Expand the "pie" before you divide it up.
Picture the following: It's time to buy a new car, and you're in the showroom at a local dealer. You're interested in a car priced at $19,000, with an initial payment of 20%, and the rest as an interest-free loan over three years. You think you can get a better price, but the salesperson isn't prepared to lower it.
So, how can you get a better overall price for yourself while also making your offer more attractive to the dealer?
You think of another option and say to the salesperson, "I like the car, but I want to change the deal to something that's more beneficial to both of us. For your price of $19,000, I'd like you to include three years of free servicing. If you do that, I'll pay you 50% of the price up front, and the rest over just two years."
This is an example of integrative negotiation. The situation has changed from a "win-lose" (a dollar you win is a dollar they lose, and vice versa) to a "win-win" (a better dollar deal for both parties).
In effect, you move toward a deal that makes the "negotiating pie" bigger, rather than continue to fight over how to cut up the existing "pie." The car dealer makes a sale with better cash flow, which outweighs the cost of servicing. And you get your car with a lower total cost of ownership because three years of servicing, which you'll need anyway, will be free.
An easy way to define integrative negotiation is to compare it with its counterpart, distributive negotiation. Distributive negotiation is what people traditionally consider negotiation to be: both sides fight over the price of a fixed package of goods or services, and they try to hide their real positions and objectives in order to gain an advantage.
In contrast, integrative negotiation uses...
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