Define negotiation and describe key characteristics of the two major types of negotiation. Which type should managers prefer, and why?

Question

What will be an ideal response?

Answer 1

Negotiation is the process by which the parties in conflict attempt to derive a solution that is acceptable to the parties by allocating resources to one another. There are two major types of negotiation-distributive negotiation and integrative bargaining. In distributive negotiation, the two parties perceive that they have a fixed pie of resources that they need to divide. Each party realizes that he or she must concede something but is out to get the lion's share of the resources. The parties see no need to interact with each other in the future and do not care if their interpersonal relationship is damaged or destroyed by their competitive negotiation. In distributive negotiations, conflicts are handled by competition. In integrative bargaining, the parties perceive that they might be able to increase the resource pie by trying to come up with a creative solution to the conflict. They do not view the conflict competitively, as a win-or-lose situation; instead, they view it cooperatively, as a win-win situation in which both parties can gain. In integrative bargaining, conflicts are handled through collaboration and compromise. Managers should prefer integrative bargaining over distributive negotiation because the former fosters continuing good relationships, while the latter tends to hurt relationships.