What is a Distributive Negotiation?
A distributive negotiation is a situation in which interests or objectives of the parties are the same and are mutually exclusive. These situations are characterized by a finite or fixed amount of resources. The interest(s) or objective(s) of the other party are in direct conflict with yours.
Further explanation below.
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In plain language, the parties seek to claim the same value; thus, any value that one party receives means the other party receives less value in the negotiation. For example, if the parties are competing for a share of the same pie, one party acquiring a greater percentage of the pie means the other party gets less pie.
This is often the case in single negotiations (single deals or transactions) at the stage of negotiation where the negotiator can effectively improve her position or gain value.
The distributive negotiation is generally very competitive (a win-lose situation) and does not foster cooperative behavior. A distributive negotiation strategy seeks to grab as much possible in that negotiation.
Note, that a distributive negotiation strategy may still be ineffective in a distributive negotiation when there will be an on-going business relationship. Such a strategy can create animosity between the parties, negative emotions, and cause damage to the party's reputation. These harsh effects may be mitigated in negotiations when parties wish to cooperate or avoid competitive behavior in the distributive negotiation.
Related Topics
- What is a distributive negotiation?
- What procedures are considered best practices in a distributive negotiation?
- What is an integrative negotiation?
- What procedures are considered best practices in an integrative negotiation?
- What personal characteristics of negotiators facilitate a successful integrative negotiation?
Discussion Question
Prior to studying negotiations, did you have a tendency to see all negotiations as distributive? Can you give an example of a time you pursued a distributive negotiation? Can you think of a time you attempted a distributive negotiation but learned that it was not really distributive in nature (i.e., the parties have integrative or compatible interests)?
Definition: Distributive bargaining is a competitive bargaining strategy in which one party gains only if the other party loses something. It is used as a negotiation strategy to distribute fixed resources such as money, resources, assets, etc. between both the parties.
Description: Distributive bargaining is also known as zero-sum negotiations because the assets or the resources which need to be distributed are fixed. So, all the negotiations will have to happen by taking that into context.
The ultimate aim, under distributive bargaining approach, is not to come to a win-win kind of situation but that one side wins as much they can. Both parties will try to get the maximum share from the asset or resource which needs to be distributed.
We end up using distributive bargaining approach in our daily lives as well when we shop. Usually distributive bargaining approach works well with products which do not have a fixed price.
For example, if you go to the supermarket and buy some products, you won't be able to bargain because they have a fixed price. Either you can buy the product or leave it.
Let's understand distributive bargaining approach with the help of another example. You go to Lajpat Nagar market in New Delhi to buy a rug. You are visiting the shop for the first time and if the rug is of adequate quality, both the parties might not see each other again. The shopkeeper will quote you one price, rather than any lower rate as suggested by you.
In distributive bargaining approach, both the parties try to know each other's walk-away-value to take a decision. After that, they make a deal in that it is closer to their own goal rather than adjusting according to the competitors.
In case the rug cost you Rs 1000, and you give a counter offer of Rs 800. The shopkeeper loses Rs 200. He/she would try to limit the loss and try selling the at around Rs 900-950.
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By — on October 31st, 2022 / Dealmaking Most negotiations call for very different, even opposing,
skills: collaboration and competition. To get a great deal, we typically must work with others to find new sources of value while also competing with them to claim as much of that value for ourselves. Before mastering the intricacies of value creation in negotiation, it helps to have a solid foundation in value claiming. In this article, we answer the question “What is distributive negotiation?” and provide five strategies for succeeding in value-claiming negotiations. Distributive negotiation is the process of dividing up the pie of value in negotiation. Distributive negotiation can be thought of as haggling—the back-and-forth exchange of offers, typically price offers, which the late Harvard professor Howard Raiffa referred to as the “negotiation dance.” The most effective bargainers in a distributive negotiation are often those who spent a lot of time preparing to negotiate. In particular, negotiators should
determine their best alternative to a negotiated agreement, or BATNA—what they’ll do if they don’t achieve their goals in the current negotiation. A job seeker might decide to pursue other job openings, for example. Negotiators also need to assess their reservation point or walk away point—the figure at which they’re indifferent
between accepting the deal they negotiated and instead of turning to their BATNA, such as $3,000 for a particular used car. The following five strategies from Harvard Business School professors Deepak Malhotra and Max H. Bazerman’s book Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond will help you maximize the amount of value you claim in your
negotiations: What other distributive negotiation tactics have you used effectively?The process of dividing the pie in negotiation requires greater skill and preparation than it may seem. Strategies from experts at Harvard Business School will help you do your best in distributive negotiation.
What is
Distributive Negotiation?
5 Proven Distributive Negotiation Strategies
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