Bargaining Strategies in Labor Relations: Integrative & Distributive

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  • 0:02 Collective Bargaining
  • 0:49 The Distributive…
  • 1:52 The Integrative…
  • 4:32 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

One of the great advantages that unionized workers have is the ability to collectively bargain as a group with management. In this lesson, you'll learn about integrative and distributive bargaining strategies. A short quiz follows.

Collective Bargaining

Meet Alice and Ben. Alice works as a negotiator for a large tool manufacturing company, and Ben is the duly elected union representative for the union workers employed at the company. The company's collective bargaining agreement expires in a few weeks. A collective bargaining agreement is an agreement entered into by a company and a union that govern key aspects of the employer-employee relationship, such as pay, benefits, hours, working conditions and other terms and conditions of employment.

It's time for Alice and Ben to slug it out and come up with a new agreement. Just like when playing a game, Alice and Ben can employ different strategies to obtain victory for their side. Let's see how they can do this.

The Distributive Bargaining Strategy

Alice and Ben can each pursue a distributive bargaining strategy. This is the traditional route taken in negotiations. In this type of bargaining, the parties view the negotiations as a zero-sum game. If one person wins, the other loses. In other words, a gain by the employer is a loss to the employees and vice versa.

The goal in distributive bargaining is to get as much of the limited resources available for your side. Since resources are finite, each side believes that giving to the other will result in giving up something that would benefit their side. For example, higher wages or better healthcare for employees means smaller salaries for management or fewer profits for shareholders. If you think of the resources, such as money for worker pay, benefits and owner's profits, as a pie, distributive bargaining is about fighting for the biggest piece you can get.

The Integrative Bargaining Strategy

Alternatively, Alice and Ben can pursue an integrative bargaining strategy. This strategy is employed when both sides can win. The idea is that both sides win but not at the expense of the other side. If you total up the wins and losses for both sides on issues at the negotiating table, there is a net positive for both management and employees, which is why it is often called a positive sum game.

Alice and Ben must have multiple issues to negotiate in order to pursue an integrative strategy so that each side can give and take and both come out winners. Let's look at some examples.

  • The company may want to increase mandatory overtime to increase productivity per worker, resulting in higher profits. Employees may want higher wages. Alice can concede to higher wages, while Ben concedes to more mandatory overtime requirements. Both sides get something.
  • The union may demand better insurance coverage for its employees but the company doesn't want to pay an arm and a leg for it because it cuts into profits. Alice could agree to improvement to coverage if Ben agrees to an increase in the employee's contribution for the coverage. Again, both sides can win.
  • The union may want to add an additional company-wide holiday to benefits, such as Martin Luther King Day. The company doesn't want to shut down operations because it's expensive to shut down. Ben and Alice may agree on a one-day increase in employees' personal leave as a compromise where both sides satisfy their objectives.

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