Contract Negotiation Paper
YOU CAN’T HAVE A BIGGER PIE, WITHOUT A BIGGER PAN; THE FORCES BEHIND INTEGRATIVE BARGAINING
By Joseph Brick
1
ABSTRACT Integrative bargaining is a highly effective means of negotiating an agreement. However, it is also an underutilized method. Although there has been a recent focus on the topic in the past thirty years, the factors which deem it beneficial are still little understood. What this paper attempts to set forth is an explanation of why integrative bargaining is a successful and desirable method of negotiating. With a better understanding of why integrative bargaining is effective, negotiators may be better able to utilize this method to its full potential. This paper culminates with a suggestion on how to best exploit this new understanding. Research up to this point has suggested that integrative bargaining is desirable due to the increasing the pie rationale. The contention set forth in this paper is that there are alternative factors driving integrative bargaining. Exploration of this theory begins with an analysis of whether integrative bargaining is driven by the interjection of equity principals into what was traditionally a law driven enterprise, that of negotiation. It is argued that the stability of contract which results from an earlier application of equitable principals in the negotiating process is just as crucial to integrative bargaining as the desire to increase the pie. With this conclusion, it becomes apparent that solutions which encourage integrative bargaining will result in more stable contracts. The increased stability rationale holds true even where there is no increase in the fixed sum negotiation. Integrative bargaining is thus shown to be desirable in all cases. To encourage the stability of contract, this paper concludes with the suggestions that mandatory disclosure laws be adopted to help encourage the use of integrative bargaining.
2
INTRODUCTION
Who doesn’t dread purchasing a new car? Aside from the
By Joseph Brick
1
ABSTRACT Integrative bargaining is a highly effective means of negotiating an agreement. However, it is also an underutilized method. Although there has been a recent focus on the topic in the past thirty years, the factors which deem it beneficial are still little understood. What this paper attempts to set forth is an explanation of why integrative bargaining is a successful and desirable method of negotiating. With a better understanding of why integrative bargaining is effective, negotiators may be better able to utilize this method to its full potential. This paper culminates with a suggestion on how to best exploit this new understanding. Research up to this point has suggested that integrative bargaining is desirable due to the increasing the pie rationale. The contention set forth in this paper is that there are alternative factors driving integrative bargaining. Exploration of this theory begins with an analysis of whether integrative bargaining is driven by the interjection of equity principals into what was traditionally a law driven enterprise, that of negotiation. It is argued that the stability of contract which results from an earlier application of equitable principals in the negotiating process is just as crucial to integrative bargaining as the desire to increase the pie. With this conclusion, it becomes apparent that solutions which encourage integrative bargaining will result in more stable contracts. The increased stability rationale holds true even where there is no increase in the fixed sum negotiation. Integrative bargaining is thus shown to be desirable in all cases. To encourage the stability of contract, this paper concludes with the suggestions that mandatory disclosure laws be adopted to help encourage the use of integrative bargaining.
2
INTRODUCTION
Who doesn’t dread purchasing a new car? Aside from the