Negotiation is defined as a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them.
There are two general approaches to negotiation- distributive bargaining and integrative bargaining.
Distributive Bargaining:- Distributive bargaining is defined as negotiations that seeks to divide up a fixed amount of resources, a win lose situation. Its most identifying feature is that it operates under zero sum conditions i.e. each party bargains aggressively and treats the other as an opponent who must be defeated.
The essence of distributive bargaining is that each party has a target point that defines what he/she would like to achieve. Each also has a resistance point, which marks the lowest outcome that is acceptable the point below which they would break off negotiations rather then accept a less favorable settlement. The area between these two points makes up each one’s aspiration range. As long as these is some overlap between the aspiration ranges, their exists a settlement range in which each one’s aspiration can be met.
When engaged in distributive bargaining one’s tactics focus on try to get one’s opponent to agree to one’s specific target point or to get as close to it as possible. Examples of such tactics are persuading to his/her target point and the advisability of accepting a settlement near yours arguing that your target is fair, which your opponent’s is not and attempting to get you opponent to feel emotionally generous toward you and thus accept an outcome close to your target point.
Integrative Bargaining :- Negotiation that seeks one or more settlements than create win- win situation.
In terms of intra-organizational behavior all things being equal integrative bargaining is preferable to distributive bargaining. Integrative bargaining builds long term relationships and facilitates working together in the future. It bonds negotiators and allows each to leave the bargaining table feeling that he/she has achieved a victory. Distributive bargaining on the other hand, leaves one party a loser. It tends to build animosities and deeper divisions when people have to work together on an ongoing process.