Managing Negotiation
Introduction
From reaching an agreement with a large client to bargaining for a higher starting salary, the ability to negotiate effectively is a critical component of success in business. One fundamental aspect of a negotiation is if it will be approached as distributive bargaining or as an integrative negotiation. Distributive bargaining is a competitive, zero-sum negotiation in which there are a limited amount of resources available, while integrative negotiation takes place when “the parties’ goals are not seen as mutually exclusive and in which the focus is on making it possible for both sides to achieve their objectives” (Nelson and Quick 2009). For example, a dispute over land would necessitate distributive bargaining, whereas a partnership between two firms to buy and sell a product could be made through integrative negotiation. The process of two or more parties reaching a joint decision is influenced by a variety of factors. In analyzing business negotiation, we will first give an overview of past scholarly research on the topic, and then explore more current mental models of negotiation. We will also examine the possible hurdles to reaching agreements posed by cross cultural differences, particularly between American and Chinese business people. Finally, we discuss the relative importance of BATNAs (Best Alternative to Negotiated Agreement) and contributions in the bargaining process.
History of Negotiation Research In the 1960’s and 1970’s, the main issues identified by scholars studying negotiation were the personality characteristics of the individuals involved and the situational context of the negotiation. Although many studies investigated the impact of personality differences on the success of a negotiation, the results generally showed that this variable accounts for only a small amount of the difference in