7 Steps to Master the 3 Types of Negotiation

Negotiation is a skill that can help you achieve your goals in personal and professional situations. Whether you are buying a car, asking for a raise, or resolving a conflict, you need to know how to negotiate effectively. But not all negotiations are the same. Depending on the situation, you may need to use different strategies and tactics to get the best outcome. In this article, we will explain what are the 3 types of negotiation and how to master them.

Key Takeaways

There are 3 types of negotiation: distributive, integrative, and mixed-motive

Distributive negotiation is win-lose, integrative negotiation is win-win, and mixed-motive negotiation is complex

To master the 3 types of negotiation, you need to identify the type, prepare your strategy, establish rapport, exchange information, generate options, evaluate options, and agree on a solution

The 3 Types of Negotiation

According to the Harvard Business Review, there are 3 types of negotiation: distributive, integrative, and mixed-motive. Each type has its own characteristics, challenges, and opportunities.

Distributive Negotiation

Distributive negotiation is also known as competitive or win-lose negotiation. It involves a fixed amount of resources that are divided between the parties. The goal of each party is to maximize their share of the resources, at the expense of the other party. Distributive negotiation is often used when the parties have no ongoing relationship or trust, and when there is no possibility of creating value through cooperation. Examples of distributive negotiation are haggling over prices, bidding for contracts, or dividing assets in a divorce.

Integrative Negotiation

Integrative negotiation is also known as collaborative or win-win negotiation. It involves creating value through cooperation and mutual problem-solving. The goal of each party is to find a solution that satisfies their interests and the interests of the other party. Integrative negotiation is often used when the parties have an ongoing relationship or trust, and when there is potential for expanding the resources or finding synergies. Examples of integrative negotiation are negotiating a salary package, forming a strategic partnership, or resolving a dispute.

Mixed-Motive Negotiation

Mixed-motive negotiation is also known as complex or hybrid negotiation. It involves elements of both distributive and integrative negotiation. The parties have some conflicting interests and some shared interests, and they need to balance competition and cooperation. Mixed-motive negotiation is often used when the parties have multiple issues to negotiate, some of which are more important than others, and when there is uncertainty or ambiguity about the value of the resources or the preferences of the parties. Examples of mixed-motive negotiation are negotiating a merger, a trade agreement, or a peace deal.

How to Master the 3 Types of Negotiation

To master the 3 types of negotiation, you need to follow these 7 steps:

Identify the type of negotiation. Analyze the situation and determine whether it is distributive, integrative, or mixed-motive. Consider factors such as the number of parties, issues, resources, relationships, trust, time, and power.

Prepare your strategy. Based on the type of negotiation, decide what your goals are, what your alternatives are, what your reservation point is (the minimum acceptable outcome), and what your target point is (the ideal outcome). Also, research the other party’s goals, alternatives, reservation point, and target point.

Establish rapport. Before you start negotiating, build a positive relationship with the other party. Express respect, empathy, and curiosity. Use open-ended questions, active listening, and nonverbal communication to show interest and understanding.

Exchange information. During the negotiation, share information that can help you create value or claim value. For example, you can reveal your interests, priorities, preferences, needs, or concerns. You can also ask questions to elicit information from the other party.

Generate options. Explore different ways to satisfy both parties’ interests and create value. Use brainstorming techniques such as expanding the pie (increasing the resources), logrolling (trading off issues), bridging (finding a third option), or cost-cutting (reducing the negative impact for one party).

Evaluate options. Compare and contrast the different options based on objective criteria such as fairness, efficiency, feasibility, or legality. Use techniques such as ranking (ordering the options from best to worst), rating (assigning scores to each option), or weighing (assigning weights to each criterion).

Agree on a solution. Choose an option that meets both parties’ reservation points and maximizes their satisfaction. Confirm the details and terms of the agreement in writing.

Tip

One tip to master the 3 types of negotiation is to adapt your style and strategy according to the situation. For example, you can use a competitive style in a distributive negotiation, a collaborative style in an integrative negotiation, and a flexible style in a mixed-motive negotiation. You can also switch between styles depending on the stage of the negotiation, the behavior of the other party, or the changes in the environment.

What are the 3 types of negotiation?

Negotiation is a skill that can help you achieve your goals and resolve conflicts in various situations. However, not all negotiations are the same. Depending on the context, the parties involved, and the desired outcomes, different types of negotiation may be more or less effective. In this blog post, we will explore three common types of negotiation and how they can affect the negotiation process and outcome.

1. Distributive negotiation

Distributive negotiation is also known as zero-sum or win-lose negotiation. It involves a fixed or finite resource that has to be divided between the parties, such as money, time, or territory. In this type of negotiation, any gain for one party means a loss for the other. Therefore, the parties are in direct competition and try to maximize their own share of the resource.

Some examples of distributive negotiation are:

Bargaining over the price of a car or a house
Negotiating a salary or a bonus
Allocating budget or resources among different departments or projects

Distributive negotiation requires assertive and aggressive tactics, such as making high demands, concealing information, making threats or ultimatums, and applying pressure. The parties may also use anchoring, framing, or bluffing techniques to influence the other’s perception of the value of the resource. The goal of distributive negotiation is to claim as much value as possible from the resource.

2. Integrative negotiation

Integrative negotiation is also known as win-win or collaborative negotiation. It involves multiple issues or interests that can be traded or exchanged between the parties, such as quality, service, delivery, or relationship. In this type of negotiation, the parties are not in direct competition but rather seek to create value by finding mutually beneficial solutions.

Some examples of integrative negotiation are:

Negotiating a contract or a partnership
Resolving a dispute or a conflict
Developing a new product or a project

Integrative negotiation requires accommodative and cooperative tactics, such as sharing information, building trust, exploring interests, generating options, and using objective criteria. The parties may also use brainstorming, problem-solving, or mediation techniques to facilitate the negotiation process. The goal of integrative negotiation is to create as much value as possible for both parties.

3. Mixed-motive negotiation

Mixed-motive negotiation is also known as hybrid or complex negotiation. It involves elements of both distributive and integrative negotiation, such as multiple issues, multiple parties, multiple objectives, or multiple phases. In this type of negotiation, the parties may have both competitive and cooperative motives and may switch between different strategies depending on the situation.

Some examples of mixed-motive negotiation are:

Negotiating a merger or an acquisition
Negotiating a trade agreement or a treaty
Negotiating a divorce or a custody

Mixed-motive negotiation requires analytical and flexible tactics, such as prioritizing issues, sequencing offers, bundling concessions, and managing relationships. The parties may also use communication, persuasion, or influence techniques to balance their interests and goals. The goal of mixed-motive negotiation is to optimize the overall outcome for both parties.

How does global demand affect the negotiation industry?

Global demand is the total amount of goods and services that consumers around the world want to buy at a given price level and time period. Global demand can affect the negotiation industry in various ways, such as:

Increasing the number and diversity of potential customers and suppliers for negotiators
Increasing the complexity and uncertainty of negotiating across different cultures, languages, laws, and norms
Increasing the opportunities and challenges for negotiators to create value and manage conflicts in global markets
Increasing the need and demand for negotiators with cross-cultural competence and global awareness

According to a report by ResearchAndMarkets.com, the global market size for negotiation training services was estimated at $2.35 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 9.9% from 2021 to 2028. The report identifies some of the key factors driving this growth as:

The rising importance of effective communication and interpersonal skills in various sectors and industries
The increasing adoption of online and blended learning methods for negotiation training
The growing awareness of the benefits of negotiation training for personal and professional development

The report also highlights some of the challenges and opportunities for the negotiation training industry in the global context, such as:

The need to customize and adapt negotiation training programs to suit different cultural preferences and expectations
The need to leverage technology and innovation to enhance the quality and accessibility of negotiation training services
The need to address the ethical and social implications of negotiation practices in different contexts

Negotiation is a vital skill for success in the 21st century. However, negotiation is not a one-size-fits-all approach. Depending on the situation, different types of negotiation may be more or less appropriate and effective. By understanding the three types of negotiation – distributive, integrative, and mixed-motive – negotiators can choose the best strategy and tactics for their goals and interests. Moreover, by recognizing the impact of global demand on the negotiation industry, negotiators can prepare themselves for the opportunities and challenges of negotiating in a globalized world.

Frequently Asked Questions

Q: What are some examples of distributive negotiation skills?
A: Some examples of distributive negotiation skills are:

Anchoring: making an initial offer that sets a favorable reference point for the negotiation
Bargaining: making concessions in exchange for concessions from the other party
Threatening: using pressure tactics such as deadlines, ultimatums, or walkouts to force the other party to accept your offer
Persuading: using logic, evidence, or emotions to convince the other party that your offer is fair and reasonable

Q: What are some examples of integrative negotiation skills?
A: Some examples of integrative negotiation skills are:

Framing: presenting the negotiation as a joint problem-solving process rather than a conflict
Identifying: discovering the underlying interests, needs, and motivations of both parties
Expanding: creating value by finding ways to increase the resources or benefits for both parties
Collaborating: working together with the other party to find a mutually beneficial solution

Q: What are some examples of mixed-motive negotiation skills?
A: Some examples of mixed-motive negotiation skills are:

Balancing: finding the optimal balance between competition and cooperation
Prioritizing: focusing on the most important issues and conceding on the less important ones
Bundling: combining multiple issues into a package deal that offers more value for both parties
Compromising: finding a middle ground that partially satisfies both parties

Reference:

https://www.cfa.harvard.edu/cfawis/bowles.pdf

https://web.archive.org/web/20070926065715/http://home.medewerker.uva.nl/g.a.vankleef/bestanden/Van%20Kleef%20et%20al.%20(2004a%20JPSP).pdf

https://deepblue.lib.umich.edu/bitstream/2027.42/26263/1/0000344.pdf