What We Learned
In Negotiations 1O1, management professor David Wagner took us into his class and gave us the core idea of integrative negotiations, a manner of negotiating that focuses on building something together. This method of negotiation looks for cooperative opportunities, rather than distributive value claiming. Integrative negotiations also look at multiple issues, not just a single value, like price.
Two examples of integrative negotiations:
EXAMPLE 1: New Independent Coffee Roaster and Established Grocery Store
An independent coffee roaster wants to sell its beans for the highest price they can, and the grocery store wants to buy the beans for the lowest price. Therefore, if the two just talked about price they would be engaged in distributive negotiations and miss out on opportunities. However, if they opened up the conversation, like Wagner advised, they would enter into integrative negotiations and could both benefit.
A possibility beyond price: The coffee roaster could explain that they are interested in exposure, and the grocery store could explain that they want to build their brand through associations with hip brands. The grocery store could offer to put the coffee roaster in the front of the store, if the coffee roaster creates a really hip display.
A possibility mixing with price: The grocery store could offer use of their large distribution networks. This would make it easier for the coffee roaster to ship to local coffee shops. The coffee roaster would gladly drop their asking price for the grocery store in exchange.
EXAMPLE 2: Iron Man and Phil Knight Negotiating before and after Listening to this Podcast