotiation Tactics
Some negotiators use aggressive tactics to gain an advantage.
Common tactics include:
Good Guy / Bad Guy
One negotiator appears friendly while the other appears strict.
Highball / Lowball
Making an unrealistically high or low opening offer.
Bogey
Pretending that a minor issue is very important.
Nibble
Requesting small additional concessions after the agreement is nearly complete.
 Hardball Negotiation Tactics
Some negotiators use aggressive tactics to gain an advantage.
Common tactics include:
Chicken
Using threats or risky behavior to pressure the other party.
Aggressive Behavior
Applying continuous pressure to force agreement.
Snow Job
Providing excessive or confusing information to overwhelm the other party.
Responding to Hardball Tactics
Negotiators can respond by:
•Ignoring the tactic.
•Discussing the tactic openly.
•Responding with a similar tactic when appropriate.
•Building a cooperative relationship with the other party.

Preparation is the best defense against hardball tactics.

Integrative Negotiation

•Integrative negotiation is a Win-Win approach.

•Both parties work together to create value.
•The goal is to satisfy the interests of both sides.
Distributive vs. Integrative
Negotiation
Distributive Integrative
Win-Lose Win-Win

Fixed resources Expand resources

Competition Cooperation

Focus on positions Focus on interests

 Interdependence

•Negotiation exists because both parties need each other.

•This is called interdependence.
•Both shared and conflicting goals exist.
 What Makes Win-Win?
Win-Win means:
•Creating value.
•Solving problems creatively.
•Meeting both parties' interests.
It does NOT simply mean:
•Compromise.
•Equal sharing.
Why Win-Win Is Possible
Negotiators differ in:
•Interests
•Priorities
•Risk tolerance
•Time preferences

These differences create opportunities for mutual gain.

Strategies That Work
Successful negotiators:
•Understand the other party's perspective.
•Ask questions.
•Share useful information.
•Negotiate several issues together.
•Make package deals.
Integrative Negotiation Process

•Share information.
•Understand interests.
•Focus on common goals.
•Find solutions that benefit both parties.
 Success Factors
Successful integrative negotiation
requires:
•Trust
•Communication
•Cooperation
•Problem-solving skills
•Commitment
Challenges
•Lack of trust.
•Fixed-pie thinking.
•Past conflicts.
•Focus on competition.
Conclusion
Successful negotiators prepare carefully,
understand their alternatives, make strategic
concessions, and respond effectively to
negotiation tactics.
Questions
 Question (11)
Which type of negotiation aims to create mutual benefits?
A. Distributive negotiation
B. Competitive negotiation
C. Integrative negotiation
D. Positional bargaining

Integrative negotiation focuses on achieving a win-

win outcome by creating value for both parties.
Answer (C)
 Question (12)
In distributive negotiation, resources are generally viewed as:
A. Unlimited
B. Expandable
C. Fixed
D. Shared equally

Explanation: Distributive negotiation assumes a fixed

amount of resources, so both parties compete over how Answer (C)
they are divided.
 Question (13)
Which statement best describes integrative negotiation?
A. Parties compete to claim the largest share.
B. Parties work together to increase the total value.
C. Only one issue is negotiated.
D. One party usually loses.

Explanation: Integrative negotiation encourages

cooperation to create additional value before dividing it.
Answer (B)
 Question (14)
7. Which pair correctly matches the negotiation style?
A. Distributive → Cooperation
Integrative → Competition

B. Distributive → Competition
Integrative → Cooperation

C. Distributive → Win-Win
Integrative → Win-Lose
Answer (B)
D. Distributive → Interests
Integrative → Positions
 Question (15)
Which negotiation type is more likely to build long-term relationships?
A. Distributive negotiation
B. Integrative negotiation
C. Competitive bargaining
D. Positional negotiation

Explanation: Cooperation and mutual benefit in integrative

negotiation strengthen long-term relationships.
Answer (B)