Monday, October 19, 2009

STRATEGY AND TACTICS OF INTEGRATIVE NEGOTIATION



INTEGRATIVE NEGOTIATION

When a negotiation is integrative, it means that negotiation is based on interest or otherwise negotiation strategy which lay emphasis on win-win situation. The goal of Integrative Negotiation is to make the parties’ interest compatible, so that both sides can win. That is, reach an agreement that satisfies their need. The goals of the parties are integrative. Negotiations are not mutually exclusive. If one party achieves its goals, the other is not precluded from achieving its goals as well. The fundamental structure of integrative negotiation situation is such that, it allows both sides to achieve their objective. 1

While Integrative Negotiation Strategies are preferable, they are not always possible. Sometimes parties’ interests really are opposed as when both sides want a larger share of fixed resources.

CHARACTERISTIC OF INTEGRATIVE NEGOTIATION
Ø It focus on commonalties rather than differences
Ø It attempt to address needs and interests, not positions
Ø It commit to meeting the needs of all involved parties
Ø Exchange information and ideas
Ø Invent options for mutual gain
Ø Use objective criteria for standard of performance.

Past experience, based perceptions and truly distributive aspects of bargaining makes it remarkable that integrative agreements occur at all. But they do, largely because negotiators work hard to overcome inhibiting factors and search assertively for common ground. Those wishing to achieve integrative results find that they must manage both the contest and the process of negotiation in order to gain the cooperation and commitment of all parties. Key contextual factors include:

- Creating a free flow of information
- Attempting to understand the other negotiator’s real need and objective
- Emphasizing the commonalties between the parties and minimizing the differences
- Searching for solutions that meet the needs and objectives of both sides.

KEY STEPS IN INTEGRATIVE NEGOTIATION PROCESSS

There are four major steps in the Integrative Negotiation Process:
Ø Identify and define the problem
Ø Understand the problem and bring interests and needs to the surface
Ø Generate alternative solution to the problems
Ø Evaluate those alternatives and select among them.

Increasing Value to Buyer


Claiming Value





Creating Value Pareto efficient frontier

Increasing Value to Seller
The first three steps of the Integrative Negotiation process are important for “Creating Value”. While the fourth step o the Integrative Negotiation Process, the evaluation and selection of alternatives INVOLVE “CLOUMING Value”. Claiming value involves many of the distributive bargaining skills discussed earlier.

1. IDENTIFY AND DEFINE THE PROBLEM

The problem identification step is often the most difficult one and it is even more challenging when several parties are involved. Negotiator need to consider five aspects when identifying and defining the problems.

§ Define the problem in a way that is mutually acceptable to both sides.
§ State the problem with an eye toward practicality and comprehensiveness
§ State the problem as a goal and identify the obstacles to attaining this goal.
§ Depersonalize the problem
§ Separate the problem definition from the search for solution.

2. UNDERSTAND THE PROBLEM FULLY

Identify interest needs – Many writers have stressed that a key step in achieving an Integrative Agreement is the ability of the parties to understand and satisfy each others interest.2 Identifying interest is a critical step in the Integrative Negotiation Process. Interests are the underlying concerns, need or desires that motivate a negotiator to take a particular position. However, in as much as satisfaction may be difficult and understanding of the underlying interest may permit them to invent solutions that meet their interest. More so, several types of interests may be at stake in a negotiation and that type may be intrinsic (the parties value it in and of itself) or instrumental (the parties value it because it helps them derive other outcomes in the futures. 3

TYPES OF INTERESTS

§ Substantive Interests - related to the focal issues under negotiation
§ Process Interests are related to the way a dispute is settled
§ Relationship Interests – indicate that one or both parties value their relationship with each other and do not want to take actions that will damage it.
§ Finally, Lax and Sebenius point out that “the parties may have interests in principles concerning what is fair, what is right, what is acceptable, what is ethical, or what has been done in the past and should be done in the future”.

Some observation on Interests
(a) There is almost always more than one type of interest underlying a negotiation
(b) Parties can have different types of interest at stake
(c) Interest often stem from deeply rooted human needs or values
(d) Interest can change
(e) Surfacing Interests is not always easy or to one’s best advantage
(f) Focusing on interests can be harmful
(g) Generate alternative solutions.

The search for alternative is the creative phase of the Integrative Negotiation. Once the parties have agreed on a common definition of the problem and understood each others interests, they need to generate a variety of alternative solution. The objective is to create a list of options or possible solution to the problem; evaluating and selecting from among those options will be their task in the final phase. Several techniques have been suggested to help negotiators generate alternative solutions. These techniques fall into two general categories. 4

i. Redefining the Problem or Problem Set:
This technique call for the parties to define their underlying needs and develop alternatives to meet them. Five different methods for achieving integrative agreements have been proposed and are highlighted below: 5

ii. Expand the pier:
This involves beginning negotiations with shortage of resources, this is not possible for both parties to satisfy their interests or obtain their objectives under current condition. A simple solution is to add resources – expand the pie.

a. Logroll – for logrolling to be successful, parties are required to find more than one issues in conflict and to have different priorities for those issues. 6 Logrolling is frequently done by trial and error as part of the process of experimenting with various packages of offers that will satisfy everyone involved. However, logrolling may be effective when the parties can combine two issues, but not when the parties take turns in successive negotiation.

More so, logrolling is not only effective in inventing options but also as a mechanism to combine options into negotiated packages. Neale and Bazerman identify a variety of approaches in addition to simply combining several issues into a package. 7 Three of these in particular, relate to the matters of outcome probabilities, and timing in other words what is to happen, the likelihood of it happening and when it happens.
b. Exploit differences in risk preference.
c. Exploit differences in time preferences
- Use nonspecific compensation – A third way to generate alternatives is to allow one person to obtain his objectives and pay off the other person for accommodating his interests. For non-specific compensation to work, the person doing the compensating needs to know what is valuable to the other person and how seriously she is inconvenienced.
- Cut the costs for compliance: Through cost cutting, one party achieves her objectives and the others costs are minimized if she agrees to go along.
- Find a bridge solution: This involve a situation whereby parties invent new options that mete all their respective needs.

3. GENERATING ALTRNATIVE SOLUTIONS TO THE PROBLEM AS GIVEN:
In addition to the techniques mentioned above, there are several other approaches to generating alternative solution. These approaches can be used by the negotiators themselves or by a number of other parties. Several of these approaches are commonly used in small groups. These include:

§ Brainstorming: In brainstorming, small groups of people work to generate as many possible solutions to the problem as they can. Someone records; the solutions without comment, as they are identified participants are urged to be spontaneous, even impractical and not to censor anyone’s ideas. The success of brainstorming depends on the amount of intellectual stimulation that occurs as different ideas are generated. The

(a) Avoid judging or evaluating solutions
(b) Separate the people from the problem
(c) Be exhaustive in the brainstorming process
(d) Ask outsider
However, the disadvantage of brainstorming is that it does not solicit the ideas of those who are present at the negotiation.

4. EVALUATE AND SELECT ALTERNATIVES:

The fourth stage in the Integrated Negotiation Process is to evaluate the alternatives generated during the previous phase and to select the best ones to implement. When the challenge is a reasonable, simple one, the evaluation and selection steps may be effectively combined into a singly step. For those uncomfortable with the Integrative Process, though we suggest a close adherence to a series of distinct steps: definitions and standards, alternative, evaluating and selection. The following guidelines should be used in evaluating options and reaching a consensus. 8

§ Narrow the range of solution options
§ Evaluate solution on the basic of quality, and acceptability
§ Agree to the criteria in advance of evaluating options
§ Be willing to justify personal preferences
§ Be alert to the influence of intangibles in selecting options
§ Use subgroups to evaluate complex options
§ Take time out to cool off
§ Explore different ways to logroll.

FACTORS THAT FACILITATE SUCCESSFUL INTEGRATIVE NEGOTIATION

We have stressed that successful Integrative Negotiation can occur if the parties are predisposed to finding a mutually acceptable joint solution. Many other factors contribute to a predisposition toward problem solving and a willingness to work together to find the best solution. These factors are also the preconditions necessary for more successful integrative negotiation. These factors includes:-
- some common objective or goal
- faith in one’s problem – solving ability
- a belief in the validity of one’s own position and the other’s perspective
- The motivation and commitment to work together.
- Trust
- Clear and accurate communication

In conclusion, whether a negotiation is distributive or integrative, negotiation should focus on substance which will produce a mutually beneficial agreement at lower cost and also focus on relations in which the parties maintain civil relations of mutual recognition and respect and improve their joint problem solving ability.

ENDNOTES
1. Walton and mckersie, 1965
2. Raiffa, 1982
3. Fisher and Ertel, 1998
4. Weingart, Prietula, Heider and Genovese, 1999
5. See Ghosh, 1996
6. See Rapoport, Erev, and Zwick, 1995
7. See Cellich, 1997; Girard, 1989
8. See Aaronson, 1989, Brooks and Odiorne, 1984

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