Distributive Bargaining - Definition & Meaning
What is Distributive Bargaining?
Distributive Bargaining style of bargaining or negotiation is used when two parties are involved in the process of dividing something or distributing something.
Distributive bargaining typically occurs while a limited amount of resources are divided between co-operations. It is also known as distributive negotiation. This kind of negotiation style is also known as a zero sum or win-lose game, where one entity’s gain is another’s loss.
It is in contrast to the other style of negotiation called integrated bargaining where there are cooperative efforts to make something than divide it.
Depending on the situation, either integrated or distributive bargaining strategy may be used. Distributive bargaining is generally used while making a purchase. A tactic generally used in this style of bargaining is holding of information. Distributive bargaining is used when the objective is short term, and not relationship oriented.
Example:
While negotiating for a contract for their website, Hudson Enterprises held back information about their budgets, costs and other information, so that they could get the best possible price from the agency they had finalised. So here, the style used was distributive bargaining, wherein Hudson and the agency wanted to maximise their gain and minimise their cost.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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