The importance of negotiation in business deals cannot be understated. Successful negotiation involves good interpersonal and communication skills and used together to bring the desired result. In fact, negotiation is one of the main qualities employers look for when recruiting staff nowadays. This is because a good negotiator can close the best deals, leading to the advancement of an organization. Improved supplier relationships, sustainable competitive advantage and managing conflicts effectively are all advantages of successful negotiations.
The term distributive means giving out or the scattering of things. By its mere nature, there is a limit or finite amount in the things being distributed or divided amongst the people involved. Hence, this type of negotiation is often referred to as “The Fixed Pie”.
There is only so much to go around, but the proportion to be distributed is limited but also variable. In the real world of negotiations, two parties face off with the goal of getting as much as possible.
The seller wants to go after the best price they can obtain, whilst the buyer wants to pay the lowest price to achieve the best bargain. This is really just good old plain haggling, which is just like from playing a tug of war.