Distributive Negotiation Strategy: How to Divide the Pie

At its core, there are two types of negotiation: distributive and integrative. In distributive negotiation, the parties involved are focused on dividing a fixed resource, such as money or time. The goal is to come to an agreement that benefits both parties, but each party is primarily concerned with getting the biggest piece of the pie. In this article, we'll dive into what distributive negotiation is, how it differs from integrative negotiation, and tips on how to prepare for and execute a successful distributive negotiation.‍

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What is distributive negotiation?

Distributive negotiation is a type of negotiation where the objective is to divide a fixed resource. In other words, the size of the pie is predetermined, and the parties involved are fighting over how the pie should be sliced. The goal is to get as much of the pie as possible and leave as little on the table for the other party. Distributive negotiation can be a win-lose scenario, where one party's gain is the other party's loss.

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How is it different from integrative negotiation?

Integrative negotiation, on the other hand, is a type of negotiation where the parties involved collaborate to create value. In this scenario, the parties are not fighting over a fixed resource. Instead, they are trying to find ways to expand the pie so that everyone can get a bigger slice. Integrative negotiation is a win-win scenario, where both parties walk away feeling like they got a good deal.

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Tips on how to prepare for a distributive negotiation

The key to preparing for a distributive negotiation is to set an aspirational opening position, target price, and knowing your BATNA. Your opening position should be aspirational and is designed to anchor your counterparty’s expectations. The target price is the price that you want to achieve in the negotiation. Knowing your BATNA means understanding what your best alternative to a negotiated agreement is. If you can't reach a deal with the other party, what is your backup plan? Understanding your BATNA will give you leverage in the negotiation.

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Tactics to use during a distributive negotiation

During a distributive negotiation, different tactics can be used to gain an advantage. Anchoring is one such tactic, where the negotiator sets the first offer high (or low, depending on the situation.) This sets the tone for the negotiation and can influence the other party's perception of what a fair deal is. Making concessions is another tactic, where the parties exchange offers and concessions until they reach an agreement. The key to making concessions is to ask for something in return for every concession you make.

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Executing a successful distributive negotiation

To execute a successful distributive negotiation, you need to have a clear understanding of what you want to achieve and what you're willing to give up to get it. You also need to be confident and assertive in your communication, but not aggressive or confrontational. Listen actively to the other party and try to find common ground. Remember, the goal is to get a deal done, not piss the other person off.

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Distributive negotiation can be challenging, but with the right mindset and preparation, you can achieve a successful outcome. Remember to set a target price, know your BATNA, and use tactics like anchoring and making concessions to gain an advantage. Stay confident, listen actively, and aim to get a deal done.

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