Q68 - Bargaining Strategies in Negotiation Process (14 Marks)

1. Introduction

Bargaining strategy is the overall plan or orientation a party adopts to achieve its goals in negotiation. Choice of strategy depends on importance of substantive issue vs relationship, time, power, and whether parties seek value-claiming or value-creating. Walton & McKersie (1965) identified four sub-processes; Fisher & Ury gave principled negotiation.

2. Two Basic Approaches

Distributive Bargaining (Competitive / Claim Value)	Integrative Bargaining (Collaborative / Create Value)
Fixed pie, win-lose	Expand pie, win-win
Positions focused	Interests focused
Secrecy, conceal information	Openness, share information
Short-term, adversarial	Long-term, trust building
Example: Wage rate for this year	Example: Gain-sharing, flexible work design

Most real negotiations are mixed-motive – both claiming and creating.

3. Major Bargaining Strategies (Thomas-Kilmann Model + IR Context)

A. Competitive / Contending Strategy (Win-Lose, High Assertiveness - Low Cooperation)

• Goal: Maximize own gain at opponent’s cost
• Tactics: Extreme opening demands, anchoring, bluffing, threatening strike/lockout, withholding information, time pressure, good-cop bad-cop
• When useful: One-time transaction, abundant alternatives, opponent weak
• Risk: Damages relationship, impasse, retaliation

B. Collaborative / Problem-Solving Strategy (Win-Win, High Assertiveness + High Cooperation)

• Goal: Find solution satisfying both sides’ underlying interests
• Tactics: Open communication, identifying superordinate goals, brainstorming options, logrolling (trade issues by priority), bridging, objective criteria
• Process: Separate people from problem, focus on interests not positions (Fisher & Ury)
• When useful: Long-term relationship, trust possible, multiple issues
• Example: Union accepts automation → management guarantees retraining + no retrenchment + productivity bonus
• Most preferred for IR and HRD.

C. Accommodative / Soft Strategy (Lose-Win, Low Assertiveness - High Cooperation)

• One party yields to preserve relationship
• Tactics: Concessions, generosity, downplaying differences
• When useful: Issue more important to other party, goodwill investment
• Risk: Exploitation, appears weak

D. Avoiding Strategy (Lose-Lose, Low Assertiveness - Low Cooperation)

• Withdraw, postpone, “agree to disagree”
• When useful: Issue trivial, need cooling-off, information inadequate
• Risk: Conflict festers, appears in IR as delaying tactics – leads to union frustration

E. Compromising / Compromise Strategy (Moderate Assertiveness & Cooperation)

• Both sides make moderate concessions, split the difference
• Tactics: Middle ground, “meet halfway”
• When useful: Time pressure, equal power, temporary settlement needed
• Limitation: Sub-optimal, neither fully satisfied; encourages horse-trading

4. Walton & McKersie’s Four Bargaining Strategies (Specific to Collective Bargaining)

1. Distributive Bargaining: Resolving conflicts of interest (wages, bonus)
2. Integrative Bargaining: Solving common problems (safety, productivity)
3. Attitudinal Structuring: Shaping relationship and trust (from adversarial to cooperative)
4. Intra-organizational Bargaining: Building consensus within each side (union leaders convincing members, HR convincing management)

5. Fisher & Ury’s Principled Negotiation (Harvard Model) - Alternative Strategy

• Separate people from problem
• Focus on interests, not positions
• Invent options for mutual gain
• Insist on objective criteria

This converts distributive into integrative.

6. Tactics Associated with Strategies

• Anchoring, Boulwarism (take-it-or-leave-it, GE), Whispsawing
• Nibbling, Chicken, Deadline effect
• BATNA leverage: Improving Best Alternative To Negotiated Agreement strengthens bargaining power

7. Choice of Strategy - Contingency Factors

• Time horizon: Short → competitive; Long → collaborative
• Power balance: Equal → integrative viable
• Trust level, Information availability, Cultural norms
• Issue importance: Vital → competitive; Routine → compromise/avoid

8. Application to Indian Industrial Relations

Historically adversarial distributive bargaining (strikes over wages). Post-1991, shift towards integrative strategies: productivity-linked wages in Maruti Suzuki, Tata Steel’s joint consultation. Yet many SMEs still competitive. Labour codes (Industrial Relations Code 2020) encourage conciliation → integrative.

9. Conclusion

No single best strategy. Effective negotiator is strategically flexible – starts with collaborative intent but can switch to competitive if exploited, and uses compromise to break deadlock. Modern HRD emphasizes integrative, principled bargaining to build harmonious IR, align employee-employer goals and sustain organizational performance. For exam, draw Thomas-Kilmann 2x2 matrix (Assertiveness vs Cooperativeness) plotting 5 strategies.