What is Distributive Negotiation and Five Proven Strategies (2024)

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.

By Katie Shonk — on / Dealmaking



What is Distributive Negotiation and Five Proven Strategies (1) Comment

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.

What is Distributive Negotiation?

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 pointor 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.

Claim your FREE copy: Dealmaking

Discover how to boost your power at the bargaining table in this FREE special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.

5 Proven Distributive Negotiation Strategies

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:

  1. Focus on the Other Party’s BATNA and Reservation Value. In addition to determining your own BATNA and reservation value, it is also important to try to estimate the other party’s BATNA and reservation point. When you do so, you can estimate the zone of possible agreement, or ZOPA—the range of deals that both parties would accept. For example, if you’re willing to spend up to $3,000 on the seller’s used car and believe the seller might be willing to part with it for $2,500, the ZOPA ranges from $2,500 to $3,000. Negotiators who focus on the other party’s BATNA tend to aim higher and capture more value, according to Malhotra and Bazerman.
  2. Avoid Making Unilateral Concessions. Once each party has made an initial offer, avoid the trap of making another concession before your counterpart has reciprocated with one of her own. If the other party won’t match your concession, it may be time for you to bow out of the negotiation and exercise your BATNA.
  3. Be Comfortable with Silence. Negotiators often are inclined to make undue concessions or retract their offer when their counterpart seems to be taking too long to respond. But keep in mind that your partner’s silence may be strategic, designed to make you uncomfortable and cave in. When you speak when it’s their turn to do so, “you will be paying by the word,” caution the authors of Negotiation Genius.
  4. Label Your Concessions. As human beings, we have an innate tendency to reciprocate the gifts and concessions we receive from others. Due to this powerful norm of reciprocity, we tend to make a concession of our own when offered one by a counterpart in a distributive negotiation. At the same time, to escape such feelings of obligation, negotiators can be motivated to undervalue or overlook one another’s concessions, write Malhotra and Bazerman. For this reason, it is important in distributive bargaining to draw attention to your concessions by labeling them. That is, clarify how costly the concession will be to you and make it clear that you’re reluctant to give this value away.
  5. Make Contingent Concessions. To further reduce the ambiguity of your concessions, you might explicitly tie your concessions to specific actions by the other party, suggest Malhotra and Bazerman. Make it clear that you will only make your concession if the other party meets your expectations. Here’s an example: “I’m willing to pay more if you can promise me early delivery.” Contingent concessions can not only secure commitments from your counterpart but also broaden the number of issues up for discussion, perhaps transforming a distributive negotiation into an integrative one—creating value in the process.

What other distributive negotiation tactics have you used effectively?

Claim your FREE copy: Dealmaking

Discover how to boost your power at the bargaining table in this FREE special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.

Related Posts

  • Dealmaking and the Anchoring Effect in Negotiations
  • Negotiating Skills: Learn How to Build Trust at the Negotiation Table
  • Dear Negotiation Coach: How Should I Handle an Early Offer Negotiation?
  • Managing a Multiparty Negotiation
  • MESO Negotiation: The Benefits of Making Multiple Equivalent Simultaneous Offers in Business Negotiations



What is Distributive Negotiation and Five Proven Strategies (5) Comment

What is Distributive Negotiation and Five Proven Strategies (2024)

FAQs

What are the five 5 different strategies for negotiation? ›

There are five primary negotiation styles: accommodating, avoiding, collaborating, competing, and compromising. A successful negotiation often consists of one or more of these different negotiation styles. Negotiation behaviors can be useful during business negotiations and in your personal life.

What is a distributive negotiation? ›

Distributive negotiation is defined as a form of negotiation in which the involved parties give each other offers and counter offers in sharing a given fixed resource. The individuals involved in the negotiations want the best offer that favors them.

What are the 5 What is the basic approaches to negotiation? ›

In fact, there are five different negotiation styles: competing, collaborating, compromising, avoiding and accommodating. We've written about them before but thought it would be useful to revisit them here in a more “at-a-glance” format for those who may want to learn more about how they approach negotiations!

What are the big five and negotiation? ›

The Big Five personality traits—Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism—can significantly influence negotiation strategies. Here's how: Openness: Open individuals tend to be more creative and adaptable in negotiations.

What are the 5 P's of negotiation? ›

But Mullett proposes a more succinct, repeatable system he's come to call the "Five P's:" prepare, probe, possibilities, propose and partner.

What are the five 5 stages of negotiation with examples? ›

What are the five stages of the negotiation process?
  • Preparation and planning.
  • Definition of ground rules.
  • Clarification and justification.
  • Bargaining and problem-solving.
  • Closure and implementation.

What are the five 5 rules of negotiation? ›

5 Key Principles of Effective Negotiation
  • Preparation is Key. Thorough preparation is crucial for successful negotiation. ...
  • Build Rapport and Trust. ...
  • Focus on Interests, Not Positions. ...
  • Be Willing to Make Concessions. ...
  • Remain Adaptable and Open-Minded.

What are the big 5 negotiations? ›

The “Big 5”

When studying personality in negotiation, psychologists generally focus on five main factors that are believed to encompass most human personality traits: extroversion, agreeableness, conscientiousness, neuroticism, and openness.

What are the 4 golden rules of negotiation? ›

These golden rules: Never Sell; Build Trust; Come from a Position of Strength; and Know When to Walk Away should allow you as a seller to avoid negotiating as much as possible and win.

What are the 3 C's of negotiation? ›

Most people know intuitively that if they are to be convincing, they need to be confident, and if they are to be confident, they need to be comfortable (comfortable, confident, and convincing are what I term the three C's of negotiation).

What are the five core concerns of negotiation? ›

These basic factors can be categorized into what Fisher and Shapiro call the “five core concerns”: (1) Appreciation; (2) Affiliation; (3) Autonomy; (4) Status; (5) Role.

What are the 3 P's of negotiation? ›

The Three P's of Successful Negotiations: Preparation, Persistence, and Patience. In today's complex and competitive world, it's more important than ever to develop superior negotiation skills that foster strong relationships.

What are negotiating strategies? ›

steps for successful negotiation are: Separate the people from the problem. Focus on interests, not positions. Invent options for mutual gain, that is work together to create options that will satisfy both parties.

What are the five strategic negotiation and conflict management? ›

Kenneth Thomas and Ralph Kilmann developed five conflict resolution strategies that people use to handle conflict, including avoiding, defeating, compromising, accommodating, and collaborating.

References

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Errol Quitzon

Last Updated:

Views: 5823

Rating: 4.9 / 5 (59 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Errol Quitzon

Birthday: 1993-04-02

Address: 70604 Haley Lane, Port Weldonside, TN 99233-0942

Phone: +9665282866296

Job: Product Retail Agent

Hobby: Computer programming, Horseback riding, Hooping, Dance, Ice skating, Backpacking, Rafting

Introduction: My name is Errol Quitzon, I am a fair, cute, fancy, clean, attractive, sparkling, kind person who loves writing and wants to share my knowledge and understanding with you.