Distributive bargaining

Definition

Distributive bargaining is a negotiation strategy where parties compete to divide a fixed resource, often resulting in a win-lose scenario. This type of bargaining is commonly seen in collective bargaining situations where labor unions and employers negotiate wages, benefits, and working conditions. Each side aims to maximize their share of the resources at the expense of the other party, making it a zero-sum game.

5 Must Know Facts For Your Next Test

1. Distributive bargaining is often characterized by competitive tactics, such as anchoring with initial offers and making concessions slowly.
2. This bargaining strategy typically occurs in negotiations over a single issue or a limited set of issues, like salary or bonuses.
3. Distributive bargaining can create adversarial relationships between negotiating parties due to its competitive nature.
4. The effectiveness of distributive bargaining relies on each party's understanding of their own needs and the minimum acceptable outcomes they are willing to accept.
5. Successful distributive bargaining often involves preparation, research, and strategic communication to influence the perceived value of the resources being negotiated.

Review Questions

• How does distributive bargaining differ from integrative bargaining in terms of negotiation outcomes?
  • Distributive bargaining differs from integrative bargaining primarily in its focus on dividing a fixed resource, leading to win-lose outcomes. In contrast, integrative bargaining seeks to create value through collaboration, aiming for win-win solutions that satisfy the interests of both parties. While distributive bargaining often fosters competition and conflict, integrative approaches encourage cooperation and problem-solving, making them more effective for long-term relationships.
• What are some common strategies used in distributive bargaining, and how can they impact the negotiation process?
  • Common strategies in distributive bargaining include anchoring with high initial offers, making incremental concessions, and using time pressure to push for decisions. These strategies can create tension between parties and lead to competitive stances that may hinder collaboration. The negotiation process can become adversarial if parties do not manage their strategies effectively, potentially damaging long-term relationships once the negotiation concludes.
• Evaluate the role of distributive bargaining in collective bargaining agreements and its potential implications for labor relations.
  • Distributive bargaining plays a crucial role in collective bargaining agreements as it often dictates how wages and benefits are negotiated between labor unions and employers. This competitive approach can lead to significant gains or losses for either side, influencing labor relations dynamics. If unions perceive management as overly aggressive in distributive tactics, it could escalate tensions and conflicts, potentially resulting in strikes or other forms of collective action. Conversely, if both sides engage in fair distributive practices, it could foster a more cooperative relationship moving forward.

Related terms

integrative bargaining: A negotiation approach that seeks win-win solutions by focusing on mutual interests and collaborative problem-solving.

collective bargaining agreement (CBA): A legally binding contract between an employer and a labor union that outlines the terms of employment, including wages, benefits, and working conditions.

batna: Best Alternative to a Negotiated Agreement; the most advantageous alternative course of action a party can take if negotiations fail.