Integrative Bargaining Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Integrative bargaining can best be analyzed by comparing it with distributive bargaining, as illustrated by Richard Walton and Bob McKersie’s pioneering study. These two approaches differ fundamentally: for example, defining the parameters of what is at stake, the range of possible outcomes, and the indices of a successful outcome. Distributive bargaining is conducted on the basis of win or lose: What one side wins, the other side loses. It is an essentially competitive and adversarial process; and it presupposes a zero-sum game or a fixed-size “pie” that implies limits on what is available for distribution. Successful bargaining, in this type of process, means obtaining as much as possible of the contested “pie” at the expense of “the other side.” Given that the priority in this bargaining process is the win/lose dynamic, the parties generally show little concern for the quality of their relationship with each other.

Much of the bargaining conducted in commercial or industrial relations contexts could be characterized as the distributive type. For example, if a buyer can successfully negotiate a lower price than that sought by the vendor, then such an outcome might be at the expense of some of the vendor’s profit. Similarly, in pay negotiations, there is usually a conflict between the views of the respective parties as to the share of revenue to be made available for employees’ pay relative to employer’s profits. In pay negotiations, management typically frames what is at stake as a fixed size “pie.”

By contrast, integrative bargaining is a cooperative approach that emphasizes the quality of the relationship between the parties as well as the substantive matters at stake. It is founded on the assumption that constructive negotiations can enlarge the “pie” by means of such strategies as, for example, identifying areas of common interest. Integrative bargaining is not an approach based on conceding easily to the other side; but it can generate agreements where each party simultaneously considers that it has won something that satisfies some significant interest(s).

For instance, if a buyer can negotiate a lower price per unit, this might be a worthwhile trade-off for the vendor if it is in exchange for the buyer committing to a larger purchase or a longer term: both parties thereby will enjoy increased benefits. Similarly, although distributive bargaining may dominate approaches to negotiating pay, managers and unions can still adopt more integrative, or mutual-gains bargaining approaches when negotiating on other relevant employment matters (e.g., occupational health and safety, work organization, training, and professional development).

Although the distinction between distributive and integrative bargaining was developed in the context of industrial relations, it is also applicable in many other contexts: for instance, political negotiations at both national and international levels. One objective of the proponents of the establishment of what later became the European Union (EU) in the post–World War II period was the prevention of further wars between historically hostile European states by means of an integration of those states within a unifying supranational structure. Subsequent bargaining to develop an expanded EU was predicated on an assumption that this could enlarge the European “pie” to make the EU economy greater than the sum of its national parts. Hence, bargaining about such substantial matters could be seen, in integrative terms, as attempts to achieve win-win outcomes for the respective parties.

Power, or the perception of relative power, is fundamental to bargaining processes and outcomes. This is particularly so for those who try to move from distributive to integrative bargaining. Most bargaining processes involve parties or “reframing” contentious questions to try to influence the perceptions and attitudes of the other party to generate opportunities for achieving consensus.

Bibliography:

J. Bamber and P. Sheldon, Collective Bargaining: An International Analysis, Comparative Labour Law and Industrial Relations in Industrialized Market Economies, 9th ed., R. Blanpain, ed. (Kluwer Law, 2007);
C. Katz, T. A. Kochan, and A. J. S. Colvin, An Introduction to Collective Bargaining and Industrial Relations, 4th. ed. (McGraw-Hill/Irwin, 2007);
A. Kochan and D. B. Lipsky, Negotiations and Change: From the Workplace to Society (Cornell University Press, 2003);
J. Lewicki, D. M. Saunders, and B. Barry, Negotiation, 5th ed. (McGrawHill/Irwin, 2005);
Lynn M. Wagner, “Problem-Solving and Bargaining in International Negotiations,” International Negotiation Series (v.5, 2008);
E. Walton, J. E. CuthcherGershenfeld, and R. B. McKersie, Strategic Negotiations: A Theory of Change in Labor-Management Relations (Cornell University Press, 2000);
E. Walton and R. B. McKersie, A Behavioral Theory of Labor Negotiations, 2nd ed. (McGraw Hill, 1991).

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