Distributive Bargaining Strategies - Literature review Example

Distributive Bargaining and Mediation Introduction Distributive bargaining refers to the gains that are achieved by parties involved in the decision-making process at the cost of the other. Labour management bargaining falls in the category of distributive bargaining. Mediation is a part of negotiation that involves a third party which facilitates resolution of conflict between agents. Distributive bargaining and integrative bargaining are types of negotiation that are highly popular among researchers. It has been observed that distributive bargaining is a process where the parties claim value or divide resources particularly when the resource pool is fixed (Walton and McKersie, 1991). In case of distributive bargaining both the parties try to maximize their gains and minimize the losses. Negotiators in this case try to promote their own-interests so that they do not look weak in the eyes of the other party. The concept of negotiation and bargaining has been found to be important in the works of Chamberlein (1955 cited in Marquis and Huston, 2009) and Stevens (1963 cited in cited in Marquis and Huston, 2009) to name a few. The purpose of this paper is to discuss about distributive bargaining and mediation as aspects of negotiation. It will also discuss the importance of mediation in the decision-making process. The first segment of the paper establishes the concepts of distributive bargaining and mediation and then the integration of both the topics in conflict-resolution. Discussion The existing literature points out that there are two main types of negotiation strategies namely distributive bargaining and integrative bargaining. The concept of distributive bargaining is embedded in the zero-sum game of economic theory and has been viewed by researcher in the light of a situation related to division of a pie. The implication a zero-sum game is that that there are mutually exhaustive ways of dividing the outcome (Bühring-Uhle, Kirchhoff and Scherer, 2006). The most important aspect of distributive bargaining is that the interests of the agents are correlated in a negative manner where positive outcome of one individual is related to the negative outcome of another. The idea of distributive negotiation had undergone a paradigm shift with the research work conducted by Fisher, Patton and Ury (1991) who had pointed out that distributive bargaining is inferior compared to integrative bargaining and this had led researchers to focus on the later. One of the most common form of distributive bargaining can be found in the labour union where the union members wants to secure certain benefits from the employers like higher wage, improved working conditions and additional perks. Employers on the other hand ensures that the commission to the union members can be minimized and maintaining the benefits of the organization. Mediation is also a type of negotiation process that has gained importance over the past decade. The existing literature on mediation is relatively scarce compared to the other two processes of negotiation. A major proponent of the mediation theory in negotiation was Donohue who had pointed out that mediation in the negotiation process can prevent certain complications. There is a conflict among researchers regarding the role of mediators in the conflict-resolution process. Some argue that mediators have no power to implement solutions and others argue that they have (Davidson and Wood, 2004). The term “intravenor” is used for mediators who have the power to implement solutions. From the growing research in this field in the recent times it can be made out that greater involvement of a mediator in the conflict management process results in superior outcomes. An interesting insight was provided in the work of Kressel, et al. (1994) who had pointed out that mediation goes beyond offering solution to the conflicting parties and has the capability to improve the relationships. According to the research conducted by Taylor and Donohue (2006) mediators are third parties who do not have any type of relationship with the parties beforehand yet they have the capability to improve the overall level of satisfaction of all the parties involved. The use of distributive bargaining in the process of mediation has been explored in the research of Vo, Padgham and Cavedon (2007). The importance of trust introduced by mediators in the bargaining process introduces fairness in the process of negotiation and improves the quality of decision. Mediation in the bargaining process helps in eliminating the risk of disclosing information to the parties involved and enhances trust in the process. Researchers have studied mediation programs in the school environment were studies. The results from the study had shown that mediation programs are beneficial for the students because they had ultimately resulted in the number of suspension from the school. The strongest explanation behind this trend is that mediation programs tend to reduce the conflicts between students by formulating constructive outcomes (Pynchon, 2012). Role of mediation in the conflict resolution process depends on the type of outcome that is expected between parties. It has been observed that cases which involve financial settlement between parties are the ones which relates to distributive bargaining. In case of distributive bargaining it has been found that tangible assets like money or property is predominant. The role of mediator in distributive negotiation is to provide a starting position for the reserve price so that the remaining negotiation process can advance in a hassle free manner (Littlejohn and Foss, 2009). The gravity of the situation can be explained with a scenario where there is no external mediator in distributive bargaining. In such a situation either of the parties can breach the rule of distributive bargaining by denying counter-offering or making the situation an absolute one based on take-it-or-leave-it. The main role of the mediator in the distributive bargaining is to ensure that the norm of reciprocity is explained in an effective manner to clear any impasse (Carnevale and Pruitt, 1992). Therefore, it can be argued that the role of the mediator in distributive bargaining is to clarify that the negotiation process is not about fairness but about feasibility. According to the research conducted by Amanatullah, Morris and Curhan (2008) it has been found that in case of distributive bargaining process unmitigated communication reduces the outcome of the negotiators. Such a situation can be effectively altered by introducing pre-negotiation anxiety and plans to involve large concessions. It can therefore be argued that presence of a mediator in this situation has the capability to facilitate the negotiation process by mitigating communication. The role of the mediator can be considered as the one which wants to balance the selfish interests of the agents by taking a neutral stand between the parties (Holbrook, 2005). Distributive bargaining is particularly useful when the expectations of the parties differ widely and in such circumstances the mediator acts as a strong link to reach a solution. In case of Australia it has been observed that distributive bargaining is a common phenomenon for employee and labour relations. Unions have been found to shy away from any type of engagement models that values mutual trust. The main reason for this is that they fear that co-operation with employees may create chances of co-option. Recently Australia’s case of distributive bargaining came from negotiations with the loan council. Intergovernmental bargaining between nations can also be taken as a type of distributive bargaining that involves fiscal gains for nations (Alexander, 2008). The work of Cooper (2003) had extended the framework of mediation in the role of legal practitioners. The research had shown that inclusion of mediators in the decision making process can either be in the form of evaluative models, facilitative, settlement and transformative. In case of the legal sector it has been observed that the evaluative mediations models are employed. The rationale behind the use of mediators in legal cases is that mediators have the power to provide appropriate outcomes as settlement. The impact of mediation in the conflict management is a rather difficult terrain as researchers have different opinion regarding the effectiveness of mediation. Researchers like Glasl (1982) have pointed out that mediation in the bargaining process turns out to be effective only when the intensity of conflict between the parties is not very strong. Few other factors which contributed to effective mediation process during bargaining include equal power of the parties, scarcity of resources is not severe and there is no involvement of general resources. Communication initiated in the mediation process is an effective way to understand the process of negotiation by understanding each other’s stance. Researchers like Wall (1981) have found that mediation process in negotiation have the capability to motivate the parties in the negotiation process. Motivation in turn can enhance fairness in conflict-resolution. Mediation has been found to be one of the oldest forms of dispute resolution in indigenous Australian societies. These indigenous societies maintain a high level of kinship with the community and these ties of network help in conflict resolution and healing from by applying a collectivist approach. The Australian National Mediator is an example of mediator institution in the country that provides information or advice to disputing parties. The mediator boards in Australia have to ensure that the people recruited for the purpose of mediation have the capability to provide conciliation and advisory mediation to the clients (Alexander, 2008). Conclusion It can be concluded that the importance of mediators in the process of distributive bargaining is mainly to remove the impasse that arises sometime. The aspect of negotiation or mediation is important in the existing literature due to the conflict of interest between parties. This research has found that distributive bargaining can be made easier by introducing mediators in the decision-making process. The major reason behind this is that mediators have the capability to create a neutral stance before the negotiation begins and this makes the process easier. Another major contribution of the negotiation process is that it improves the long-term relationship between disputing parties. Mediation is also useful for distributive bargaining as mediators can generate trust among parties in financial arrangements. Mediation is receiving increasing importance in the works of researchers who have applied the concept in legal and educational backgrounds. Reference List Amanatullah, E. T., Morris, M. W. and Curhan, J. R., 2008. Negotiators who give too much: unmitigated communion, relational anxieties, and economic costs in distributive and integrative bargaining. Journal of personality and social psychology, 95(3), pp. 723-730. Bühring-Uhle, C., Kirchhoff, L. and Scherer, G., 2006. Arbitration and mediation in international business. Netherlands: Kluwer Law International. Cooper, D. M., 2013. The "new advocacy" and the ermergence of lawyer representatives in ADR. Australasian Dispute Resolution Journal, 24, pp. 178-186. Davidson, J. and Wood, C., 2004. A conflict resolution model. Theory Into Practice, 43(1), 6-13. Fisher, R., Patton, B. and Ury, W., 1991. Getting to yes: Negotiating agreement without giving in. Boston: Houghton Mifflin Harcourt. Glasl, F., 1982. The process of conflict escalation and roles of third parties. In Conflict management and industrial relations, pp. 119-140. Holbrook, J. R., 2005. A unified field theory of mediation. [pdf] American Arbitration Association. Available at: [Accessed 16 September 2014]. Kressel, K., Frontera, E. A., Forlenza, S., Butler, F. and Fish, L., 1994. The Settlement‐Orientation vs. the Problem‐Solving Style in Custody Mediation. Journal of Social Issues, 50(1), 67-84. Littlejohn, S. W. and Foss, K. A., 2009. Encyclopedia of Communication Theory. London: Sage. Marquis, B. L. and Huston, C. J., 2009. Leadership roles and management functions in nursing: Theory and application. Philadelphia: Lippincott Williams & Wilkins. Alexander, N., 2008. The Mediation Metamodel: Understanding Practice. Conflict Resolution Quarterly, 26(1), pp. 97-121. Pynchon, V., 2012. Success as a mediator for dummies. New Jersey: John Wiley & Sons. Taylor, P. J. and Donohue, W. A., 2006. Lessons from hostage negotiation. The negotiator’s fieldbook, pp. 667-674. Vo, Q. B., Padgham, L. and Cavedon, L., 2007. Negotiating flexible agreements by combining distributive and integrative negotiation. Intelligent Decision Technologies, 1(1), pp. 33-47. Wall, J. A., 1981. Review Section: Mediation an Analysis, Review, and Proposed Research. Journal of Conflict Resolution, 25(1), 157-180. Walton, R. E. and McKersie, R. B., 1991. A behavioral theory of labor negotiations: An analysis of a social interaction system. New York: Cornell University Press. Read More