Integrative Bargaining

Integrative Bargaining Professor Bruce Fortado MAN 4441 University of North Florida

Integrative bargaining is often depicted as having a better solution for both sides. The goals of the parties are not mutually exclusive. The process is described as collaborating, problem solving or “win-win.” People may be said to have achieved a consensus. One can find ambiguous statements in the literature. One group of authors talked about adhering to a set of assumptions that lead people to search for win-win solutions and usually find them. If one failed to settle a matter, they argue you simply did not pursue integrative methods hard enough. In later passages, the same authors said pure integrative solutions were rare. Most situations are “mixed motive,” containing some elements that require distributive bargaining and others that require integrative. As a general rule, conflict and competitiveness drive out cooperation and trust, making it more difficult for the parties to find common ground. How can one make sense of such conflicting remarks? What stage of the process are we talking about? Before talks get underway, one still must prepare for all contingencies. Do people simply label the situation afterwards? If both are happy, it must have been integrative? Has one side simply agreed to lose? Are we talking about (1) goals, (2) tactics, or (3) outcomes? You really should be talking about goals or at least the tactics used. It seems inappropriate to label situations after the fact based on how people feel about the outcomes and the process. The Dual Concerns model showed it is not simply a matter of a negotiation being integrative or distributive. Avoiding, yielding and forcing were also considered. Nevertheless, much of the literature reduces matters to either distributive or integrative.

Obstacles to Integrative Bargaining

* The history of the relationship = When an animosity has developed, one will have a very difficult time changing the parties’ interaction pattern. When one side tries to heal a relationship, and the other side snubs them, the overture is unlikely to be repeated. People form conclusions about what others are like, and they tend to respond in kind (trust begets trust, and mistrust begets mistrust).

* An inability to open one’s mind to other views/possibilities = This can result from different training and past experiences, which lead people to define problems in a certain way. Differences in data sources can also lead people to different conclusions. It is quite possible for people to see their own view as the sole and true view. At this point, one must choose between one position or the other.

* Fear of the other party taking advantage of you = Most negotiations have both integrative and distributive aspects. This fosters caution that inhibits integrative bargaining.

* The situation is so complex it is simpler to view it in win-lose terms

* You are representing constituents who have distributive (macho) agendas Active Listening Carl Rogers coined this word. He did it in a counseling environment. In recent years, people have transferred the concept to negotiations, with little concern about any differences that might exist. First, one should grasp what the term means in a counseling setting:

* Ask open ended questions.

* Encourage and accept what the person is saying with statements like “Uh huh,” “That is interesting,” and “Tell me more about that.”

* Do not judge what the other person says.

* Listen for emotion, not just the words the person speaks. Watch for physical signals. [It is called a floogle when a person does something like stating “I am not going to let this bother me,” while at the same time he slams his hand down on the table.]

* Restate the person’s last remark as a question to get them to continue.

* Do not give advice. If a person asks what the other party thinks he/she should do, use replies like (1) You feel frustrated, and do not know what to do, (2) You do not see any way out, or (3) What options do you see? Let the person think the problem through, and come to terms with the situation. Eventually, more balanced thoughts and remarks will surface. [Should emotional and technical issues be handled differently?]

* After a period of time, try to summarize the person’s main points to test your understanding and stop repetitive cycling.

* Becoming torn by empathy. Active listening requires security and self understanding.

* Can you accept hostile expressions without reciprocating? Many people are not able to do so.

* Can workers accept a manager being reactive/passive, rather than knowing all the answers and taking charge? Many expect the same behavior pattern they have seen for years. Some might charge that managers are avoiding taking responsibility, or have abdicated their responsibility.

How much of this counseling approach can be translated into a business setting? Is enough time available? Can you direct (get things done) and be a sympathetic listener? The Hawthorne plant had a 20 year non-directive counseling program, with non-authority figures, it was confidential and there was little feedback, even for training purposes. They found, 36% of the workers accessed the program over the course of a year, and 10 % felt it helped. Is this good? The program was finally abandoned and nothing of the same scale has been attempted since then.

Principled Negotiation Fisher and Ury outlined the basics of principled negotiation in a book entitled Getting to Yes.

* Separate people from the problem. This means you should avoid the ego battles that can emerge in distributive situations. We must stop trying to beat the other side. One should be soft on the people. This means you manage the emotional level of the talks. The problem should be depersonalized.

* Focus on interests, not positions. Do not look at their stated position and strive to split the difference. Try to determine what they really want to accomplish. Be tough on interests, not positions.

* Generate alternatives without judging them. Get people to toss out their ideas, even seemingly crazy ones, and record them on a black board or flip chart. Later you can try to combine or modify the ideas that were generated. “If” questions can be utilized to explore possibilities. Eventually, you will prioritize them in order of potential.

* Seek objective criteria to make your ultimate judgments by. What type of statistics can everyone agree are relevant? Do the parties accept some people as experts that are worthy of being consulted?

* Develop the Best Alternative to a Negotiated Agreement (BATNA). If you are able to walk away from the talks and still meet you objectives, the talks will go more smoothly. Hence, you should vigorously pursue all of your options.

When one side is more powerful, keep inquiring about the reasons they have taken certain positions, and suggest the proper criteria to judge the equity of the proposal.

Wait a minute, is this very easy to accomplish? First, in some instances, you will be unable to separate people from the problem. People and relationships can be a large part of the problem. Statements like the one above would lead people away from carefully studying the characters and their history, which would inhibit achieving a good solution. Second, identifying the other person’s interests is a fine idea. Yet, many people go to great lengths to hide or distort this information. Further, in the case of intangibles, they may be at least partially unaware of what they want, or they may be unable to fully articulate their interests. Third, some people will have great difficulty suspending their judgment of the feasibility of alternatives. They may question spending valuable time on things that seem unrealistic. Other people will feel it is wishy washy not to have “the answer.” Some people in the finance area may be put out by having to run cost figures on numerous scenarios, and then possibly have to do many more “what if” scenarios. Fourth, one can hardly argue that identifying objective criteria would help. The problem is, there are no universally accepted criteria. For example, many problems have been cited with the commonly used measures of inflation like the Consumer Price Index. If the parties can agree on a statistic or an expert, objective criteria can be said to exist. However, what if they point to competing statistics or experts?

The Fundamentals of Integrative Bargaining * Establish Trust = How does one do this? Try to engage in sincere, casual, friendly and relaxed actions prior to the negotiation. Friendly gestures during a negotiation may be viewed as a trick or an attempted bribe. - We tend to trust those who seem similar to us. We seek out common ground during our informal conversations. - We tend to trust those who have positive attitudes towards us, those who initiate cooperation, or those who make concessions. Therefore, opening gestures form critical impressions. - You should recognize your mutual vulnerability. People will trust those who are dependent on them. Trust is a necessary, but not sufficient condition for problem solving.

* Clear and Accurate Communication = There should be a free flow of information. Ambiguities should be avoided. People should ask for clarifications. Let everyone speak. One should avoid having everyone talking at once. People should not interrupt one another. You should not judge others views as good or bad. First, try to understand and repeat their points. Next, try to incorporate the various views into a solution.

* Emphasize Commonalities and Minimize Differences. Seek Common Objectives or Goals. - In an economic crisis, mutual survival can bring labor and management, or customers, producers and suppliers together. - “We are part of the same organization, if it prospers, we will both prosper.” - Expand the pie, so we can both gain. - Some times you can agree on the measures to examine, even though the meaning of the measure may be different for the parties. For example, lowering turnover and raising satisfaction might mean greater productivity or profits to the managers, while it might mean more human treatment and greater fairness to the employees. - Everyone must believe they are better off if they work in unison. State this position. -Explain it is not your objective to defeat or hurt the other side. You want good relations.

* Gaining Commitment - The Motivation to Work Together = A firm, but flexible style ought to be adopted. - People are strongly influenced by those who surround them. Cohen (1980) talks about getting close to the people who influence the other party (the boss, family, friends, etc.). Where the body goes, the head will follow. - Some associates recognize a person might object, so they go ahead, claim ignorance, and simply apologize if harsh criticism surfaces. -Show them what is in it for them. Learn their interests, incorporate them, and sell it to them. Participation generally gets people to buy into the end product.

Step 1 Problem Identification Define the problem in a mutually satisfactory way. You should not enter the process with any preconceptions. Do not manipulate information, state facts that are in your favor, or adopt a narrow definition of the problem that will inhibit problem solving. Do not question the other side’s views. Try to incorporate these views into the definition of the problem.

Keep the problem statement clean and simple. Only raise secondary issues if they are inextricably bound to the problem.

State the problem as a goal and identify obstacles to achieving it. People must overcome their reluctance to admit faults, and practice some self criticism in this process.

Depersonalize the problem.

Separate the problem definition from the search for a solution.

Step 2 Generate as Many Alternatives as Possible

Now that the problem has been stated, you must seek “win-win solutions.” Be firm about interests, but flexible about how these can be met. Do not judge any idea as good/bad, or realistic/unrealistic. Advocates of integrative bargaining contend little time will be wasted on weak alternatives, because they will quickly be dismissed. They feel the danger of missing out on a good idea is a more serious concern. The ideas can be documented on a black board, flip chart or piece of paper. Piggy backing, meaning combining or modifying a group of ideas, should be encouraged. A “bridge solution” refers to finding a way to meet all the parties’ needs in an unanticipated way. Everyone should be involved. Social loafing refers to some people letting others do all the work. Steps should be taken to avoid this. For instance, you can ask everyone in succession what they think, or have each person write on a piece of paper what he/she would like to contribute. You may get silence from some groups, because no one ever asked before. They may wonder if you are serious, or they may be unaware how to proceed.

- The Nominal Group Technique = (1) define the problem, (2) have everyone write a possible solution on a piece of paper, (3) document the options, (4) discuss the options, and lastly, (5) the group votes to prioritize and select an option.

- Surveys = These can be used to generate ideas, and minimize meeting time. The problem is there is little real group discussion.

- Brainstorming = Small spontaneous groups are best able to generate ideas and piggy back.

-You should keep your options open as long as you can = Post meeting ideas may yield even better options. If you re-open an issue that some people thought was closed or select a new solution, some people are likely to see this as bad faith bargaining. -Generating viable solutions- Moving from positions to needs = Groups are generally thought to produce higher quality decisions than an individual would. Of course, groups take far longer to reach a decision. We are also assuming the participants have a meaningful base of knowledge from which they can contribute. When people participate, less resistance of the final proposal should be encountered. Despite all the potential positives, we have all heard about the animal a committee created. People may try to appease others, and in the process make a poor decision. Some people also get tired, so they rush to a premature decision.

- The power of your attitude = Nothing can irritate you without your consent. Never jump on the ideas of others and run them down. Simply say how you feel, and do not be judgmental. Ask for help, listen with empathy and repeat points.

Step 3 The Evaluation and Selection of Alternatives

Drop options that are not strongly supported. Seek hard facts, and accepted standards/measures. What is fair and equitable to everyone? What objective criteria exist?

- Use subgroups to make the meetings more manageable. This can increase participation, save overall group time and produce more homogenous groups with expertise in an area.

- Take time to cool off if people get emotional.

- Keep decisions tentative until everything is finalized.

- Minimize formality and precise language until you are close to an agreement.

- End talks on a conciliatory note, even if you do not feel that way.

- Voting can be used to reach a decision. Many people argue voting saves time, and the losers generally can accept the outcome of a democratic process. Some integrative zealots, however, want people to continue discussions until a consensus is achieved.

Outcomes should be judged by how well they meet the goals of both sides. Outcomes should not be evaluated based on whether one side is doing better than the other. Reservations

The integrative bargaining literature has much to offer. Even those who frequently engage in distributive negotiations could benefit by using integrative bargaining techniques. Nonetheless, one should have a well rounded and realistic view of the world we live in. The following reservations should provide some balance, making it more likely you will not have naive expectations.

* How can anyone enter a process with no preconceptions? You are hardly able to erase your own past experiences. It would be unwise not to do any research on the issues or gather information on the other side. Clean and simple problem statements may be difficult to agree upon if the conflict is in fact complicated. If one side has issues fully or partially left out, the ensuing process will obviously be something less than entirely satisfactory. Does the very act of suggesting certain criteria as objective, or raising problems with a suggested criteria, show you have preconceptions?

* If you accept the other side as an equal, and give equal respect to their view, does this mean you will have to compromise your moral values on occasion? The former Soviet Union arms negotiator talked to the U.S. negotiators about the number of tanks, missiles and other military hardware both sides had. The U.S., however, did not occupy and oppress countries in the same way after WW II, or treat political objectors in the same way, so the two were not really moral equivalents. Treating them as such would be a distortion of reality.

* The recommendation to “expand the pie,” essentially violates the basic fixed resources element of the definition of a negotiation situation. Who is paying for the bigger pie? A third party, the organization, the tax payers, the next generation or ...?

* The Japanese are famous for “consensus” decision making. In some cases, people have left an item on their desk for an extended period, indicating they are not very happy about it, before putting their chop on it (a stamp representing their name). This conveys the message: “You owe me one.” This sounds more like a distributive trade than consensus decision making.

* Keeping the table open to new ideas up until the last minute leaves you open to nibbling and screening.

(There were a number of additional reservations listed earlier on page 3.)