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Nurul Inna
Nurul Inna
Indonesia

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by Nurul Inna
1

Types of negotiation

Negotiation strategies can be broadly categorized into distributive, integrative, and contingent approaches. Distributive negotiation, also known as win-lose, focuses on maximizing individual gains at the expense of the other party, often involving a fixed pool of resources. Integrative negotiation, or win-win, aims for mutually beneficial outcomes through collaboration and joint value creation. Contingent negotiation involves agreements where outcomes are tied to specific conditions or future events. 


Distributive Negotiation (Win-Lose)

• Focus: Maximizing individual gains, often at the expense of others. 

• Strategy: Competitive, resource-scarce, and adversarial. 

• Example: In a labor contract negotiation, the employer (maximizing profit) and the union (maximizing wages) might engage in a distributive negotiation, where one side's gain is the other's loss. 

• Accounting Example: A company negotiating a new accounting software contract with a vendor might focus on getting the lowest price, regardless of the vendor's potential losses or limitations. 

2

Integrative Negotiation (Win-Win)


• Focus: Mutual gains through collaboration and joint problem-solving. 

• Strategy: Cooperative, relationship-building, and value-creating. 

• Example: A company and its supplier might work together to develop a more efficient supply chain, resulting in cost savings for both. 

• Accounting Example: A company and its auditor might engage in integrative negotiation to find mutually acceptable accounting practices that are both accurate and efficient, benefiting both the company and the public.

3

Contingent Negotiation

• Focus: Setting outcomes based on future uncertainties or conditions.

• Strategy: Risk mitigation, flexibility, and long-term collaboration.

• Example: A company might agree to a certain level of bonus payments based on future financial performance targets.

• Accounting Example: A company might negotiate a loan agreement with a bank where the interest rate is tied to a specific financial benchmark, creating a contingent contract.
 
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