Cooperative (integrative) bargaining, unlike competitive (distributive) bargaining, does not assume it fixes the value being bargained. In competitive bargaining, the parties accept that whatever one side gains, the other side must lose. Cooperative bargainers, however, seek ways both sides can achieve their goals with as little cost as possible to the other side.
To overcome the limitations of competitive bargaining, most negotiators use strategies described as cooperative, problem-solving, principled, collaborative or integrative. While there are some differences among these approaches, they are very similar concepts.
Go Beyond the Zero-Sum Exchange
Cooperative bargaining, also referred to as interest-based bargaining, sometimes appears difficult to apply to disputes which seek to distribute specifically identified financial resources. However, an excellent negotiator can often find creative strategies, even in restrictive circumstances. The goal in these negotiations isn’t a lopsided distribution, it’s essentially a win-win, where both sides come to the table with ideas.
One example of a zero-sum exchange is in dealing with a loved one’s estate after their death. In a competitive bargaining situation, those who have inherited the estate, or particularly those who haven’t, may feel they’re entitled to more than a straight split down the middle. Consider what was probably the most popular inheritance dispute of the 1990s, the case of Marshall v. Marshall (2006). When 90-year-old billionaire J. Howard Marshall II died in 1995, his eldest son and sole beneficiary, E. Pierce Marshall inherited the entire estate.
The next year, however, J. Howard’s widow, 26-year-old model Anna Nicole Smith, sued E. Pierce claiming her husband intended to provide for her through a gift in the form of a catch-all trust, but that E. Pierce had interfered with the process. The courts spent the next 20 years processing the various suits, countersuits, appeals, and more, with several of the principals dying before they resolved the case.
In cooperative bargaining, there may be several inheritors of an estate, and while they are still distributing it among themselves, there’s not as much focus on which person receives 56% and who receives 44%. This type of bargaining involves a high trust and collaboration but usually leads to more successful and more positive outcomes.
Imagine how much time and stress warring parties might save if they went into negotiations with a mind to collaborate and find a solution as close to workable as possible for both sides instead of pushing for a win-lose they might not even get to enjoy.
Expand the “Pie”
The general approach of cooperative bargaining is to be more global than the competitive bargainer; not tied to the obvious, but to move “outside the box” and create value.
One example of where people get creative is in home buying. A buyer and seller may negotiate the price of a house, but there are a few minor elements, often called contingencies, still outstanding. For example, the prospective home buyer wanted a fence for the backyard. The seller had already been planning to build a fence for the property but had run into production delays. The buyer might either suggest a discount for the price of the yet-to-be-built fence, or the seller can opt to sell the house for the original negotiated price and take on the building of the fence themselves.
This is ultimately a win/win because the buyer gets the house with the fence, and the seller can sell the house for a higher price point. If both buyer and seller had been focused on coming away with a win at the expense of the other, the deal might have fallen through and both parties would have come away unsatisfied, even though a deal was ultimately close at hand.
Separate the People from the Problem
The problem the cooperative bargainer is seeking to solve is dealt with rigorously.
Because negotiations are often emotionally charged, cooperative bargainers attend carefully to the details either to steer the focus back to substance whenever the negotiation strays to personalities, or to deal forthrightly with affective issues when they interfere with discussing the substance of the negotiation.
The negotiation process is as much an issue for the cooperative bargainer as the bargaining interests of the parties. Only when the bargainers are comfortable with their bargaining relationship, can they risk approaching the negotiation using techniques that go beyond competitive strategies.
Focus on Interests, Not Positions
Every negotiation seeks to resolve issues. Competitive bargaining focuses on the positions the parties take to resolve those issues. Less obvious in a negotiation are the interests that lie underneath the issues and the positions. The cooperative bargainer directs the attention of the negotiation to interests, not positions or even issues.
By focusing on interests, the cooperative bargainer seeks to “go below the line” to find what is driving the conflicting positions. When discovered, more creative and more satisfactory resolutions are achievable.
Cooperative Negotiation Roadmap
When you enter a negotiation willing to collaborate, listen and truly negotiate, it’s a good idea to arm yourself with a roadmap to success. It’s important to remember that while collaboration is a part of cooperative bargaining, it doesn’t mean you agree on every point of contention, it just means you work together to find common ground. Having these key steps on top of mind helps you get to a solution without being a pushover, or a stalwart.
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Go Below the Line
When issues arise, it is often one party’s position relating to them. Immediate reaction to these positions can cause disagreement, delay or prevent a discussion of important interests.
Interest-based negotiation happens when people seek what is behind such positions. Instead of just reacting to the various positions, the sophisticated negotiator will attempt to explore their bases, seeking the interests that underlie them.
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Ask Questions (Like a Counselor Would Ask)
The key to capturing the below-the-line interest-based information is asking questions like a counselor would ask. By asking “what” and “how” questions, sophisticated negotiators can learn the reasons behind the positions and seek to satisfy those interests rather than the more concrete issues.
The questions asked should invite the other person to share information. They should be open-ended and begin with phrases such as “Tell me about…” or “Help me understand….”
Avoid questions that begin with “why” as they have a tendency to put people in a defensive posture. When people are defensive, they naturally close up and become reluctant to share interesting information.
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Listen Actively (Especially for the Unstated)
We cannot look into people’s minds, but we can know both their stated and unstated communication. Sensitivity, especially to what they leave unstated, will help identify the interests of people involved, even if they cannot or will not verbalize those interests themselves.
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Create Options
Follow a process that allows initially for no criticism and does not obligate the suggesting party to defend or eventually accept the suggestion. Both parties must be free to make suggestions without obligation and continue inventing options until they explore all ideas.
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Develop Options
Once a list of options has developed, the parties can determine which are possible. It’s important to emphasize that one should insulate this stage as much as possible from judgmental perceptions. The focus should be on the potential of each option, not the desirability.
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Evaluate Options
Once all the options are on the table, consider which options are realistic and which best meet the needs of both parties. First, review the interests revealed in the bargaining process; assess how the solutions developed in brainstorming impact those interests; make a cost/benefit analysis of each viable option, and integrate options, if possible, to provide the best solutions.
Keep in mind a deal that expands the pie and meets the concerns of both parties is more amenable than a solution that more narrowly meets the needs of only one. In evaluating potential deals, seeking ways to meet multiple concerns should be high-priority.
If compromise proves too lopsided to agree, it may show the options being considered are insufficiently creative to provide a long-lasting solution to the issues being negotiated. The more the parties can see solutions from the other’s frame of reference, the more likely they will find a deal.
Benefits of Cooperative Bargaining
- Increased Efficiency
- Better Agreements
- Preserving the Relationship
- Reducing the Danger that the Agreement will be Repudiated
- Improved Organizational Effectiveness
Learn How to Negotiate with Confidence
The Lowry Group, LLC (TLG) is the outgrowth of almost three decades of experience helping organizations achieve their next level of success throughout the United States and around the world, including conflict resolution. TLG’s work began as an external consulting, systems design, and training resource composed of faculty from the Straus Institute for Dispute Resolution at Pepperdine University School of Law.
But TLG has moved beyond its academic roots to respond to repeated requests from corporate and government organizations for “real world” assistance. The TLG team has been chosen by scores of major organizations that must become more effective in negotiating sales, business transactions, client relationships and disputes.
What makes companies and individuals truly successful is the ability to ably manage negotiation. We created resources you need to identify, resolve and manage negotiation. From CEOs, to small business owners, and to anyone managing a team – developing the skills to navigate negotiations is not just important, it’s imperative. Managing negotiations is a cornerstone not only in conflict resolution but also in understanding the psychology of business relationships. Learn how to up your negotiation skills with the Negotiation Navigator Online Course!
