Distributive negotiation

Definition

Distributive negotiation is a competitive bargaining strategy where the parties involved view the negotiation as a zero-sum game, meaning one party's gain is another party's loss. This type of negotiation often revolves around a fixed amount of resources or value, requiring each party to claim their share through tactics such as pressure and persuasion. It emphasizes maximizing individual outcomes rather than seeking mutual benefits, leading to potential conflicts and tension between negotiators.

5 Must Know Facts For Your Next Test

1. Distributive negotiation is often used in one-time transactions, where parties are unlikely to work together in the future and are focused on immediate outcomes.
2. In distributive negotiation, tactics like anchoring (setting an initial high or low offer) can significantly influence the negotiation process and outcomes.
3. This type of negotiation may involve competitive behaviors such as bluffing or withholding information to gain an advantage over the other party.
4. It typically requires clear communication about limits and expectations since both parties aim to achieve their best possible deal.
5. Distributive negotiation can create adversarial relationships between negotiators, making future collaborations more challenging.

Review Questions

• How does distributive negotiation differ from integrative negotiation in terms of strategies and outcomes?
  • Distributive negotiation focuses on claiming value from a fixed resource pool, resulting in one party's gain equating to another's loss. In contrast, integrative negotiation seeks to create value through collaboration and finding mutually beneficial solutions. While distributive negotiation may lead to competitive tension and conflict, integrative approaches aim for cooperation, fostering better relationships and long-term partnerships.
• What role does BATNA play in distributive negotiations, and how can it impact the bargaining power of each party?
  • BATNA serves as a critical benchmark in distributive negotiations by providing parties with alternative options if an agreement cannot be reached. A strong BATNA enhances a negotiator's bargaining power by allowing them to walk away from unfavorable offers confidently. Conversely, a weak BATNA can lead to lower negotiating power, making a party more susceptible to accepting less favorable terms due to lack of alternatives.
• Evaluate the implications of using distributive negotiation tactics on long-term relationships between negotiating parties.
  • Using distributive negotiation tactics can have significant implications for long-term relationships between negotiating parties. Since this approach prioritizes individual gains over collaborative efforts, it may foster resentment or distrust, especially if one party feels manipulated or taken advantage of during the process. This adversarial nature can hinder future collaborations or negotiations, as parties may enter future interactions with preconceived notions of hostility or competition. Building trust and rapport often becomes challenging after engaging in competitive negotiations, emphasizing the importance of understanding when to apply this strategy appropriately.

Related terms

integrative negotiation: A collaborative negotiation strategy that focuses on mutual gains and finding win-win solutions for all parties involved.

BATNA:

Best Alternative to a Negotiated Agreement; it represents the most advantageous alternative action a party can take if negotiations fail.

ZOPA:

Zone of Possible Agreement; the range in which an agreement is satisfactory to both parties involved in a negotiation.